Board of Ed. of City School Dist. of City of Cincinnati v. Walter
| Decision Date | 13 June 1979 |
| Docket Number | No. 78-1284,78-1284 |
| Parties | , 12 O.O.3d 327 BOARD OF EDUCATION OF the CITY SCHOOL DISTRICT OF the CITY OF CINCINNATI et al., Appellees and Cross-Appellants, v. WALTER et al., Appellants and Cross-Appellees. |
| Court | Ohio Supreme Court |
Syllabus by the Court
The statutory system established by the General Assembly for the financing of public elementary and secondary education (R.C. 3317.022; R.C. 3317.023(A), (B) and (C); R.C. 3317.02(E); R.C. 3317.53(A); and Section 30 of Am.Sub. S.B. 221 effective November 23, 1977) does not violate either Section 2 of Article I, or Section 2 of Article VI of the Ohio Constitution.
This cause was filed in the Court of Common Pleas of Hamilton County as a declaratory judgment action on April 5, 1976, seeking to have the Ohio system of financing public elementary and secondary education declared unconstitutional under the Ohio Constitution. The trial court decided that the cause was a proper class action, and the following constitute the parties plaintiff:
(A) The Board of Education of the City School District of the City of Cincinnati;
(B) Members of that board;
(C) The Superintendent of Schools for the City School District of the City of Cincinnati;
(D) The Clerk-Treasurer of the City School District of the City of Cincinnati;
(E) The named students who reside in the City School District of the City of Cincinnati and who attend the Cincinnati public schools;
(F) The named parents of children attending such
schools who also are owners of real property located in the Cincinnati School District;
(G) All of the above in their representative capacities and as representative parties on behalf of all similarly situated school districts in Ohio, the members of the boards of education for such school districts, all administrators employed by such school districts, the students who reside therein and attend public elementary and secondary schools operated by such school districts, the parents of such students, and the owners of real property situated in such school districts.
The trial was commenced on December 6, 1976, and consisted of 78 days of testimony, including the testimony of approximately 77 witnesses and the introduction of approximately 2,400 exhibits. The record consists of 7,530 pages of transcript.
The trial court held for the plaintiffs and declared certain statutory provisions in Ohio's school finance system void and inoperative under both Section 2 of Article VI, the Thorough and Efficient Clause, and Section 2 of Article I, the Equal Protection and Benefit Clause of the Ohio Constitution. In so doing, the trial court adopted and filed approximately 400 pages of findings of fact and 35 conclusions of law submitted by plaintiffs.
The defendants appealed to the Court of Appeals for Hamilton County. On September 5, 1978, the court issued its judgment affirming in part, and reversing in part, the trial court's decision. The Court of Appeals affirmed the trial court's holding that the statutory plan for financing elementary and secondary education violates the Equal Protection Clause of the Ohio Constitution but reversed the trial court's holding that the system violates the Thorough and Efficient Clause of the Ohio Constitution.
The defendants appeal from that part of the Court of Appeals' judgment which held that the present system violates Ohio's Equal Protection Clause, while the plaintiffs cross-appeal from that part of the judgment which held that the system does not violate the Thorough and Efficient Clause.
The cause is now before this court pursuant to the allowance of a motion and cross-motion to certify the record.
John A. Lloyd, Jr., and Nancy A. Lawson, Cincinnati, for appellees and cross-appellants.
William J. Brown, Atty. Gen., David H. Beaver and Henry A. Arnett, Asst. Attys. Gen., for appellants and cross-appellees.
The various provisions of Ohio law which are challenged in this litigation revolve around the allocation formula contained in R.C. 3317.022. That section provides the principal rule for state basic aid allocation, while the other challenged provisions adjust for cost differences among districts and facilitate the transition from the former formula to the guaranteed yield formula.
R.C. 3317.022 contains a two-part formula under which each school district participating in the state basic aid program is guaranteed:
"(T)he same number of dollars per pupil, In state and local funds combined, for each mill of local property tax effort as in any other district, up to a maximum millage rate set by the state (30 mills)." (Education Review Committee Report, December 15, 1974, at page 3; see fn. 1, Infra.)
