Committee for Educational Equality v. State

• Decision Date: 01 September 2009
• Docket Number: No. SC 89010.,SC 89010.
• Parties: COMMITTEE FOR EDUCATIONAL EQUALITY, et al., Appellants, Coalition to Fund Excellent Schools, et al., Appellants, v. STATE of Missouri, et al., Respondents, W. Bevis Schock, Rex Sinquefield, and Menlo Smith, Respondents.
• Court: Missouri Supreme Court

294 S.W.3d 477

COMMITTEE FOR EDUCATIONAL EQUALITY, et al., Appellants Coalition to Fund Excellent Schools, et al., Appellants, v. STATE of Missouri, et al., Respondents W. Bevis Schock, Rex Sinquefield, and Menlo Smith, Respondents.

No. SC 89010.

Supreme Court of Missouri, En Banc.

September 1, 2009.

Alex Bartlett, Husch Blackwell Sanders, LLP, Audrey Hanson McIntosh, Audrey Hanson McIntosh, PC, Jefferson City, MO, James C. Owen, McCarthy, Leonard & Kaemmerer, L.C., Chesterfield, MO, Richard B. Walsh, Jr., Evan Z. Reid, Lewis, Rice & Fingersh, L.C., St. Louis, MO, for Appellants.

Chris Koster, Attorney General, James R. Layton, State Solicitor, Jefferson City, MO, Christopher J. Quinn, Assistant Attorney General, Maureen Beekley, Assistant Attorney General, Joshua M. Schindler, The Schindler Law Firm, John R. Munich, St. Louis, MO, for Respondents.

Ellen M. Boylan, Newark, New Jersey, for Amici Curiae.

Rodney D. Gray, Jefferson City, MO, for Citizens for Missouri's Children and Missouri Child Care Resource and Referral Network.

Molly A. Hunter, Educational Law Center, Newark, New Jersey, Melissa K. Randol, Columbia, MO, for Missouri School Boards Association, et al.

MARY R. RUSSELL, Judge.

The issue before this Court is the constitutional validity of Missouri's system for funding public schools. Plaintiffs¹ allege that Missouri's school funding formula results in a public education system that is unconstitutionally disparate and inadequate. They assert that the formula applies wrongly calculated tax assessment data, rendering incorrect "local effort" contributions and directly impacting the adequacy and equity of the education provided in Missouri's schools. The State of Missouri defends the school funding formula, arguing that it is constitutional and that it incorporates appropriate tax assessment data.²

After extensive discovery and a trial lasting more than a month,³ the trial court found against Plaintiffs, denying some claims on their merits and dismissing others. This appeal follows.

Exclusive jurisdiction of Plaintiffs' appeal is in this Court pursuant to Missouri Constitution article V, section 3, as the case presents a challenge to the constitutional validity of a Missouri statute.

This Court agrees with the trial court that Plaintiffs have not shown they are entitled to relief and affirms its judgment.⁴

I. Background

Plaintiffs originally brought suit to challenge Missouri's school funding formula as it existed in 2004, referred to generally as Senate Bill No. 380 (1993) (SB380). They alleged that Missouri's school funding formula was unconstitutional because it resulted in inadequate and inequitable funding to Missouri's public schools. They maintained that the inadequacies of that school funding formula undermined article IX, section 1(a), of the Missouri Constitution, which directs that the State provide all persons under 21 years of age a free public education to promote "[a] general diffusion of knowledge and intelligence."⁵

As Plaintiffs' case proceeded, the legislature amended the school funding formula in 2005. As such, this case has evolved into a challenge of Missouri's current school funding formula, adopted in Senate Bill No. 287 (2005) (SB287).⁶

SB287's revisions to the school funding formula were made after a joint legislative committee, the Joint Interim Committee on Education, investigated concerns that Missouri's school funding scheme was inadequate and inequitable. This investigation led to the passage of SB287 during the 2005 legislative session. SB287's funding formula is codified in chapter 163, RSMo Supp.2008.⁷

In simplified form, this formula provides state aid to Missouri's public schools under the following calculation:

                          [weighted average daily attendance8]
                  ×       [state adequacy target9]
                  ×       [dollar value modifier10]
                  =       subtotal of dollars needed
                

                  -       [local effort11]
                  =       state funding
                

The revised formula attempted to remedy inequities resulting from school funding that is financed in part by state funds and in part by local funds. It reflected a view that schools with greater "local effort" contributions require less state financial assistance to meet the costs of providing a free public education.

