treatment and in our review of the place of education in our society. Significantly, the statements by the founding fathers cited earlier emphasized the importance education of the general public played in maintenance of the democratic system rather than the importance it had for an individual in the social and economic areas. As the Court said in Van Dusartz v. Hatfield:

Education has a unique impact on the mind, personality, and future of the individual child. It is basic to the functioning of a free society and thereby evokes special judicial solicitude.251

The Supreme Court has expressed great solicitude for education, noting that "[t]he American people have always regarded education and acquisition of knowledge as matters of supreme importance which should be diligently promoted...." 282 There is a strong possibility, therefore, that the Court will accord the same special treatment to education as now afforded to political and civil rights.

23

If the Court chooses to regard education as a social or economic interest. whether or not it will afford close scrutiny to educational finance systems will depend upon its evaluation of the magnitude of the injury inflicted by those systems. Just as in Lindsey, where the Court concluded that there is no "Constitutional guarantee of access to dwellings of a particular quality" (emphasis added) or as in Dandridge, where the Court rejected the contentions that a person had a right to a particular level of subsistence, so too the Court might conclude that as long as a State provides an educational program, it will not become involved in question related to the quality or level of that program. As this Report shows, however, the disparities among districts are of enormous magnitude. Even if there is continuing debate over whether additional money will improve educational achievement, there can be no debate that money buys books, laboratory facilities, pleasant surroundings and pays teachers' salaries." The distparities in the availability of funds to different school districts are so extreme that resulting injury is inevitable and substantial.

284

The substantiality of the disparities, however, seems to distinguish the school finance cases from cases such as Dandridge and Valtierra. In Dandridge, the discrimination between large families and small families was relatively modest.

251 334 F. Supp. 870, 875 (D. Minn. 1971). The court argues that the Dandridge opinion supports its special treatment of education. "Even the majority opinion in Dandridge," the Court notes, "seems to intimate this by its citation of the decision in Shelton v. Tucker, 364 U.S. 479, 81 S. Ct. 247, 5 L. 2d 231 (1960) as the exemplar of the Court's commitment to those areas where freedoms guaranteed by the Bill of Rights may be affected 397 U.S. at 484, 90 S. Ct. at 1161. In Shelton, Mr. Justice Stewart for the majority had declared that "The vigilant protection of constitutional freedoms is nowhere more vital than in the community of American schools', 364 U.S. at 487, 81 S. Ct. at 251." Id. at 875 n. 10. The court also found support in the Valtierra decision saying "In another respect Valtierra actually supports the fundamentality of the interest in education. The Court there emphasized the special importance of the democratic process exemplified in local plebiscites. That perspective here assists pupil plaintiffs who ask no more than equal capacity for local voters to raise school money in tax referenda, thus making the democratic process all the more effective." Id. at 875 n. 9. See Coons, Clume and Sugarman, "Educational Opportunity: A Workable Constitutional Test for State Financial Structures". 5 7Cal. L. Rev. 305, 373-389 where the authors review the special status of education. The authors argue that education should be viewed as a "favored interest"-not as a "right"; to treat education as a right is "preposterous" and will create a 'judicial nightmare". Courts would be unable to develop managerable standards. Id. at 373-74. In other areas, however, where interests are regarded as 'rights", the courts have had to develop standards and distinguish between degrees of impairment. The "right to vote" involves everything from the denial of the ballot, to dilution of one's vote to limiting one's choice of candidates. See also Silard and White "Intrastate Inequalities in Public Education: The Case for Judicial Relief Under the Equal Protection Clause," 1970 Wis. L. Rev. 7, 18 (1970). 282 Meyer v. Nebraska, 262 U.S. 390. 400 (1923). See also Mr. Justice Brennan concurring in Abington School District v. Schempp, 374 U.S. 203, 230 (1963); “. Americans regard the public schools as a most vital civic institution for the preservation of a democratic system of government. It is therefore understandable that the Constitutional prohibitions encounter their severest test when they are sought to be applied in the school

cilassroom.

