Chapter 3 Legal Framework for Financing Public Education

1. Chapter 3Legal Framework for Financing Public Education

2. Federal Role in Education • The federal government has a long precedent of providing education programs, funds, & initiatives to the states • Without federal intervention, many initiatives may not have been started, and many injustices would have continued longer

3. Federal Role in Education, cont. • Brown v. Board of Education of Topeka (ended desegregation) • Brown II (ended more desegregation) • Serrano v. Priest (finance equity) • The Kentucky Education Reform Act (more finance equity) • Title IX (ended gender discrimination), • Title VII (Civil Rights Act) • Public Law 94-142 (Special ed. rights)

4. Limited Federal Role in Education • The Tenth Amendment to the United States Constitution says that the powers not delegated to the federal government by the Constitution or are not prohibited by it are reserved for the states • Since the first ten Amendments do not mention education, it became a state function by default

5. The 10th Amendment compromise balanced interests of those who wanted a strong federal government and those who wanted to preserve states’ rights The states are not willing to surrender control of education and the federal government can’t afford to pay its promised share The Tension Continues Today

6. 10th Amendment Compromise:Plenary Power • Each state is responsible for setting up an educational system and may pass laws it considers desirable towards that end as long as those laws are not in conflict with its own State ConstitutionorFederal Constitution • The courts, however, can only intervene if there is a challenge based on a legitimate controversy brought by a party with legal standing concerning the state’s practice and the State or Federal Constitution or its application

7. 10th Amendment Compromise:Plenary Power, cont. Over the past decades, the federal powers have somewhat reduced the plenary nature of the states’ control of education.

8. Each state’s constitution has language that forms the legal framework for the organization of the state’s education function All states except Hawaii (and the District of Columbia) delegate much of the authority for education to local school boards to be coordinated through the State Department of Education – also known as the State Education Agency (SEA) State Control of Education

9. The state constitution & the state’s department of education regulations control the parameters under which each local school district operates State Control of Education, cont.

10. Finance is perhaps the most critical issue facing states as it affects the federal role in education Increasingly, federal courts are ruling against states in cases involving state’s education funding formulae, challenging equity and adequacy School Finance & The Law

11. A Historical & Legal perspective and Guiding principles regarding Taxation Equal protection State & Federal Constitutional language Adequacy Vouchers and charter schools Tuition tax credits School Finance & The Law, cont.

12. Taxing to Fund Schools • The federal level has a long history of taxing & spending to pay for education services • The first public school laws involved taxation in the Massachusetts Bay Colony to raise the necessary funds for education services – the 1647 Ye Olde Deluder Satan laws

13. Taxing to Fund Schools, cont. • Section 8, Article 1 of the U.S. Constitution gives the Congress the right to tax and spend • The article, in part, reads, “The Congress shall have Power to lay and collect Taxes, Duties, and Imports and Excises, to pay the Debts and provide for the common Defense and General Welfare of the United States…”

14. “General Welfare” Clause • Originally controversial, the “General Welfare” clause conferred on Congress broad powers to tax and spend for the general welfare of the United States.[1] • [1] United States v. Butler, 297 U.S. 1, 56 S. Ct. 312 (1936).

15. Taxing to Fund Schools • At the state level, the Supreme Court has ruled that states have taxing power “ to resort to all reasonable forms of taxation in order to defray the government expenses”. • Further, the court said, “Unless restrained by provisions of the Federal Constitution, the power of the state as to the mode, form, and extent of taxation is unlimited” . • Shaffer v. Carter, 252 U.s. 37 (1970).

16. Federal Involvement in Education ONLY When • (1) States agree in accepting federal grants that are provided under the authority given the Congress by the General Welfare Clause • (2) Standards or regulations that the Congress has authorized within the Commerce clause • (3) Court actions that constrain states by enforcing federal constitutional provisions protecting individual rights and freedoms

17. Federal Involvement in Education ONLY When… 1. When the state has accepted a federal grant (NCLB, Drug Free Schools, etc.) and grant provisions require the state to comply with certain federal guidelines. If states and localities do not comply, the federal government can force the state to comply.

18. Federal Involvement in Education ONLY When… 2. A state action impacts the Commerce Clause (as in the case of United States v. Lopez). In this case, the U.S. Congress made it a crime to have a gun within a school zone. A student brought a loaded pistol to school and was sent to jail under the Gun Free School Zone. • United States v. Lopez, 131 L.Ed.2d 626, 115 S. Ct. 1624 (1995).

19. Federal Involvement in Education ONLY When… 3. U.S. Constitutional rights are involved(as in Tinker v. Des Moines Independent Community School District). The school suspended students for wearing black arm bands to protest the Vietnam war. The Supreme Court ruled that a school policy cannot outweigh freedom of expression (speech) without reasonable knowledge that such an act of expression would have foreseeably substantially disrupted the school process.

