State ex rel. v. State Bd. of Edn.

• Decision Date: 25 October 2006
• Docket Number: No. 2004-1668.,2004-1668.
• Parties: The STATE ex rel. OHIO CONGRESS OF PARENTS & TEACHERS et al., Appellants and Cross-Appellees, v. STATE BOARD OF EDUCATION et al., Appellees and Cross-Appellants.
• Court: Ohio Supreme Court

Page 1148

857 N.E.2d 1148

111 Ohio St.3d 568

2006-Ohio-5512

The STATE ex rel. OHIO CONGRESS OF PARENTS & TEACHERS et al., Appellants and Cross-Appellees, v. STATE BOARD OF EDUCATION et al., Appellees and Cross-Appellants.

No. 2004-1668.

Supreme Court of Ohio.

Submitted November 29, 2005.

Decided October 25, 2006.

COPYRIGHT MATERIAL OMITTED

Ulmer Berne, L.L.P., and Donald J. Mooney Jr., Cincinnati, for appellants and cross-appellees.

Jim Petro, Attorney General, Douglas R. Cole, State Solicitor, Stephen P. Carney, Senior Deputy Solicitor, and Roger F. Carroll, Assistant Attorney General, for state appellees and cross-appellants.

Jones Day, Fordham E. Huffman, and Chad A. Readler, Columbus, for community-school appellees and cross-appellants.

Isaac, Brandt, Ledman & Teetor, L.L.P., David G. Jennings, and Mark Landes, Columbus, for appellee University of Toledo Charter School Council.

Chester, Willcox & Saxbe, L.L.P., Donald C. Brey, and Charles R. Saxbe, Columbus; Brennan, Manna & Diamond, L.L.C., John B. Schomer, and Leigh A. Maxa, Akron, for appellee and cross-appellant White Hat Management.

Louis B. Geneva Co., L.P.A., and M. Jayne H. Geneva, supporting appellants and cross-appellees for amici curiae Coalition for School Funding Reform, Community Advocates for Public Education, Cleveland Heights-University Heights City School District, Lakewood City School District, and Shaker Heights City School District.

Rachelle Johnson, supporting appellants and cross-appellees for amicus curiae Ohio Education Association.

Carpenter & Lipps, L.L.P., Jeffrey A. Lipps, and Michael N. Beekhuizen, Columbus, supporting appellees and cross-appellants for amicus curiae Buckeye Community Hope Foundation.

McNamara, Hanrahan, Callender & Loxterman, James S. Callender Jr., Mentor, and Sheila M. Sexton, supporting appellees and cross-appellants for amici curiae Ohio Counsel of Community Schools, Lucas County Educational Service Center, Reynoldsburg Board of Education, Ashe Cultural Center, and National Association of Charter School Authorizers.

Nicola, Gudbranson & Cooper, L.L.C., Timothy L. McGarry, Arthur L. Clements III, and Becky M. Scheiman, Cleveland, supporting appellees and cross-appellants for amici curiae parent-teacher organizations of the following schools: Hope Academy-Canton Campus; Hope Academy-University Campus; Parma Community School; Summit Academy-Akron; Summit Academy-Dayton; Summit Academy-Parma; W.E.B. DuBois Academy; Ohio Coalition of E School Families, Inc.; Summit Academy-Xenia; and The Edge Academy.

Porter, Wright, Morris & Arthur, James B. Hadden, and Anne M. Hughes, Columbus, supporting appellees and cross-appellants for amici curiae Charter School Leadership Council, Alliance for School Choice, Thomas B. Fordham Institute, and state charter-school organizations.

Bricker & Eckler, L.L.P., Susan B. Greenberger, Anne Marie Sferra, and Jennifer A. Flint, Columbus, not in support of the position of any party for amicus curiae Tri-Rivers Educational Computer Association.

LANZINGER, J.

{¶ 1} In this action, while recognizing that the challengers retain their ability to litigate alleged statutory violations against particular schools, we hold that community schools, also known as "charter schools," in and of themselves, are not unconstitutional. The appellants and cross-appellees are the Ohio Federation of Teachers, the Ohio Congress of Parents and Teachers, the Ohio School Boards Association, other education associations and teachers' unions, certain parents, taxpayers, school district boards of education, and residents of various school districts ("appellants"). Their lawsuit challenges the constitutionality of laws for the establishment and operation of Ohio's community schools enacted by the General Assembly by Am.Sub.H.B. No. 215 in 1997 and codified at R.C. Chapter 3314.¹

{¶ 2} The appellees and cross-appellants include the State Board of Education, Ohio's Superintendent of Public Instruction, the Ohio Department of Education, various Ohio community schools, Ohio community-school operators, and White Hat Management, L.L.C., a company that manages 28 community schools in the state ("appellees").

{¶ 3} The parties filed jurisdictional memoranda asking us to accept this case as a discretionary appeal to determine the constitutionality of R.C. Chapter 3314. We accepted the appeal and the cross-appeals solely to determine the constitutional issues. Appellants' charges regarding the establishment and operation of community schools are still pending at the trial court.

