Educational Adequacy and Fiscal Reality
Scott Bauries on Thursday, January 6, 2011 at 11:40AM Two recent developments highlight what I think portends lots of coming chaos in school finance. The first is a suit filed by parents in a middle-class Kansas school distict challenging the state's limits on local property tax millage rates (enacted in response to Kansas's numerous school finance cases). The parents allege that their First Amendment right to direct the education of their children is infringed by the caps. They also allege that their Fourteenth Amendment rights to control their own property and the uses to which it is put are infringed. This is a novel claim, but it illustrates very clearly the conflicts that judicial rulings on systemic equality of educational resources create--simply put, these equalities cannot be achieved without limiting local control, and if these parents are correct, there are federal constitutional interests in local control of educational expenditures. The parents have Harvard Law Professor Lawrence Tribe on their side, so this is not just a shot in the dark.
The other development is the re-opening, once again, of the Abbott v. Burke case in New Jersey. This time, the plaintiffs challenge the $800-plus million in budget cuts that the Christie Administration has directed at the NJ schools to help close an $11 billion dollar budget gap resulting from the recent economic times. The most recent prior action of the New Jersey Supreme Court (the most activist court in the nation on school finance) was to grudgingly approve the latest set of funding levels (enacted before Governor Christie was elected), on the explicit assumption that these levels would not be reduced. Now that the funding levels have been reduced, it is likely that the court will once again find its way into the case. By my count, if the new set of hearings results in a written decision, this will be the 21st New Jersey Supreme Court opinion in the Abbott case. Pretty remarkable.
The question now is what will happen as a result. If the courts in both cases rule for the plaintiffs, will the political branches comply? In Kansas, this would seem to be easy, as the legislature can just remove the caps from the plaintiff district, but the suit in Kansas did not open up the prior Kansas Supreme Court decision--it is an independent challenge to the legislation based on federal constitutional rights, so the Kansas legislature may be faced with an equality mandate from its own supreme court and simultaneously an order forbidding the application of its equality legislation from the federal courts. In New Jersey, it's hard to see this being resolved without a constitutional confrontation, unless the court completely capitulates to the Governor's arguments that the state just doesn't have the money. The really scary thing is that, considering the coming end to the ARRA and its federal subsidies of state education systems, these two cases are likely only the tip of the iceberg.
Reader Comments (10)
The Shawnee Mission parents lawsuit in Kansas is not only a shot in the dark, but as far as I can figure, is patently absurd, whether Lawrence Tribe is involved or not.
The suit essentially argues that the first amendment (and 14th) protect a right of local voters (of some/any jurisdiction) to adopt whatever level of property taxation they see fit. The problem here occurs at many levels. Property taxation and its various elements typically exists only as a function of state policies, including statutory and constitutional definitions of property types, valuation methods and for that matter referendum procedures - and the definitions of the taxing jurisdictions (in Kansas, school districts are not aligned with other jurisdictions). These are all generally a function of state policies... not left to each local jurisdiction to determine on its own (boundaries, property types, valuation method, referendum procedures, etc.).
Extending the logic of the SMSD parent argument, this would mean that states would have no authority over the measurement of property value (which may limit the yield of taxes), or the procedures for passing referenda to increase property taxes (or the revenues generated). These are all limitations to property taxation imposed by the state. Clearly states do have this authority and states further have the authority to place other specific limits on property taxes as well as define alternative procedures for overriding those limits - for example, requiring a 2/3 majority for override of limits. Again, a limit.
Most states have some form of tax and expenditure limits (on level or growth) and many have specific tax and expenditure limits pertaining to "local" property taxes. Again, this works mainly because property taxes are largely governed by states to begin with, even if budgets are set and/or tax levies determined via some state sanctioned locally operated procedure. If the federal courts were to step in and determine that local property taxation is analogous to private giving to political campaigns and not a part of state tax policy, this would throw all of these state policies into upheaval.
FYI - previous iterations of these claims filed by the same attorney included numerous additional absurd claims which have been removed from the current version. Previous versions (a few years back) attempted to argue that Rodriguez protected this supposed right to unlimited local property taxation.