This "equal yield for equal effort" formula is calculated for each district by a formula which pegs the level of each district's state funding to a mathematically "equalized" level of property wealth and a mathematically "equalized" tax rate. The law requires that each school district levy at least 20 mills in order to participate, and it rewards districts which levy more than 20 school operating mills commensurately with their millage up to 30 mills. This last element is called "reward for effort." The entire basic support formula is referred to as "guaranteed yield" and "equal yield" and is a variation of a type of school financing called "district power equalizing," "power equalizing," "DPE," and "percentage equalizing." Its objective is to equalize the property wealth base upon which the school districts raise operating revenue through the levy of voter-approved taxes so that school districts receive the same number of dollars per pupil in basic state aid plus local revenue for each mill up to 30 mills.
The first step in the State Basic Aid Formula provides for a total yield of $48 per pupil per mill from both local revenue and state support for the first 20 mills, assuming the system is fully funded. This means that, if all the districts received all the local tax revenues which they were presumed under the formula to receive, each district in the state which levies 20 mills would be eligible to receive from local and state funds 20 mills X $48 or $960 per pupil. The state in that manner provides the basic support to each school district for the first 20 mills by making up the difference between the district local yield per pupil per mill and $48.
The second calculation for state basic aid is the element of the state finance system called "reward for effort," wherein the state pays a bonus to and rewards school districts for their school operating millage above 20 mills up to 30 mills. For that quantum of funding, the guaranteed level is pegged at $42 per pupil per mill. Since the purpose of the act is to pay extra monies to districts based upon the number of mills they levy beyond 20 mills, the procedure is to deduct the district's local yield per pupil per mill from $42 and multiply that difference by the number of students (Average Daily Membership (ADM)) and finally by the "equalized" millage in excess of 20 up to 30.
The enactment by the General Assembly of a guaranteed yield formula inherently involves a policy decision as to the funding level or the amount to be guaranteed through the formula. The General Assembly's decision was to establish a funding level of $960 per pupil at 20 mills up to $1,380 per pupil at 30 mills.
That policy decision was based upon the recommendation of the Education Review Committee. 1 The committee in the "Goettle Report" found that the 1973-1974 cost for a school district to operate at the state minimum standards which define a general education of high quality was $715 per pupil. The committee, therefore, reasoned that the $960 guarantee at 20 mills was sufficient to provide an adequate program in each district. The committee also recognized that the funding level would necessarily have to be increased as inflation continued to increase the cost of education.
In addition to state basic aid, certain school districts also receive additional state aid under the "save harmless" guarantee. This provision guarantees that a school district will not receive less under the new "Equal Yield Formula" than it did under the former funding system. The state also provides direct grants to school districts which offer specialized programs. Finally, the system rewards or penalizes school districts depending upon their compliance or non-compliance with certain mandated requirements.
The first issue presented to this court for decision is whether Ohio's statutory system for financing elementary and secondary education violates the Equal Protection and Benefit Clause, Section 2, Article I of the Ohio Constitution.
The trial court's declaratory judgment order stated that the system establishes invidious classifications among Ohio's school children which are neither supported by any compelling state interest nor predicated upon any rational basis, resulting in a violation of the Equal Protection Clause. The Court of Appeals affirmed the trial court's findings and agreed that Section 2 of Article I of the Ohio Constitution provides Ohio's school-age children with a "fundamental right" to equal educational opportunity.
Defendants argue that the lower courts should be reversed on this issue because: (1) Ohio's system is rationally designed to allow local control in making decisions about services to be provided to meet perceived educational needs; (2) education is not a fundamental interest and, therefore, the financing system should not be subjected to "strict scrutiny"; and (3) even if the system is subjected to "strict scrutiny," local control is a compelling state interest justifying disparity of educational opportunity.
The courts below applied the "two-tiered test," formulated by the United States Supreme Court to Ohio's Equal Protection Clause. Defendants...
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