The opinion
[This opinion has been published in Ohio Official Reports at 78 Ohio St.3d 193.]
DEROLPH ET AL., APPELLANTS, V. THE STATE OF OHIO ET AL., APPELLEES.
[Cite as DeRolph v. State, 1997-Ohio-84.]
Constitutional law—Education—Schools—Ohio’s elementary and secondary
public school financing system violates Section 2, Article VI of the Ohio
Constitution—Specific school funding statutes that are unconstitutional.
Ohio’s elementary and secondary public school financing system violates Section
2, Article VI of the Ohio Constitution, which mandates a thorough and
efficient system of common schools throughout the state. The following
specific provisions are unconstitutional:
(a) R.C. 133.301, granting borrowing authority to school districts;
(b) R.C. 3313.483, 3313.487, 3313.488, 3313.489, and 3313.4810, the
emergency school assistance loan provisions;
(c) R.C. 3317.01, 3317.02, 3317.022, 3317.023, 3317.024, 3317.04,
3317.05, 3317.051 and 3317.052, the School Foundation Program;
(d) R.C. Chapter 3318, the Classroom Facilities Act, to the extent that it
is underfunded.
(No. 95-2066--Submitted September 10, 1996--Decided March 24, 1997.)
APPEAL from the Court of Appeals for Perry County, No. 94-CA-477.
__________________
{¶ 1} The constitutionality of Ohio’s public elementary and secondary
school finance system is at issue in this case. The named plaintiffs-appellants are
the Youngstown City School District Board of Education, Mahoning County; the
Lima City School District Board of Education, Allen County; the Dawson-Bryant
Local School District Board of Education, Lawrence County; the Northern Local
School District Board of Education, Perry County; the Southern Local School
District Board of Education, Perry County; and the superintendents and certain
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named members of the boards of education of these districts, as well as certain
teachers, pupils and next friends. Numerous organizations representing such
diverse groups as teachers’ unions, administrators, school boards, and handicapped
children, and various legislators, as well as the American Civil Liberties Union and
the Ohio AFL-CIO, have filed amicus curiae briefs on behalf of the appellants.
{¶ 2} The defendants-appellees are the state of Ohio, the State Board of
Education, the Superintendent of Public Instruction, and the Ohio Department of
Education. The Alliance for Adequate School Funding, Stanley Aronoff, JoAnn
Davidson, and Governor George Voinovich have filed amicus curiae briefs on
behalf of the appellees.
PROCEDURAL HISTORY
{¶ 3} On December 19, 1991, appellants filed a complaint for declaratory
and injunctive relief in the Court of Common Pleas of Perry County, seeking a
determination that Ohio’s system of funding public education is unconstitutional.
Trial began on October 25, 1993 and lasted thirty days, culminating in more than
five thousand six hundred pages of transcript and the admission of approximately
four hundred fifty exhibits into evidence. Sixty-one witnesses testified at trial or
by way of sworn deposition. Although the parties disagree over the
constitutionality of the relevant statutes, plaintiff and defense witnesses alike
testified as to the inadequacies of Ohio’s system of school funding and the need for
reform. In fact, defendant State Board of Education has not only advocated
comprehensive reform but has stated the following three goals of such reform:
equity, adequacy and reliability of school funding.
{¶ 4} Following trial, the trial court issued extensive findings of fact and
conclusions of law. The court determined that Ohio’s system of school funding
violates numerous provisions of the Ohio Constitution, including Section 2, Article
VI, requiring a thorough and efficient system of common schools throughout the
state. The trial court ordered the Superintendent of Public Instruction and the State
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Board of Education to prepare legislative proposals for submission to the General
Assembly to eliminate wealth-based disparities among Ohio’s public school
districts. The trial court retained jurisdiction in the matter only for a period of time
to ensure that the order was followed and that appropriate steps were taken to
institute a totally new system of school funding. The trial court also awarded costs
and attorney fees to appellants.
{¶ 5} The State Board of Education voted not to appeal from the trial court’s
decision. However, the Ohio Attorney General filed a notice of appeal to the Fifth
District Court of Appeals. The court of appeals, in a split decision, reversed the
trial court. The majority relied on Cincinnati School Dist. Bd. of Edn. v. Walter
(1979), 58 Ohio St.2d 368, 12 O.O.3d 327, 390 N.E.2d 813, and found that the
current system of school funding is constitutional. The court also determined that
the trial court had erred in awarding attorney fees to appellants and in retaining
jurisdiction in the case.
{¶ 6} In his concurring opinion, Judge Reader conceded that current school
funding was insufficient, but was unwilling to find the statutory scheme
unconstitutional. Instead, he stated that it is up to this court to declare the current
system unconstitutional and for the General Assembly to repair it. Despite this
position, Judge Reader emphasized the peculiar nature of this case and the lack of
dispute over the evidence:
“*** The defendants, the State of Ohio, the State Board of Education, the
Superintendent of Public Instruction, and the Ohio Department of Education in their
appellate brief indicated that there are few facts in dispute. Of course, there aren’t
-- they agreed with almost everything the [plaintiffs] stated. In fact, an examination
of testimony by defense witnesses in this case would indicate that these witnesses
stated that the system of funding was immoral and inequitable. If there was ever a
case where the parties acted more in concert than this one, I haven’t seen it. ***
Further, it is a matter of public record that the appellants, having previously
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indicated their satisfaction with the trial court’s decision, were literally forced to
appeal the ruling.”
{¶ 7} Judge Gwin, in his dissenting opinion, agreed with the trial court that
Ohio’s statutory scheme for financing its schools violates the “thorough and
efficient” clause of the Ohio Constitution. He stressed that due to the glaring
discrepancies in school buildings, facilities, access to technology and curriculum,
some students within the state are being deprived of educational opportunity.
Furthermore, Judge Gwin stated that the state had shirked its duty to generate
revenue for the schools by underfunding Ohio schools and by permitting schools to
borrow against future revenue. He also criticized the majority for disregarding
certain findings of fact by the trial court and for essentially conducting a de novo
review. Judge Gwin found that the trial court had not abused its discretion in
awarding attorney fees to plaintiffs.
{¶ 8} The cause is now before this court pursuant to the allowance of a
discretionary appeal.
__________
Bricker & Eckler, Nicholas A. Pittner, John F. Birath, Jr., Sue W. Yount,
Michael D. Smith and Susan B. Greenberger, for appellants.
Betty D. Montgomery, Attorney General; Jeffrey S. Sutton, State Solicitor;
Christopher M. Culley and Sharon A. Jennings, Assistant Attorneys General, for
appellees.
Dinsmore & Shohl, Lawrence A. Kane, Jr., Mark A. VanderLaan, Joel S.
Taylor, David K. Mullen and William M. Mattes, Special Counsel for appellees
State Superintendent of Public Instruction and State Department of Education.
Ben Espy Co., L.P.A., and Ben E. Espy; Jan Michael Long, urging reversal
for amici curiae members of the Ohio House of Representatives Mary Abel, John
Bender, Ross Boggs, Dan Brady, Samuel Britton, Jack Cera, Jack Ford, Robert
Hagan, David Hartley, William Healy, Troy Lee James, Jerry Krupinski, Lloyd
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Lewis, Jr., Sean Logan, June Lucas, Mark Mallory, Dan Metelsky, William Ogg,
Darrell Opfer, C.J. Prentiss, Tom Roberts, Frank Sawyer, Michael Shoemaker,
Betty Sutton, Vernon Sykes, and Charleta Tavares; Ohio Senators Robert Boggs,
Robert Burch, James Carnes, Ben Espy, Linda Furney, Leigh Herington, Jeffrey
Johnson, Anthony Latell, Jan Michael Long, Rhine McLin, and Alan Zaleski; and
U.S. Representatives Louis Stokes, Robert Ney, and Frank Cremeans.
Joan M. Englund, urging reversal for amicus curiae American Civil
Liberties Union of Ohio Foundation, Inc.
Means, Bichimer, Burkholder & Baker Co., L.P.A., and Kimball H. Carey,
urging reversal for amici curiae Buckeye Association of School Administrators,
Ohio School Boards Association and Ohio Association of School Business
Officials.
James A. Ciocia, urging reversal for amicus curiae Cleveland Teachers
Union.
Spieth, Bell, McCurdy & Newell Co., L.P.A., and Frederick I. Taft, urging
reversal for amici curiae Coalition for School Funding Reform (Bay Village City
School District, Cleveland Heights-University Heights City School District,
Lakewood City School District, and Shaker Heights City School District).
Patrick F. Timmins, Jr., urging reversal for amicus curiae Coalition of
Rural and Appalachian Schools.
David Goldberger and Edward B. Foley, urging reversal for amicus curiae
Institute for Democracy in Education.
Goldstein & Roloff and Morris L. Hawk, urging reversal for amici curiae
Ohio Association of Elementary School Administrators and Ohio Association of
Secondary School Administrators.
Buckley, King & Bluso, Robert J. Walter and Thomas C. Drabick, Jr.,
urging reversal for amicus curiae Ohio Association of Public School Employees
(OAPSE)/AFSCME Local 4, AFL-CIO.
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Stewart Jaffy & Associates Co., L.P.A., Stewart R. Jaffy and Marc J. Jaffy,
urging reversal for amicus curiae Ohio AFL-CIO.
Schnorf & Schnorf Co., L.P.A., David M. Schnorf and Johna M. Bella,
urging reversal for amicus curiae Ohio Federation of Teachers.
Susan G. Tobin, urging reversal for amici curiae Ohio Legal Rights Service
and Ohio Coalition for the Education of Children with Disabilities.
Berry, Shoemaker & Clark and Kevin Shoemaker, urging reversal for
amicus curiae Ohio Professional Staff Union.
Chester, Willcox & Saxbe, John J. Chester and Donald C. Brey, urging
affirmance for amicus curiae Governor George Voinovich.
Benesch, Friedlander, Coplan & Aronoff, P.L.L., and N. Victor Goodman,
urging affirmance for amici curiae Stanley J. Aronoff, President of the Ohio Senate,
and JoAnn Davidson, Speaker of the Ohio House of Representatives.
Walter & Haverfield and James E. Betts, urging affirmance for amicus
curiae Alliance for Adequate School Funding.
__________
FRANCIS E. SWEENEY, SR., J.
{¶ 9} In 1802, when our forefathers convened to write our state
Constitution, they carried within them a deep-seated belief that liberty and
individual opportunity could be preserved only by educating Ohio’s citizens. These
ideals, which spurred the War of Independence, were so important that education
was made part of our first Bill of Rights. Section 3, Article VIII of the Ohio
Constitution of 1802. Beginning in 1851, our Constitution has required the General
Assembly to provide enough funding to secure a “thorough and efficient system of
common schools throughout the State.”
{¶ 10} Over the last two centuries, the education of our citizenry has been
deemed vital to our democratic society and to our progress as a state. Education is
essential to preparing our youth to be productive members of our society, with the
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skills and knowledge necessary to compete in the modern world. In fact, the
mission statement of defendant, Ohio State Board of Education, echoes these
concerns:
“The mission of education is to prepare students of all ages to meet, to the
best of their abilities, the academic, social, civic, and employment needs of the
twenty-first century, by providing high-quality programs that emphasize the
lifelong skills necessary to continue learning, communicate clearly, solve problems,
use information and technology effectively, and enjoy productive employment.”
State Board of Education, Preparing Ohio Schools for the 21st Century, Sept. 1990,
ii.
{¶ 11} Today, Ohio stands at a crossroads. We must decide whether the
promise of providing to our youth a free, public elementary and secondary
education in a “thorough and efficient system” has been fulfilled. The importance
of this case cannot be overestimated. It involves a wholesale constitutional attack
on Ohio’s system of funding public elementary and secondary education.
Practically every Ohioan will be affected by our decision: the 1.8 million children
in public schools and every taxpayer in the state. For the 1.8 million children
involved, this case is about the opportunity to compete and succeed.
{¶ 12} Upon a full consideration of the record and in analyzing the pertinent
constitutional provision, we can reach but one conclusion: the current legislation
fails to provide for a thorough and efficient system of common schools, in violation
of Section 2, Article VI of the Ohio Constitution.
{¶ 13} In reaching this conclusion, we dismiss as unfounded any suggestion
that the problems presented by this case should be left for the General Assembly to
resolve. This case involves questions of public or great general interest over which
this court has jurisdiction. Section 2(B)(2)(d), Article IV of the Ohio Constitution.
{¶ 14} Under the long-standing doctrine of judicial review, it is our sworn
duty to determine whether the General Assembly has enacted legislation that is
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constitutional. Marbury v. Madison (1803), 5. U.S. (1 Cranch) 137, 2 L.Ed. 60.
We are aware that the General Assembly has the responsibility to enact legislation
and that such legislation is presumptively valid. R.C. 1.47(A); Adamsky v. Buckeye
Local School Dist. (1995), 73 Ohio St.3d 360, 361, 653 N.E.2d 212, 214. However,
this does not mean that we may turn a deaf ear to any challenge to laws passed by
the General Assembly. The presumption that laws are constitutional is rebuttable.
Id. The judiciary was created as part of a system of checks and balances. We will
not dodge our responsibility by asserting that this case involves a nonjusticiable
political question. To do so is unthinkable. We refuse to undermine our role as
judicial arbiters and to pass our responsibilities onto the lap of the General
Assembly.
{¶ 15} We quote, with approval, the Texas Supreme Court’s remarks when
it addressed a similar challenge to its authority to review its state’s school funding
system:
“‘[W]e have not been unmindful of the magnitude of the principles
involved, and the respect due to the popular branch of the government. ***
Fortunately, however, for the people, the function of the judiciary in deciding
constitutional questions is not one which it is at liberty to decline. *** [We] cannot,
as the legislature may, avoid a measure because it approaches the confines of the
constitution; [we] cannot pass it by because it is doubtful; with whatever doubt,
with whatever difficulties a case may be attended, [we] must decide it, when it
arises in judgment.’” Edgewood Indep. School Dist. v. Kirby (1989), 777 S.W.2d
391, 394, quoting Morton v. Gordon (Republic of Tex.1841), Dallam 396, 397-398.
{¶ 16} Therefore, we are clearly within our constitutional authority in
reviewing this matter and in declaring Ohio’s school financing system
unconstitutional. We turn now to a review of the record.
OHIO’S SYSTEM OF PUBLIC SCHOOL FINANCING
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{¶ 17} Ohio’s statutory scheme for financing public education is complex.
At the heart of the present controversy is the School Foundation Program (R.C.
Chapter 3317) for allocation of state basic aid and the manner in which the
allocation formula and other school funding factors have caused or permitted to
continue vast wealth-based disparities among Ohio’s schools, depriving many of
Ohio’s public school students of high quality educational opportunities.
{¶ 18} According to statute, the revenue available to a school district comes
from two primary sources: state revenue, most of which is provided through the
School Foundation Program, and local revenue, which consists primarily of locally
voted school district property tax levies. Federal funds play a minor role in the
financing scheme. Ohio relies more on local revenue than state revenue, contrary
to the national trend.
