Exira Community School Dist. v. State
| Citation | 512 N.W.2d 787 |
| Decision Date | 23 February 1994 |
| Docket Number | No. 93-194,93-194 |
| Parties | 89 Ed. Law Rep. 965 EXIRA COMMUNITY SCHOOL DISTRICT, Aaron Petersen, A Minor Child, by Curtis Petersen, His Father and Next Friend, and Curtis Petersen, Matthew Rasmussen, Toni Rasmussen, Joseph Rasmussen, Trisha Rasmussen, Minors by Mike Rasmussen, Their Father and Next Friend, and Mike Rasmussen, Appellants, v. STATE of Iowa, Iowa Department of Education, Audubon Community School District, Atlantic Community School District, Kenneth Slothouber, Auditor of Audubon County, and Peggy Smalley, Treasurer of Audubon County, Appellees. |
| Court | United States State Supreme Court of Iowa |
Thomas R. Eller of Eller, Brink & Sextro, Denison, for appellants.
Bonnie J. Campbell, Atty. Gen. and Christie J. Scase, Asst. Atty. Gen., for appellees State of Iowa and Iowa Dept. of Educ.
Thomas W. Foley of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, Des Moines, for appellee Audubon Community School Dist.
Kenneth J. Fossen, Atlantic, for appellee Atlantic Community School Dist.
Brian P. Anderson, Asst. County Atty., for appellees Kenneth Slothouber and Peggy Smalley.
Considered by LARSON, P.J., and CARTER, LAVORATO, NEUMAN, and TERNUS, JJ.
This case pits a small school district against two larger school districts in a David and Goliath battle over the constitutionality of the financing provision in our state's open enrollment statute. See Iowa Code § 282.18(8) (1991). Exira Community School District (Exira), along with two taxpayers who live in the district and their children who attend school there, appeal. Unless the context dictates otherwise, for the balance of this opinion, we refer to Exira, the two taxpayers, and their children collectively as appellants. The appellants challenge a district court order (1) denying Exira standing, and (2) upholding the constitutionality of the financing provision in section 282.18(8) against due process and equal protection challenges. Because we conclude Exira has no standing and the financing provision is constitutional, we affirm.
Iowa's open enrollment law allows taxpayers who live in one school district to enroll their children in school districts outside the district in which they live. As a practical matter, the 1990-91 school year was the first time Iowa parents could take advantage of the open enrollment law. During that school year, forty students living in Exira open enrolled to either the Audubon Community School District (Audubon) or the Atlantic Community School District (Atlantic). Thirty-six of the forty students chose Audubon; the rest chose Atlantic. Most of these students gave "better curriculum" as their reason for the change. During this same school year, five students open enrolled to Exira from other districts.
Exira has about 350 to 400 students. Audubon has about 900 students, while Atlantic has in excess of 1500.
Under the financing scheme of the open enrollment statute, the receiving school district sends a quarterly statement to the sending school district. The statement requests tuition payments for those students of the sending district who are attending school in the receiving district. Audubon billed Exira. After some foot dragging, Exira paid most of the open enrollment tuition owed Audubon for the first three quarters of the 1990-91 school year. But Exira withheld the balance despite Audubon's repeated demands for payment.
Records for the 1991-92 school year show that seven students open enrolled into Exira and forty-seven students open enrolled out of Exira to other school districts. Since it last paid Audubon for the three quarters of the 1990-91 school year, Exira has refused to pay any further open enrollment tuition either to Audubon or to Atlantic.
The appellants filed a petition for declaratory judgment and injunctive relief against the State, the Iowa Department of Education, Audubon and Atlantic school districts, the auditor of Audubon County, and the treasurer of Audubon County. The petition sought an injunction to prohibit the transfer of Exira property tax revenues to Audubon and Atlantic to pay charges for students who had transferred under the open enrollment statute. The main relief sought was a declaratory ruling that section 282.18(8) was unconstitutional as applied to the appellants. This constitutional challenge was limited to that part of section 282.18(8) that required transfer of these property tax revenues. The following day, the district court issued the requested injunction ex parte.
