Financing Public Education: Recent Developments and the Outlook for Nebraska
NEBRASKA LAW REVIEW-VOL.
Financing Public Education: Recent Developments and the Outlook for Nebraska
Kenneth Stephan 0 1 2
0 Thi s Article is brought to you for free and open access by the Law, College of at
1 University of Nebraska College of Law , USA
2 Kenneth Stephan and Richard Wegener, Financing Public Education: Recent Developments and the Outlook for Nebraska, 52 Neb. L. Rev. 77 (1973) Available at: https://digitalcommons.unl.edu/nlr/vol52/iss1/7 , USA
-
Article 7
"Today, education is perhaps the most important function of state
and local governments."
-Brown v. Board of Education'
"Lines drawn on the basis of wealth or property, like those of
race... are traditionally disfavored."
-Harper v. VirginiaState Board of Elections 2
INTRODUCTION
Since 1968 suits have been filed in at least ten states3 alleging
that public school financing systems which rely primarily on local
ad valorem property taxes are unconstitutional in that they violate
the equal protection clause of the Fourteenth Amendment. The
legal basis for this contention is that these systems make the
quality of education dependent upon the wealth of the particular
school district, thereby favoring school children who happen to live
in a district having high
against children who live in
property values and discriminating
districts having relatively little
assessable property.
Two basic social principles are involved:
(
1
)
the fundamental importance of a system
of free public education
in a democracy, and (
2
) the belief that a government should not
discriminate between the rich and the poor in providing essential
services.
On August 30, 1971, the Supreme Court of California decided
the leading case of Serrano v. Priest4, in which it held that:
a public school financing system 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 grants invidiously discriminates against
the poor and violates the equal protection clause of the Fourteenth
Amendment. 5
Since all of the states except Hawaii have school
financing systems which derive most of their revenue from local
property taxes, 6 the Serrano decision has far-reaching implications.
United States District Courts in Texas7 and Minnesota8 have
applied the Serrano rationale to invalidate existing school funding
systems in those states, and a New Jersey Superior Court has cited
the Serrano decision with approval in a case in which the New
Jersey school financing system was held to violate the equal
protection clauseY Public interest in the so-called "school tax" issue
is intense, especially in an election year in which rising property
taxes constitute a major political issue.1 0
In an effort to bring recent developments into sharper focus,
this article will examine the issue of public school finance and
the requirements of the equal protection clause from two
perspectives. First, the recent series of "school tax cases" will be
examined in detail, with particular emphasis placed upon the
Serrano decision. An attempt will be made to determine the effect
that these cases will have on existing state education funding
systems. Second, the Nebraska system's vulnerability to constitutional
attack in light of recent decisions will be considered.
EXISTING SCHOOL FINANCING SYsTEms: A BASIC EXPLANATION
A thorough understanding of the constitutional principles
involved in the school tax cases is dependent upon a basic familiarity
with the characteristics of existing school financing systems. As
noted earlier, all of the states except Hawaii have school funding
systems which are characterized by reliance on ad valorem
property taxes assessed and collected by the local school districts.
This type of revenue is the largest single component of the state's
total education expenditure. The concept of decentralized fiscal
planning and policy-making is basic to the system of public
education in America, and its sudden exposure to criticism comes as
a social upheaval in many communities, especially those that fear
that centralization of education funding will result in the
diversion of some of their tax dollars to school districts having lower
tax bases.
The typical public school financing system is relatively simple
in operation. Approximately 50-75% of each district's available
funds are derived from a tax levied on real property located
within the district. Therefore, the amount of money which can
be spent for education in any given district is largely dependent
upon two factors: (
1
) the assessed property valuation of the
district, and (
2
) the mill levy, or rate of taxation, determined by the
residents of the district based on recommendations of school
district officials. The two factors are inversely proportional. For
example, suppose that two school districts having roughly equal
numbers of taxpayers and school children wish to provide the
same amount o (...truncated)