Friday, September 07, 2001

Decision could cost state hundreds of millions more

By Spencer Hunt and Jim Siegel
Enquirer Columbus Bureau

        COLUMBUS — A divided Ohio Supreme Court on Thursday ended a decade-long fight over how schools are funded by ordering the case closed if the state spends hundreds of millions more on education.

[photo] Senate President Richard Finan, R-Evendale, (right) and Sen. Jeff Jacobson, R-Dayton, said the ruling could cost the state $1.24 billion.
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        Calling it a pragmatic compromise, four justices delivered a decision they say will produce the “thorough and efficient” school funding system the state constitution requires.

        Chief Justice Thomas Moyer, writing for the majority, said it was time to end years of uncertainty and debate.

        “In that spirit, we have created the consensus that should terminate the role of this court in the dispute.”

        Dissenting justices said their colleagues overstepped legal bounds, and others warned the high court's solution could cost anywhere from $400 million to $1.24 billion a year. Either amount could require dramatic tax increases or drastic budget cuts.

        The 4-3 ruling was a clear defeat for a coalition of schools and teachers that argued a $1.4 billion reform plan the General Assembly passed in May was woefully inadequate.

        Twice before, in 1997 and 2000, the court had agreed with the coalition that the state system was unconstitutional.

[photo] Steven Adamowski, Cincinnati schools superintendent, said Thursday that he's disappointed that the Supreme Court ruling failed to address the income level of students.
(Associated Press photos)
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        If the majority Republican lawmakers who crafted the $1.4 billion plan were winners, they weren't celebrating. Senate President Richard Finan, R-Evendale, said this legal victory is too expensive.

        “I am here to tell you that we in the Ohio Senate are not going to raise taxes,” Mr. Finan warned. “That's an absolute disaster for taxpayers and an economy that is already struggling.”

High marks

        The decision and its unfolding consequences mark the beginning of a critical new chapter in the state's historic battle over education funding.

        Justice Moyer wrote the majority opinion with Justices Andrew Douglas, Paul E. Pfeifer and Evelyn Lundberg Stratton.

        He wrote that the new school funding system reaches the constitutional mark previous plans missed by spending more for per-pupil aid to schools and by offering poorer school districts extra funds to eliminate gaps with wealthy districts.

   Ohio's school funding case began Dec. 19, 1991, when the Coalition for Equity and Adequacy of School Funding filed its lawsuit in rural Perry County. The suit said the state's school funding system was unconstitutional because it creates rich and poor school districts.
   Here is a look at the case's most recent history:
   March 1997: The Ohio Supreme Court rules 4-3 that the state's school funding system is unconstitutional. It orders the state to overhaul the system in 12 months.
   February 1998: Lawmakers change the school funding formula to set a minimum per-pupil spending level. The $4,063-per-pupil level was to be increased 2.8 percent a year for five years.
   February 1998: The General Assembly asks voters to approve a 1-cent sales tax increase for schools. It would raise $1 billion, half of which would be used to reduce property taxes.
   May 1998: Voters reject the proposed sales tax increase by a 4-1 margin.
   June 1999: Gov. Bob Taft signs a budget that would spend a record $13 billion on schools. The budget sets per-pupil spending one year ahead of schedule.
   November 1999: Ohio voters pass Issue 1, which lets the state borrow construction money for schools.
   November 1999: The General Assembly approves a 12-year, $10 billion school construction program funded in part through tobacco lawsuit settlement money.
   May 2000: In another 4-3 decision, the Ohio Supreme Court declares that the school funding system remains unconstitutional and gives the state until June 15, 2001, to fix it.
   December: The Ohio General Assembly passes a bill intended to ease unfunded mandates, or telling schools what to do but not paying for it.
   January: Mr. Taft outlines a two-year $808 million school plan in his State of the State address. The next day, Senate Republicans unveil a $1.3 billion plan.
   March: House Speaker Larry Householder, R-Glenford, proposes a $3.2 billion spending plan funded in part by placing slot machines at Ohio racetracks. Though it is embraced by the coalition of schools, the governor sinks it with a threat to veto the gambling measure.
   April: Mr. Taft, Senate President Richard Finan and Mr. Housholder agree to a $1.4 billion spending plan.
   May: The General Assembly passes a $44.9 billion state budget containing the school spending changes.
   June: Mr. Taft signs the budget bill. The state and school coalition lawyers argue the case before the Supreme Court.
   Sept. 6: The Supreme Court in 4-3 decision orders the state to increase funding to schools and says Ohio's system of paying for education would be constitutional with the additional spending. The court will no longer retain jurisdiction over school funding.
        The majority praised lawmakers for immediately increasing schools' basic state aid from $4,294 per pupil to $4,814. He called steps lawmakers took to increase funding to poor school districts, special education and transportation “genuine efforts” to comply with the court's earlier orders.