A more relevant claim would be if the limits actually prohibited the district from providing an adequate education under the state constitution. That is, does the state school finance system - including the level of funding and limits to spend above that level fail to "make suitable provision to finance the educational interests of the state?"
Note that challenges to the Kansas state school finance system have in the past made their way through the federal courts up to the 10th circuit - Robinson v. Kansas. In Robinson, the court accepted that plaintiffs could challenge (albeit under rational basis) funding disparities created by weightings that provided different levels of funding across Kansas districts. The court accepted that funding disparities created within the formula were not governed by Rodriguez, which accepted under rational basis, those disparities resulting from local "control" (property taxation). If SMSD were able to show that it was inequitably treated by those weightings - and if it could show that the inequitable treatment is so completely freakin' irrational, arbitrary and capricious, etc., etc., to actually win that argument under rational basis, then they'd have something. BUT... SMSD is a relatively affluent, predominantly white (built almost entirely as an all white, segregated enclave post WWII - see Kevin Fox Gotham's Race & Real Estate in Kansas City) district that still maintains relatively high academic outcomes (hard to show the damages on behalf of SMSD).
Thanks very much for the informed comments, Bruce. You obviously know a lot more about this case than I do after just reading the complaint. I tended to lean your way re:absurdity on my initial read of the Kansas complaint, but (taking the allegations as factually true, as I must, since I have no idea what the actual fiscal state of this school district is), I have to admit that I found the allegations based on Pierce v. Society of Sisters to be at least colorable (though I would ultimately reject them were I the judge and I hope they don't succeed). I share your extreme skepticism of the property rights argument, but the idea that the individual right to direct the education of one's children may limit the power of the state to place limits on one's generosity to oneself is gaining traction (at least politically).
Let me be clear: I do not think that a federal court would be correct in ruling for the plaintiffs in Kansas, but I do see the potential that it could happen, based on the implication in Citizens United that even entities created by the state may possess First Amendment rights, and that these rights may not be limited even if not all of the members within the entity in question agree with the ends to which those rights are directed. I doubt that it will be successful, but it does not seem to be a shot in the dark.
I agree that a better claim would be one simply founded on inequality of resources, but I think the better venue for that claim would be state court, both because Kansas has already issued the Montoy decisions affirming the right to substantially equal resources (with no requirement to prove irrationality or arbitrariness), and due to the reasons you state regarding irrationality and how hard that is to prove in federal court. The point of the First Amendment argument, it seems, is to eliminate this latter consideration by placing unequal funding into the realm of strict scrutiny by arguing that it burdens the fundamental right to direct one's children's education.
regarding entities created by the state having first amendment rights, this is a case where the entity - a taxing jurisdiction - and all of the rules by which the entity operates - property types, valuation methods, referendum or budget procedures - are all a function of state policy. Each piece of this puzzle is, in effect, a limit. For example, state law says that residential property will be valued at 11.5% of market value, less the first $20,000 (for taxes for general funds) and without that $20k exemption for other revenue raising. So, the 11.5%, and the $20,000 exemption are also state imposed limits to the ability of a jurisdiction to raise revenue via property taxes. It's not just about whether the jurisdiction can hold referenda to increase the tax rate, and resulting revenue yield. If the court were to wade into this mess they would have to acknowledge that they are overturning all state imposed definitions that result in limitations to revenue raising via property taxes, and the state would have to turn over all governance of property taxation to local jurisdictions. Similar complexities exist in nearly every state.
If the parents were arguing against a state prohibition on private contributions to the school district, then I could see your point. But, there is no such prohibition.
Bruce, I wrote a response, but the system apparently ate it, so here's another. If the other one I submitted pops up, please don't think that I have lost my mind.
Basically, I agree with everything you say normatively, but I still see the potential that a court will find school districts and corporations similar enough, or will focus on the fundamental rights of the parents in the aggregate, such that the plaintiffs could win, and that is exactly what worries me.