"

283 An alternative to treating education as a political or civil right would be to categorize it as a "fundamental interest", as did the Serrano Court. This, however, seems a more porous container than "political or civil right". In Shapiro v. Thompson, 394 U.S. 618 (1969) welfare payments were treated as a "fundamental interest" since many families depend upon them "to obtain the very means of subsistence-food, shelter, and other necessities of life." Id. at 627. On the other hand, in Dandridge v. Williams, 397 U.S. 471 (1970), welfare payments were denied the favored "fundamental interest" caption even though they involve "the most basic economic needs of impoverished human beings". Id. at 485. See Mr. Justice Harlan's criticism of the concept of "fundamental interests", Shapiro v. Thompson, Id. at 660-62. Interests regarded as "political or civil rights" almost always receive close scrutiny from the Court when an impairment is alleged; other types of interests may be regarded as fundamental under some circumstnaces and not in other instances. We have preferred to label this second category as "economic and social rights." 234 See Coons, Clume and Sugarman, Private Wealth and Public Education 25-33 (1970); Burke & Callahan, op. ct. supra note at 39.

In Valtierra, sustaining the California law would not necessarily result in a substantial dimunition of housing opportunities for the poor. These cases might be said to involve classifications based on wealth that impose minimal injury. To be sure, the school finance cases do not involve situations where persons are denied the opportunity to attend school; what is involved is a system which dilutes or diminishes that opportunity. We are not dealing with the type of total deprivations that were involved in Harper and Griffin. School finance is more like Baker v. Carr where an irrational structure resulted in the diminishing of a right. Accordingly, a strong argument can be made that the school finance cases involve injury of a sufficiently significant magnitude as to warrant different constitutional treatment.

285

Should the Court conclude that disparate educational financing schemes encroach on political or civil rights, or, alternatively that they do substantial injury to an economic or social interest, the burden would be on the State to present a strong justification for the inequities it created. The Court, however, might choose to employ the "suspect" classification "fundamental interests" "compelling state interest" terminology that has developed over recent years, and there is nothing in the recent cases to suggest that the Court has abandoned this method of analysis. In Bullock, the Court recognized classifications based on wealth as "suspect" and required a "compelling state interest" as a justification; in Lindsey, the Court acknowledged that were it faced with a "fundamental interest" the State would be required to demonstrate a "compelling interest" to justify its discrimination. Both of these cases involved an application of the equal protection clause. Accordingly, it seems unlikely that the Boddie decision represents a Court determination to abandon the equal protection path in favor of a due process framework.

286

Once the Court concluded that systems of educational finance that discriminate on the basis of wealth violate the equal protection clause, it would be necessary to frame an appropriate order to secure relief. As McInnis v. Shapiro demonstrates, there are doubts as to the ability of courts to devise manageable standards that a State could be required to implement. In McInnis, the court was asked to order educational funding that met the "needs" of the pupils in various districts. The more recent school finance cases, however, have urged a negative declaration from the courts.287 The courts have been requested to tell the States what they cannot do, not what they should do. For example, in Van Dusartz v. Hatfield, the court concluded that "a system of public school financing which makes spending per pupil a function of the school district's wealth violates the equal protection guarantee of the 14th Amendment to the Constitution of the United States." 99 288 The court did not prescribe any particular formula for remedying the Constitutional violation; in fact, it deferred action until after the then current session of the Minnesota legislature.

There is ample precedent for the Supreme Court to conclude that a particular type of discrimination violates the equal protection clause without prescribing a specific formula for remedying the violation.20 In Brown v. Board of Educa

285 Cf. Schoettle, op. cit. supra note at 1400. "One could not expect a court that regarded state imposition of a flat dollar ceiling per family unit in dispensing AFDC payments as presenting an intractable economic, social, and even philosophical problem insusceptible of judicial resolution to look favorably upon claims of legal entitlement to compensatory education or equality of educational opportunity in some positive sense."

286293 F. Supp. 327 (N.D. Ill. 1968), aff'd mem. sub. nom., McInnis v. Ogilvie, 394 U.S. 322 (1969).

287 In Serrano v. Priest, 5 Cal. 3d 584, 614, 487 P. 2d 1241, 96 Cal. Reptr. 601 (1971) the court concluded that the California educational finance system "classifies its recipients on the basis of their collective affluence and makes the quality of a child's education depend upon the resources of his school district and ultimately upon the pocketbook of his parents." (emphasis added). Schoettle, op. cit. supra note argues that if the California Court's decision is interpreted to mean that school districts must be of equal quality, this would be an inappropriate exercise of judicial power. He contends that "a number of considerations based upon educational research and budgetary theory lend support to the conclusion that the Supreme Court should not hold that the fourteenth amendment requires that the states afford equality of educational opportunity in some positive sense.' "Id. at 1399.

