Serrano v. Priest

• Decision Date: 30 August 1971
• Citation: 487 P.2d 1241,5 Cal.3d 584,96 Cal.Rptr. 601
• Court: California Supreme Court
• Parties: , 487 P.2d 1241, 41 A.L.R.3d 1187 John SERRANO, Jr., et al., Plaintiffs and Appellants, v. Ivy Baker PRIEST, as State Treasurer, etc., et al., Defendants and Respondents. L.A. 29820.

Page 601

96 Cal.Rptr. 601

5 Cal.3d 584, 487 P.2d 1241, 41 A.L.R.3d 1187

John SERRANO, Jr., et al., Plaintiffs and Appellants, v.Ivy Baker PRIEST, as State Treasurer, etc., et al., Defendants and Respondents.

L.A. 29820.

Supreme Court of California In Bank.

Aug. 30, 1971.

As Modified on Denial of Rehearing Oct. 21, 1971.

David A. Binder, Michael H. Shapiro, William T. Rintala, Harold W. Horowitz, Los Angeles, and Sidney M. Wolinsky, San Francisco, for plaintiffs and appellants.

Kenneth Hecht, Peter B. Sandmann, San Francisco, (Kathrine Sears, Anne Unverzagt, of counsel), Louis Garcia, Mario Obledo, Alan Exelrod, Michael Mendelson, Joe Ortega, Stephen D. Sugarman, Los Angeles, John E. Coons, Berkeley, David L. Kirp, Mark G. Yudof, Paul R. Dimond, Cambridge, Mass., Kenneth F. Phillips, Berkeley, Marc I. Hayutin, A. L. Wirin, Fred Okrand, Laurence R. Sperber, Los Angeles, Paul N. Halvonik, Charles C. Marson, Ephraim Margolin, Irving G. Breyer, Milton Marks, George R. Moscone, Willie Brown, Jr., John Burton, John Francis Foran and Leo T. McCarthy, San Francisco, as amici curiae on behalf of plaintiffs and appellants.

Evelle J. Younger and Thomas C. Lynch, Attys.Gen., Sanford N. Gruskin, Asst. Atty. Gen., John D. Maharg, County Counsel, James W. Briggs, Asst. County Counsel, Elaine M. Grillo and Donovan M. Main, Deputy County Counsel, for defendants and respondents.

SULLIVAN, Justice.

We are called upon to determine whether the California public school financing system, with its substantial dependence on local property taxes and resultant wide disparities in school revenue, violates the equal protection clause of the Fourteenth Amendment.We have determined that this funding scheme invidiously discriminates against the poor because it makes the quality of a child's education a function of the wealth of his parents and neighbors.Recognizing as we must that the right to an education in our public schools is a fundamental interest which cannot be conditioned on wealth, we can discern no compelling state purpose necessitating the present method of financing.We have concluded, therefore, that such a system cannot withstand constitutional challenge and must fall before the equal protection clause.

Plaintiffs, who are Los Angeles County public school children and their parents, brought this class action for declaratory and injunctive relief against certain state and county officials charged with administering the financing of the California public school system.Plaintiff children claim to represent a class consisting of all public school pupils in California, 'except children in that school district, the identity of which is presently unknown, which school district affords the greatest educational opportunity of all school districts within California.'Plaintiff parents purport to represent a class of all parents who have children in the school system and who pay real property taxes in the county of their residence.

Defendants are the Treasurer, the Superintendent of Public Instruction, and the Controller of the State of California, as well as the Tax Collector and Treasurer, and the Superintendent of Schools of the County of Los Angeles.The county officials are sued both in their local capacities and as representatives of a class composed of the school superintendent, tax collector and treasurer of each of the other counties in the state.

The complaint sets forth three causes of action.The first cause alleges in substance as follows: Plaintiff children attend public elementary and secondary schools located in specified school districts in Los Angeles County.This public school system is maintained throughout California by a financing plan or scheme which relies heavily on local property taxes and causes substantial disparities among individual school districts in the amount of revenue available per pupil for the districts' educational programs.Consequently, districts with smaller tax bases are not able to spend as much money per child for education as districts with larger assessed valuations.

