Appendix — Clowes v. Serrano

Coutt, U. S.

ree D

APPENDIX. MAY 2 1977

Supreme Court of the United ates RODAK, JR., CLERK

October Term, 1976

ae yj 6-1512

RICHARD M. CLOwEs, Superintendent of Schools of the

County of Los Angeles; Howarp B. ALvorp, Treas-

urer and Tax Collector of the County of Los An-

geles; LONG BEACH UNIFIED SCHOOL DisTRICT; EL

SEGUNDO UNIFIED SCHOOL DisTRICT; BURBANK UNI-

FIED SCHOOL DISTRICT; BEVERLY HILLS UNIFIED

SCHOOL DisTRICT; and SAN MARINO UNIFIED SCHOOL

DIsTRICT,

Petitioners,

vs.

JOHN SERRANO, JR., ef al.,

Respondents.

APPENDIX TO PETITION FOR A WRIT OF

CERTIORARI TO THE SUPREME COURT

OF THE STATE OF CALIFORNIA.

JOHN H. Larson,

County Counsel,

JAMES W. BriGGs,

Division Chief, Schools Division,

DONOVAN M. MAIN,

Deputy County Counsel,

648 Hall of Administration,

Los Angeles, Calif. 90012,

(213) 974-1807,

Attorneys for Petitioners.

Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622

ee

——

INDEX TO APPENDICES

Appendix A. Opinion of the California Supreme

Court in “Serrano II”. Reported in 18 Cal.3d

728, 135 Cal.Rptr. 345, 555 P.2d 929 ..App. p.

Richardson, J., Dissenting ..................----ccccce-e-

Clark, J., Dissenting ................ CAAT: Se eee

Appendix B. Modification of Opinion in “Ser-

TE ccncinnsibiateciadincenesbinaiibaiaiaiabiniatialeide

Appendix C. Opinion of the California Supreme

Court in “Serrano I’. Reported in 5 Cal.3d 584;

96 Cal.Rptr. 601, 487 P.2d 1241 0...

BI, Bg TOI cccsecccttnctesetnsiccnccninntwene

Appendix D. Opinion of Court of Appeal. Re-

ported in 89 Cal.Rptr. 345, Vacated by Califor-

er

Appendix E. Opinion of the Trial Court After

Trial on Remand by “Serrano I”. (Unreported)

Appendix F. Judgment of the Trial Court After

Trial on Remand by “Serrano I” ......................

Appendix G. Relevant Portion of Appellants’

{Defendants’| Opening Brief on Appeal in Ser-

rano II, Filed in August of 1975 ......................

Appendix H. Relevant Portion of Appellants’

[Defendants’| Reply Brief on Appeal in Serrano

Il, Filed in December of 1976 ..........................-.

Appendix I. Relevant Portions of Appellants’

[Defendants’| Petition for Rehearing in Serrano

II, Filed in January of 1977 ............................--

Appendix J. Constitutional, Statutory, and Ad-

ministrative Provisions Involved ........................

148

149

161

282

290

304

310

IN THE

Supreme Court of the United States

October Term, 1976

ER

RICHARD M. CLowes, Superintendent of Schools of

the County of Los Angeles; Howarp B. ALvorp,

Treasurer and Tax Collector of the County of Los

Angeles; LONG BEACH UNIFIED SCHOOL DISTRICT;

EL SEGUNDO UNIFIED SCHOOL DISTRICT; BURBANK

UNIFIED SCHOOL DisTRICT; BEVERLY HILLS UNIFIED

SCHOOL DisTRICT; and SAN MARINO UNIFIED SCHOOL

DIsTRICT,

Petitioners,

vs.

JOHN SERRANO, JR., ef al.,

Respondents.

APPENDIX TO PETITION FOR A WRIT OF

CERTIORARI TO THE SUPREME COURT

OF THE STATE OF CALIFORNIA.

APPENDIX A.

Opinion of the California Supreme Court

in “Serrano II”.

Reported in 18 Cal.3d 728, 135 Cal.Rptr. 345,

557 P.2d 929.

[L.A. No. 30398. In Bank. Dec. 30, 1976. ]

John Serrano, Jr., et al., Plaintiffs and Respondents,

v. Ivy Baker Priest,* as State Treasurer, etc., et al.,

Defendants and Appellants; California Federation of

Teachers, AFL-CIO, Intervener and Respondent; Bev-

erly Hills Unified School District et al., Interveners and

Appellants.

SUMMARY |

In an action challenging the constitutionality of the

California public school financing system, tried on re-

mand after the Supreme Court had reversed a prior

judgment of dismissal entered upon orders sustaining

general demurrers, various interested parties were al-

lowed to intervene on both sides, but the trial court

declined defendants’ suggestion that the Legislature and

the Governor be joined as indispensable parties. In

the prior decision the Supreme Court had held that

if plaintiffs’ allegations were sustained on trial, the

financing system must be declared invalid as in violation

of state and federal constitutional provisions guarantee-

ing the equal protection of the laws, but during the

trial itself the holding with regard to the federal provi-

sions was undercut by the United States Supreme Court,

which ruled against Texas plaintiffs in a Fourteenth

Amendment attack on a generally similar system in

*Although neither the former state Treasurer (now de-

ceased) nor the present holder of that office is a party to

this appeal, we continue to use the title Serrano v. Priest

for purposes of consistency and convenience.