Later the State moved to dismiss, contending that Exira lacked standing. Atlantic joined in this motion. Audubon also counterclaimed for the open enrollment tuition payments that Exira owed it for the 1990-91 and 1991-92 school years.
By agreement the appellants' request for temporary injunction and the motions to dismiss were joined with the trial on the merits. The parties also agreed to continue trial on the counterclaim until after the district court resolved the appellants' claims.
Following trial the district court upheld the constitutionality of section 282.18(8) and dissolved the temporary injunction. Later the temporary injunction was reinstated until resolution of Audubon's counterclaim. The district court ultimately entered judgment against Exira in favor of Audubon for the open enrollment tuition payments. This appeal followed.
The well-settled rule in Iowa is that school districts, as political subdivisions of the state, lack standing to mount a constitutional attack against a state statute. See Southeast Warren Community Sch. Dist. v. Iowa Dep't of Pub. Instruction, 285 N.W.2d 173, 176 (Iowa 1979). This is so because
[a school district] is a legislative creation.... It is not a "person," within the meaning of any bill of rights or constitutional limitation. It has no rights, no functions, no capacity, except such as are conferred upon it by the legislature.
Boyd v. Johnson, 212 Iowa 1201, 1210, 238 N.W. 61, 65 (1931). Exira concedes this point, but insists that this court has recognized an exception to the general rule for cases of "great public importance." Exira thinks the disbursement of school funds is just such a case. In support Exira cites Board of Supervisors v. Iowa Dep't of Revenue, 263 N.W.2d 227 (Iowa 1978).
In Board of Supervisors v. Iowa Department of Revenue, this court did say that "public importance" was recognized by some courts as an exception to the general rule of no standing. Id. at 232-34. But the court also expressly held that it was unnecessary to decide whether it should adopt such an exception. Id. at 234. This was so because there were parties to the suit who could satisfy the traditional test of constitutional standing: the alleged constitutional defect must affect the party. Id. See State v. Gates, 306 N.W.2d 720, 723 (Iowa 1981) (). Those parties were taxpayers and property owners whose interests were allegedly infringed by the challenged legislation. Board of Supervisors, 263 N.W.2d at 234. Because those parties were in a position to raise the constitutional challenges themselves, the "public importance exception" to the general no standing rule was not even considered. Id.
Here the district court correctly likened the individual appellants to the taxpayers and property owner-plaintiffs in Board of Supervisors v. Iowa Department of Revenue: the individual appellants here--like the taxpayers and property owners in that case--are alleging interests that are adversely affected by the challenged provision. These appellants are the real parties in interest and are fully capable of raising the due process and equal protection challenges asserted.
We conclude that the general rule controls here, leaving Exira without standing to contest the constitutionality of the financing provision in section 282.18(8). The district court correctly dismissed Exira as a party to the suit.
We reach the merits of the constitutional claims because the remaining appellants--the taxpayers who live within the Exira school district and their children who attend school there--do have standing to challenge the constitutionality of section 282.18(8).
Because constitutional claims are alleged, our review is de novo in light of the totality of the circumstances. State v. Taft, 506 N.W.2d 757, 762 (Iowa 1993).
A. Iowa's school financing scheme. To understand better the appellants' constitutional claims, we need to explore somewhat the structure of Iowa's school financing scheme.
Local property taxes and state foundation aid are the two primary sources of financing available to local Iowa school districts. What the state contributes is not static but depends upon the amount of funds generated through local taxation and the number of students living in each school district.
As the district court found, Iowa's school finance formula is pupil-driven. That becomes apparent when one studies the formula for funding that portion of a school district's budget allotted to educating all students living in the district.
Before describing the specifics of the formula, we need to explain some terms. Because of the complexity of school financing in Iowa and the number of variables involved, our explanation will be general and limited to financing of regular education programs.
The district cost per pupil is the total cost of educating all students in a district divided by the number of students in the district. The amount changes each year, but under current law it cannot exceed 110% of the state cost per pupil.
The state cost per pupil is similarly calculated. The state determines what it will cost to educate all the children in the state...
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