{¶ 19} Under the foundation program,1 state basic aid is available for school
districts that levy at least twenty mills of local property tax revenue for current
operating expenses.2 R.C. 3317.01(A). State basic aid for qualifying school
districts is calculated each biennium as part of the General Assembly’s budget
pursuant to a formula set forth in R.C. 3317.022.3
1. The current version of the School Foundation Program is contained in R.C. 3317.01 et seq. The
School Foundation Program for allocation of state aid has operated in a similar manner from 1981
through the present day despite numerous amendments. The statutory provisions at issue are those
that were in existence in January 1992 at the time the amended complaint was filed.
2. A mill is one tenth of a cent. The required twenty mills of local tax includes unvoted or “inside”
millage (that portion of the total available ten-mills of unvoted property tax authorized by Section
2, Article XII of the Ohio Constitution that may be levied by a school district) and voted or “outside”
millage approved by the voters. The appellant school districts have all participated in the School
Foundation Program.
3. The formula was as follows: (school district equalization factor X the formula amount X ADM)
- (.02 X total taxable value) = state aid. Former R.C. 3317.022(A). Am.Sub.H.B. No. 298, 144
Ohio Laws, Part III, 3987, 4122. The basic state aid calculation remains essentially the same in the
current version of R.C. 3317.022(A).
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{¶ 20} The “formula amount” has no real relation to what it actually costs
to educate a pupil. In fact, Dr. Howard B. Fleeter, Assistant Professor at the School
of Public Policy and Management at Ohio State University, stated that the
foundation dollar amount “is a budgetary residual, which is determined as a result
of working backwards through the state aid formula after the legislature determines
the total dollars to be allocated to primary and secondary education in each biennial
budget. Thus, the foundation level reflects political and budgetary considerations
at least as much as it reflects a judgment as to how much money should be spent on
K-12 education.” (Emphasis sic.)
{¶ 21} The foundation formula amount, which was set at $2,817 per pupil
in the 1992-1993 school year, 144 Ohio Laws, Part III, 4122, is adjusted by a school
district equalization factor, now called the “cost of doing business” factor. R.C.
3317.02(E). These rates of adjustment vary from county to county and apply
equally to all districts within the county without regard to the actual costs of
operations within the individual school districts. The cost-of-doing-business factor
assumes that costs are lower in rural districts than in urban districts.
{¶ 22} A target amount of combined local and state aid per district is
reached by multiplying the formula amount, the cost-of-doing-business factor and
the average daily membership. R.C. 3317.022(A). However, subtracted or
“charged off” from that figure is the total taxable value of real and tangible personal
property in the district times a certain percentage. Id. Subtracting the applicable
charge-off results in a figure constituting basic state aid for the district in question.
The effect of an increase in this percentage would be to decrease the amount of
basic state aid, resulting in an even greater burden for local schools to fund
education through local property and/or income taxes.
{¶ 23} The financing scheme is further complicated when special factors
are taken into account. For instance, additional appropriations may be made for
categorical programs, such as vocational education, special education and
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transportation. R.C. 3317.024. However, no adjustment is made for the relative
wealth of the receiving district. Moreover, children in funded handicapped “units”
are not included in the state basic aid formula. R.C. 3317.02(A). Thus, funds for
handicapped students, for instance, whose education costs are substantially higher
(due to state mandates of small class size and because of related extra services) are
disbursed in a flat amount per unit (see R.C. 3317.05). If the actual cost exceeds
the funds received, wealthier districts are in a better position to make up the
difference.
{¶ 24} In addition, school districts with children whose families collect Aid
to Dependent Children (“ADC”) receive additional distributions which increase
according to the concentration of ADC pupils. R.C. 3317.023(B). However, the
level of distributions freezes once the concentration reaches twenty percent. R.C.
3317.023(B)(1). Thus, districts with higher concentrations of ADC pupils are
forced to carry more of the extra cost. Moreover, testimony revealed that above the
twenty-percent concentration level, educational need increases at a faster rate than
the concentration percentage.
{¶ 25} The School Foundation Program does contain certain guarantees so
that a school district receives the greater of the program amount or the guarantee
amount. See R.C. 3317.04 and 3317.0212. However, testimony revealed that the
guarantees work to the substantial benefit of the wealthier districts and represent a
flaw in the system of school funding, because they work against the equalization
effect of the formula.
{¶ 26} Another weakness in the system is certain “tax reduction factors”
introduced into law by the General Assembly’s 1976 enactment of R.C. 319.301 in
Am.Sub.H.B. No. 920, 136 Ohio Laws, Part II, 3182, 3194. The purpose of R.C.
319.301, as amended, is to limit growth of real property tax revenues that would
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otherwise occur as a consequence of inflation of property values.4 R.C. 319.301
requires the application of tax reduction factors when property values increase due
to reappraisal or update. The result is that a school district will receive the same
number of dollars from voted tax levies after reappraisal as it did before reappraisal,
even though real property valuation in the district has increased through real estate
inflation. As a direct result of these tax reduction measures introduced by H.B. No.
920, local revenues cannot keep pace with inflation, and school districts have been
required to propose additional tax levies—most of which ultimately fail.
{¶ 27} H.B. No. 920 has also resulted in a phenomenon called “phantom
revenue.” As already explained, tax reduction factors limit revenue growth that
would otherwise occur due to inflation of real property values. However, at the
same time, the increased valuation of property is taken into account in the charge-
off portion of the foundation formula. R.C. 3317.022(A). Thus, a school district
can experience an increase in the valuation of its taxable real property without
enjoying any additional income and yet receive less under the formula because the
total taxable value of property has increased.
{¶ 28} Another inherent weakness in the system stems from forced
borrowing. Districts unable to meet their budgets are forced to borrow funds. The
first type of state-mandated loan is the “spending reserve” loan. R.C. 133.301.
Under the spending reserve loan program, school districts are permitted to borrow
against a subsequent year’s revenue with approval of the Superintendent of Public
Instruction. Id. Although there is a statutory maximum amount that can be
borrowed by a school district, the superintendent may (and does) permit borrowing
beyond that limit. R.C. 133.301(C).
4. Inside millage (millage levied without the approval of the electorate and limited to a ten-mill
ceiling on unvoted property taxes), new construction growth and, of course, tangible personal
property are not subject to tax reduction factors.
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{¶ 29} If a school district cannot meet its current operating needs through a
spending reserve loan, it is then required to seek approval of a loan under R.C.
3313.483. These loans are obtained from commercial lenders. R.C. 3313.483(D).
{¶ 30} Pursuant to R.C. 3313.483(A), local boards of education in such
circumstances declare by resolution that they are unable to remain open for
instruction and are unable to meet their expenses. The board must then request that
the State Auditor determine that such a condition exists. Id. If the auditor finds
that the board has exhausted all available revenue sources, the auditor must certify
that finding to the Superintendent of Public Instruction and the State Board of
Education and must also certify the amount of operating deficit the district will have
at the end of the fiscal year. R.C. 3313.483(B). A school district that has been
certified as having a projected operating deficit must apply for a loan from a
commercial lender. R.C. 3313.483(D). However, if the commercial loan is denied,
a school district must submit a plan for reducing the district’s budget. R.C.
3313.483(E)(1). The budget reduction plan must provide for repayment of the loan
within two years (ten years for very large amounts), R.C. 3313.483(E)(2), but the
plan need not provide for repayment of any spending reserve loan. The loan is
repaid by diverting funds otherwise available to the school district under the school
foundation program to the commercial lender. R.C. 3313.483(E)(3).
{¶ 31} Effective December 1992, if a district receives an R.C. 3313.483
emergency school assistance loan in excess of seven percent of the district’s general
fund expenditures and has received a loan under R.C. 3313.483 within the last five
years, the district is subject to state supervision under R.C. 3313.488 for that year
and the ensuing two years. R.C. 3313.4810. School districts subject to state
supervision are prohibited from making any expenditure of money or any
employment, purchase or rental contract, giving any order involving the
expenditure of money, or increasing any wage or salary schedule without written
approval of the superintendent. R.C. 3313.488(A). The debt which stems from
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mandated borrowing programs is in many instances staggering, and the cyclical
effect of continued borrowing has made it more difficult to maintain even minimal
school operations. See R.C. 133.301 and 3313.483. These loan programs,
discussed above, are nothing less than a clever disguise for the state’s failure to
raise revenue sufficient to discharge its constitutional obligations.
{¶ 32} The School Foundation Program contains no aid expressly for
capital improvements for Ohio’s public schools. Aid for that purpose is provided
by the Classroom Facilities Act, R.C. Chapter 3318. However, the evidence
showed, and the trial court found, that the Act is insufficiently funded to meet the
needs of districts that are poor in real property value.
A “THOROUGH AND EFFICIENT SYSTEM OF COMMON SCHOOLS”
{¶ 33} In urging this court to strike the statutory provisions relating to
Ohio’s school financing system, appellants argue that the state has failed in its
constitutional responsibility to provide a thorough and efficient system of public
schools.5 We agree.
{¶ 34} Section 2, Article VI of the Ohio Constitution requires the state to
provide and fund a system of public education and includes an explicit directive to
the General Assembly:
“The general assembly shall make such provisions, by taxation, or
otherwise, as, with the income arising from the school trust fund, will secure
a thorough and efficient system of common schools throughout the State ***.”
{¶ 35} The delegates to the 1850-1851 Constitutional Convention
recognized that it was the state’s duty to both present and future generations of
Ohioans to establish a framework for a “full, complete and efficient system of
5. Appellants also contend that education is a fundamental right and that the current funding system
violates equal protection. They further argue that the school financing system violates Section 3,
Article VIII and Section 4, Article XII. However, since we decide that Ohio’s school financing
system violates the Thorough and Efficient Clause of our state Constitution, we decline to address
appellants’ other constitutional claims.
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public education.” II Report of the Debates and Proceedings of the Convention for
the Revision of the Constitution of the State of Ohio, 1850-51 (1851) (“Debates”).
Thus, throughout their discussions, the delegates stressed the importance of
education and reaffirmed the policy that education shall be afforded to every child
in the state regardless of race or economic standing. Debates at 11, 13.
Furthermore, the delegates were concerned that the education to be provided to our
youth not be mediocre but be as perfect as could humanly be devised. Debates at
698-699. These debates reveal the delegates’ strong belief that it is the state’s
obligation, through the General Assembly, to provide for the full education of all
children within the state.
{¶ 36} Dr. Samuel Kern Alexander, a leading professor in the area of school
law and school finance, testified that, in the context of the historical development
of the phrase “thorough and efficient,” it is the state’s duty to provide a system
which allows its citizens to fully develop their human potential. In such a system,
rich and poor people alike are given the opportunity to become educated so that
they may flourish and our society may progress. It was believed by the leading
statesmen of the time that only in this way could there be an efficient educational
system throughout the state.
{¶ 37} This court has construed the words “thorough and efficient” in light
of the constitutional debates and history surrounding them. In Miller v. Korns
(1923), 107 Ohio St. 287, 297-298, 140 N.E. 773, 776, this court defined what is
meant by a “thorough and efficient” system of common schools throughout the
state:
“This declaration is made by the people of the state. It calls for the
upbuilding of a system of schools throughout the state, and the attainment of
efficiency and thoroughness in that system is thus expressly made a purpose, not
local, not municipal, but state-wide.
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“With this very purpose in view, regarding the problem as a state-wide
problem, the sovereign people made it mandatory upon the General Assembly to
secure not merely a system of common schools, but a system thorough and efficient
throughout the state.
“A thorough system could not mean one in which part or any number of the
school districts of the state were starved for funds. An efficient system could not
mean one in which part or any number of the school districts of the state lacked
teachers, buildings, or equipment.” (Emphasis added.)
{¶ 38} Cincinnati School Dist. Bd. of Edn. v. Walter (1979), 58 Ohio St.2d
368, 387, 12 O.O.3d 327, 338, 390 N.E.2d 813, 825, cited Miller with approval.
Additionally, Walter recognized that while the General Assembly has wide
discretion in meeting the mandate of Section 2, Article VI, this discretion is not
without limits. Id. Walter found that a school system would not be thorough and
efficient if “a school district was receiving so little local and state revenue that the
students were effectively being deprived of educational opportunity.” Id.
{¶ 39} Other states, in declaring their state funding systems
unconstitutional,6 have also addressed the issue of what constitutes a “thorough and
efficient” or a “general or uniform” system of public schools. We recognize that
some of these decisions were decided on different grounds or involved different
6. The following states have declared their school funding statutes unconstitutional: Roosevelt
Elementary School Dist. v. Bishop (1994), 179 Ariz. 233, 877 P.2d 806; DuPree v. Alma School
Dist. No. 30 (1983), 279 Ark. 340, 651 S.W.2d 90; Serrano v. Priest (1976), 18 Cal.3d 728, 135
Cal.Rptr. 345, 557 P.2d 929; Horton v. Meskill (1977), 172 Conn. 615, 376 A.2d 359; Rose v.
Council for Better Edn. (Ky.1989), 790 S.W.2d 186; McDuffy v. Secy., Executive Office of Edn.
(1993), 415 Mass. 545, 615 N.E.2d 516; Helena Elementary School Dist. No. 1 v. State (1989), 236
Mont. 44, 769 P.2d 684; Abbott v. Burke (1990), 119 N.J. 287, 575 A.2d 359; Tennessee Small
School Sys. v. McWherter (Tenn.1993), 851 S.W.2d 139; Edgewood Indep. School Dist. v. Kirby
(Tex.1989), 777 S.W.2d 391; Brigham v. State (Vt.1997), ___ A.2d ___, 1997 WL 51794; Seattle
School Dist. No. 1 of King Cty. v. State (1978), 90 Wash.2d 476, 585 P.2d 71; Pauley v. Kelley
(1979), 162 W.Va. 672, 255 S.E.2d 859; Washakie Cty. School Dist. One v. Herschler (Wyo.1980),
606 P.2d 310.
16
January Term, 1997
education provisions. Despite these differences, we still are persuaded by the basic
principles underlying these decisions.
{¶ 40} For instance, in Edgewood Indep. School Dist. v. Kirby, supra, 777
S.W.2d 391, the Texas Supreme Court invalidated its state funding structure, in
which annual per-student expenditures varied from $2,112 in the poorest districts
to $19,333 in the wealthiest districts. The court noted at 393:
“Property-poor districts are trapped in a cycle of poverty from which there
is no opportunity to free themselves. Because of their inadequate tax base, they
must tax at significantly higher rates in order to meet minimum requirements for
accreditation; yet their educational programs are typically inferior. The location of
new industry and development is strongly influenced by tax rates and the quality of
local schools. Thus, the property-poor districts with their high tax rates and inferior
schools are unable to attract new industry or development and so have little
opportunity to improve their tax base.”
{¶ 41} The plaintiffs in Edgewood presented compelling evidence of how
fiscal inequities produced inadequate educational opportunities. The court in
Edgewood stated that the inequalities resulting from Texas’s school funding system
violated the constitutional requirement of efficiency. Thus, the court declared that
the legislature must provide for an efficient system in which funds are distributed
more equitably. As the court noted, at 397, to correct the deficiencies, “[a] band-
aid will not suffice; the system itself must be changed.”
{¶ 42} The dissent believes that we rely too heavily upon anecdotal
evidence to support our holding that the current system is unconstitutional.
