Lujan v. Colorado State Bd. of Educ.
| Decision Date | 24 May 1982 |
| Docket Number | No. 79SA276,79SA276 |
| Citation | 649 P.2d 1005 |
| Parties | 6 Ed. Law Rep. 191 Theodore LUJAN, et al., Plaintiffs-Appellees, v. COLORADO STATE BOARD OF EDUCATION, et al., Defendants-Appellants, and Adams-Arapahoe-Aurora School District 28-J, et al., Intervenors-Appellants. |
| Court | Colorado Supreme Court |
Davis, Graham & Stubbs, L. Richard Freese, Jr., Joseph J. Bellipanni, Denver, David C. Long, Washington, D. C., John E. McDermott, Studio City, Cal., for plaintiffs-appellees.
Israel Galindo, Denver, for plaintiff-appellee Colorado Rural Legal Services.
J. D. MacFarlane, Atty. Gen., Richard F. Hennessey, Deputy Atty. Gen., Mary J. Mullarkey, Sol. Gen., Stephen H. Kaplan, First Asst. Atty. Gen., Deanna E. Hickman, Asst. Atty. Gen., Denver, for defendants-appellants.
Caplan & Earnest, Gerald A. Caplan, Alexander Halpern, Boulder, for intervenors-appellants.
Philip G. Dufford, Rebecca C. Lennahan, Douglas G. Brown, Denver, for the General Assembly of the State of Colo.
McClure & Jacobs, P. C., John C. McClure, Gordon J. Bosa, Alamosa, for amici curiae Alamosa, Brighton, Centennial, Del Norte, Elizabeth, Huerfano, Monte Vista, Mountain Valley, North Conejos, Sierra Grande, South Conejos and Trinidad School Districts.
Morris W. Sandstead, Jr., Boulder, for amicus curiae American Civil Liberties Union.
Henry, Cockrell, Quinn & Creighton, Benjamin L. Craig, Denver, for amici curiae Douglas County School Dist. Re. 1, School Dist. No. 50 in Adams County, and School Dist. No. 11 in El Paso County.
The trial court declared Colorado's system of financing public elementary and secondary education unconstitutional. This school finance system is encompassed within the provisions of the Public School Finance Act of 1973, section 22-50-101 et seq., C.R.S.1973 and 1981 Cum.Supp., and is affected by the statutory provisions relating to the capital reserve fund, sections 22-40-102(4) and 22-45-103(1)(c), C.R.S.1973 and 1981 Cum.Supp., and those provisions pertaining to the bond redemption fund, sections 22-42-104(1)(a) and 22-45-103(1)(b), C.R.S.1973 and 1981 Cum.Supp. 1 Appellants are the Colorado State Board of Education and its members. Intervenors-Appellants are 26 school districts within Colorado who challenge the trial court's declaration. The appellees are school children residing in 16 of the 181 school districts located within the state, who, as plaintiffs below, sought a ruling that the school finance system was unconstitutional.
The trial court determined that the school finance system, which derives approximately forty-seven percent of its operating income from local property tax levies, violates the equal protection provisions of the United States and the Colorado Constitutions, and also violates the Colorado constitutional mandate that a "thorough and uniform" system of public schools be provided. Colo.Const. Art. IX, Sec. 2. 2 We reverse the trial court's judgment.
Contrary to the trial court, we hold that Colorado's school finance system does not violate Article IX, Section 2 of the Colorado Constitution, nor does it deny equal protection of the law to plaintiffs-appellees, or those similarly situated. We also hold, contrary to the trial court, that Colorado's method of capital outlay financing is constitutional and rule that this method of capital financing, whereby each local school district is governed by a limitation on its taxing authority, is rationally related to a legitimate state purpose.
By section 7 of the Colorado Enabling Act, the Congress of the United States set aside certain lands in each township of Colorado "for the support of the common schools." 18 pt. 3, U.S.Stat. at L., 474 (1875).
Since statehood, public schools in Colorado have been financed by locally levied property taxes and state contributions. The state's contribution was initially limited to the revenue generated through the interest, rentals, and leases on the state-owned school lands. In 1935, the first direct state support of local school districts was enacted. It was challenged and found to be constitutional in Wilmore v. Annear, 100 Colo. 106, 65 P.2d 1433 (1937). Since 1935, a combination of local property tax levies and direct state contributions has been the principal source of financial support for Colorado's public school system.
