Buse v. Smith
| Decision Date | 30 November 1976 |
| Docket Number | No. 75--552,75--552 |
| Citation | 247 N.W.2d 141,74 Wis.2d 550 |
| Parties | Glenn A. BUSE et al., Petitioners, v. Charles P. SMITH, Wisconsin State Treasurer, et al., Respondents. |
| Court | Wisconsin Supreme Court |
L. C. Hammond, Jr. (argued), Michael J. Spector (argued), and Quarles & Brady, Milwaukee, on brief, for petitioners. for Wisconsin Education Association argued; Bronson C. La Follette, Atty. Gen., and Allan P. Hubbard, Asst. Atty. Gen., on brief, for respondents.
James L. Greenwald, Gen. Counsel, Madison, forWisconsin Education Association Council.
Richard S. Kohn and David C. Long, Lawyers Committee for Civil Rights under Law, Washington, D.C., for Wisconsin Education Association Council; League of
Women Voters of Wisconsin and Wisconsin Secondary School Administrators Association, Inc.
We have fully considered the briefs, oral arguments and extensive appendix submitted by the respective parties, and the briefs of the several amicus curiae. It is our conclusion that the negative-aid provisions of school district financing, as mandated by secs. 121.07 and 121.08, Stats., are violative of the rule of uniform taxation set forth in art. VIII, sec. 1, of the Wisconsin Constitution.
As pertinent to this action, sections 121.07 and 121.08, Stats., provide:
'121.07 General provisions; state aid computation. In this subchapter:
'. . ..
'(6) Shared cost. (a) 'Shared cost' is the cost of operation, minus the operational receipts and amounts received under s. 79.04(1)(c), plus the principal and interest payments on long-term indebtedness and annual capital outlay, for the current school year. The sum of the principal and interest payments on long-term indebtedness and annual capital outlay included in shared cost shall not exceed $100 per pupil. Any amounts contributed by the school district to provide food service programs for the elderly shall not be included.
'(b) In computing state aid for a school district, that portion of its shared cost per pupil which is more than 10% above the average per pupil shared cost for the previous school year (for school districts of like organization), 1 as determined by the state superintendent, shall be excluded except as provided in par. (c).
'(c) In computing state aid on the shared cost excluded under par. (b), the secondary guaranteed valuation shall be used.
'(7) School district guaranteed valuations for districts operating both elementary and high school grades. 'School district guaranteed valuation' is the amount set forth in pars. (a) and (b) multiplied by the number of resident pupils enrolled.
'(a) The primary guaranteed valuation shall be $71,200 in the 1973--74 school year and $75,500 thereafter. 2
'(b) The secondary guaranteed valuation shall be an amount rounded to the nearest $100 determined by dividing the equalized valuation of the state by the number of pupils enrolled in the state.
'. . .
'(10) Mill levy rate. 'Mill levy rate' is the sum of the rates derived in pars. (a) and (b).
'(a) The primary required levy rate is the quotient of the shared cost not excluded by sub. (6)(b) divided by the school district primary guaranteed valuation.
'(b) The secondary required levy rate is the quotient of the shared cost determined in sub. (6)(c) divided by the school district secondary guaranteed valuation.'
'121.08 State aids; payments by certain districts. (1) The state shall pay to the school district a sum equal to the amount by which the primary guaranteed valuation exceeds the school district equalized valuation, multiplied by the primary required levy rate and a sum equal to the amount by which the secondary guaranteed valuation exceeds the school district equalized valuation multiplied by the secondary required levy rate.
'(2) The school district shall pay to the state the sum of pars. (a) and (b).
'(a) Beginning with the 1977--78 school year the amount by which the school district equalized valuation exceeds the primary guaranteed valuation, multiplied by the primary required levy rate.
'(b) The amount by which the school district equalized valuation exceeds the secondary guaranteed valuation, multiplied by the secondary required levy rate.
