McDaniel v. Thomas

• Court: Georgia Supreme Court
• Writing for the Court: SMITH; JORDAN; HILL
• Citation: McDaniel v. Thomas, 248 Ga. 632, 285 S.E.2d 156 (Ga. 1981)
• Decision Date: 24 November 1981
• Docket Number: Nos. 37611,37612,s. 37611
• Parties: , 1 Ed. Law Rep. 982 McDANIEL, et al. v. THOMAS, et al. THOMAS, et al. v. McDANIEL, et al.

Page 156

285 S.E.2d 156

248 Ga. 632, 1 Ed. Law Rep. 982

McDANIEL, et al. v. THOMAS, et al.

THOMAS, et al. v. McDANIEL, et al.

Nos. 37611, 37612.

Supreme Court of Georgia.

Nov. 24, 1981.

Rehearing Denied Dec. 17, 1981.

Michael J. Bowers, Atty. Gen., Alfred L. Evans, Jr., Asst. Atty. Gen., for Charles McDaniel, Supt., et al.

John M. Graham, III, Smith, Shaw, Maddox, Davidson & Graham, Rome, David C. Long, Long & Silverstein, Washington, D. C., Barry R. Chapman, Bennett, Wisenbaker, Bennett & Chapman, Valdosta, J. Thomas Vance, Tisinger, Tisinger & Vance, P. C., Carrollton, Glenn T. York, Jr., York, Cummings & McRae, Cedartown, for Donald R. Thomas et al.

SMITH, Justice.

The basic question presented by this case is whether the current system of funding public education in Georgia conforms to the mandates of our state constitution.

Plaintiff-appellees are parents, children and school officials who reside in school districts which, in relation to other school districts in the state, have a low property tax base. ¹ They brought a declaratory judgment action in the Superior Court of Polk County alleging that the existing system of financing public education 1) violates the equal protection provisions of our state constitution (Constitution of 1976, Art. I, Sec. II, Par. III (Code Ann. § 2-203); Art. I, Sec. II, Par. VII (Code Ann. § 2-207)) and 2) deprives the children in their district of an "adequate education" in contravention of Art. VIII, Sec. I, Par. I (Code Ann. § 2-4901) and Art. VIII, Sec. VIII, Par. I (Code Ann. § 2-5601). The trial court agreed with plaintiffs' equal protection arguments and declared the existing school finance system unconstitutional. Defendants brought this appeal. ² The court, however, rejected plaintiffs' assertions regarding "adequate education," and they have filed a cross-appeal.

I. Justiciability

Appellants contend that there is a "threshold issue" which, when properly resolved, must result in a dismissal of the case without consideration of the merits. They argue that "the question of how public education can best be funded is nonjusticiable" and is "more suitably handled by other branches of government."

Such an argument, in our view, misperceives the nature of this dispute. Neither the trial court nor this court has been called upon to decide whether, as a policy matter, a particular financing scheme is "better" than another. We have been asked to determine whether the existing method of financing public education in this state meets constitutional requirements. Judicial review of legislative enactments is central to our system of constitutional government and deeply rooted in our history (Marbury v. Madison, 5 U.S. (1 Cranch) 137, 176, 2 L.Ed. 60 (1803)). A substantial number of courts have been called upon to decide issues similar to those presented in this case and have not found the difficulties associated therewith to be insurmountable. See, e.g., Northshore School District No. 417 v. Kinnear, 84 Wash.2d 685, 530 P.2d 178 (1974); Shofstall v. Hollins, 110 Ariz. 88, 515 P.2d 590 (1973). Indeed, "[w]e know of no sister State which has refused merits treatment to such issues, and we would regard our own refusal to adjudicate plaintiffs' claim of constitutional infringement an abdication of our constitutional duties. We turn, then, to the merits of the action." Board of Education, Levittown v. Nyquist, 83 App.Div.2d 217, 443 N.Y.S.2d 843 (1981).

II. The Georgia Public School Financing System

Public education in Georgia is financed through federal, state and local funds. In the decade of the 1970's, the relationship between these sources was as follows:

             1970-71                     1974-75             1977-78
                         -------------              ------------------  ------------------
                            Amount      Percentage  Amount  Percentage  Amount  Percentage
                         (in millions)
                Local         151          23.9      260       27.9       358      27.5
                State         367          58.0      516       55.3       719      55.3
                Federal       115          18.1      157       16.8       224      17.2
                Total         633         100.0      933      100.0      1301     100.0
                