20. In 2003, the total federal contribution to national education expenditures was approximately 10% Federal $$$ to Schools

21. Department of Health and Human Services' Head Start program Department of Agriculture's School Lunch program Department of Education pays only 6% of total education spending Federal $$$ to Schools Includes

22. The US Department of Education’s annual $63.2 billion appropriation is only 2.9 % of the Federal Government's nearly $2.2 trillion budget in fiscal year 2003. The remaining dollars are divided almost equally between state and local revenues. Federal $$$ to Schools

23. Federal Education Funds Over Time

24. State Prerogatives • States may tax what they wish as long as it does not conflict with federal provisions or with the state’s constitution

25. State Prerogatives, cont. • Taxing authority is not considered to be inherent in school districtsunless the state constitution language permits such taxing authority

26. State Prerogatives, cont. • There is strong legal precedent for state constitutionlanguage to be strong and clear regarding authority for school boards to tax • In Marion and McPherson Railway Co. v. Alexander, 64 P. 978 (Kan. 1901), the Kansas Supreme Court ruled that the authority to levy taxes is …extraordinary... and should never be left to implication • Contested again: Florida Department of Education v. Glasser, 622 So.2d 944 (Florida, 1993)

27. State Prerogatives, cont. • This has been contested again in 1993 • The Florida Supreme Court ruled that the School Board of Sarasota County required authorization of law by the state legislature to levy taxes for schools. Absent the specific authorization, the school board could not direct the County tax collector to collect and remit school taxes • Florida Department of Education v. Glasser, 622 So.2d 944 (Florida, 1993)

28. State Prerogatives, cont. • Some school districts have the legal authority to levy taxes for schools • Others must wait for a governing body to approve a school budget as one part of a city or county budget. That governing body must then set the tax rate • In spite of the states’ prerogative in taxing, virtually all states rely on one primary revenue source to finance public schools – property taxes

29. Property taxes date back to ancient Greece In Athens, land and houses were taxed Later, in Rome, people and property were taxed In Europe, land, homes, and livestock were taxed Property Taxes

30. Taxing property became the accepted means for funding schools Land was taxed at different rates if it were cleared, uncleared, or cultivated Later, livestock and equipment was seen as a source of taxable property Property Taxes in the 19th Century

31. Taxing property & equipment at different rates became increasingly complex for localities Property Taxes in the 19th Century, cont.

32. States developed a uniform general property tax based on a percentage of the value (or millage) of the land If Farmer Brown’s land were worth more than Farmer Jones’ land, Farmer Brown would pay more in property taxes The tax rate, however, would be uniform throughout the state or locality Property Taxes in the 19th Century, cont.

33. Once states establish a revenue source,they must decide how to distribute that revenue to school districts The Fourteenth Amendment, ratified in 1868: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. “Equal Protection” & Taxation

34. The Civil War had ended three years earlier and the country was trying to decide how to treat the newly-freed slaves The 14th Amendment was clearly an attempt to legislate civil rights after the war “Equal Protection” & Taxation, cont.

35. “Equal Protection” & Taxation, cont. • Supreme Court took a role in defining “equal protection” of state taxation • The court determined that the equal protection clause established a minimum standard of uniformity to which that state legislation must adhere

36. “Test” of States’ Taxation Constitutionality, 1890 Equal protection does not require identical treatment. It only requires: • The classification rest on real & not feigned differences • The distinction have relevance to the purpose for which the classification is made • The different treatment be not so disparate, relative to the difference in classification, as to be wholly arbitrary

37. Contained ground-breaking language regarding race and discrimination under the language of equal protection. This time the equal protection clause was linked to federal spending. Civil Rights Act of 1964

38. Education was a constitutionally-protected right of all citizens and that right should be provided to all citizens on equal terms Any state that provided fewer dollars for poor school districts denied those children equal protection under the law Civil Rights Act of 1965

39. Since the Supreme Court had already ruled that classifying people on the basis of poverty, occupation, homesite, or the like was unreasonable, it held that the quality of education could not be based on a state or local taxing system where the level of education is determined by the locality’s wealth.

40. Both cases cited that large disparities in ability to fund education within their respective states (Illinois & Virginia) resulted in wealthy school districts spending more to meet student needs than in poorer districts where educational needs may be much greater Two Court Cases Litigated Under Equal Protection Clause

41. The Supreme Court affirmed the lower courts’ rulings against the parents and for the existing funding practice in Illinois and Virginia, saying that equal expenditures were not required under the Fourteenth Amendment Two Court Cases Litigated Under Equal Protection Clause

42. Plaintiffs could not define a court-requested reasonable standard to assess and measure educational need Since the ideas could not then be addressed with research or consensus, the Court refused to declare the finance systems unconstitutional Two Court Cases Litigated Under Equal Protection Clause

43. Challenged the California funding formula – Serrano v. Priest (1971) The Court determined: Education was a fundamentalinterest The basic state aid did tend to equalize among the disparate school districts 1977 California Supreme Court Case

44. The Court determined: 3. The state funding model generated state & local funds that created substantial disparities in revenue to school revenue – proportional to the wealth of the individual school 4. Declared: Unconstitutional 1977 California Supreme Court Case, cont.

45. 1973 Rodriguez Case • A group of Mexican-American parents from the Edgewood Independent School District sued the Texas system of education funding • The plaintiffs argued that education funding model in Texas makes the quality of education a function of the local property tax base and that the state funding is insufficient to correct the inherent inequalities

46. 1973 Rodriguez Case, cont. • A Texas three-judge panel stated that since education is a state function, the quality of education should not be determined by the locality’s wealth, but by the state’s overall wealth • On appeal, the United States Supreme Court heard the arguments & decided that the wide disparities in the Texas funding formula do not violate the equal protection clause of the 14th Amendment

47. Litigating Equal Protection & School Finance After Rodriguez, for all intents and purposes, litigation for school finance reform under the umbrella of the equal protection clause ended.

48. Standards of Equal Protection The courts use 3 tests to decide if government actions that treat individuals differently for any reason violates the equal protection clause: • Rational relationship test • Intermediate test • Strict scrutiny test

49. Does the government have a rational reason for the differential treatment of individuals that does not violate the Constitution? The court is not looking for scientificdata to substantiate the claim -- only for a rational relationship Test 1: The Rational Relationship Test

50. Instead of asking that there be a reasonable basis for the treatment based on a rational relationship, the court will ask for evidence of some substantial government interest Test 2: The Intermediate Test