Skeen v. State

Citation505 N.W.2d 299
Decision Date20 August 1993
Docket NumberNo. 700,C7-92-678,Nos. C5-92-677,700,s. C5-92-677
PartiesSheridan SKEEN, et al., Respondents, v. STATE of Minnesota, et al., Appellants (C5-92-677) Respondents (C7-92-678) and Virginia Independent School District, et al., Intervenors, Respondents (C5-92-677) Appellants (C7-92-678).
CourtSupreme Court of Minnesota (US)

Mark B. Levinger, Sara Jones, Jarvinen Asst. Atty. Gens., Hubert H. Humphrey III, Atty. Gen., St. Paul, for State of Minnesota, et al.

Thomas L. Fabel, Randy G. Gullickson, Minneapolis, for Sheridan Skeen, et al.

J. Dennis O'Brien, Eric J. Magnuson, Amy K. Adams, Minneapolis, for Virginia Indep. School Dist. No. 700.

Stephen F. Rufer, Law Office Building, Fergus Falls, for amici curiae Independent School Dist. No. 261, et al.

Christina L. Clark, Harley M. Ogota, Roger L. Barret, Rebecca H. Hamblin, Minnesota Educ. Ass'n, St. Paul, for amici curiae Minnesota Educ. Ass'n.

Syllabus by the Court

1. The current system of state funding of education does not violate the Education Clause of the Minnesota Constitution.

2. Under the equal protection clause of the Minnesota Constitution, the state constitutional provision requiring the legislature to establish a "general and uniform system of public schools" indicates that education is a fundamental right in Minnesota. However, the current system of state educational finance satisfies that fundamental right, particularly where all plaintiff districts are provided with an adequate level of education which meets or exceeds the state's basic educational requirements and where these districts are given sufficient funding to meet their basic needs.

Heard, considered, and decided by the court en banc.

KEITH, Chief Justice.

This case presents the issue of whether the state's present system of educational finance is sufficient to meet the state constitutional requirement that the legislature "establish a general and uniform system of public schools" and provide sufficient financing to "secure a thorough and efficient system of public schools throughout the state."

The plaintiffs in this case consist of 52 school districts and ten parents who brought suit in October 1988 against the State of Minnesota, State Board of Education, and the Commissioner of Education ("defendants"), seeking declaratory and injunctive relief against the state by claiming that certain components of the Minnesota education finance system were unconstitutional under the Education Clause of the Minnesota Constitution. Minn. Const. art. XIII, § 1 ("Education Clause"). In June 1989, 24 higher tax base school districts joined the state by intervening as defendants in this case.

Following a 67-day trial in Wright County District Court, the court declared three components of the education finance system--referendum levy, debt service levy, and supplemental revenue--unconstitutional under the Education Clause and the equal protection guarantees of the Minnesota Constitution, Minn. Const. art. I, § 2. The court held, under the Minnesota Constitution, that education is a fundamental right, property wealth or property tax base is a suspect classification under this constitutional provision, and wealth-based disparities between districts result in an "impermissible absence of uniformity" in the state educational system.

The state and intervenors separately appealed the decision to the court of appeals. The court of appeals consolidated the appeals and certified the matter to this court, which accepted certification. On appeal, this court is asked to decide whether the present state educational financing system is constitutional.

In addressing these concerns, we must be cognizant of the parties involved in this lawsuit, the language of the Education Clause under the state constitution, the components of the state educational financing system, and other underlying policy issues which are relevant to this court's consideration. Each of these will be considered below.

A. The Parties

The parties to this lawsuit include 52 plaintiff school districts, 24 intervenor districts, and the State Department of Education. The 52 plaintiffs are primarily located in outer-ring suburbs and adjacent rural areas, and they represent about 25% of the state's K-12 enrollment. The majority of the plaintiff districts belong to the Association of Stable and Growing School Districts (ASGSD). These districts have been experiencing a higher than average enrollment increase, with their enrollment rising by 22% between the 1973-74 and 1987-88 school years. Meanwhile, state-wide enrollment declined by 12% over the same time period. Although the resident income and home values in plaintiff districts are somewhat above the state average, their school districts have property tax base per pupil unit (ppu) below the state average.