Most federal funds for public education are earmarked for specified purposes and may be termed "categorical" grants. (See, e.g., Education for All Handicapped Children Act, 20 U.S.C. § 1401 et seq.) As the state's control over these funds is limited, they are not a basic part of the state financing system. When federal funding is removed, the above table can be recomputed as follows:

          1970-71                      1974-75             1977-78
                       -------------              ------------------  ------------------
                          Amount      Percentage  Amount  Percentage  Amount  Percentage
                       (in millions)
                Local       151          29.2      260       33.5       358      33.2
                State       367          70.8      516       66.5       719      66.8
                Total       518         100.0      776      100.0      1077     100.0
                

Some state funding is also "categorical" and is frequently distributed in conjunction with federal programs. Programs for superintendents' salaries, teacher retirement, compensatory education, staff development, school lunches, assistance to the handicapped and cooperative educational service agencies fall under this general heading.

The great bulk of state support for local school systems, approximately 80 per cent, is allocated under the Adequate Program for Education in Georgia (APEG). See Code Ann. Chapter 32-6A. In fiscal year 1981, APEG was funded at a level of almost $800 million.

APEG sets forth thirteen items for cost calculation purposes: (1) salaries of special education teachers, (2) salaries of pre-school (i.e. kindergarten) teachers, (3) salaries of classroom teachers and vocational education teachers, (4) purchase of instructional media, (5) purchase and repair of instructional equipment, (6) maintenance and operation expenses, (7) payment of sick and personal leave expenses, (8) travel expenses of personnel, (9) student services support personnel salaries, (10) salaries of administrative and supervisory personnel, (11) salaries of clerical personnel, (12) pupil transportation expenses, and (13) expenses of maintaining isolated schools. The APEG items, of course, are not funded equally--over half of APEG funding is for Item 3 alone. ³

APEG is designed to meet basic educational needs. Because the basic needs of school districts vary, the amounts allocated to a particular school district within a particular APEG item also vary. Most allotments are based upon the number of pupils in the district in average daily attendance. ⁴ See, e.g. Code Ann. §§ 32-605a, 610a. Others, such as transportation, take other factors into account. See Code Ann. § 32-625a. None of the parties to this litigation challenge the propriety of the APEG classifications.

APEG is not simply a grant from the state to local school districts. As a condition to participation in APEG, each local school district must contribute an amount obtained from ad valorem taxation. This amount is referred to as "required local effort" (RLE). Each school district's RLE is calculated on the basis of its proportionate share of the equalized adjusted school property tax digest ⁵ multiplied by a total statewide local effort figure of 78.6 million. ⁶ Because the RLE is determined on the basis of a school district's proportionate share of property wealth, the property tax rate imposed by each school district for RLE is virtually the same, approximately 2.15 mills. (A one mill rate imposes a tax of 1/10 cent on each dollar's worth of property.)

After a district's RLE is determined, it is deducted from the total amount to which the district is entitled under APEG. The remainder is provided by the state. With the total statewide RLE fixed at $78.6 million, APEG is currently funded 90% by state funds and 10% by RLE.

Theoretically, RLE is an equalizing component in the APEG system--the state provides less funds to school districts which by virtue of local property values, are more capable of financing public education at the local level. Suppose there were two school districts in the state, each with 1,000 students in ADA. If District A with $100,000 in assessed valuation per student in ADA had twice the assessed valuation of District B (which thus has $50,000 in assessed valuation per student in ADA), District A would have an RLE of $1,000 per student in ADA and District B would have an RLE of $500 per student in ADA, if both districts imposed an RLE ad valorem tax of 10 mills. If both districts had an APEG cost of $1,000 per student in ADA, District A would receive no funds from the state, while District B would receive $500 per student in ADA from state APEG funds.

In reality, however, RLE does little to equalize property rich and property poor districts. As indicated above, the total statewide RLE has been fixed at approximately $78.6 million. Meanwhile, educational costs have risen. Whereas, in the early 1970's, total RLE constituted almost 20 per cent of APEG, it now amounts to only 10 per cent. Total RLE is at such a low level, relative to total APEG expenditures that it cannot have a significant equalizing effect as between property rich and property poor districts. Thus, to an extent, APEG has become a flat grant from the state to local districts wherein considerations relating to local wealth have no place.

If APEG were the only source of public school funding in this state, there would be no significant disparities between school districts insofar as revenues per student in ADA is concerned. However, APEG is not the only source of school revenues. All 187 local school districts in Georgia supplement APEG with funds derived from local property tax assessments. See Constitution of 1976, Art. VIII, Sec. V, Par. VI (Code Ann. § 2-5306); Art. VIII, Sec. VII, Par. I (Code Ann. § 2-5501); Art. VIII,...