First, although a school district is created by the state and follows regulations that are entirely state-created, it is not "the state." If a district were "the state," then it would be clothed in 11th Amendment sovereign immunity, and school districts are not so clothed. Also, a school district has many features that it shares with a corporation (some are even officially called "school corporations" or "municipal corporations"). Both have legislative bodies elected by the voting members (residents in a school district and shareholders in a corporation). Both use these legislative bodies to determine policy directions and general goals. Both exist under the limitations placed upon them by positive law. Each may sue and be sued as an entity on its own. Still, a school district is not a corporation in the same sense that Citizens United was a corporation. A school district exists primarily to achieve state-specified goals, while a private corporation may seek to achieve any goal not prohibited by the state. However, the state may not place a limitation on corporate goals that burdens the fundamental right to free expression (and possibly other rights that a corporation may possess). Can we say the same about a school district? I think not, but some judges may disagree.
However, there is another possibility. The parents of the district may be thought to have aggregated their fundamental right to direct the upbringing of their children, including their education. If so, and if voting on school tax increases is the way they accomplish this direction, then it may be that the state scheme to prevent them from accomplishing such tax increases through voting is unconstitutional as applied to them, rather than facially, as it burdens this fundamental right. The Yoders made this argument as individuals in Wisconsin and managed to carve out an exception for themselves to the state's compulsory education and trunancy laws. The additional step required here is to allow for the aggregate exercise of the right through voting. I don't buy it, but a judge may.
It's the aggregation of the "individual right" (Yoder) to a collection of parent/residents who reside in a geographic space defined by the state as a school district, that creates a huge disconnect for me. In this case the proposed aggregation of these residents is brought by the few residents who file the case. Not to mention that the exercise of this right - even if the aggregation of "parent/residents" is accepted - has consequences for all other property owners in the geographic space - commercial/industrial property owner, and residential property owners who do not have children in the schools.
Absolutely right, and a big, big problem if the argument is accepted. I think that you have hit upon why it will likely not succeed. All that would be required is one objector who did not vote for the tax increase and wishes to direct fewer funds to the education of his children, and the theory falls apart.
Whew, glad you 2 figured that out. I can sleep tonight :)
The issue of districts having First Amendment protection intrigues me, though I don't see it happening. Schools exist at the will of the legislature. They are executive or administrative in nature. While Indiana may call them "School Corporations," fundamentally it is a public service - paid for and operated by the public. Extending this logic, where would the line between the state and a state corporation lie? On one side are some clear examples on the corporation side, such as KET (our state-wide, public funded PBS station) or UK (our state university) and on the other are some clear examples on the non-corporation side, such as EPSB (our educator certification board) or KCHIP (children's health insurance department). Schools lie somewhere in the middle, but how does one draw that line?
Also, hating to bring in Garcetti here, but using the Court's logic on that case on public employees ... would public corporations function any differently? If the school exists at the will of the legislature (think at-will employment), anything the school expresses (such as opinions on local mill rates) would be within the scope of employment (or existence). I don't know, its a stretch, but I do think there is something there.
Surprised Lawrence Tribe is jumping in on that. Like Bruce, I just have no clue as to how one would even attempt to win a case like that. I just don't get it. If some parents want to spend more money on their kids ... hire them a tutor. Create a non-profit afterschool program. There are lots of ways for parents to spend money on their kids.
P.S. - Shoot me an email on that system issue. I'll try to investigate.
I see the First Amendment arguments taking us down the rabbit hole, but maybe that's where Citizens United, Rust v. Sullivan (govt. speech), and Garcetti lead us.
As to your concerns in the last paragraph before the "P.S.," Justin, the argument appears founded on the (alleged) fact that overwhelming majorities of citizens have repeatedly approved school tax increases, only to be frustrated by the challenged limits. So the ultimate claim appears to found itself on the idea that these majorities form the "will" or the "expressive intent" of the school district as a whole, much the same way that a corporate board chosen by a "majority" of shareholders can formulate and express a corporation's expressive intent through political spending. If this is the actual theory, then it might have the salutory effect of illustrating the absurdity of the Citizens United reasoning, taken to its logical conclusion.