In 1952, following a study of the school finance system by a Governor's committee, the General Assembly passed the first Public School Finance Act. See Colorado Legislative Council, Report to the Colorado General Assembly: State Aid to Schools in Colorado, Research Publ. No. 117 (1966). This Act provided each school district with an equalization "support level" or set amount of money for each district in each calendar year. However, this Act was soon criticized for not eliminating the spending disparities among the school districts. Apparently in response to this criticism, the General Assembly enacted the Public School Finance Act of 1973, sections 22-50-101 et seq., C.R.S.1973 (hereinafter PSFA), which was challenged in the trial court and is the subject of this appeal. To understand the nature and substance of the issues before us, it is necessary to examine some of the features of Colorado's school finance system.
There are currently 181 school districts in Colorado providing a kindergarten through twelfth grade education for 535,085 students. Under the PSFA, the school system is financed primarily from local, state, and federal revenues. As an example, in 1977, local taxes generated forty-seven percent of public school funds, the state general fund provided forty-three percent, federal revenues accounted for six percent, and miscellaneous sources contributed the remaining four percent.
Under statutory provisions for levying taxes for educational purposes, each school district shall certify to the county commissioners the amount of revenue needed for operating its school system. The county commissioners then place a levy against the valuation of taxable property within the district's boundaries to raise the desired revenue. Sections 22-40-102(1) and (2), C.R.S.1973 (1978 Supp. and 1981 Cum.Supp.). Each school district may expend all such revenue collected within its boundaries, provided it is used strictly for educational purposes.
The school finance system creates four main components to provide funding for the general educational efforts of a school district. These components are authorized revenue base, state equalization aid, guaranteed yield plan, and capital outlay financing.
The authorized revenue base (ARB) is a specified dollar amount established annually for each district, and is the maximum annual amount a district may spend in general operating expenses per pupil. The ARB amount was first established for each district in 1974, and was based in part on the amount each district was then spending per pupil. This spending figure was used by the General Assembly as an estimate of what the educational costs were for each district. However, the ARB has been adjusted upwards, especially in the low spending districts, to more accurately reflect the educational needs of the districts. Under S.B. 11, Colo.Sess.Laws 1980, ch. 99, 22-50-105 at 559, the minimum ARB in 1982 will be $2,000 per pupil, or the 1981 ARB level plus $160, whichever amount is greater. Compare, S.B. 25, Colo.Sess.Laws 1978, ch. 69, 22-50-106 at 371-372.
A school district may increase its ARB by one of two ways. First, by requesting an ARB increase from the State School District Budget Review Board. Second, if this request is refused in part or in whole, by holding an election so that the electorate may decide on the increase. Sections 22-50-107 and 108, C.R.S.1973. When an ARB increase is granted under either procedure, the district is responsible for funding the increase for the first year. Thereafter, it is included in the formula determining the state equalization aid.
The statutory equalization program, section 22-50-105, C.R.S.1973 and 1981 Cum.Supp., provides financial support for districts lacking a high tax base or revenue raising capacity. Under this section, a district with low revenue generating capacity will receive aid to bridge the difference between revenues generated by local property tax levies and the statutorily guaranteed amount. For example, in 1977, the General Assembly passed S.B. 138 amending the state equalization program in order that $35.00 per pupil would be guaranteed for each mill levied for the general fund of a school district. Colo.Sess.Laws 1977, ch. 264, 22-50-105.
A formula used in determining whether a district is entitled to equalization aid can be illustrated by applying it to the South Conejos School District, a district receiving considerable state equalization aid:
3. Assessed valuation is the sum of the total value assigned to all taxable real property within the taxing district.
Assessed Valuation (AV) 3 ................................... $4,772,260.00
Authorized Revenue Base (ARB) ................................... $ 1,181.08
Attendance Entitlement (AE) ...................................... 782 students
Then it is necessary to apply these figures to the formula to determine the local share per mill 4 per pupil:
To determine the mill levy:
ARB = $1,181.08 = 33.75
--------------- ---------
State Guarantee $35.00
With the mill levy being 33.75, the state equalization aid per student is $28.90 X 33.75 = $975.38. Thus, the total State aid to the South Conejos School District in 1978 was $975.38 X 782(AE) = $762,844.00.
Accordingly, the State provided the South Conejos School District with the difference between the state guaranteed amount and the revenue raised by a...
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