Glaringly absent from the dissenting opinion, however, is any consideration of the
massive evidence presented to us. There is one simple reason for this noticeable
omission. The facts are fatal to the dissent. The dissent wisely recognizes that it
could not, in good conscience, address these facts and then conclude that Ohio is
providing the opportunity for a basic education. Therefore, it does the only thing
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SUPREME COURT OF OHIO
that it could do, it ignores them. Instead, it turns to facts outside the record and to
laws passed by the General Assembly after this lawsuit was filed as a means of
justifying its position.7 We, however, know that it is imperative to consider the
record as presented to us. In doing so, we find that exhaustive evidence was
presented to establish that the appellant school districts were starved for funds,
lacked teachers, buildings, and equipment, and had inferior educational programs,
and that their pupils were being deprived of educational opportunity.
{¶ 43} In 1989, the General Assembly directed the Superintendent of Public
Instruction to conduct a survey of Ohio’s public school buildings. Section 8,
Am.Sub.S.B. No. 140, 143 Ohio Laws, Part I, 837. The purpose of this survey was
to determine the cost of bringing all facilities into compliance with state building
codes and asbestos removal requirements, as well as all other state and local
provisions related to health and safety. Id.
{¶ 44} The results of this study were published in the 1990 Ohio Public
School Facility Survey. The survey identified a need for $10.2 billion in facility
repair and construction.
{¶ 45} Among its findings, the survey determined that one-half of Ohio’s
school buildings were fifty years old or older, and fifteen percent were seventy
years old or older. A little over half of these buildings contained satisfactory
7. In State v. Ishmail (1978), 54 Ohio St.2d 402, 8 O.O.3d 405, 377 N.E.2d 500, paragraph one of
the syllabus, we held that a reviewing court may not rely upon matters outside the record in deciding
the appeal. Contrary to this holding, the dissent relies upon a nationwide survey of test results which
was not part of the record. Since the dissent finds this way of proceeding acceptable, we feel at
liberty to point out the stark reality of Ohio’s plight. A June 1996 survey conducted by the United
States General Accounting Office demonstrates the woeful lack of progress in Ohio’s schools. The
report notes that ninety-five percent of Ohio’s schools reported a need to upgrade or repair buildings
to good overall condition. School Facilities: Profiles of School Condition by State, A Report to
Congressional Requesters by the General Accounting Office (June 1996) 143. In 1993-1994, Ohio
spent an average of only $38 per student for K-12 school facilities. Id. Additionally, Ohio ranked
last in the number of students per computer among the fifty states. School Facilities: America’s
Schools Not Designed or Equipped for 21st Century, A Report to Congressional Requesters by the
General Accounting Office (Apr.1995) 43.
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January Term, 1997
electrical systems; however, only seventeen percent of the heating systems and
thirty-one percent of the roofs were deemed to be satisfactory. Nineteen percent of
the windows and twenty-five percent of the plumbing and fixtures were found to
be adequate. Only twenty percent of the buildings had satisfactory handicapped
access. A scant thirty percent of the school facilities had adequate fire alarm
systems and exterior doors.
{¶ 46} Over three years after the 1990 survey was published, the current
Superintendent of Public Instruction, John Theodore Sanders, averred that his visits
to Ohio school buildings demonstrated that some students were “making do in a
decayed carcass from an era long passed,” and others were educated in “dirty,
depressing places.”
{¶ 47} Robert Franklin, the Building Assistant Supervisor for the Ohio
Department of Education, gave disturbing examples of incidents where the health
and safety of students were threatened. In Buckeye Local, Belmont County, three
hundred students were hospitalized because carbon monoxide leaked out of heaters
and furnaces. In another school district in Wayne County, an elementary school
built in 1903 had floors so thin that a teacher’s foot went through the floor while
she was walking across her classroom.
{¶ 48} Another major health and safety hazard is asbestos, which has yet to
be removed from 68.6 percent of Ohio’s school buildings, in direct violation of a
1987 mandate by the United States Environmental Protection Agency. In fact, over
ninety-nine percent of public school structures in Ohio have asbestos in them. Jack
D. Hunter, supervisor of school facilities with the Ohio Department of Education,
testified that around seventy-five percent of Ohio’s public school facilities “have
asbestos that should be abated *** either immediately or near-term.” For fiscal
year 1990, over two hundred forty school districts applied for $140,000,000 in
asbestos-abatement money from the state. Only sixty-three districts received funds.
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{¶ 49} Other conditions which existed within the appellant school districts
were equally deplorable. The Nelsonville York Elementary School in Athens
County is sliding down a hill at a rate of an inch per month. The school district has
hired a registered surveyor to monitor the building’s movement. At Eastern Brown
High School, the learning-disabled classroom is a converted storage room with no
windows for ventilation; a fan is placed on the floor to provide ventilation. The
students at Ash Ridge Elementary eat lunches at their desks because there is no
school cafeteria.
{¶ 50} In the Dawson-Bryant school system, where a coal heating system is
used, students are subjected to breathing coal dust which is emitted into the air and
actually covers the students’ desks after accumulating overnight. Band members
are forced to use a former coal bin for practice sessions where there is no ventilation
whatsoever, causing students to complain of headaches. Special education classes
are also held in a former closet that has one bare lightbulb hanging from the ceiling.
{¶ 51} Deering Elementary is not handicapped accessible. The library is a
former storage area located in the basement. Handicapped students have to be
carried there and to other locations in the building. One handicapped third-grader
at Deering had never been to the school library because it was inaccessible to
someone in a wheelchair.
{¶ 52} The Northern Local School District in Perry County has also been
plagued with deteriorating facilities, which include bulging bricks and walls which
bow out at the now closed Somerset Elementary School, leaking roofs and
windows, outdated sewage systems which have actually caused raw sewage to flow
onto the baseball field at Sheridan High School, and the presence of arsenic in the
drinking water in the Glenford Elementary School buildings.
{¶ 53} Equally alarming are the conditions found in the Southern Local
School District in Perry County, where buildings are crumbling and chunks of
plaster fall from the walls and ceiling. In fact, the problem was so severe that the
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January Term, 1997
principal and custodians at Miller Junior High at Shawnee deliberately knocked
plaster off the ceilings so that the plaster would not fall on the students during the
day.8
{¶ 54} Appellant Christopher Thompson poignantly described his
experience growing up in this school district. While Chris attended New Straitsville
Elementary School in Perry County, plaster was falling off the walls and
cockroaches crawled on the restroom floors. Chris said the building gave him a
“dirty feeling” and that he would not use the restroom at school because of the
cockroaches. In subsequent years, Chris had to contend with a flooded library and
gymnasium, a leaky roof where rainwater dripped from the ceiling like a
“waterfall,” an inadequate library, a dangerously warped gymnasium floor, poor
shower facilities, and inadequate heating. In fact, due to construction and
renovation of the heating system, when Chris attended high school, there was no
heat from the beginning of the fall of 1992 until the end of November or beginning
of December. Students had to wear coats and gloves to classes and were subjected
to kerosene fumes from kerosene heaters which were used when the building
became very cold.
{¶ 55} Obviously, state funding of school districts cannot be considered
adequate if the districts lack sufficient funds to provide their students a safe and
healthy learning environment.
{¶ 56} In addition to deteriorating buildings and related conditions, it is
clear from the record that many of the school districts throughout the state cannot
provide the basic resources necessary to educate our youth. For instance, many of
8. In late 1990, the Southern Local School District was successful in obtaining Classroom Facilities
Act funds and passed a tax levy and a bond issue to help construct new facilities. However, the trial
court found that even after the completion of the project in 1993, significant problems will remain.
The project will not address all the district’s outstanding needs, and the building assistance program
will not provide operating and maintenance funds to keep the facilities in good working order.
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SUPREME COURT OF OHIO
the appellant school districts have insufficient funds to purchase textbooks and must
rely on old, outdated books. For some classes, there were no textbooks at all. For
example, at Southern Local during the 1992-1993 school year, none of the students
in a Spanish I class had a textbook at the beginning of the year. Later, there was a
lottery for books. Students who picked the lucky numbers received a book.
{¶ 57} The accessibility of everyday supplies is also a problem, forcing
schools to ration such necessities as paper, chalk, art supplies, paper clips and even
toilet paper. A system without basic instructional materials and supplies can hardly
constitute a thorough and efficient system of common schools throughout the state
as mandated by our Constitution.
{¶ 58} Additionally, many districts lack sufficient funds to comply with the
state law requiring a district-wide average of no more than twenty-five students for
each classroom teacher. Ohio Adm.Code 3301-35-03(A)(3). Indeed, some schools
have more than thirty students per classroom teacher, with one school having as
many as thirty-nine students in one sixth grade class. As the testimony of educators
established, it is virtually impossible for students to receive an adequate education
with a student-teacher ratio of this magnitude.
{¶ 59} The curricula in the appellant school districts are severely limited
compared to other school districts and compared to what might be expected of a
system designed to educate Ohio’s youth and to prepare them for a bright and
prosperous future. For example, elementary students at Dawson-Bryant have no
opportunity to take foreign language courses, computer courses, or music or art
classes other than band. Junior high students in this district have no science lab. In
addition, Dawson-Bryant offers no honors program and no advanced placement
courses, which disqualifies some of the students from even being considered for a
scholarship or admittance to some universities. Dawson-Bryant is not alone—
similar problems were being experienced by each of the appellant school districts.
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January Term, 1997
{¶ 60} None of the appellant school districts is financially able to keep up
with the technological training needs of the students in the districts. The districts
lack sufficient computers, computer labs, hands-on computer training, software,
and related supplies to properly serve the students’ needs. In this regard, it does
not appear likely that the children in the appellant school districts will be able to
compete in the job market against those students with sufficient technological
training.
{¶ 61} Lack of sufficient funding can also lead to poor academic
performance. Proficiency tests are a method of measuring education. The ninth
grade proficiency test was designed to measure that body of knowledge pupils are
expected to have mastered by the ninth grade. R.C. 3301.0710. Passage of the
ninth grade proficiency test is required before a student may receive a high school
diploma. R.C. 3313.61(A). As of the fall of 1993, thirty-two out of ninety-nine
seniors at Dawson-Bryant had not passed all parts of the ninth grade proficiency
test. This means that nearly one third of the senior class had not met basic
graduation requirements. The district did not have enough money to pay tutors to
assist these students. Poor performance on the ninth grade proficiency tests is
further evidence that these schools lack sufficient funds with which to educate their
students.
{¶ 62} The dissent emphasizes that since schools have complied with
minimum standards enacted in 1983, students are being provided with an adequate
education. However, in March 1992, the State Superintendent suspended routine
minimum standard evaluations. Consequently, these minimum standards have not
been regularly enforced since that time.
{¶ 63} All the facts documented in the record lead to one inescapable
conclusion—Ohio’s elementary and secondary public schools are neither thorough
nor efficient. The operation of the appellant school districts conflicts with the
historical notion that the education of our youth is of utmost concern and that Ohio
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children should be educated adequately so that they are able to participate fully in
society. Our state Constitution was drafted with the importance of education in
mind. In contrast, education under the legislation being reviewed ranks miserably
low in the state’s priorities. In fact, the formula amount is established after the
legislature determines the total dollars to be allocated to primary and secondary
education in each biennial budget. Consequently, the present school financing
system contravenes the clear wording of our Constitution and the framers’ intent.
{¶ 64} Furthermore, rather than following the constitutional dictate that it
is the state’s obligation to fund education (as this opinion has repeatedly
underscored), the legislature has thrust the majority of responsibility upon local
school districts. This, too, is contrary to the clear wording of our Constitution. The
responsibility for maintaining a thorough and efficient school system falls upon the
state. When a district falls short of the constitutional requirement that the system
be thorough and efficient, it is the state’s obligation to rectify it. See DuPree v.
Alma School Dist. No. 30 (1983), 279 Ark. 340, 349, 651 S.W.2d 90, 95.
{¶ 65} Also, when we apply the tests of Miller and Walter as to what is
meant by the words “thorough and efficient,” the evidence is overwhelming that
many districts are “starved for funds,” and lack teachers, buildings, or equipment.
These school districts, plagued with deteriorating buildings, insufficient supplies,
inadequate curricula and technology, and large student-teacher ratios, desperately
lack the resources necessary to provide students with a minimally adequate
education. Thus, according to the tests of Miller and Walter, it is painfully obvious
that the General Assembly, in structuring school financing, has failed in its
constitutional obligation to ensure a thorough and efficient system of common
schools. Clearly, the current school financing scheme is a far cry from thorough
and efficient. Instead, the system has failed to educate our youth to their fullest
potential.
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January Term, 1997
{¶ 66} In so finding, we reject appellees’ contention that Walter is
controlling. The equal yield formula challenged in Walter was repealed shortly
after the case was decided. See former R.C. 3317.022 as amended by Am.Sub.S.B.
No. 221, 137 Ohio Laws, Part I, 581, and repealed by Am.Sub.S.B. No. 59, 138
Ohio Laws, Part I, 188, 200, 230. Moreover, Walter involved a challenge to only
one aspect of school funding. In contrast, the case at bar involves a wholesale
constitutional attack on the entire system. Additionally, in creating the funding
system at issue in Walter, the General Assembly had relied on a determination of a
legislative committee that the statutorily guaranteed amount actually was sufficient
to provide a high quality education. Id., 58 Ohio St.2d at 372, 12 O.O.3d at 329,
390 N.E.2d at 817. Here, however, the evidence clearly indicates that the funding
level set by today’s School Foundation Program has absolutely no connection with
what is necessary to provide each district enough money to ensure an adequate
educational program. The system in place today differs dramatically from that in
place nearly twenty years ago; thus, our holding in Walter does not control the
outcome in this case.
{¶ 67} We also reject the notion that the wide disparities in educational
opportunity are caused by the poorer school districts’ failure to pass levies. The
evidence reveals that the wide disparities are caused by the funding system’s
overreliance on the tax base of individual school districts. What this means is that
the poor districts simply cannot raise as much money even with identical tax effort.
For example, total assessed property valuation in the Dawson-Bryant School
District in 1991 was $28,882,580, while Beachwood School District in Cuyahoga
County had $376,229,512. (The two districts have about the same number of
pupils.)
{¶ 68} We recognize that disparities between school districts will always
exist. By our decision today, we are not stating that a new financing system must
provide equal educational opportunities for all. In a Utopian society, this lofty goal
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would be realized. We, however, appreciate the limitations imposed upon us. Nor
do we advocate a “Robin Hood” approach to school financing reform. We are not
suggesting that funds be diverted from wealthy districts and given to the less
fortunate. There is no “leveling down” component in our decision today.
{¶ 69} Moreover, in no way should our decision be construed as imposing
spending ceilings on more affluent school districts. School districts are still free to
augment their programs if they choose to do so. However, it is futile to lay the
entire blame for the inadequacies of the present system on the taxpayers and the
local boards of education. Although some districts have the luxury of deciding
where to allocate extra dollars, many others have the burden of deciding which
educational programs to cut or what financial institution to contact to obtain yet
another emergency loan. Our state Constitution makes the state responsible for
educating our youth. Thus, the state should not shirk its obligation by espousing
cliches about “local control.”
