School Finance Lawsuits Stretch from Ohio to Colorado to Texas

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Schools in several states are contesting education funding formulas they say are inequitable to students, which can also adversely affect transportation services. Cincinnati Public Schools announced it is suing the state of Ohio to recover more than $7.4 million in back taxes the district alleges it is owed by the city of Cincinnati. CPS, the state’s third-largest district, was forced to cut 200-plus jobs this past summer to help balance its $458.6 million budget. The Cincinnati Board of Education authorized CPS to challenge a provision in the state budget bill that retroactively exempts the city from paying taxes owed on the Duke Energy Convention Center, the site of next month’s 37th Annual NAPT Trade Show.

Superintendent Mary Ronan said that the state, at the city’s behest, illegally included this provision in its June budget. On Wednesday, she stated that CPS must take a stand because persistent funding cuts by other government agencies have “undermined the fiscal stability of our district.” Last school year, CPS ceased paying for school crossing guards, and this year it has cut funds for school nurses. Hamilton County approved a land bank policy that will drain $1 million annually in property taxes from the school district. Historic state budget cuts have cost the district $4.5 million this year, and it could lose $18 million next year.

“Everyone is basically stealing from us. It isn’t fair, it isn’t right and we need to speak up for the children,” Ronan said. “It is our responsibility to ensure that our students receive all the resources to which they are entitled.”

Lobato v. State of Colorado

In the landmark case Lobato v. State of Colorado, the plaintiff charged that the state’s school finance system does not meet the constitutional requirement for “thorough and uniform” and is thus unconstitutional. The solution, argued the plaintiff, is for the court to force the state legislature to create and fully fund a new system. But, in closing arguments Sept. 2, the defense lawyer countered that the plaintiffs are seeking an “education utopia.” Judge Sheila Rappaport will make her ruling by mid-October.

“What’s interesting is that the case is not about whether the state is fully funding education or not — it’s about whether they have an appropriate funding mechanism,” said Bruce Little, senior transportation consultant at the Colorado Department of Education.

While Colorado’s per pupil funding for education remains well below the national average, the state is already spending about 40 percent of its General Fund budget on education.

“Even if the judge says you’ve got to put more money into education, the assembly is going to say, ‘Where will it come from?’ The current method of funding is not appropriate because it’s not uniform…some districts get more money from the state than others,” Little said. “It’s not just the number of students you have, but also how much you get from taxes, the economic status of the school, etc. Every child living in a district must have equal access to education.”

Little added that, no matter what the verdict, the case is headed straight to appeal.

Equal-Funds Suit in Texas

The Ore City Independent School District became the latest to join roughly 700 districts in a lawsuit against the state of Texas alleging unfair disparities in school funding. Superintendents from several low- and medium-income school districts plan to sue the state over its school finance system as early as October.

In the current system, some school districts receive more than $11,000 per child, while others receive as little as $4,600. Ore City ISD receives $4,969 per student from the state. Even though students in nearby Union Grove receive a higher amount ($5,440 per child), this school district pledged money toward the lawsuit about a week ago.

The Equity Center, the group organizing litigation against the state, provided examples in a summer newsletter to illustrate the inequities in Texas’ public school funding. One such example is Glen Rose ISD, which can raise about $8,400 per student with its tax rate of 82.5 cents per $100 of assessed property valuation, whereas Diboll ISD can only come up with $4,882 per student with its $1.04 tax rate. Another example points to a state Senate bill that cut Lufkin ISD’s funding from $5,225 to $4,965 per child, to save an estimated $2.8 million — but, if the state had instead cut Northwest ISD’s funding from $6,641 to $6,240 per student, it could have reportedly saved $7.9 million.

“Given an excellent political excuse of ‘having’ to cut funding for public education, the legislature could have taken the opportunity to at least make the current funding scheme more fair and efficient,” the Equity Center stated in its newsletter. “Instead, the leadership chose to require substantial funding cuts for the children in the lowest-funded districts in order to mitigate the cuts for those lucky enough to reside in privileged zip codes.”