288 334 F. Supp. 870, 877 (D. Minn. 1971).

289 Schoettle, op. cit. supra note concludes that ". the courts should not attempt to guarantee equality of educational attainment. The means through which such a result might be obtained are at present unknown. The courts are an especially inappropriate institution to make such an effort." Id. at 1401. Nevertheless, he says: "Our conclusion that a court should not attempt to insure equality of education result does not dictate that the court should abstain altogether from protecting against inequality. The inability of a court to state with certainty that particular programs will produce equality of educational attainment does not mean that the court cannot remedy instances of injustices and afford protection against too gross an inequality." Id. at 1401-1402.

tion 200

291

the Supreme Court held that separate but equal public school education denied equal protection of the laws. No specific formula was prescribed for attaining a discrimination free school system. Rather, the Court deferred ruling on the question of relief. When, a year later, it directed itself to this question, it merely provided some general guidelines to the lower courts and ordered that plans be implemented for carrying out its 1954 declaration "with all deliberate speed".2 In subsequent years, numerous questions arose as to what specific systems constituted compliance with the Court's order, and these issues were considered and resolved on a case by case basis.292 Similarly, when the Court first ventured into the area of reapportionment, it did nothing more than declare that legislative apportionment schemes that dilute the votes of citizens in particular areas violate the equal protection clause." 293 It was left to subsequent cases to define more specifically what types of systems complied with the equal protection clause.294

The Court could declare that educational financing schemes that discriminate on the basis of wealth violate the 14th amendment. It could be left to future cases to more concretely define what type of systems are in accord with the equal protection clause.205 As we indicate supra, some commentators anticipate that a Supreme Court declaration in this area will set off a wave of reform by state legislatures. This might well make future court action unnecessary. In fact, as we already have shown, there already has been considerable nonjudicial action directed at equalizing state educational finance systems. Dire warnings preceded and accompanied the Supreme Court's involvement in the "political thicket" of legislature reapportionment." Happily, the decision did not involve the Court in unmanageable problems. Rather, compliance has proceeded rather rapidly, and our democracy has been considerably strengthened as a result. The consequences of the Court's involvement in the school finance area might well be the same.

296

V. DEVELOPING AN EQUITABLE SYSTEM OF SCHOOL FINANCING

Reforming the methods by which our schools are financed is not dependent upon the Supreme Court's response to the school finance cases. As we have shown, State courts, legislatures and executives are acting to assure that the level of education a district offers is not dependent on the wealth of that district.207

Many formulas are available to the reformers, and the particular formula selected will have varying impact on different segments of the population and sections of the States.

A. Impact on the Cities

There has been much concern for our financially strapped cities where the poor and the minorities are located in large numbers. The expectation has been that a wealth free system of school financing would benefit the cities and their poor and minorities. The opposite may be true.

Under the present system of school financing, a school district's ability to raise money is dependent upon the value of the property in the district subject to taxation as well as the tax rate. There are obvious limits on the degree to which tax rates can be raised; therefore the extent to which a district is property rich is the principal determinant of its ability to raise taxes for schools, and other purposes. Under a wealth free system of financing, educational expenditures cannot be a function of district wealth; property rich districts, therefore, lose the advantages associated with their high property values. Cities face a potential loss of education funds under a wealth free system because,

290 347 U.S. 483 (1954).

291 Brown v. Board of Education (II), 349 U.S. 294 (1955).

292 See note for a collection of sources that discuss the school desegregation litigation subsequent to Brown.

203 See Baker v. Carr, 369 U.S. 186 (1962).

294 See e.g., Gray v. Sanders, 372 U.S. 368 (1963); Reynolds v. Sims, 377 U.S. 533 (1964). Wesberry v. Sanders, 376 U.S. 1 (1963).