The 24 intervenor districts are a mix of inner-ring suburbs and Iron Range schools, and they represent approximately 17% of state enrollment. Many of these districts belong to the Association of Metropolitan School Districts (AMSD). These districts experienced a 32% decline in enrollment, on average, between the 1973-74 and 1987-88 school years. In fact, some of these districts lost more than 50% of their enrollment during the aforementioned period. Their property tax base is significantly above the state average.

Unlike challenges to state financing of education in other states, which frequently have been initiated by property-poor inner-city districts, this case does not involve the three largest metropolitan school districts, Minneapolis, St. Paul, and Duluth. Although these districts contain the majority of AFDC and minority population, they also have the highest property tax base because the state places a higher property tax rate on commercial entities. In addition, this case is somewhat atypical because the small, rural districts also are not included. These rural districts, which represent less than 12% of the state's pupil population, comprise over half of the total number of school districts.

B. The Education Clause and Claims of Relative Harm

The provision which generates the impetus for this lawsuit is the Education Clause of the Minnesota Constitution. 1 This provision requires a "general and uniform system of public schools," but, unlike many cases in other states, this case never involved a challenge to the adequacy of education in Minnesota. In fact, the parties conceded that all plaintiff districts met or exceeded the educational requirements of the state. Rather, the plaintiffs' action is premised on claims of relative harm--i.e., harm caused by the availability of fewer resources in low-wealth districts than in their high-wealth counterparts. Plaintiffs contend that the present system causes disparities in educational opportunity which are related to property wealth, thereby leading to a lifetime of relative disadvantage which violates the uniformity requirement of the Education Clause.

C. The General System of Education in Minnesota

In evaluating plaintiffs' claim of relative disparity, it is important to understand the basic state property tax system which generates funds for state education as well as other funding mechanisms which districts may use to supplement the level of basic revenue provided by the state. The following chart demonstrates how the state's funding has changed over the last decade:

Total Dollar Amount of General Education Revenue by Category

Selected Years (amounts in millions)

                Revenue Category                FY 80        FY 84        FY 88        FY 90
                Uniform Basic Revenue        1,070.2      1,202.1      1,663.6      2,303.1
                Cost Differential Revenue
                        Pupil Unit               65.6         67.4          5.1         00.0
                          Decline/Growth
                        Compensatory/AFDC        48.4         70.5        101.1         63.6
                        Teacher Retirement      131.7        178.6        238.7         00.0
                        Sparsity                  1.7          2.3          5.3          5.0
                        Training &               00.0         00.0        130.2         14.3
                          Experience
                        Low Fund Balance         00.0         30.8        000.0         00.0
                Total Cost Differential      247.4        349.6        480.4        82.9
                Grandfather/Supplemental     48.5         46.9         5.2          12.0
                Referendum/Discretionary Revenue
                        Referendum               12.3         68.9        111.8        162.1
                        Discretionary            00.0        113.7        000.0        000.0
                Total Referendum             12.3         182.6        111.8        162.1
                Total Revenue $ Millions     $1,378.4     $1,781.2     $2,261.0     $2,560.1
                ----------               Percent of General Education Revenue by Category
                                                Selected Years
                Revenue Category                   FY 80       FY 84       FY 88       FY 90
                Uniform Basic Revenue            77.6     %  67.5     %  73.6     %  90.0     %
                Cost Differential Revenue
                          Pupil Unit                 4.8  %      3.8  %      0.2  %      0.0  %
                            Decline/Growth
                          Compensatory/AFDC          3.5  %      4.0  %      4.5  %      2.5  %
                          Teacher Retirement         9.6  %     10.0  %     10.6  %      0.0  %
                          Sparsity                   0.1  %      0.1  %      0.2  %      0.2  %
                          Training & Experience      0.0  %      0.0  %      5.8  %      0.5  %
                          Low Fund Balance           0.0  %      1.7  %      0.0  %      0.0  %
                Total Cost Differential          18.0     %  19.6     %  21.3     %  3.2      %
                Grandfather/Supplemental         3.5      %  2.6      %  0.2      %  0.5      %
                Referendum/Discretionary Revenue
                          Referendum                 0.9  %      3.9  %      4.9  %      6.3  %
                          Discretionary              0.0  %      6.4  %      0.0  %      0.0  %
                Total Referendum                 0.9      %  10.3     %  4.9      %  6.3      %
                Total General Education Revenue  100.0    %  100.0    %  100.0    %  100.0    %
...

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