{¶ 70} We recognize that money alone is not the panacea that will transform
Ohio’s school system into a model of excellence. Although a student’s success
depends upon numerous factors besides money, we must ensure that there is enough
money that students have the chance to succeed because of the educational
opportunity provided, not in spite of it. Such an opportunity requires, at the very
least, that all of Ohio’s children attend schools which are safe and conducive to
learning. At the present, Ohio does not provide many of its students with even the
most basic of educational needs.
{¶ 71} Since the filing of this lawsuit, the General Assembly has scrambled
to enact new laws to soften the blow of the failing system. For instance, beginning
in 1992, “equity funds” were provided to supplement distributions under the
funding system to those districts with low property valuations and low income.
R.C. 3317.0213 and 3317.0214 (Sub.H.B. No. 671, 144 Ohio Laws, Part IV, 6062,
effective 6-30-92). In addition, funds were appropriated for technology grants to
26
January Term, 1997
assist poorer school districts in purchasing computer equipment. Id. at Section 4.
However, appropriations for computers are meaningless when school systems
cannot use the equipment due to asbestos, faulty electrical wiring, or the lack of
teachers. While these programs and funds are desperately needed, they simply are
insufficient to get the job done and do not rectify the serious problems inherent in
Ohio’s financing scheme.
{¶ 72} School funding has been, and continues to be, a Herculean task. As
thirty-seven lawmakers concede in their amicus curiae brief, despite their recent
efforts, the General Assembly has not funded our public schools properly. They
assert that unless this court rules in favor of the appellants, the urgency of resolving
public school funding will quickly fade. We find that this brief eloquently
expresses the helplessness felt even by many of our state legislators.
CONCLUSION
{¶ 73} We know that few issues have the potential to stir such passion as
school financing. In many districts in this great state of ours, students and teachers
must fight a demoralizing uphill battle to make the system work. All parties
concede that the current system needs to be reformed.
{¶ 74} By our decision today, we send a clear message to lawmakers: the
time has come to fix the system. Let there be no misunderstanding. Ohio’s public
school financing scheme must undergo a complete systematic overhaul. The
factors which contribute to the unworkability of the system and which must be
eliminated are (1) the operation of the School Foundation Program, (2) the
emphasis of Ohio’s school funding system on local property tax, (3) the
requirement of school district borrowing through the spending reserve and
emergency school assistance loan programs, and (4) the lack of sufficient funding
in the General Assembly’s biennium budget for the construction and maintenance
of public school buildings. The funding laws reviewed today are inherently
incapable of achieving their constitutional purpose.
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SUPREME COURT OF OHIO
{¶ 75} We therefore hold that Ohio’s elementary and secondary public
school financing system violates Section 2, Article VI of the Ohio Constitution,
which mandates a thorough and efficient system of common schools throughout the
state. The following specific provisions are unconstitutional:
(a) R.C. 133.301, granting borrowing authority to school districts;
(b) R.C. 3313.483, 3313.487, 3313.488, 3313.489, and 3313.4810, the
emergency school assistance loan provisions;
(c) R.C. 3317.01, 3317.02, 3317.022, 3317.023, 3317.024, 3317.04,
3317.05, 3317.051 and 3317.052, the School Foundation Program.
(d) R.C. Chapter 3318, the Classroom Facilities Act, to the extent that
it is underfunded.
REMEDY
{¶ 76} Although we have found the school financing system to be
unconstitutional, we do not instruct the General Assembly as to the specifics of the
legislation it should enact.9 However, we admonish the General Assembly that it
must create an entirely new school financing system. In establishing such a system,
the General Assembly shall recognize that there is but one system of public
education in Ohio. It is a statewide system, expressly created by the state’s highest
governing document, the Constitution. Thus, the establishment, organization and
maintenance of public education are the state’s responsibility. Because of its
importance, education should be placed high in the state’s budgetary priorities. A
thorough and efficient system of common schools includes facilities in good repair
and the supplies, materials, and funds necessary to maintain these facilities in a safe
manner, in compliance with all local, state, and federal mandates.
9. The dissent faults us for failing to provide specific guidelines for the General Assembly to follow.
However, we recognize that the proper scope of our review is limited to determining whether the
current system meets constitutional muster. We refuse to encroach upon the clearly legislative
function of deciding what the new legislation will be.
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January Term, 1997
{¶ 77} We recognize that a new funding system will require time for
adequate study, drafting of the appropriate legislation and transition from the
present scheme of financing to one in conformity with this decision. Therefore, we
stay the effect of this decision for twelve months.
{¶ 78} Appellants are entitled to recover against the state their attorney fees
and costs as found by the trial court. Motorists Mut. Ins. Co. v. Brandenburg
(1995), 72 Ohio St.3d 157, 160, 648 N.E.2d 488, 490.
{¶ 79} The court of appeals’ judgment is reversed. We remand this cause
to the trial court with directions to enter judgment consistent with this opinion. The
trial court is to retain jurisdiction until the legislation is enacted and in effect, taking
such action as may be necessary to ensure conformity with this opinion.10
Judgment reversed
and cause remanded.
DOUGLAS, RESNICK and PFEIFER, JJ., concur and concur separately.
MOYER, C.J., COOK and LUNDBERG STRATTON, JJ., dissent.
__________________
DOUGLAS, J., concurring.
{¶ 80} I concur in the courageous and well-reasoned decision of the
majority. Specifically, I agree that the statutory scheme for funding public
elementary and secondary education in Ohio clearly violates Section 2, Article VI
of the Ohio Constitution. I write separately only for the purposes of offering some
additional explanation why Ohio’s statutory scheme violates this provision, to
express my view that public education in Ohio is a fundamental constitutional right,
and to point out that Ohio’s statutory scheme for funding public elementary and
secondary schools also violates other constitutional provisions not addressed in the
majority opinion.
10. We grant plenary jurisdiction to the trial court to enforce our decision. This authority includes
the right to petition this court for guidance, if the need arises.
29
SUPREME COURT OF OHIO
{¶ 81} The time has come to end the fact that, in too many cases, the quality
of a child’s education in Ohio is dependent on the vicissitudes of geography—that
is, the place of the child’s birth or residence. After an exhaustive review of the
record, I am also convinced that it is time for the General Assembly to set education
standards and to require performance of the education establishment, with rewards
when they meet the standards or severe corrective action when they do not. This
should include mandates for cost cutting (additional money is not the only answer)
and cost containment with clear accountability.
{¶ 82} To do this and be fair, however, each district must be given school
structures that are safe and conducive to learning, including the necessary fixtures,
equipment and supplies that ensure thorough and efficient opportunity to learn. In
addition, each district must be placed on a financial footing that permits the district
to compete so as to meet the prescribed standards. That is not only a mandate of
equity. It is what our Constitution requires.
{¶ 83} By today’s decision, a majority of this court has given the General
Assembly the opportunity to revamp the entire education system in this state just
as a number of other legislative bodies in our sister states have done in recent
years.11 If all of this requires additional revenue, as it almost certainly does, then
that is the price we must pay to enforce, protect and preserve constitutional rights.
I would only caution those who would castigate us (as some did the trial judge) for
their own purposes to remember what Abraham Lincoln said in his First Inaugural
Address, March 4, 1861, in discussing the obligations of the United States Supreme
Court and its decisions:
“It is a duty from which they may not shrink to decide cases properly
brought before them, and it is no fault of theirs if others seek to turn their decisions
11. An outstanding example of this is the state of Kentucky, as so clearly chronicled in a series of
recent articles in both the Canton Repository and the Akron Beacon Journal.
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January Term, 1997
to political purposes.” Lott, The Presidents Speak; The Inaugural Addresses of the
American Presidents, from Washington to Clinton (1994) 143.
I
Jurisdiction and Judicial Review
{¶ 84} This appeal presents a number of issues for this court’s
consideration. Is the right to a free public education a fundamental right guaranteed
by the Ohio Constitution? Does the system of funding public elementary and
secondary schools in Ohio violate the Equal Protection Clause of Section 2, Article
I of the Ohio Constitution? Does the system of funding public elementary and
secondary schools in Ohio violate Section 2, Article VI of the Ohio Constitution,
requiring a thorough and efficient system of common schools throughout the state?
Does Cincinnati City School Dist. Bd. of Edn. v. Walter (1979), 58 Ohio St.2d 368,
12 O.O.3d 327, 390 N.E.2d 813, control the disposition of the case at bar?
Resolution of these issues requires, among other things, a detailed understanding
of Ohio’s system of school funding. Equally important to a resolution of these
issues are an understanding of the historical development of Ohio’s school funding
laws and an earnest appreciation of the significance that the founders of our state
and nation placed on public education. However, before addressing these various
matters, I find it necessary to briefly comment on this court’s jurisdiction to
entertain the present appeal.
{¶ 85} The court of appeals’ majority held that the courts are not the proper
place to challenge the constitutionality of Ohio’s statutory scheme for school
funding. Despite overwhelming evidence that the state has utterly failed to
establish a system of school funding that is thorough and efficient, the court of
appeals’ lead opinion stated that “[i]f changes are needed in the manner in which
schools receive funding, this matter is properly within the discretion of the
legislative branch of the government, not the judicial branch.” Judge Reader
reiterated these sentiments in his concurring opinion. However, I respectfully
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SUPREME COURT OF OHIO
disagree with that view. Rather, I believe that Judge Gwin of the court of appeals
was absolutely correct that the constitutionality of Ohio’s statutory framework for
school funding is unquestionably a matter for the courts to decide. To hold
otherwise would be to ignore the fundamental concept of judicial review
established nearly two hundred years ago in Marbury v. Madison (1803), 5 U.S.
137, 177-178, 2 L.Ed. 60, 73-74. Marbury established, beyond cavil, the inherent
powers of the judicial branch of government to review the constitutionality of the
acts of the other branches of government.
{¶ 86} In Walter, 58 Ohio St.2d 368, 12 O.O.3d 327, 390 N.E.2d 813, this
court entertained certain constitutional challenges to a statutory system for school
funding that has since been repealed and replaced with the current statutory
framework for funding public elementary and secondary education. However, the
following observations in Walter concerning the power of the judiciary are as
applicable today as they were at the time Walter was decided:
“We wish to state clearly at the outset that this court has the authority, and
indeed the duty, to review legislation to determine its constitutionality under the
Constitution of Ohio and to declare statutes inoperative. The doctrine of judicial
review articulated by Chief Justice John Marshall in the landmark case of Marbury
v. Madison (1803), 5 U.S. (1 Cranch) 137, establishes the judicial branch as the
final arbiter in interpreting the Constitution.
“The doctrine of judicial review is so well established that it is beyond cavil.
Consider this court’s opinion in State v. Masterson (1962), 173 Ohio St. 402 [20
O.O.2d 36, 38, 183 N.E.2d 376, 379], which states, at page 405, in part:
“‘It has long been an established principle of law that courts do not interfere
in political or legislative matters except in those instances where legislative
enactments violate the basic law. In those instances where enactments violate the
basic law, it was determined early in our judicial history that the courts have not
only the power but the duty to declare such enactments invalid.
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January Term, 1997
“‘One of the basic functions of the courts under our system of separation of
powers is to compel the other branches of government to conform to the basic law.’
“* * *
“We find that the issue concerning legislation passed by the General
Assembly pursuant to Section 2 of Article VI of the Ohio Constitution [the
Thorough and Efficient Clause] presents a justiciable controversy. * * *” Walter,
58 Ohio St.2d at 383-384, 12 O.O.3d at 336, 390 N.E.2d at 823-824.
{¶ 87} Walter makes it abundantly clear that constitutional challenges to the
statutory system for funding public education are a matter for the courts to decide.
Obviously, this court is not at liberty to shirk that responsibility, and we cannot
simply send plaintiffs-appellants to the General Assembly to seek redress of their
grievances. Judge Reader stated in his concurring opinion in the court of appeals:
“The tax payers of this state should rise up in righteous indignation and tell all the
parties in this case to take their truckloads of paper and solutions if any, to where it
would do the most good—the General Assembly of the State of Ohio.” However,
this case involves a constitutional attack on Ohio’s system of funding public
schools. The General Assembly is not the appropriate place to raise such a
constitutional challenge.
{¶ 88} I completely agree with the majority’s astute observations
concerning the jurisdiction of this court to resolve this case. Specifically, I join the
majority in utterly rejecting any suggestion that this case and the constitutional
issues involved herein should be left for the legislature to decide. In my view,
fifteen of the most compelling words spoken at the one-and-one-half-hour oral
argument of this case were spoken by plaintiffs’ counsel: “We’re not asking you
to do their job, we’re asking you to do your job.” Accordingly, we have proceeded
not with any glee but, rather, pursuant to our constitutional duty.
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{¶ 89} The cause is properly before this court for review and final
determination pursuant to the judicial powers vested in this court pursuant to the
Ohio Constitution.
II
Ohio’s System of Public School Funding
{¶ 90} The focus of this case is R.C. Chapter 3317, the School Foundation
Program for the allocation of state basic aid. In Walter, 58 Ohio St.2d at 378, 12
O.O.3d at 333, 390 N.E.2d at 820, this court recognized that “[t]he history of
educational funding in Ohio * * * has been an accommodation between two
competing interests—the interest in local control of educational programs and the
means to fund them and the interest of the state in insuring that all children receive
an adequate education.” In Walter, we outlined some of the history of Ohio school
funding, and a review of that history is pertinent to the discussion herein.
{¶ 91} In 1821, the Ohio General Assembly enacted a bill making the
property in the townships subject to school taxes. See 19 Ohio Laws 51, 55. This
legislation was largely ineffective because the levying and collection of taxes were
at the option of the local district. In 1825, the General Assembly enacted legislation
directing county commissioners to levy a real property tax of one-half mill to
support local public schools. 23 Ohio Laws 36, 37. At that time in history, the
property tax was the primary means of support for the local public schools. See
Walter, 58 Ohio St.2d at 378, 12 O.O.3d at 333, 390 N.E.2d at 820. In 1906, Ohio
undertook a program calling for a large measure of state financial participation to
begin assisting financially weak school districts for the purpose of providing those
districts with some minimum support for education. Id. In 1935, the General
Assembly enacted the first Foundation Program, providing substantial financial aid
to school districts based on average daily attendance plus additional aid for poorer
districts. Id. at 378, 12 O.O.3d at 333, 390 N.E.2d at 820-821. The amount of state
aid was continually increased over the next twenty-one years. Id. at 379, 12 O.O.3d
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at 333, 390 N.E.2d at 821. However, despite the increases in the total amount of
state aid, the percentage of state support dropped considerably in relation to the
local school districts’ total operating costs. Id. In 1956, the format of state aid was
changed to provide state support based on “teacher-units” rather than average daily
membership. Id. By the 1965-1966 school year, the state was providing
approximately one-third of the total operating costs of the local school districts,
with local property tax furnishing the remainder. Id.
{¶ 92} In fiscal year 1975-1976, the General Assembly enacted the “Equal
Yield Formula” for computing state aid. 136 Ohio Laws 475. See Walter, at 379,
12 O.O.3d at 334, 390 N.E.2d at 821. This formula was intended to provide an
equal sum of combined state and local funds on a per-pupil-per-mill basis for each
qualifying school district. Id.; former R.C. 3317.022, 136 Ohio Laws, Part I, 492.