295 See Silard and White, op. cit. supra. note at 30-31.

296 See Colegrove v. Green, 328 U.S. 549 (1946) and Mr. Justice Frankfurter dissenting in Baker v. Carr, 369 186, 266 (1962).

207 See text accompanying note supra.

in general, the assessed value of property per pupil in cities is higher than the average in the State.298

This phenomena can be demonstrated by a simple hypothetical. Assume that a State adopts a strict application of the wealth free system by providing an equal expenditure of $1,000.00 for all pupils wherever located-city, rural, or suburban areas. The tax rate required to raise this amount will depend upon the statement average assessed value of property per pupil. The appropriate rate will then be imposed on every district. In districts where the assessed value of property is below the State average, the amount raised will be less than $1,000.00 and the State will have to make up the difference. In districts where it is above, excess taxes will be raised and turned over to the State. Suppose that under the present system Fun City is able to raise $1,000.00 per pupil by taxing at a rate of 3 percent; Poverty Hollow, on the other hand, must tax at a 6 percent rate to raise that same amount. Under our hypothetical, it might require a statewide rate of 4 percent to raise $1,000.00 per pupil statewide. Such a rate would raise Fun City's tax rate by 1 percent. If, in fact, Fun City had been taxing at the rate of 3.5 percent in order to spend $1,200 per pupil, under our hypothesized wealth free system it would find itself taxing at a 4 percent rate and only receiving $1,000.00 per pupil.

Focusing on two specific cities, we compare urban Albany which has a valuation per student of $57,498 with Carthage a rural district with a valuation of $14,109.00 If both districts taxed at a rate of $.02 for educational revenues, Albany would raise $1,149.96 in local taxes per student, whereas, Carthage would raise only $282.18. Under a strict application of the wealth-free formula of distribution both Carthage and Albany would receive equal expenditures per student. Albany would receive less than before, because the average valuation per student in New York is less than Albany's valuation. Carthage on the other hand with a lower than average valuation per student would receive more than before. If, for example, the average valuation were $40,000 in New York and educational funds were raised by a uniform State property tax of $.02 then a student in Albany would receive only $800 from the property tax revenues. Here, therefore, Albany is receiving less money for the same tax effort.

An analysis of the effect on the central cities of the 37 largest metropolitan areas of providing essentially equal expenditures for all children financed from a broad based statewide tax system of proportional rather than progressive rates has shown that nearly twice as many central cities would receive lower expenditures from the States than they presently receive under existing revenue structures. Coincidentally, in three quarters of the cities in these metropolitan areas, school taxes would rise. For example, in Indianapolis, the tax rate would go from 2.4 to 2.8 while per pupil expenditures would drop from $415 to $377; in Denver, the tax rate would increase from 3.3 to 4.3 as expenditures declined from $667 to $507. If, however, the cities were allowed to keep the additional revenue raised by the higher tax rates, the effect would be significant. In four-fifths of the cases in the largest 37 metropolitan areas, these higher tax rates would have provided the city with more revenue than they will receive under a State distribution system.

300

Thus, although many cities are losing in assessed value as industry and the wealthy escape to the suburbs, they still are relatively wealthy in terms of assessed value and would be financially prejudiced by a system that provided equal educational expenditures per pupil.301 The advantages that many cities have

298 See Berke and Callahan, op. cit. supra note at 55.

Robert Reischauer, a Brookings Institution property tax expert, has said: "It is an interesting hypothesis that central cities are poor. Relative to new growth, of course, cities are declining. But in very few cities is absolute wealth declining. It is probably going up slightly in most cities. Cities have real problems, but maybe it's not their fiscal base, but their excessive needs." Quoted in Myers, "Second Thoughts on the Serrano Case", 5 City 38, 40 (1971). A study by the Fleischmann Commission in New York reveals that virtually every sizable city in New York State falls above the statewide median in wealth as measured by property value per pupil. Id. at 40. The poor areas, in terms of taxable wealth, are in the rural areas. See Press Summary, Fleischmann Commission 5, 6 (January 30, 1972). 299 Press Summary, op. cit. supra note at 5

300 See Berke and Callahan, op. cit. supra note at 65-71. The authors of this analysis cautioned: "The foregoing tax expenditure analysis should, we believe, be seen as a warning to those who uncritically hailed the new cases and proposals that call for State assumption of educational costs by proportional taxes and a reduction of expenditure disparities." Id. at 71.

