City of Humboldt v. McKnight, No. M2002-02639-COA-R3-CV (TN 8/25/2005)
| Decision Date | 25 August 2005 |
| Docket Number | No. M2002-02639-COA-R3-CV.,M2002-02639-COA-R3-CV. |
| Parties | THE CITY OF HUMBOLDT, et al. v. J.R. McKNIGHT, ET AL. |
| Court | Tennessee Supreme Court |
Appeal from the Chancery Court for Davidson County; No. 99-466-III; Ellen Hobbs Lyle, Chancellor.
Judgment of the Chancery Court Reversed.
Paul G. Summers, Attorney General and Reporter; Michael E. Moore, Solicitor General; Kate Eyler, Deputy Attorney General; Kevin Steiling, Deputy Attorney General, for the State Defendant-Appellant.
Jerry D. Kizer, Jr., Patrick W. Rogers, Jackson, Tennessee, for the Defendants-Appellants, Gibson County, Gibson County Commission and its Members and Gibson County Board of Education and its Members.
Valerie B. Speakman, Memphis, Tennessee, for the Defendants-Appellants Gibson County Special School District and Its Members.
L.L. Harrell, Jr., Trenton, Tennessee, for the Defendants-Appellants, Trenton Special Schools District and Bradford Special School District.
Randall G. Bennett, Tennessee School Boards Association, Nashville, Tennessee, for the Defendants/Appellants J.R. McKnight, et al.
Lewis R. Donelson, Angie C. Davis, Memphis, Tennessee, for the Plaintiffs-Appellees, The City of Humboldt and Mayor and Aldermen of the City of Humboldt.
Patricia J. Cottrell, J., delivered the opinion of the court, in which William C. Koch, Jr., P.J., M.S., and William B. Cain, J., joined.
This lawsuit is about the operation and funding of public schools educating the children in Gibson County. Since 1981 the county has not operated a county school system, and all K-12 students have been in schools operated by the municipal and special school systems. The county ceased operating schools when a 1981 Private Act created the Gibson County Special School District. This arrangement was ratified by a 2002 Public Act stating that where all K-12 students are eligible to be served by city and special school systems, the county is not required to operate a separate county school system or have a county board of education. The trial court held that the 2002 Act was unconstitutional as special legislation and that the 1981 Act, though constitutional, was illegal. It ordered the dissolution of the Gibson County Special School District and that the county undertake operation of the schools not included in the other municipal or special school systems within the county. The court further found that the county was required to levy a countywide property tax to fund the local share of education costs and divide the proceeds among all school systems in the county. We hold that the 2002 Act does not violate Article XI, Section 8 of the Tennessee Constitution and, consequently, there is no obligation for the county to operate a county school system. We also conclude that the facts do not establish any disparity of educational opportunity among the school systems in the county and, consequently, the principles and holdings in the Small Schools cases do not apply to require a specific organizational structure and do not preclude the method used in Gibson County. Finally, we conclude the county is not required to levy a countywide property tax for schools. Accordingly, we reverse the trial court's judgment.
This suit challenges the unique method of operating and funding education in Gibson County whereby the county operates no schools, has no elected school board, and levies no countywide property tax to fund education. All students in Gibson County are served by either a special or municipal school district.
The plaintiffs, City of Humboldt and its officials, brought this suit alleging that Gibson County officials are acting in dereliction of their constitutional and statutory duties by failing to perform any educational role. The Gibson County Special School District, which serves the rural Gibson County students, is alleged to be the device whereby Gibson County avoids its responsibilities. The city also contends that a statute passed after the lawsuit was filed intending to address Gibson County's situation has no effect since it is special legislation in violation of Article XI, Section 8 of the Tennessee Constitution.