In addition, sec. 121.07(8) and sec. 121.07(9), Stats., 3 establish different primary and secondary guaranteed valuations for school districts operating only elementary grades (K--8), and for school districts operating only high school grades (9--12). The effect of these different valuations is to reduce the positive aid which such districts might receive, or to increase the negative aid which they might pay in relation to school districts which operate both elementary and high school grades (K--12), and thus to encourage districts to operate both elementary and high school grades (K--12). Section 121.08(4) provides for phased transitional computations ending in 1984. 4
The foregoing statutes contain a district power equalization factor based upon the equalized valuation of real estate for taxation purposes located within each school district. As a result of the introduction of the district power equalization factor into the procedure for financing school districts, certain of the school districts in the state will not receive any state aid. Instead, they will be required to pay a portion of their property tax revenues into the general state fund to ultimately be redistributed to other school districts in the state. The districts so required to make payments into the state fund have become known as 'negative-aid districts.' The school districts receiving state aid have become known as 'positive-aid districts.'
This is a class action, brought on behalf of all property taxpayers residing in negative-aid school districts and on behalf of all such school districts themselves. The petitioners are Glenn A. Buse, a property taxpayer residing in the Nicolet Union High School District, a negative-aid school district; other property taxpayers residing in other negative-aid districts; Joint School District No. 1, located principally in the city of West Allis; and other negative-aid school districts. A stipulated statement of facts has been submitted.
Sec. 121.08, Stats., is intended to achieve equalization of taxing power among the school districts of Wisconsin. Power equalization legislation is based on the premise that student equality of opportunity results when: (a) Regardless of a school district's actual property valuation, its tax levy rate for school purposes produces the same net amount of available school revenue as the same tax levy rate in every other like school district; and (b) there are no per-pupil spending disparities between districts.
The two objectives are pursued concurrently by means of the aid formula set out in sec. 121.08, Stats. The formula possesses two fiscal components: The 'primary guaranteed valuation' per pupil figure and the 'secondary guaranteed valuation' per pupil figure. The secondary guaranteed valuation figure is always less than the primary guaranteed valuation figure. The primary figure is set biennially by the legislature while the secondary figure equals the actual statewide equalization valuation per public school pupil. The secondary figure is used only to compute positive or negative aid for a school district on that portion of its shared cost per pupil which is more than ten percent above the average per pupil shared cost for the previous school year. See: sec. 121.07(6)(b) and (c).
Thus, the secondary guaranteed valuation per pupil figure serves as a built-in disincentive to spend above and beyond 110 percent of the state average per pupil shared cost for the previous school year. If a positive-aid district spends beyond this level, it will receive less aid. If a negative-aid district spends beyond this level, it will be required to pay more of its revenue to the state. The obvious aim of this secondary aspect to the formula is to encourage districts to remain close to the median state per pupil spending ceiling.
As the objective of the aid formula is to treat each school district as if its equalized valuation per pupil equals the state guaranteed valuation figures, the first computation is to determine the difference (positive or negative) between the state guaranteed valuation figures (both primary and secondary) and a district's actual equalized valuation per pupil. The district's equalized valuation per pupil is computed by dividing the full value of the taxable property in the school district (as determined by sec. 121.06, Stats.) by the total number of children enrolled therein as determined by sec. 121.07(1), Stats. 5
The positive or negative difference computed as above is then multiplied by the primary required mill levy rate, and the secondary required mill levy rate. The primary required mill levy rate is established by applying the provisions of sec. 121.07(10)(a), Stats. The primary required mill levy rate is the district's per pupil cost or the state shared cost per pupil ceiling (as determined by sec. 121.07(6)(b)), whichever is less, divided by the primary guaranteed valuation per pupil, as fixed by the provisions of sec. 121.07(7) (a). 6
The secondary required mill rate levy is determined by the applying of the provisions of sec. 121.07(10)(b), Stats. The secondary...
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