A qualifying school district was one that levied twenty mills for current operating
expenses. Former R.C. 3317.01, 136 Ohio Laws, Part I, 487. The formula provided
a two-tiered system. That is, every school district received an amount per pupil per
mill for the first twenty mills and additional amounts were given to each school
district with millage above twenty mills up to thirty mills. Walter at 370-371, 12
O.O.3d at 328-329, 390 N.E.2d at 816. In Walter, this court reviewed the
constitutionality of the Equal Yield Formula for school funding and, in 1979,
upheld that formula as constitutionally acceptable. There is a body of thought that
the General Assembly created the Equal Yield Formula in anticipation of the filing
of the Walter case. After Walter was decided, the General Assembly, in 1981,
abandoned the Equal Yield Formula, former R.C. 3317.022. See Am.Sub.H.B. No.
694, 139 Ohio Laws, Part II, 3460, 3684. At that time, the Equal Yield Formula
was replaced by the School Foundation Program, which remains in use today.
A
The School Foundation Program
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{¶ 93} Ohio’s School Foundation Program can be found in R.C. 3317.01 et
seq. The School Foundation Program for the allocation of state basic aid has
operated in a similar manner since 1981. Under the School Foundation Program,
state basic aid is available for school districts which, among other things, levy at
least twenty mills of local property tax revenue for current operating expenses.
R.C. 3317.01(A). State basic aid for qualifying school districts is calculated
pursuant to a foundation formula set forth by law. The version of R.C. 3317.022
that was in effect at the time this case was filed (Am.Sub.H.B. No. 298, 144 Ohio
Laws, Part III, 3987, 4122) provided the following calculation for the computation
and distribution of state aid to qualifying school districts:
(school district equalization factor X the formula amount X ADM)
- (.02 X total taxable value).
{¶ 94} The basic state aid calculation remains essentially the same in the
current version of R.C. 3317.022. Through this formula, the School Foundation
Program guarantees a minimum level of combined state and local per pupil funding.
The Formula Amount
{¶ 95} The “formula amount” in the calculation represents a figure set by
the General Assembly as part of the biennial budget process. In January 1992, at
the time the amended complaint was filed, the formula amount equaled $2,817. See
Am.Sub.H.B. No. 298, 144 Ohio Laws, Part III, 3987, 4122. The formula amount
is currently set at $3,500 pursuant to R.C. 3317.022. The trial court found (and the
evidence supports the finding) that the formula amount is determined by the
General Assembly based solely on how much money is left in the budget after all
other legal entitlements are funded. In other words, the amount appropriated for
education represents a “budgetary residual” that has nothing to do with the true
costs of educating a student. Oliver Ocasek, President of the State Board of
Education at the time of trial, testified that the State Board of Education believed
that a formula amount of $4,000 per pupil was necessary to even approach an
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January Term, 1997
adequate level of funding for Ohio’s school districts. It should be noted, however,
that Ocasek personally believed that the true egregious impact of the School
Foundation Program was that it did not even come close to providing equalization,
given the flat distributions in areas of categorical funding, etc., explained infra.
The Cost-Of-Doing-Business Factors
{¶ 96} Under the state basic aid calculation, the formula amount ($2,817 in
school year 1992-1993) is adjusted by a school district equalization factor or cost-
of-doing-business factor. R.C. 3317.022(E). The applicable rates of adjustment
for the 1992-1993 school year were contained in former R.C. 3317.02(E). 144 Ohio
Laws, Part III, 3987, 4118-4120. The rates are similar in the current version of
R.C. 3317.02(E). These rates of adjustment vary from county to county and apply
equally to all districts within the county. The cost-of-doing-business factors
assume that costs are lower in rural districts than in urban districts but, as the trial
court correctly concluded, that assumption is not always true.
The “Charge-Off”
{¶ 97} “ADM” stands for average daily membership, which is calculated
pursuant to R.C. 3317.03. See R.C. 3317.02(A). By multiplying the formula
amount, the cost-of-doing-business factor, and the ADM, the foundation formula
establishes a minimum amount of combined local and state per pupil aid per district.
A “charge off” is then subtracted from that figure. The charge-off is the total
taxable value of real and tangible personal property in the district times a certain
percentage. See R.C. 3317.022(A) (computation for state aid) and 3317.02(D)
(defining “total taxable value” as the sum of the amounts certified by the Tax
Commissioner under R.C. 3317.021[A][1] and [2]). At the time this case was filed,
total assessed value was multiplied by .02 (i.e., twenty mills times total assessed
valuation) to produce the applicable charge-off. 144 Ohio Laws, Part III, 3987,
4122. During the pendency of the litigation, the twenty-mill multiplier was
increased to 20.5 mills (Am.Sub.H.B. No. 152, Section 36.12, 145 Ohio Laws, Part
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III, 4432-4433) and was raised thereafter. Currently, total taxable value is
multiplied by .023 for purposes of calculating the charge-off. R.C. 3317.022.
Subtracting the applicable charge-off results in a figure constituting the amount for
basic state aid for the district in question.
Disadvantaged Pupil Impact Aid and Categorical Programs
{¶ 98} In addition to the formula amount, school districts with children
whose families collect Aid to Dependent Children (“ADC”) receive what is called
“Disadvantaged Pupil Impact Aid” or “DPIA.” Am.Sub.H.B. No. 298, Section
59.02, 144 Ohio Laws, Part III, 4556-4557. This funding is calculated pursuant to
R.C. 3317.023 and consists of flat distributions (distributions that are not equalized)
based on ADM. Pursuant to R.C. 3317.022 and 3317.023, the aid to be provided
to a local district comprises the amount the district is entitled to receive under the
foundation formula plus the amount of DPIA. The state also provides
appropriations to school districts for categorical programming such as vocational
and special education. R.C. 3317.024. There is essentially no equalization for
funding of categorical programs, so that districts receive categorical aid without
regard to school district wealth. According to the testimony of Oliver Ocasek, the
President of the State Board of Education at the time of trial, the flat distributions
for categorical aid represent a major flaw in the system of school funding and
reduce the equalization effect of the foundation formula. Ocasek testified that the
“main categoricals,” such as special education, vocational education, and DPIA,
have “never been fully funded.” Rather, funding for those categories is
accomplished by essentially siphoning funds that would otherwise be available for
distribution under the foundation formula. In the words of Mr. Ocasek: “[A]s you
take a pot of money and you deduct from that these fine categorical programs and
for [DPIA], you, therefore, are siphoning away from the total pot of funds, which I
think are basic, and the more categorical money we give, the less equalization
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January Term, 1997
money we have. That simple. I don’t think you need to be a professor of school
finance to say that.”
Guarantee Provisions
{¶ 99} The School Foundation Program contains certain guarantee
provisions to ensure that a school district receives the greater of the program
amount or the guarantee amount. See R.C. 3317.04 and 3317.0212. Thus, some
districts receive guarantee payments from the state under the School Foundation
Program rather than payments calculated pursuant to the foundation formula
described above. Oliver Ocasek testified that the guarantee provisions
disproportionately benefit the wealthier districts, compromise the equalization
effect of the School Foundation Program, and represent a major defect in Ohio’s
system of school funding.
Am.Sub.H.B. No. 920 and Tax Reductions
{¶ 100} School districts are required to levy twenty mills for current
operating expenses in order to participate in the School Foundation Program. See
R.C. 3317.01(A). The twenty mills comprise both “inside” and “outside” mills.
Inside mills are levied without approval of the electorate. Unvoted property taxes
are limited to ten mills, with the ten mills spread among the various taxing units.
See Section 2, Article XII of the Ohio Constitution and R.C. 5705.02. An average
local school district in Ohio manages to raise revenue from approximately 4.6 of
the ten available inside mills. Theoretically, a school district can raise an unlimited
amount of outside millage, with the only limitation being that outside millage must
be approved by the electorate. R.C. 5705.07.
{¶ 101} For property tax purposes, real property in Ohio is divided into two
classifications: Class I property, consisting of residential and agricultural property,
and Class II property, consisting of all other real property, including commercial,
industrial, public utility and mineral. See R.C. 5713.041; Section 2a, Article XII,
Ohio Constitution.
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{¶ 102} Complicating the system of school funding in Ohio is the effect of
certain tax reduction factors originally introduced into law with the General
Assembly’s enactment of Am.Sub.H.B. No. 920 (136 Ohio Laws, Part II, 3182,
3194). H.B. 920 was enacted by the General Assembly as a tax reduction measure.
The provisions of law enacted by the General Assembly in H.B. 920 have
themselves been amended on several occasions since 1976. A product of these
various amendments is the current version of R.C. 319.301, which is very similar
to the version of that statute in existence at the time this case was commenced.
{¶ 103} As pointed out by the majority, the purpose of R.C. 319.301 (like
the predecessor versions of that statute, including the version of R.C. 319.301
introduced into law by H.B. 920) is to limit the effect of inflation in property values
on growth of real property tax revenues. These R.C. 319.301 tax reduction factors
are applied when property values increase due to reappraisal or update. Pursuant
to R.C. 319.301(A)(2), inside millage is not subject to tax reduction factors.
Additionally, R.C. 319.301 provides that tax reduction factors do not apply to new
construction growth or tangible personal property. The effect of R.C. 319.301 is
that a school district will receive the same revenue from voted tax levies after
reappraisal as it did before reappraisal, notwithstanding that real property valuation
in the district has increased through inflation since the time of the initial tax levy.
Thus, revenue derived from effective outside mills essentially remains frozen in
time—it does not increase through the life of the levy. As a direct result of the tax
reduction measures first introduced by H.B. 920, local revenues cannot keep pace
with inflation. To keep abreast of costs, many school districts have been required
to propose additional tax levies. However, most of these additional tax levies have
failed.
{¶ 104} Since R.C. 319.301 tax reduction factors do not apply to new
construction growth, see R.C. 319.301(B)(2)(a), (b) and (D)(1), school districts
with new construction growth enjoy additional revenue from an increase in
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January Term, 1997
valuation, while districts with growth attributable solely to inflation do not.
Moreover, R.C. 319.301 sets a floor of effective tax rate reductions at twenty mills
for each class of real property. School districts that have reached the twenty-mill
floor of reductions do not have their effective rates reduced further. R.C.
319.301(A)(2). Consequently, even if all other things are considered equal, school
districts with increases in real property valuation receive differing amounts of local
tax levy revenue depending on whether the district has reached the twenty-mill
floor.
{¶ 105} Suffice it to say that the effects of tax reduction factors are
complicated, including the effects of “phantom revenue” discussed in the majority
opinion. The effects are varied and uneven among Ohio’s school districts,
depending on the amount of real versus tangible personal property, the amount of
inside mills a district has, the existence and extent of new construction growth,
whether the district is at or close to the twenty-mill floor in either class of real
property, and the extent of increases in real property valuation.
School District Borrowing
{¶ 106} To supplement their budgets, school districts have been forced at
an increasing and alarming rate to borrow heavily against future expected revenue
receipts. Under the so-called spending reserve loan program, school districts are
permitted to borrow against a subsequent year’s revenue with approval of the
Superintendent of Public Instruction. See R.C. 133.301. There is a statutory
maximum amount that can be borrowed by a school district under the spending
reserve program, but the Superintendent of Public Instruction may permit excess
borrowing. Id. Obviously, where a school district borrows against a subsequent
year’s tax receipts, the district takes away resources for operations for the next
fiscal year. Thus, as the trial court found, “[a] school district can get into a spiral
where it is continually borrowing and paying back the following year. A school
district, therefore, is always taking away from the future. Any time a school district
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does such borrowing into the future, it robs future generations of children.” For
some school districts, borrowing has become a way of life, leading to the proverbial
spiral of debt.
{¶ 107} School districts may also borrow from commercial lenders
pursuant to R.C. 3313.483 et seq., the emergency school assistance loan program.
However, school districts are required to borrow under the spending reserve loan
program as a condition precedent to participating in the emergency school
assistance loan program. See R.C. 3313.483(B). Pursuant to R.C. 3313.483(A),
school districts may determine by resolution that they are unable to remain open
for instruction on all days set forth in the adopted school calendar and are unable to
pay their expenses. Such a determination may also be made by the Superintendent
of Public Instruction pursuant to R.C. 3313.489. In either event, the auditor of
state12 must determine whether such a condition exists. If the auditor finds that the
board of education has attempted to avail itself of all revenue sources available, the
auditor must certify that finding to the Superintendent of Public Instruction and the
State Board of Education and must also certify the amount of operating deficit the
district will have at the end of the fiscal year. R.C. 3313.483(B). A school district
that has been certified as having a projected operating deficit must apply for an
ordinary commercial loan from a commercial lender or underwriter. R.C.
3313.483(D). If the application is rejected, the school district must submit to the
Superintendent of Public Instruction a plan for reducing the district’s budget and
12. It is interesting to note that a news article in the Athens News of Wednesday, November 27,
1996, entitled “State Auditor: School equity, an idea whose time has come” stated that:
“An equity lawsuit filed on behalf of the Perry County schools—and a statewide coalition
of public schools—is currently being considered by the Ohio Supreme Court, whose decision could
pave the way for a major change in education funding.
“Petro said he believes the Supreme Court will overturn an earlier appellate court decision
in the case, and will rule that Ohio’s school funding method violates the state constitution.
“‘And frankly, I think it’s time to do that,’ he added.”
The auditor, a former member of the General Assembly, is faced in his official capacity
with having to frequently deal with financially struggling school districts. I find his candor
refreshing.
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January Term, 1997
must then apply for a loan from a commercial bank, underwriter or other
prospective lender. R.C. 3313.483(E)(1). The superintendent is required to review
each budget reduction plan. The plan must include a repayment schedule in
amounts sufficient to permit repayment of the principal amount of the emergency
assistance loan, but apparently does not require reductions sufficient in amount to
pay the interest on the emergency loan or to repay the principal and interest on any
spending reserve loan. Thus, as the trial court found, for most school districts with
outstanding emergency assistance loans, subsequent borrowing under the spending
reserve loan program will be required.
{¶ 108} The superintendent routinely recommends controlling board
approval of an emergency school assistance loan for a school district that has
completed the application process and has a certified projected shortfall of
operating revenue. If a school district receives controlling board approval, the
district may obtain the loan from a commercial lending institution. See R.C.
3313.483(E). Pursuant to R.C. 3313.483(E)(3), the loan is repaid by diverting
funds otherwise available to the school district under the School Foundation
Program to the commercial lender for repayment of the loan. R.C. 3313.483(E)(3)
also provides that “[n]o note or other obligation of the board of education under the
loan constitutes an obligation nor a debt or a pledge of the faith, credit, or taxing
power of the state, and the holder or owner of such note or obligation has no right
to have taxes levied by the general assembly for the payment of such note or
obligation, and such note or obligation shall contain a statement to that effect.”
{¶ 109} Effective December 22, 1992, if a district receives an R.C.
3313.483 emergency loan of more than seven percent of the district’s general fund
expenditures and has already received an emergency loan under R.C. 3313.483
within the last five years, the district is subject to state supervision. See R.C.