{¶ 4} After first providing an overview of the enabling legislation and the history of this case, this opinion will analyze the constitutional claims arising under the Ohio Constitution, specifically (1) Section 2, Article VI, the Thorough and Efficient Clause, (2) Section 3, Article VI, governing city school districts, (3) Section 5, Article XII, limiting proceeds of taxes to their stated purposes, and (4) Sections 4 and 5, Article VIII, restricting the lending of the state's credit and the state's assumption of debt.

I. Overview of the Community-Schools Act, R.C. Chapter 3314

{¶ 5} Ohio adopted charter-school legislation when the Ohio General Assembly enacted R.C. Chapter 3314 in 1997. Am. Sub.H.B. No. 215, 147 Ohio Laws, Part I, 909, 1187. As legislatively created, community schools are independently governed public schools that are funded from state revenues pursuant to R.C. Chapter 3314.

{¶ 6} In enacting R.C. Chapter 3314, the General Assembly declared that its purposes included "providing parents a choice of academic environments for their children and providing the education community with the opportunity to establish limited experimental educational programs in a deregulated setting." Am.Sub.H.B. No. 215, Section 50.52, Subsection 2(B), 147 Ohio Laws, Part I, 2043. Community schools are permitted to target and tailor programs for small student populations such as learning-disabled students or dropouts from traditional schools. R.C. 3314.06(B), 3314.03(A)(2), and 3314.04.

{¶ 7} The General Assembly explained that "[a] community school created under this chapter is a public school, independent of any school district, and is part of the state's program of education." R.C. 3314.01(B). Community schools are state-funded, R.C. 3314.08(D), but each is privately run, R.C. 3314.01 and 3314.02(B) and (C)(1). Each community school must be formed as either a nonprofit corporation or a public-benefit corporation. R.C. 3314.03(A)(1). Community schools cannot charge tuition, R.C. 3314.08(I), and must be nonsectarian, R.C. 3314.03(A)(11)(c), with enrollment policies that comply with R.C. 3314.06. While community schools are exempt from certain state laws and regulations, R.C. 3314.04, they must comply with many of the same statewide academic standards, R.C. 3314.03(A)(11). Community schools contract with sponsors, which are responsible for monitoring their performance and compliance with applicable standards and requirements. R.C. 3314.03(A)(4). In turn, sponsors are monitored and overseen by the Ohio Department of Education ("ODE"). R.C. 3314.015.

{¶ 8} Formerly, sponsors were required to be public entities (i.e., local boards of education, the ODE, educational service centers, or trustees of universities or their designees). Former R.C. 3314.02(A)(1) and (C)(1), 1999 Am.Sub.H.B. No. 282, 148 Ohio Laws, Part I, 2022-2023. Since April 8, 2003, certain other approved, nonprofit, education-oriented entities may also be sponsors. R.C. 3314.02(C)(1)(f), 2002 Sub. H.B. No. 364, 149 Ohio Laws, Part V, 10,208 and 10,210. Under R.C. 3314.015(A), the ODE must approve sponsors, monitor the effectiveness of their oversight of their schools, and issue reports on the effectiveness of the schools' academic programs, operations, and legal compliance and on their financial condition. Sponsors must seek ODE approval, according to criteria, procedures, and deadlines established by ODE. R.C 3314.015(B). If a sponsor becomes unwilling or unable to complete its duties, ODE may revoke approval to act as a sponsor and assume direct sponsorship of the community school in question for up to two years. R.C. 3314.015(C).

{¶ 9} Each community school is governed by a contract between the governing authority of the school and its sponsor. R.C. 3314.03. The initial contract term may last no more than five years. R.C. 3314.03(A)(13). If the school does not meet its contract objectives, the sponsor may choose not to renew the contract. Alternatively, the sponsor may terminate the contract for good cause before the end of the contract's term. R.C. 3314.07.

{¶ 10} Ohio is not alone in adopting charter-school legislation. As of 1992 a majority of states allow for the creation of charter schools, typically allowing those schools to use a per-pupil funding stream from government sources (either state or local) to pay for the schools. With the increasing prevalence of charter schools has come increased statutory oversight and regulation, especially for licensing, regulatory inspections, and academic testing. 50 State Statutory Survey, "Charter School Licensing Requirements, Inspections, and Testing" (2006). R.C. Chapter 3314 has been amended frequently since it was enacted,² and the law governing community schools continues to evolve.

II. Procedural History of Case

{¶ 11} The appellants filed suit on May 14, 2001, requesting declaratory and injunctive relief and writs of mandamus, raising several constitutional challenges to various aspects of R.C. Chapter 3314. The appellants filed a third amended complaint asserting ten different claims, including several as bases for the trial court to issue a declaratory judgment stating that R.C. Chapter 3314 is unconstitutional on its face and as applied.

{¶ 12} At a status conference on November 9, 2001, the trial judge bifurcated the litigation to reduce the potential burden on the parties. In the first phase, they...