SB287's formula was designed to be phased in over seven years, with the old formula under SB380 still accounting for a large portion of the calculated state aid at the outset.¹² Both the SB380 and SB287 formulas applied assessed valuation calculations about which the Plaintiffs complain in this case. Plaintiffs' assessment complaints and constitutional arguments are similar in that they both allege that Missouri's school funding formula fails to fund its public schools adequately.

At trial, Plaintiffs presented evidence of alleged inadequacy through "focus district" plaintiff schools, whose funding under SB287's formula failed to meet the required "state adequacy target." Plaintiffs stressed that the alleged inadequacy of school funding in Missouri most impacts Missouri's high-risk children, such as those living in poverty and those with special needs. They also highlighted the spending disparities among Missouri's school districts, with per-pupil spending ranging from $4,704.11 in the Diamond R-IV School District to $15,251.28 in the Gorin R-III School District. And they noted the differences among the tax bases in Missouri's school districts, with assessed valuation per eligible pupil in the 2004-2005 school year ranging from $19,605 in the Cooter R-IV School District to $416,679 in the Clayton School District.

Plaintiffs argued the assessed valuation calculations incorporated into SB287's funding formula were inaccurate. They contended that the legislature acted irrationally in relying on 2004 tax assessment data that they assert were calculated unlawfully by the State Tax Commission through a failure of its oversight and equalization responsibilities. They argued that Missouri's assessed valuations were not on pace with market values and suggested that the legislature compounded this mistake by "freezing" the 2004 assessment data into the funding formula. Their evidence included a study critical of Missouri's school funding formula that was conducted at the Public Policy Research Center (PPRC) at the University of Missouri-St. Louis. This study, "Disparity of Assessment Results: Why Missouri's School Funding Formula Doesn't Add Up" (hereinafter PPRC Study), was reported in October 2006. The PPRC Study concluded that SB287's funding formula was based wrongly on assessment calculations that varied widely throughout the state and that, in many cases, were unacceptably low because they did not reflect market values.

An education finance expert testified on Plaintiffs' behalf that Missouri's school finance system was "one of the most disparate systems in existence in the United States" because SB287's funding formula placed a greater financial burden on local school districts by increasing their responsibility for funding public schools. Plaintiffs acknowledged that SB287's formula revisions would contribute more than $2 million in additional funds for Missouri's schools but noted that the increased monies were far below the additional $904.8 million in funds that Missouri's State Board of Education had determined were necessary to fund Missouri's public schools adequately.

Defendants countered Plaintiffs' evidence by stressing that SB287 would provide an additional $800 million for Missouri's public education system when fully phased in. They stressed that the long-term goal of SB287 was to move Missouri's funding formula to a need-based, rather than a tax-based, system to provide increased state aid to poorer school districts. They also asserted that the funding produced under the SB287 formula is constitutional because it complies with the funding mandate outlined in article IX, section 3(b), of the Missouri Constitution, which provides that the State "set apart [no] less than [25] percent of the state revenue, exclusive of interest and sinking fund, to be applied annually to the support of the free public schools."¹³

The trial court agreed with Defendants that the State is not required to provide its public schools funding beyond 25 percent of the State's revenue, as directed by article IX, section 3(b). It noted that the legislature may provide additional monies, but it determined that no Missouri constitutional provision requires allocation of increased funding. The trial court also found that Plaintiffs had not shown that SB287 violated the Missouri Constitution's Hancock Amendment or that it provided the remedy sought. The trial court dismissed the assessment calculation issues on standing and jurisdictional grounds, and it rejected Plaintiffs' claims that the legislature wrongly relied on the State Tax Commission's 2004 assessment data.

Plaintiffs appeal the trial court's judgment, raising four categories of challenges to Missouri's school funding formula: (1) the formula "inadequately" funds schools in violation of article IX of the Missouri Constitution; (2) the formula violates equal protection; (3) the formula violates Missouri's Hancock Amendment; and (4) the legislature violated article X of the Missouri Constitution and certain statutes by incorporating inaccurate assessment figures into the formula. These issues are addressed separately below.

II. Procedural Issues

Before addressing Plaintiffs' challenges to the school funding formula, this Court addresses two threshold issues: (1) Plaintiffs' standing; and (2) the joining of defendant-intervenors.

A. Standing

This Court must address issues of standing before exploring Plaintiffs' constitutional challenges. See, e.g., Conseco Fin. Servicing Corp. v. Mo. Dep't of Revenue, 195 S.W.3d 410, 413 n. 3 (Mo. banc 2006). Standing is reviewed de novo. Mo. State Med. Ass'n v. State, 256 S.W.3d 85, 87 (Mo. banc 2008). Standing requires that a party...