It is alleged that 'As a direct result of the financing scheme * * * substantial disparities in the quality and extent of availability of educational opportunities exist and are perpetuated among the several school districts of the State * * *.(Par.)The educational opportunities made available to children attending public schools in the Districts, including plaintiff children, are substantially inferior to the educational opportunities made available to children attending public schools in many other districts of the State * * *.'The financing scheme thus fails to meet the requirements of the equal protection clause of the Fourteenth Amendment of the United States Constitution and the California Constitution in several specified respects.¹

In the second cause of action, plaintiff parents, after incorporating by reference all the allegations of the first cause, allege that as a direct result of the financing scheme they are required to pay a higher tax rate than taxpayers in many other school districts in order to obtain for their children the same or lesser educational opportunities afforded children in those other districts.

In the third cause of action, after incorporating by reference all the allegations of the first two causes, all plaintiffs allege that an actual controversy has arisen and now exists between the parties as to the validity and constitutionality of the financing scheme under the Fourteenth Amendment of the United States Constitution and under the California Constitution.

Plaintiffs pray for: (1) a declaration that the present financing system is unconstitutional; (2) an order directing defendants to reallocate school funds in order to remedy this invalidity; and (3) an adjudication that the trial court retain jurisdiction of the action so that it may restructure the system if defendants and the stateLegislature fail to act within a reasonable time.

All defendants filed general demurrers to the foregoing complaint asserting that none of the three claims stated facts sufficient to constitute a cause of action.The trial court sustained the demurrers with leave to amend.Upon plaintiffs' failure to amend, defendants' motion for dismissal was granted.(Code Civ.Proc., § 581, subd. 3.)An order of dismissal was entered (Code Civ.Proc., § 581d), and this appeal followed.

Preliminarily we observe that in our examination of the instant complaint, we are guided by the long-settled rules for determining its sufficiency against a demurrer.We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.(Daar v. Yellow Cab Co.(1967)67 Cal.2d 695, 713, 63 Cal.Rptr. 724, 433 P.2d 732.)We also consider matters which may be judicially noticed.(Id. at p. 716, 63 Cal.Rptr. 724, 433 P.2d 732.)Accordingly, from time to time herein we shall refer to relevant information which has been drawn to our attention either by the parties or by our independent research; in each instance we judicially notice this material since it is contained in publications of state officers or agencies.(Board of Education of City of Los Angeles v. Watson(1966)63 Cal.2d 829, 836, fn. 3, 48 Cal.Rptr. 481, 409 P.2d 481;seeEvid.Code, § 452, subd. (c).)

I

We begin our task by examining the California public school financing system which is the focal point of the complaint's allegations.At the threshold we find a fundamental statistic--over 90 percent of our public school funds derive from two basic sources: (a) local district taxes on real property and (b) aid from the State School Fund.²

By far the major source of school revenue is the local real property tax.Pursuant to article IX, section 6 of the California Constitution, the Legislature has authorized the governing body of each county, and city and county, to levy taxes on the real property within a school district at a rate necessary to meet the district's annual education budget.(Ed.Code, § 20701 et seq.)³The amount of revenue which a district can raise in this manner thus depends largely on its tax base--i.e., the assessed valuation of real property within its borders.Tax bases vary widely throughout the state; in 1969--1970, for example, the assessed valuation per unit of average daily attendance of elementary school children ⁴ ranged from a low of $103 to a peak of $952,156--a ratio of nearly 1 to 10,000.(Legislative Analyst, Public School Finance, Part V, Current Issues in Education Finance(1971)p. 7.)⁵

The other factor determining local school revenue is the rate of taxation within the district.Although the Legislature has placed ceilings on permissible district tax rates (§ 20751 et seq.), these statutory maxima may be surpassed in a 'tax override' election if a majority of the district's voters approve a higher rate.(§ 20803 et seq.)Nearly all districts have voted to override the statutory limits.Thus the locally raised funds which constitute the largest portion of school revenue are primarily a function of the value of the realty within a particular school district, coupled with the willingness of the district's residents to tax themselves for education.

Most of the remaining school revenue comes from the State School Fund pursuant to the 'foundation program,' through which the state undertakes to supplement local taxes in order to provide a 'minimum amount of guaranteed support to all districts * * *.'(§ 17300.)With certain minor exceptions, ⁶ the foundation program ensures that each school district will receive annually, from state or local funds, $355 for each elementary school pupil (§§ 17656,17660) and $488 for each high school student.(§ 17665.)

The state contribution is supplied in two principal forms.'Basic state aid' consists of a flat grant to each district of $125 per pupil per year, regardless of the relative wealth of the district.(...