3313.488 and 3313.4810. The State Board of Education may also subject a district
to state supervision pursuant to R.C. 3313.487. School districts subject to state
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supervision are prohibited from making any expenditure of money, any
employment, purchase or rental contract, giving any order involving the
expenditure of money, or increasing any wage or salary schedule without written
approval of the Superintendent of Public Instruction. R.C. 3313.488. The so-called
receivership school districts (certain heavily indebted districts that have been
subjected to the provisions of R.C. 3313.488) include school districts from large
urban areas in Ohio as well as property-poor rural school districts. Twenty-five
school districts were receivership districts as of December 23, 1992.
Public School Buildings
{¶ 110} The School Foundation Program contains no express provision for
the construction and maintenance of Ohio’s public school facilities. Rather, the
construction of public elementary and secondary schools in Ohio is primarily
financed through the issuance and sale of school district bonds upon approval of
the electors in the district. The bonds are repaid with the proceeds of property taxes
levied on the taxable property of the school district for that purpose. With stated
exceptions, districts are limited by law to a maximum bonded indebtedness of nine
percent of the district’s total property valuation. See R.C. 133.06(B). This amount
is exclusive of, among other things, any emergency school assistance loan. R.C.
133.06(D)(4). However, “special needs” districts may apply to the Superintendent
of Public Instruction for permission to exceed the nine-percent limitation. R.C.
133.06(E). A district may qualify as a special-needs district if the superintendent
finds that (1) the district does not have sufficient additional funds from state or
federal sources to meet projected needs, and (2) the projection of the district’s
potential average growth of tax valuation during the next five years indicates a
likelihood of potential average growth of at least three percent per year. Id.
{¶ 111} R.C. Chapter 3318, the Classroom Facilities Act, is essentially a
loan program for the construction of public school facilities. Specifically, R.C.
Chapter 3318 provides a means by which qualifying school districts may
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January Term, 1997
“purchase” classroom facilities from the state. See R.C. 3318.02. The process of
obtaining state assistance under the Classroom Facilities Act for construction of
public school facilities is extremely complicated. However, in general terms, this
assistance is contingent on, among other things, the existence of adequate state
funds, the approval of a school district’s proposed project, the passage of a
proposition by the electors in the district authorizing the district to issue bonds in
an amount sufficient to bring the district to a required level of net indebtedness and
authorizing a local tax levy for the purpose of paying the cost of the purchase from
the state, and the execution of a written agreement between the State Board of
Education and the local school district. See R.C. 3318.01 through 3318.08. Based
upon the evidence at trial and the stipulations of the parties, the trial court made the
following relevant findings of fact concerning the Classroom Facilities Act:
“In order to participate in Classroom Facilities Act funds, a district must be
included on a ‘list’ of eligible districts. Lists are only created at such time as funds
are available. After reviewing the applicants, the Department of Education
conducts a statewide survey to determine those districts most in need of additional
facilities.
“Approval for participation for Classroom Facilities Act funding involves
an inspection by the Ohio Department of Education officials and a determination
of the number and percent of inadequately-housed pupils, as well as a prioritization
of school district applicants based on the percentage of inadequately-housed pupils
that need to be housed with state money.
“From 1976 to the present time, there have been three lists of districts
eligible for Classroom Facilities Act funding; the initial list was prepared prior to
1976 when Dr. Phillis became Assistant Superintendent of Public Instruction. A
second list was prepared in 1984 and a subsequent list in 1989. The 1989 list was
revised with one additional district being included in 1991.
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“Plaintiffs’ Exhibit 378 is a list of the 44 school districts who have been
approved for classroom facilities assistance pursuant to the provisions of Chapter
3318 of the Ohio Revised Code. The list was adopted by the State Board of
Education on December 20, 1989, and updated in 1991. The list describes a total
of over $114,000,000 [sic, $414,000,000 according to the exhibit and the
stipulations of the parties] in value of approved facilities needs. Of these school
districts, 18 have been approved for school building assistance, passed the requisite
levies, and funds have been made available for school construction. Twenty-six
(26) school districts remain on the approved building list, for which no funds have
been appropriated by the Ohio General Assembly.
“All the pupils identified as ‘improperly housed’ in 1989 in districts that
have not received Classroom Facilities Act assistance continue to be improperly
housed unless the school district has provided facilities without state assistance.
“* * *
“Because any school district beyond [those listed in Plaintiffs’ Exhibit 378]
[is] at least seven to nine years down the road before help will be available to them
(assuming a level of appropriations by the General Assembly), the Division of
School Building Assistance of the Ohio Department of Education accepts letters of
intent from school districts, indicating their interest [in being] placed upon the
approved school building assistance list. Stipulation Exhibit 52 lists those 50
school districts who have filed letters of intent with the building assistance office,
including Plaintiff Northern Local School District.
“It is the intent of the State Board of Education to take care of all 44 districts
set forth on the approved building assistance list, Plaintiffs’ Exhibit 378, before the
State moves on to any more districts. These districts must pass levies and their
projects must be completed before any new schools will make it on to the approved
buildings list.
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“Classroom Facilities Act funds do not include funds for the equipment or
operation of schools, but are limited to provision of school facilities only. [See
R.C. 3318.01(B).]
“The state has final approval in the design of facilities funded with
Classroom Facilities Act funds. [R.C. 3318.091.]” (Citations to evidence omitted.)
{¶ 112} The parties have stipulated that as of July 1993, only $2,006,176.83
was available from the state to fund approved classroom facilities projects, not
including, among other things, fiscal year 1994 and 1995 budgeted appropriations.
In 1990, the Ohio Department of Education conducted a comprehensive survey of
Ohio’s public school facilities. The survey identified approximately $10.2 billion
in needs for repairs and improvements for Ohio’s public school facilities. The trial
court reviewed the Classroom Facilities Act (R.C. Chapter 3318) and found the
program to be seriously underfunded. A review of the record can lead to no other
conclusion.
The 1990 Ohio Public Schools Facilities Survey
{¶ 113} In 1989 and 1990, the Ohio Department of Education, at the
direction of the General Assembly, conducted a statewide survey of Ohio’s public
school buildings. The survey cost approximately $3.5 million and involved an on-
site review of each public school building in the state that housed pupils. The
Facilities Survey was conducted by architects. There is no dispute that the survey
represents a fair and accurate report of the conditions of Ohio’s schools as of 1990.
The results of the survey were published and submitted to the General Assembly.
The survey is contained in the record as Plaintiffs’ Exhibit 14 and identified $10.2
billion in needed improvements for Ohio’s public elementary and secondary school
facilities.
{¶ 114} The Facilities Survey identified the need for over $153 million to
make public school buildings accessible to the handicapped. However, the
evidence demonstrates that given the requirements of the Americans with
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Disabilities Act (“ADA”), Section 12101 et seq., Title 42, U.S.Code, the $153
million in needs identified by the survey represents a substantial underestimation
of the true costs involved in complying with applicable federal mandates. The
survey determined that only about twenty percent of existing public school
buildings in Ohio are satisfactory in terms of accessibility to the handicapped. The
state of Ohio provided grants for architectural barrier abatement in fiscal year 1990
and 1991. Between that time and the time of trial, the General Assembly had
provided no additional appropriations for barrier abatement in public schools. The
amounts appropriated in 1990-1991 totaled $3.38 million. School districts were
permitted to apply for a maximum of three grants for architectural barrier
abatement. The grants were doled out on a first-come, first-served basis, without
regard to the relative wealth of the districts applying for grant money. Seventy-six
school districts that applied for grants received none. As of the time of trial, there
were no funds available from the state or federal government to help pay for making
public school buildings accessible as required by the ADA.
{¶ 115} The Facilities Survey identified over $328 million in funds needed
for the management of asbestos hazards in public school buildings. Funds are
available to public school districts on the federal level for asbestos abatement. See,
generally, Section 4011 et seq., Title 20, U.S.Code. However, federal funds are
scarce. In this regard, the trial court made the following relevant findings of fact.
In 1993, school districts in Ohio submitted $120 million in requests for funds to
abate “Class 1” asbestos hazards to conform to the federal Asbestos Hazard
Emergency Response Act, Section 2641 et seq., Title 15, U.S.Code. Only twenty-
nine school districts received a total of $14.7 million in grants and loans for
abatement of the Class 1 asbestos hazards. For fiscal year 1990, approximately $18
million was appropriated by the General Assembly for asbestos abatement in the
public schools. The funds were available on a first-come, first-served basis. More
than two hundred forty school districts submitted applications totaling $140 million
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in requests for the $18 million in available funds. Only sixty-three districts received
any funding. For fiscal year 1991, thirty-four districts received asbestos abatement
grants while more than one hundred fifty-eight districts that had applied for grants
received none. Between 1991 and the date of trial, no further state funds were
available for asbestos abatement. Aside from the scarce federal funds, no money
was available to the districts for asbestos abatement other than local school district
revenue.
{¶ 116} Each of the appellant school districts was determined by the
Department of Education to have greater facilities needs than could be paid for by
the districts on a local level, even if the districts had no other indebtedness and even
if the districts were capable of passing local bond issues to the maximum amount
permitted by law. The trial court found that in addition to the appellant school
districts, sixty-one percent of the school districts in Ohio are unable to meet the
amount of their identified facilities needs.
B
The Inadequacy and Inequity of School Funding
{¶ 117} The operation of the School Foundation Program, the emphasis of
Ohio’s school funding system on local property tax, the effects of the R.C. 319.301
tax reduction requirements, mandated school district borrowing through the
spending reserve and emergency school assistance programs, imposition of state
and federal unfunded mandates, and the inability or unwillingness of the General
Assembly to provide sufficient funding for, among other things, the construction
and necessary maintenance of school facilities have all combined to create a severe
negative impact on Ohio’s public schools. A review of the trial court’s findings
makes clear the various causes of the deplorable conditions in which some of
Ohio’s public school students are educated, as well as the nature and extent of such
conditions. The trial court’s findings of fact in this case are four hundred forty-
eight pages in length and document the inequities and fundamental weaknesses of
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Ohio’s system of school funding. None of the findings are challenged by the parties
to this appeal. For the most part, the trial court’s findings of fact were premised on
the joint stipulations of the parties. Some of the trial court’s findings and the
evidence upon which the findings were based may be summarized as follows.
• The formula amount provided through the School Foundation
Program does not even come close to the average expenditure per pupil in Ohio,
and the average per-pupil expenditure is outpacing the formula amount at an
increasing rate. The fact that the formula amount does not reflect the true costs of
education represents a substantial weakness in Ohio’s system of school funding.
• For fiscal years 1994 and 1995, the State Board of Education
requested a $1.9 billion increase in funding. The General Assembly appropriated
only $625 million in additional funds. The amounts requested by the State Board
of Education and denied by the General Assembly were considered to be necessary
for the education of Ohio’s public school students.
• Categorical program allocations to school districts through the
School Foundation Program are not equalized. Wealthy districts receive the same
unit funding as poor districts for, among other things, vocational and special
education. Further, the amounts received for categorical programs such as
vocational and special education are less than the actual costs of the programs, with
poor school districts having less ability to make up the difference between the state
funding provided and the actual program costs.
• The guarantee provisions of the School Foundation Program
diminish the equalization effects of the foundation program. For fiscal year 1993,
over one-third of all school districts in Ohio received payments under guarantee
provisions as opposed to the formula for state basic aid. A majority of the payments
under the guarantee provisions go to the wealthier districts. The operation of the
guarantee provisions of the School Foundation Program is considered by the State
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Board of Education to be a fundamental weakness in the way Ohio funds its
schools.
• The formula for determining Disadvantaged Pupil Impact Aid
(“DPIA”) does not accurately reflect the true costs of educating disadvantaged
pupils in high concentrations of poverty. There is no predictability to the DPIA
system of funding, and predictability in funding is an important aspect of financial
management.
• The amount of charge-off in the foundation formula does not
accurately measure the ability of school districts to pay their local share of the basic
program.
• The cost-of-doing-business factors in the foundation formula apply
equally to all school districts within a county regardless of the true cost of
operations in the individual districts. The factors assume that costs are lower in
rural districts as opposed to urban districts, but many costs associated with running
a school district are not affected by the district’s location in the state. Additionally,
the cost-of-doing-business factors do not fully reflect differences in costs associated
with school district operations and do not adequately account for differences in
costs within counties.
• The tax reduction factors of R.C. 319.301 severely limit growth of
local property tax revenues. Consequently, school districts must repeatedly
propose local tax levies to raise necessary funds. These increased numbers of
proposals have met with increasing failure.
• R.C. 319.301 and the effects of phantom revenue in the state aid
calculation deprive school districts of necessary funding. Phantom revenue occurs
where a school district has inflationary growth in real property valuation, receives
no additional local tax receipts commensurate with the increased valuations, and
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receives less in state basic aid since the increased valuations increase the amount
of the district’s charge-off.
• But for tax reduction factors, a total of more than $1.176 billion in
additional revenues would have been available for Ohio’s public schools in 1990
alone. As a result of the tax reduction factors, school districts lost over $1.472
billion in real property tax revenue in fiscal year 1992. In fiscal year 1992, tax
reduction factors reduced property taxes statewide to the tune of 26.12 percent.
• Ohio’s system of school funding places so much of the burden for
raising required revenues on the backs of the local school districts that it invites
disparities among the districts. There is a strong correlation in Ohio between
assessed property valuation per pupil and total expenditures per pupil. The top two
hundred school districts in Ohio (ranked by assessed value per pupil) spend over
$1,000 more per pupil per year than the bottom two hundred school districts. The
result is that there are rich and poor school districts in Ohio. Specifically, there are
districts in which per-pupil revenue and expenditure levels far exceed the per-pupil
revenue and expenditure levels of other (less fortunate) schools.
• The disparities in school district revenues and expenditures are not
due to the lack of tax effort of the districts or the voters in the districts. The trial
court found that “[f]iscal effort between the top and bottom deciles of assessed
valuation per pupil indicates that although there is a revenue and expenditure
disparity, the level of effort between the rich and poor is virtually uniform.” The
trial court also found that “[t]aking into account both the value of assessed property
and the adjusted gross income as combined measures of ability to pay taxes, the
poorest 200 school districts in Ohio actually exerted a greater level of tax effort in
1990 than the wealthiest 200 school districts.”
• Because one mill of local tax effort raises so little in districts with
low assessed valuation, those districts have extreme difficulties in passing effective
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millage since (1) voters can ill afford to pay the increased tax, and (2) the benefits
to the school district are minimal since property valuation is low. The extent of
disparities in funds available to Ohio’s school districts grew over the decade of the
1980s and continues to grow.
• According to the testimony and the trial court’s findings, Ohio is
among the states with the greatest disparities in expenditures per pupil. In 1990,
Ohio ranked forty-eighth out of the fifty states in the extent of disparity of revenue
and expenditure per pupil.
• Predictability and reliability of income are extremely important
aspects of school finance. However, the system of school funding in Ohio does not
provide stability of income to local school districts and adversely affects the ability
of the districts to properly manage the operation of the public schools.