        The state's efforts to rebuild its crumbling schools, highlighted by a 12-year, $11 billion construction program, also got high marks, though his opinion urged lawmakers to do more.

        “Indeed, the evidence before us demonstrates Ohio schools are already improving,” Justice Moyer wrote, citing an overall improvement in academic test scores and noting that 36 school districts have improved their state designation from “academic emergency” to “academic watch.”

        “The plan is designed to ensure that an adequate number of teachers and supplies will exist in every district, thereby affording every child an opportunity to receive a basic education,” he wrote.

More ordered

        The good news for state officials ends there.

        Justice Douglas took a dim view of the formula lawmakers used to calculate the $4,814 basic per-pupil cost. He said steps that screen out wealthy schools' spending and others were “designed to do nothing more than lower the basic aid amount to a figure that is palatable to the General Assembly.”

        The majority told lawmakers to increase parity aid, a fund intended to help poor school districts pay for programs or classes rich districts fund through property taxes. The change would require an additional $300 million in the 2004 fiscal year.

        The biggest immediate problem lies with increasing per-pupil spending. Though the Supreme Court set no deadline for making these changes, it told lawmakers they must be retroactive to July 1, the beginning of the current fiscal year.

        These orders also come with a carrot. The high court will consider the case closed, as long as lawmakers agree to its terms.

        “Because we have no reason to doubt the defendants' good faith, we have concluded there is no reason to retain jurisdiction of the matter,” Justice Moyer wrote.

What's the cost?

        Mr. Finan declared the state would have to spend $1.24 billion to meet the court's demands.

        That would require a 45 percent cut to all state agencies' discretionary funds, he said. Without cuts, Mr. Finan said, the state would have to raise personal income taxes 17 percent or increase the state sales tax at least 1 percentage point.

        Saying he wasn't willing to do either, he shrugged when asked if he would instead do nothing at all.

        “We're left with a big quandary,” he said.

        Mr. Finan's estimate is by far the most expensive. Figures provided by Justice Douglas, and dissenting Justice Alice Robie Resnick, indicate the state must spend between $500 million and $530 million.

        William Phillis, executive director of the Ohio Coalition for Equity and Adequacy, which represents the more than 500 schools suing the state, offered a $600 million estimate and called the decision a “blueprint for mediocrity.”

        Dr. Steven Adamowski, superintendent of Cincinnati Public Schools, said he still has concerns.

        “If we have any frustration in any of these issues, it's that the basic approach now affirmed by the court has been to measure property values as opposed to addressing the income level of students.”

Dissenting Justices

        The new Supreme Court coalition of Justices Moyer, Pfeifer, Stratton and Douglas left a fragmented group of dissenters.

        Justice Deborah Cook continued to insist that the high court has no authority to demand school funding changes.

        Justice Resnick, the lead writer of the last decision declaring the system unconstitutional, blasted the new majority for going too far.

        Often criticized as an activist judge who writes laws from the bench, that's just what she accused her colleagues of doing.

        “We are not members of the legislature, where compromise is the order of the day and backroom deals are taken for granted,” Justice Resnick wrote.

        She said the majority is entering “dangerous territory in ordering that specific legislation must be enacted to make the school funding system constitutional.”

        While the decision promises an end to years of litigation in the case, one expert predicts the legal wrangling is far from over.

        “What you have now is a constitutional standard,” said Julie Underwood, general counsel for the National School Board. “Unless everyone is happy or they are just marginally miserable someone is going to challenge what the legislature does.”

        Ms. Underwood noted that after 28 years, school funding lawsuits filed in New Jersey and Texas still are unresolved.

        “These are just like little yo-yos,” she said. “They keep going back and forth.”
- Decision could cost state hundreds of millions more
GOP Justices Pfeifer, Douglas change stands
Ruling falls short, school officials say
Written opinions tell how the court thinks

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