301 It should be noted, however, apart from any effect the wealth free formula has on the absolute amount of funds alloted the cities, the cities have something to gain because use of such a formula would reduce the large differentials in educational expenditures between the cities and nearby suburbs. Competition with wealthy suburban areas for better teachers has been an important source of the cities' high costs for education. See Myers, op. cit. supra note at 41.

over the average district in assessed valuation, however, is overshadowed by special urban problems that have been taken many city schools beyond the crisis stage and on to the verge of financial collapse.

1. Added Educational Costs of Cities.

303

Higher than average costs strain the budgets of the city schools. Higher teacher salaries, the largest budget item, are caused by a stable and mature teaching staff at the top of the salary schedule and aggressive teacher union acitvity. For example, Detroit offered a beginning teacher salary in 1968-69 of $7,500. The average for 35 surrounding suburban district was $6,922.303 Big cities also usually pay higher wages to nonprofessional workers.

Urban school districts must pay high prices for land acquisition. Urban land is scarce and therefore expensive; in the outlying areas, less expensive undeveloped land can often be found. In 1967 Detroit paid an average price per acre for school sites in excess of $100,000; surrounding suburban districts only paid approximately $6,000 per acre. 304 In the twenty-five largest cities average land costs per acre are $658,000—in their contiguous suburbs, $3,500.305 City school districts also have higher insurance rates, vandalism costs, and maintenance costs for the older school buildings.

306

2. Special Educational Problems of the Cities.

Equal per pupil distribution of education funds, therefore, would be inequitable for the cities because it does not take account of higher urban costs. Nor does it take account of the special problems of educating the large number of disadvantaged minority and low-income children found in the cities. James Kelly, a specialist in public education, has said of such children: "Their verbal skills may be severely limited; their motivation to do school work may be inadequate; their attitudes may be inappropriate to the traditional classroom context.' 99307 That extra needs require additional expenditures was noted by the court in Robinson v. Cahill: "It is now recognized that children from lower socio-economic level homes require more educational attention if they are to progress normally through school. When the additional compensatory education is provided, it results in substantially higher costs." (Emphasis in original.)*

308

Large populations of minorities and poor are found in the central cities. In the 37 largest metropolitan areas, central cities average more than 20 percent black population, while outlying areas have approximately 5 percent.300 The percentage of black students in the schools is considerably higher than in the general population in the cities due to the higher proportion of white students in nonpublic schools and because of larger proportions of nonwhite families with children in core cities. 310 Approximately half the black school children in the country are enrolled in the Nation's 100 largest systems.11 located primarily in the cities. In the five Southwestern States of Arizona, Texas, Colorado, California and New Mexico, 80 percent of the Mexican Americans lived in cities in 1960.3 Thus, most Mexican American children also probably are enrolled in city school systems.

3. Higher Noneducational Costs of the Cities.

312

A strict application of a wealth free formula that provides equal per pupil expenditures also fails to take account of the additional noneducational services that cities must support from their property tax revenues. "Municipal overburden" is the term used to express the cities' greater needs for general public

302 A typical public school district spends approximately two-thirds of its annual budget on teachers' salaries. See Schoettle, op. cit. supra note at 1359.

303 See Report of the Commissioner's Ad Hoc Group on School Finance, Department of Health, Education, and Welfare, Equal Educational Opportunity Hearings, pt. 16D-3 at 8372 (1971). See also Berke and Callahan op. cit. supra note at 52.

304 Report of the Commissioner's Ad Hoc Group on School Finance op. cit. supra note at 8372.

305 Ibid.

306 See also Testimony of Dr. Mark Shedd, Equal Educational Opportunity Hearings, pt. 16A at 6609-6613.

307 J. Kelly. "Judicial Reform of Educational Finance", Equal Educational Opportunity Hearings at 7468 (1971).

308 Robinson v. Cahill op. cit. supra note at 52.

300 Berke and Callahan, op. cit. supra note at 51.

310 Ibid.

311 Washington Post, Nov. 28, 1971.

312 See U.S. Department of Commerce. Bureau of Census, We The Mexican Americans (Nosotros Los México Americanos) 6 (1970).