• The trial court found that one of the driving forces behind the
financial disparities in Ohio’s system of school finance is the differences in Class
II real property valuation among the various districts. The growth in inequity in
the distribution of Class II property (property other than residential/agricultural)
among the districts grew from 1981 through 1990 at a far greater rate than the
growth in inequity in Class I (residential/agricultural) real property.
• There is little industry in the Dawson-Bryant School District. Thus,
most of the burden of local taxation is placed directly on the backs of the residents
of the district. Average income is very low compared to other districts within the
state. The residents of the Dawson-Bryant School District have little or no
discretionary income with which to pay additional taxes. Twenty-five percent of
the district’s students are ADC recipients and a great percentage of the students
qualify for free or reduced-price lunch programs.
• With respect to the Lima City School District, the trial court found
that “[p]eople who move into [this] district tend to be people who are moving to
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take advantage of low income housing. As a result, the individuals who attend the
Lima City Schools tend to be poor.” The trial court further found that “[t]he Lima
City School District has not proposed the passage of additional tax levies to its
voters because it has one of the lowest tax bases and one of the lowest per capita
incomes of any school district in the State of Ohio, such that the tax payers of the
District are already assuming a significant burden. * * * Thus, the existing tax
burden, combined with an ever increasing population living below the poverty line
makes the prospect of passage of an additional tax levy unlikely.”
• Northern Local School District has experienced rapid increases in
enrollment as a consequence of an increase in the concentration of mobile homes.
These homes are taxed at lower rates than permanent structures, and the influx of
mobile homes has diminished the district’s tax receipts. Given the lower tax rate,
an influx of mobile homes generally harms a district by bringing in many new
students without adequate corresponding tax revenue. Residents moving into the
district tend to be poor and the ability of the district’s residents to pay additional
taxes has decreased over time.
• The economic situation in the Southern Local School District is
grim. Jobs are scarce and large coal companies have either reduced or ceased
operations in the district. Additionally, the federal government has purchased large
tracts of land in the district and does not pay any taxes on the property.
• The economy of Youngstown has hurt the Youngstown City School
District. The combination of steel mill closings and tax abatements to draw new
businesses has had a devastating impact on the future viability of the Youngstown
city schools. With respect to this district, the trial court made the following relevant
findings:
“The Select Committee to Review and Study Ohio’s Education System
heard testimony from the Superintendent of the Youngstown City Schools that the
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Youngstown-Mahoning Valley area lost 40,000 jobs between 1977 and 1987,
resulting in income loss to employee wage earners and loss of personal tangible
property value throughout the area.
“The plant closings in Youngstown have made it very difficult for the
school system to function. The closings have caused tremendous unemployment,
increased numbers of people on ADC, increased numbers of students on free or
reduced price lunches, increased numbers of single-parent families, increased
latchkey situations, increased numbers of neglected children, and many people are
functioning on a survival basis with food, clothing, and shelter needs.
“The total value of abated property in the Youngstown City School District
grew from $4,073,310 in [1988] to $16,928,920 in 1992. Property in the district,
exempt from taxation, was valued at $159,023,950 in 1992.
“In the Youngstown City School District, between tax year 1978 and 1987,
the total assessed property value fell from slightly over $1 billion to $606 million,
measured in 1990 dollars. By the 1990 tax year, total assessed value had fallen to
$547 million.
“In Plaintiff Youngstown City School District, 1 mill of taxes raised about
$62 for each student in 1979, $41 in 1987, and only $37 in 1990.
“The average daily membership (ADM) of the Youngstown City Schools
has declined by about 1,866 students from 1982 to 1992. * * *” (Citations to
evidence omitted.)
• Property-poor school districts and others have been forced to borrow
funds to meet their needs. The trend in borrowing has grown, with a growing
number of school districts entering into receivership/state supervision. For some
school districts, borrowing under the state’s loan programs has become a way of
life. The majority of these districts have low property valuation and have been
unsuccessful in passing additional tax levy millage on more than one occasion. The
magnitude of borrowing under the loan programs has become staggering, and most
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districts have very little chance of escaping from this vicious circle of mortgaging
the future of Ohio’s public school students.
• As a condition to receiving emergency school assistance loans,
school districts must borrow under the spending reserve loan program and must
drastically cut expenditures. Cutting expenditures in anticipation of having to
borrow funds is common financial practice. Thus, expenditure reduction is
common among financially distressed school districts -- even those that have not
entered into the emergency school assistance loan program.
• School district plans for expenditure reductions submitted with
applications for emergency school assistance loans normally include, as the first
order of business, cuts in school administrators, classroom teachers and support
personnel. The next largest area of expenditure reduction comprises materials,
supplies and textbooks. Next are early retirement incentives, delay in the purchase
of school buses, and cuts in maintenance costs. However, cuts in textbook
purchases and maintenance usually occur long before a district applies for an
emergency assistance loan. As a result of the cuts that must be made to receive a
loan, educational programs are less effective. Reduction of classroom teachers,
textbooks and supplies adversely affects educational opportunity.
• At the time the trial court issued its decision in this matter, at least
four of the “big eight” city school districts in Ohio had been approved for an
emergency school assistance loan. These districts were the Youngstown, Akron,
Cleveland and Cincinnati city school districts. The Southern Local School District
borrowed money through the emergency assistance loan program in fiscal year
1992 and had instituted many cuts in staff, supplies and materials. These cuts had
devastating consequences in the district, including a large number of students not
passing on to higher grade levels due, at least in part, to the lack of available staff
and the lack of sufficient teaching materials. If Southern Local needs to borrow
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January Term, 1997
additional moneys under the emergency assistance loan program, there is very little
(if anything) the district could cut from its bare-bones budget for the required
expenditure reduction plan. The trial court found that as of the time of trial,
appellant Northern Local School District was the only district in Perry County not
to receive an emergency school assistance loan. However, while Northern Local
was not a loan fund district, it was considered a “borderline” school district.
• Budget cuts and lack of funding have deprived the students in the
appellant school districts of the educational opportunities available to other public
school students in Ohio. The trial court found and the evidence confirms that
students in the appellant school districts are not being provided with adequate
textbooks, a sufficient number of teachers and support personnel, an acceptable
level of guidance counseling and necessary supervision, sufficient laboratory
equipment, opportunities for advanced placement, acceptable levels of vocational
training, and a host of other resources, items and materials necessary to ensure the
students a high quality education.
• The appellant school districts have lost or are in the process of losing
experienced teachers to districts that are able to pay higher salaries. Property-poor
districts, including some of the appellant school districts, have been required to hire
less experienced school teachers because they can be paid less. Poorer school
districts, including some of the appellant school districts, have had great difficulty
hiring necessary personnel. The trial court found that the salary schedule for
Dawson-Bryant was inadequate to attract certificated teachers and was not
competitive with the pay scales of other districts within the county or the state.
Thus, Dawson-Bryant was losing good teachers to neighboring school districts and
was in jeopardy of losing more for the same reason. The Lima City School
District’s average teacher salary was lower than all the other districts of its type in
the state. Northern Local has lost teachers and administrators due to a lack of
competitive salaries. The district has lost other teachers and support personnel as
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a result of budgetary reductions. Northern Local cannot hire experienced teachers
because of a lack of funding. Rather, the district has been forced to hire
inexperienced teachers whose salaries are lower. The average teacher salary for the
Southern Local School District is one of the lowest in the state. For average
teacher’s salary, Southern Local ranks five hundred fifty-seventh in the state. The
district has trouble recruiting teachers in certain specialized areas. The
Youngstown City School District generally hires inexperienced teachers due to
budgetary constraints. The district’s salary schedule is not adequate to draw needed
teachers and teachers with certain training into the community. Staff development
and in-service teacher training for the appellant school districts and others have
been woefully inadequate.
• The curricula in the appellant school districts are severely limited.
For example, at the Dawson-Bryant High School, there was only one science lab,
which, as of February 1993, was in a general state of disrepair. Dawson-Bryant has
been unable to implement model math and language arts curricula due to a lack of
necessary resources and materials. Similar problems, to a greater or lesser degree,
were being experienced by each of the appellant school districts.
• Generally, reductions by a school district in the number of teachers,
textbooks, materials and supplies directly affect the educational opportunity
available to students. At the time of trial, the appellant school districts were
financially unable to purchase required textbooks, and were using texts with
missing pages and with ancient copyright dates. For some classes, there were no
textbooks at all. There was evidence as to the inadequacies of school libraries.
There were serious shortages of materials and supplies throughout the appellant
school districts. Lima City, Southern Local, and Youngstown school teachers often
spend a good amount of their own money to bring supplies to work. Teachers in
the Southern Local School District are issued one or two boxes of paper that must
last them the entire school year, and most teachers end up buying paper to bring to
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work. Not only is paper rationed in the Southern Local School District, but paper
clips are rationed, time on the copier is rationed, and art supplies, chalk, and even
toilet paper are rationed. The paper shortage is so severe in the Southern Local
School District due to the lack of adequate funding that the district does not even
provide employees with paychecks in envelopes. Resources are so scarce that to
receive paychecks during the summer months, teachers must provide the district
with an envelope and stamp if they wish to receive their checks by mail -- otherwise,
the teachers must pick up their checks in person.
• None of the appellant school districts are financially able to keep up
with the technological training needs of the students in the districts, which makes
it highly unlikely that the children of the appellant school districts will be able to
meaningfully compete in the job market against those students from richer districts
who receive a sufficient level of technological training.
• The trial court found that as of October 26, 1993, approximately
seventeen thousand Ohio high school seniors had not passed all parts of the ninth
grade proficiency exam after having at least six opportunities to do so. The trial
court also found that, on the average, pupils in school districts having lower levels
of taxable property have lower passage rates on the test than pupils in districts with
higher levels. Moreover, the trial court determined on the basis of the information
available that “[p]upils from high socio-economic backgrounds have a greater
likelihood of passing the ninth grade proficiency tests. Those same pupils generally
attend schools that have greater levels of expenditure per pupil.” Additionally, the
trial court determined that the percentage of pupils passing all parts of the ninth
grade proficiency test from the appellant school districts is substantially less than
the passage rates for the wealthiest quintile of school districts in the state.
• As of the fall of 1993, thirty-two out of ninety-nine seniors in the
Dawson-Bryant Local School District had not passed all parts of the ninth grade
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proficiency test. By contrast, only one out of one hundred high school seniors in
the Beachwood City School District near Cleveland (a school with a large per-pupil
expenditure) had not passed the ninth grade proficiency test. That one student,
however, had passed all but one part of the test. Further, that student had been
diagnosed as having severe learning problems. In the Lima City School District,
seventy-two out of two hundred sixty-eight seniors had not passed and were in
danger of not receiving a diploma. As of the time of trial, only fifty-three percent
of the juniors and thirty-seven percent of the sophomores had passed all parts of the
test. As of the fall of 1993, thirteen out of one hundred fifty-four seniors at Northern
Local had not passed all parts of the proficiency test. As with all of the appellant
school districts, the Northern Local School District does not have sufficient funds
to stop the high rate of failures. Those funds that are available for intervention are
expended, but that merely takes away opportunities from other students who are in
need of attention. As of the time of trial, sixteen out of seventy-nine seniors in the
Southern Local School District had not passed all parts of the ninth grade
proficiency test. As of November 1993, three hundred of seven hundred seventy-
three seniors in the Youngstown City School District had not passed all parts of the
test. The trial court found and the evidence suggests that the massive test failures
would result in an increased student dropout rate. Most inmates in Ohio’s
correctional institutions lack a high school diploma. Obviously, the lack of a high
school diploma deprives individuals of a number of opportunities in life.
C
Public School Buildings in the Plaintiff Districts
{¶ 118} The evidence in this case and the trial court’s findings of fact
pertaining to the condition of the school buildings in the appellant school districts
and others provide compelling proof of the economic despair created by Ohio’s
system of school funding. Some of the trial court’s most disturbing findings
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relating to the condition of the facilities and the evidence upon which the findings
are based may be summarized as follows.
Dawson-Bryant
{¶ 119} At the time of trial, there were four school buildings in operation in
the Dawson-Bryant Local School District: Monitor Elementary, Deering
Elementary, the intermediate school building, and the Dawson-Bryant High School.
Dr. Lee R. McMurren, then superintendent of the Beachwood City Schools near
Cleveland, testified concerning a tour he had taken through the Dawson-Bryant
School District. According to McMurren, the materials used in the classrooms were
worn and outdated. He observed special education classes and testified that the
types of classrooms used to educate the students were a disgrace to the state of Ohio
and to all Americans.
{¶ 120} At the time of trial, Monitor Elementary had no location for
breakfast or lunch programs, no appropriate location for art and music classes, and
no location for a physical education program. There were no nursing facilities in
the event a child became ill. The library was small and dark, and could house only
about ten children at a time, with no room for the children to sit down and browse
through books. The building was not accessible to the handicapped. The electrical
wiring in the building limited the use of technology. At Monitor, if more than three
teachers plugged in fans at the same time, the breaker switch would kick off because
the wiring cannot handle the electrical current.
{¶ 121} Deering Elementary was not accessible to the handicapped.
Handicapped students had to be carried to certain locations in the building. There
were no nursing facilities at Deering. Evaluations for identifying and placing
handicapped students were performed in a former closet with one light bulb
hanging from the ceiling and no heating or ventilation. Part of the assessment
required evaluation of fine motor activities which were extremely difficult to
perform in an unheated closet in the depth of winter. The trial court found and the
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evidence indicates that from August 23, 1993 to August 30, 1993, the average
afternoon temperature in the Deering Elementary building was one hundred degrees
downstairs and one hundred fifteen degrees upstairs and in the cafeteria.
{¶ 122} The intermediate school building was out of compliance with EPA
emissions standards. The coal heating system in the building was a health hazard.
Coal dust could be seen in the air within the building. The area used for a band
room was a former coal bin with no ventilation and no windows. There was no
kitchen or cafeteria in the building and no free breakfast program could be offered.
The building had no science laboratories and technology in the school was limited.
There was one shower room in the school, which was shared by boys and girls.
There was no art or music room. Special education class was held in a former
storage area. The Ohio Department of Education had informed Dawson-Bryant of
the need to move the special education classroom; however, there was no place to
move. From August 23, 1993 to August 30, 1993, the average temperature in the
building exceeded ninety-five degrees.
{¶ 123} There was no band or music room at Dawson-Bryant High School.
The library was located in a modular building that was not readily accessible to
students. Water and gas stations in the science laboratory were not functional. Two
special education classes were held in former storage areas. The kitchen and
cafeteria were insufficient to serve the students’ needs. Classrooms were cramped
and noisy. The high school had coal-fired boilers which emitted hazardous coal
dust into the building. The only rooms in the entire building with hot water were
the home economics room, the cafeteria, and the locker room. None of the
restrooms had hot water.
{¶ 124} In May 1993, the Dawson-Bryant Local School District was
successful in passing a bond issue that will allow the district to participate in the
public school building assistance program under the Classroom Facilities Act (R.C.
Chapter 3318). At the time of trial, the new facilities were expected to be completed
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in 1995. The district’s plans included closing Monitor Elementary and the
intermediate school buildings, making renovations and additions to Deering
Elementary to provide a centralized facility for kindergarten through fifth grade,
modifying and renovating the high school into a middle school facility, and building
a new high school. However, the trial court found that significant problems will
remain even after completion of the project due to the lack of sufficient funding.