The Gibson County Special School District, serving the rural county students, opposes plaintiffs' request that it be dissolved and asserts that its existence and operation are not prohibited by law, but, instead, are specifically authorized. Gibson County argues that no law or constitutional provision places upon it the affirmative burden of operating a school system since all students in Gibson County are served by municipal or special school districts, and that the statute passed during this litigation specifically authorizing this arrangement is constitutional. Furthermore, the county claims that since each of the districts that serve the students collects a property tax assessed by either the city or the General Assembly that is more than sufficient to meet local funding requirements, it is not required to levy a countywide property tax for educational purposes.
The trial court decided the merits of this controversy on cross motions for summary judgment. The trial court found, and the record reflects, that the following facts are not in dispute among the parties.
Since the creation of the Gibson County Special School District ("GCSSD") by Private Act in 1981, all students residing in Gibson County have been included in one of five (5) school districts. Since all students were served by either the GCSSD, the Trenton Special School District ("TSSD"), the Bradford Special School District ("BSSD"), the Milan Special School District ("MSSD") or the Humboldt City School System ("HCSS"), a municipal school district, the county itself operates no schools. All of Gibson County is included within the geographical boundaries of these systems. Each of these local school systems is separate and autonomous.
Prior to the creation of the GCSSD in 1981, Gibson County operated the Gibson County School System, and the Gibson County Commission levied a countywide property tax for education. According to the affidavit of Bill Carey, who served as Superintendent of Gibson County School System from 1978-81 and as Superintendent of the GCSSD from 1981-97, the impetus for formation of the GCSSD was the difficulty in obtaining adequate funding for the rural schools from the Gibson County Commission. Prior to 1981, according to Mr. Carey, there had been a constant struggle between the Gibson County Commission and the Gibson County Board of Education concerning adequate funding. Since 17 of the 25 commissioners sitting on the commission were from Trenton, Bradford, Milan, or Humboldt, it was perceived they were reluctant to levy a countywide property tax sufficient to fund the rural county schools at the expense of their urban districts. For this reason, the GCSSD was created by Chapter 62 of the Private Acts of the General Assembly of the State of Tennessee for 1981, as amended, and encompasses all of Gibson County not otherwise included within one of the four preexisting school districts. In the private act creating GCSSD, the legislature assessed a property tax on property within GCSSD to operate and maintain the school district.
Upon the creation of the GCSSD, Gibson County, in effect, went out of the education business since no students were left to serve. After 1981, Gibson County has not operated or administered a school system. The Gibson County Board of Education continued to exist but, after creation of the GCSSD, its members were no longer elected but appointed. In addition to disbanding the operational components of education, the county ceased funding education in Gibson County through property taxes and changed its property tax rate to reflect the elimination of funding for education. It continues to levy and collect a local option sales tax for education, which is apportioned among the school systems operating in the county.
All five (5) school districts in Gibson County are in compliance with the state's education standards and requirements under the state's Basic Education Program ("BEP"). Under the funding aspect of the BEP, the state must provide seventy-five (75%) percent of the state mandated education funds for classroom components and fifty (50%) percent of the state mandated education funds for non-classroom components. The local school systems collectively are required to fund the remaining twenty-five (25%) percent and fifty (50%) percent respectively. Each system must contribute a minimum share based upon fiscal ability. Each of the five local school systems in Gibson County contributes more than its state mandated local share under the BEP. In other words, students in both Humboldt and the GCSSD receive more funds per pupil than is required under the BEP. The City of Humboldt spends more per pupil than any of the other systems in Gibson County.
Local governments generally fund their share of the BEP match through property taxes and the local option sales tax. Gibson County does not levy a countywide property tax to fund education since property within each of the school districts is already taxed for education purposes. The private acts creating the GCSSD, the MSSD, the TSSD and the BSSD levy a property tax on the property located within their respective districts and specify the rate to be assessed. HCSS levies a property tax for education as authorized by the legislature. On the other hand, the local option sales tax is collected by Gibson County and then distributed among the five school systems on a weighted full-time equivalent average daily attendance ("WFEADA") basis. The creation of the GCSSD had no effect on Gibson County's collection of sales tax and its distribution of a portion of that sales tax to the five public school systems operating in Gibson County. There is no dispute that...
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