Lima City School District
{¶ 125} The trial court found that the Lima City School District cannot raise
enough money through the passage of a construction levy to meet its facility needs.
At the time of trial, the district operated sixteen school buildings that housed pupils,
i.e., eleven elementary school buildings, three middle schools, a high school and an
alternative high school.
{¶ 126} Three of the elementary school buildings were built in the 1920s
and contained significant amounts of asbestos in the ceilings and piping. The
plumbing in the buildings was deteriorating and there was great need for updated
electrical service. To provide new electrical service would be extremely costly,
since running additional wiring through the floors or ceilings would disturb the
asbestos, resulting in substantial effort and expense to prevent friable asbestos from
escaping into the air. At the time of trial, only one of the eleven elementary schools
was accessible to the handicapped.
{¶ 127} South Middle School in Lima is an ancient building. Testimony
established that its electrical problems are so bad that maintenance personnel have
to wear rubber gloves and rubber vests to work on the electrical panel. In the fall
of 1993, a portion of the exterior of the building collapsed onto a sidewalk.
Fortunately, there were no injuries to students who used the sidewalk to enter and
leave the building. Certain portions of the building that did not collapse are similar
in design to the portion of the building that did collapse. Thus, the building is in
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great need of repair. Lima operated a total of three middle schools, none of which
met ADA requirements for accessibility to the handicapped.
{¶ 128} At the time of trial, Lima Senior High School had asbestos in every
room in the facility. The facility housed approximately one thousand four hundred
students. Testimony established that any structural work on the high school is
difficult because it disturbs the asbestos, resulting in substantial costs connected
with monitoring and encapsulation. As one extreme example of the problem, a
shop teacher at the high school removed a dust collection system in a room and
disturbed some friable asbestos, costing the district $15,000 to make the room safe
for students.
{¶ 129} The trial court found that the Lima City School District is unable to
engage in any preventative maintenance of its school facilities and that it repairs its
facilities on an emergency-needs basis. Further, the court found that the district
needs only seven elementary schools as opposed to the eleven in operation, but that
the district is unable to reorganize elementary programs because to do so would
require a new larger school building which the district cannot afford.
Youngstown City School District
{¶ 130} At the time of trial, many of the school buildings in the
Youngstown City School District were in a state of disarray with bad roofs,
overcrowded classrooms, and a host of other problems. Building maintenance was
performed on an emergency basis only. The 1990 Facilities Survey identified
approximately $67 million in needs for the Youngstown schools. Very few of these
needs had been addressed by the time of trial. All capital improvements had been
put on hold due to a lack of funds. Overcrowding and high student-to-teacher ratios
had become common in several of the school buildings. Asbestos removal and
architectural barrier abatement needs could not be met due to lack of funds. The
following findings of fact by the trial court sum up the state of affairs in many of
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the Youngstown city schools, and provide a unique perspective on the educational
opportunities available to pupils in the Youngstown City School District:
“The John White Elementary School building has a metal building addition
that * * * [i]n the summer * * * heats up during the day so the students can hardly
bear to be in their rooms, and in winter it stays so cold there is often frost on the
interior walls. The building also houses special education and remediation students
in a portable unit. The library * * * has been divided to create more classroom
space, so there is not sufficient library space. There is no computer lab[;] computers
are placed on carts for intervention classes.
“* * *
“The Lincoln Elementary School has some grades which are overcrowded,
computers on carts, and insufficient recreational space. The playground doubles as
a parking lot for staff and a shooting gallery for the neighborhood.
“* * *
“The Martin Luther King Elementary School is beginning to have extensive
roof leaks which the district has been unable to address due to lack of funds. The
building is not handicapped accessible. The Martin Luther King Elementary
building has security problems, and equipment has been stolen from the building.
“Taft Elementary School is overcrowded, and the first grade classes in
1992-93 school year had 33, 34 and 35 students, respectively. Some parents
voluntarily agreed to allow the district to transport their students to other buildings
in the district just to get the first grade classes down to a 30 to 1 ratio. * * *
“* * *
“Volney Rogers Junior High School is the only junior high in the district
with a science lab. There are no science labs at the other junior high schools
because they are extremely expensive to install and the district cannot afford to use
the classroom space to put in science labs. At Youngstown, the first lab courses
are offered as a sophomore in high school.” (Citations to evidence omitted.)
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{¶ 131} In all, the record is clear that the facilities in the Youngstown school
district are wholly inadequate to meet the district’s needs.
Southern Local School District
{¶ 132} Recently, the Southern Local School District was successful in
obtaining funds under the Classroom Facilities Act together with the passage of the
necessary tax levy and bond issue to provide new school facilities in the district.
However, the need for the new facilities had existed since 1980. The Southern
Local School District had over eight hundred improperly housed students identified
in connection with its application for Classroom Facilities Act assistance. The trial
court’s findings concerning the state of the Southern Local schools prior to the
completion of the renovation project are nothing less than staggering, and the fact
that the schools were ever allowed to reach that point is simply outrageous. This
case was commenced in 1991. Some of the trial court’s findings concerning the
Southern Local schools as they existed up to and during the time this case was
litigated convincingly demonstrate how far some of Ohio’s districts have sunk
under the current system of school funding:
“When Superintendent [Carol] Spangler was employed in August 1991,
elementary students were house[d] at New Straitsville Elementary, Corning
Elementary, and Moxahala Elementary; junior high students were housed at Miller
Junior High at Shawnee, and high school students were housed at Miller High
School. The New Straitsville and Shawnee buildings were built around 1915, with
Shawnee having some additions after that. Moxahala and Corning were both built
in the 1920s.
“As a result of the lack of resources for comprehensive maintenance and
upkeep, all of the buildings, other than the high school, were in very poor condition
in 1991 when Ms. Spangler became Superintendent. The heating, electricity,
ventilation, plumbing, and sewage systems in the elementary and junior high
buildings needed comprehensive repair. The sewage system at New Straitsville
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Elementary would flood over State Route 93 on occasion. Incidents such as the
temperature in Moxahala’s gym being only 20 degrees were not uncommon. * * *
Asbestos was a primary concern in the elementary and junior high buildings. At
Shawnee, the major part of the building was constructed with asbestos in the lower
layer of the plaster. Because plaster was falling, some mornings the custodian and
principal at the Shawnee building would go into rooms and knock plaster off the
ceilings so that big chips would not fall on students during the day. * * * At
Shawnee, the roof leaked, the lighting was poor, the heating was inconsistent, and
there was no hot water in the bathrooms.
“Louis Altier, President of the Southern Local Board of Education, testified
that he has farm animals that are housed better than students were housed in the
Shawnee building. Whereas his animals were dry and warm, that could not be said
about the students in the Shawnee building.
“The district did not have the financial resources to completely replace
electrical systems and plumbing systems, to remove asbestos, and to perform the
comprehensive maintenance that was necessary to keep the buildings in a safe
condition.
“* * *
“Chris Thompson attended the New Straitsville Elementary for
kindergarten, for the two weeks he spent in 2nd grade before being advanced a
grade, and for 3rd grade (1984-85 and 1986-87). The building gave Christopher ‘a
dirty feeling.’ There was plaster falling off the walls and ceilings and cockroaches
had been seen crawling on the floor in the restrooms. Chris avoided using the
restrooms at all while at school; he waited the entire school day to use the bathroom
at home. The gymnasium floor was warped and it was so small that Chris found it
difficult to play some sports because students would run into the walls. * * * The
library was very small with inadequate book supplies and with outdated books.
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Following a storm, the roof leaked and a large piece of the ceiling fell onto the floor
and the library was closed for about two to three weeks. * * *
“In the 4th through 6th grades, Chris Thompson attended the Corning
Elementary building (1987-88 and 1989-90). The building was very dirty, the
bathrooms had cockroaches and other creatures crawling on the floors, possibly
silverfish. A leaking roof was a real problem. In math class, water dripped like a
waterfall from the ceiling into a bucket after rains. Sometimes, the students had to
ask the teacher to be moved because the water was splashing on them. After a hard
rain the night before, the constant drip into the bucket was very annoying. The
library at Corning was very small with an inadequate supply of books and with
outdated books. The science room was next to the furnace room, which made the
science room very noisy, and it was hard for the students to concentrate or to hear
the teacher talk. Plaster was falling off the walls at the Corning building.
“Chris Thompson attended the Shawnee building for the 1st grade (1985-
86) and for the 7th and 8th grades (1990-91 to 1991-92). In the six years between
his 1st grade and the 7th grade attendance, the building really had not changed
much. The floors at Shawnee were warped, plaster was falling off the walls, and
there were large holes in the walls in the front part of the building. * * *
“When Chris Thompson was at Shawnee, the gymnasium had a leaking
roof, and at one time part of the gym was flooded due to leakage. When a ball hit
the ceiling while students were playing kickball or volleyball, part of the ceiling
came down. The locker rooms below the stage area and adjacent to the gym had
almost no water pressure, stunk, and were unfit for student use. Students changed
clothes in two storage rooms next to the stage, but had no shower facilities
available.
“When Chris Thompson began to attend high school, the high school
building did not have heat due to construction and renovation of the heating system
in the fall of 1992 until the end of November or the beginning of December.
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Students had to wear coats and gloves to classes, and were subjected to fumes from
large kerosene heaters when the building got very cold.
“* * * All of the pupils who attended the elementary and middle school
buildings at Southern Local remained improperly housed until the fall of 1993.”
(Citations to evidence omitted.)
{¶ 133} As a result of the passage of a 1990 local tax levy and state
assistance provided through the Classroom Facilities Act, the district completed, in
1993, the construction of new elementary and middle school facilities. Shawnee,
Moxahala, New Straitsville and Corning schools were closed. The new facilities
have had a very positive effect on students and their performance. However, the
new facilities have still left the district with numerous unmet facility needs. Miller
High School was somewhat improved during the construction project, but the
improvements were not nearly sufficient to correct the ills plaguing that facility.
The district apparently does not raise enough funding to properly furnish the new
facilities and will likely be unable to keep the new facilities in a state of good repair.
Further, the district faced (and probably still faces) a problem as to what to do with
the facilities that are no longer in use. It was estimated that to demolish Shawnee
would cost the district $800,000. The district owns three other facilities that are no
longer in use as schools. The district needs money to deal with these properties in
a responsible manner.
Northern Local School District
{¶ 134} The plight of the Northern Local School District is truly tragic, as
reflected by the trial court’s findings of fact. As of the time of trial, Northern Local
was thirtieth in line to get on the list of school districts approved for Classroom
Facilities Act funding. The significance of this fact should not be overlooked. If
Northern Local was not immediately entitled to funding for its facilities, it makes
me wonder how disastrous the situation is in other school districts across this state
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and how long it will take for the needs of the districts to be addressed under the
current system of school funding.
{¶ 135} In July or August 1992, the bricks were bulging out near the parapet
at the north end of the Somerset Elementary School. An engineer examined the
building and recommended that it be closed. The Department of Education
inspected the building and observed that the bricks on the parapet walls were bowed
out and represented a hazard to pupils. The Department of Education strongly
recommended that the facility be closed for safety reasons. The school district
sought emergency financial help from the Department of Education and others, but
was told that there was no money available to aid the district in addressing its
emergency situation.
{¶ 136} In October 1992, the Northern Local School District Board of
Education decided to close the Somerset school building. Before the building was
closed, the district erected scaffolding around the entire building and canopies over
doorways to protect students from falling bricks. When Somerset was finally
closed, some of the students were required to be temporarily educated in facilities
within the New Lexington School District. Busing the children to New Lexington
on a daily basis resulted in the children missing part of the school day. As a result
of the closing of Somerset Elementary, classes throughout the Northern Local
School District had to be rearranged to accommodate the displaced Somerset school
students.
{¶ 137} At the time of trial, Glenford Elementary School was housed in two
separate buildings. The windows and roofs of both buildings leaked, the lighting
was bad, and the restroom facilities were deplorable. State Route 204 runs between
the two buildings. The road is heavily traveled, especially by trucks transporting
sand. Kindergarten through second grade students must cross the highway up to
five times a day for, among other things, lunch and recess. The restrooms smell
bad, look terrible, and are in need of replumbing. Because of limited class space,
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kindergarten students must climb three flights of stairs to use a bathroom. The roof
in one of the buildings leaks even when it is not raining due to water trapped
between layers in the roof. In November 1992, the Ohio EPA found high levels of
arsenic in the water wells that service the Glenford school buildings. The district
sought financial aid from the state to address this problem, but no aid was
forthcoming.
{¶ 138} At Thornville Elementary, the roof and windows leak continually.
Particle board was placed over peeling plaster. In the summer of 1993, when a
piece of particle board was removed, maggot and ant infestations were discovered.
The mortar is decaying and needs to be replaced or repaired.
{¶ 139} Recently, Northern Local was informed by an engineer employed
to study the district’s facility problems that if the Thornville and Glenford buildings
were not renovated they would have to be closed. Given the debt limitation of R.C.
133.06, the district could not borrow enough to construct a building complex to
house students in kindergarten through eighth grade. To build such a building, the
district would have had to generate somewhere between $14 and $15 million. As
of November 1993 the total assessed valuation in the district was approximately
$90 million. The R.C. 133.06 debt limits restrict the district to nine percent of the
district’s total assessed valuation except under specified conditions. Thus, a new
complex was not an option. Accordingly, the school board proposed to renovate
Glenford, Thornville, Somerset, and the junior/senior high complex to meet the
district’s needs. To achieve that goal, the board put a $6.5 million bond issue before
the voters in May and August 1993. The issue failed. The board placed another
bond issue before the voters in November 1993 for $6.3 million (5.26 mills), which
would not have been nearly enough for the district to take care of its facilities needs.
That issue failed as well. The trial court found that the facilities in Northern Local
“had not changed in the past 20 years.”
III
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Constitutional Guarantees Related to Public Education
{¶ 140} The history of some of Ohio’s constitutional provisions relating to
education is simply fascinating. Some of the history is set forth below to emphasize
the important role education has played in the development of our state and nation.
{¶ 141} Following the Revolutionary War, the Confederate Congress, in the
Land Ordinance of May 20, 1785, provided for the surveying and sale of lands in
what was then known as the Western Territory. That territory, as described in the
ordinance, included lands that would eventually become Ohio. In the Land
Ordinance, Congress reserved one thirty-sixth of every township in the Western
Territory expressly for the maintenance of public schools, stating: “There shall be
reserved the lot No. 16, of every township, for the maintenance of public schools
within the said township.” 1 Laws of the United States 563, 565. Since the
townships under the congressional survey were to be six miles square, this meant
that a section of every township measuring one mile square would be devoted to
educational use. Spayde, Lewis & Jollay, Baldwin’s Ohio School Law (1984) 2,
Section 1.03. “It was the intention of Congress in making this generous grant that
these lands, approximately 704,488 acres in all, intelligently managed, would
support the public schools of the state in perpetuity, so that there would be no need
to tax the citizens for the cost of operating the public school system.” Id.
{¶ 142} Following the enactme
This text is long and has been trimmed here. Open the source document for the complete record.