—

that state. The trial court, following the law of the

case, taking into consideration two new bills enacted

into law during the pendency of trial proceedings,

and supporting its decision by nearly 300 findings

of fact, held that the California system still violated

the state’s, though not the federal, equal protection

provisions. Indicating the nature of such violations,

the court allowed six years for bringing the system

into constitutional compliance, during which the existing

system should continue, and retained jurisdiction so

that any party might apply for appropriate relief in

the event of noncompliance. Defendants’ motion for

new trial was denied. (Superior Court of Los Angeles

County, No. C 938254, Bernard S. Jefferson, Judge.)

On appeal by certain defendants, as supplemented

by briefs of several amici curiae, the Supreme Court

affirmed. Rejecting defendants’ contentions that the

Legislature and the Governor were indispensable par-

ties, and noting that the criteria used by the trial

court in reaching its decision were those set forth

in the law of the case as declared by the Supreme

Court in its prior ruling on demurrer, the court held

that, despite the admitted improvements of the recent

legislation, the system suffered from the same basic

shortcomings that were alleged to exist in the original

complaint; the system allowed the availability of educa-

tional opportunity to vary as a function of the assessed

valuation (per “average daily attendance” of students)

of taxable property within a given district. For purposes

of determining the validity of the school financing

legislation under the equal protection provisions of the

state Constitution, education was a fundamental interest

and discrimination in educational opportunity on the

basis of district wealth involved a suspect classification;

therefore, the legislation was subject to strict judicial

_

scrutiny, and the state had the burden of showing

a compelling state interest to justify such discrimination.

This the state failed to do; the purported justification,

namely, local control of fiscal and educational matters,

was chimerical from the standpoint of districts less

favored in terms of taxable wealth per pupil, and

the recent legislation was insufficient to negate such

inequities in the foreseeable future, primarily because

of the continued availability of voted tax overrides.

The court also rejected defendants’ contention that

other constitutional provisions, relating to school financ-

ing and educational improvement, specifically author-

ized the existing system, and held that in exercising

its powers under such provisions the Legislature was

obliged to act in a manner consistent with general

constitutional limitations applicable to all legislation,

including fundamental constitutional provisions guaran-

teeing the equal protection of the laws to all citizens

of the state. (Opinion by Sullivan, J., with Wright,

C. J., and Tobriner and Mosk, JJ., concurring. Dissent-

ing opinion by Richardson, J. Separate dissenting opin-

ion by Clark, J., with McComb, J., concurring. )

COUNSEL

John H. Larson, County Counsel, James W. Briggs

and Donovan M. Main, Deputy County Counsel, for

Defendants and Appellants and Interveners and Appel-

lants.

Ronald A. Zumbrun, John H. Findley, H. Leroy Can-

non, Roger J. Nichols, Leonard Siegel and Nichols

& Rose as Amici Curiae on behalf of Defendants

and Appellants and Interveners and Appellants.

Sidney M. Wolinsky, Daniel M. Luevano, Rosalyn M.

Chapman, John E. McDermott, Mary S. Burdick, Rose

Ochi, Joel Edelman, David A. Binder, Harold W. Horo-

_—

witz, Michael H. Shapiro, Jerome Levine and Robert

F. Knox for Plaintiffs and Respondents.

Thomas F. Griffin, Stephen D. Sugarman, Robert H.

Mnookin, John E. Coons, Ernest L. Aubry, John R.

Phillips, Carlyle W. Hall, Jr., Brent N. Rushforth,

Frederic P. Sutherland, A. Thomas Hunt and Timothy

B. Flynn as Amici Curiae on behalf of Plaintiffs and

Respondents.

Levy, Koszdin & Woods and Henry R. Fenton for

Intervener and Respondent.

Kronick, Moscovitz, Tiedmann & Girard, Edward J.

Tiedmann and Mark Paul as Amici Curiae.

OPINION

SULLIVAN, J.—The instant proceeding, which in-

volves a constitutional challenge to the California public

school financing system, is before us for the second

time. In 1971, we reversed a judgment of dismissal

entered upon orders sustaining general demurrers and

remanded the cause with directions that it proceed

to trial (Serrano v. Priest (1971) 5 Cal.3d 584 [96

Cal.Rptr. 601, 487 P.2d 1241], hereafter cited as

Serrano I.) In so doing we held that the facts alleged

in plaintiffs’ complaint were sufficient to constitute

the three causes of action there set forth, and that

if such allegations were sustained at trial, the state

public school financing system must be declared invalid

as in violation of state and federal constitutional provi-

sions guaranteeing the equal protection of the laws.’

1The kernel of our holding was set forth as follows: “In

sum, we find the allegations of plaintiffs’ complaint legally

sufficient and we return the cause to the trial court for further

proceedings. We emphasize, that our decision is not a final

judgment on the merits. We deem it appropriate to Pawn out

for the benefit of the trial couft on remand (see Civ.

endies

Upon remand answers to the complaint were filed

by all existing defendants’ and certain school districts

of the County of Los Angeles were allowed to intervene

as defendants, adopting as their own the answers pre-

viously filed by the other county defendants.’ The Cali-

fornia Federation of Teachers, AFL-CiO, was permitted

to intervene as a plaintiff on condition that its complaint

adopt the essential allegations of the original complaint.

The trial court declined to accept defendants’ suggestion

that the Legislature and the Governor be joined as

indispensable parties. _*

Trial commenced on December 26, 1972. After more

than 60 days of trial proceedings the court issued

its “Memorandum Opinion Re Intended Decision” on

Proc., § 43) that if, after further proceedings, that court should

enter final judgment determining that the existing system of

public school financing is unconstitutional and invalidating said

system in whole or in part, it may properly provide for the

enforcement of the judgment in such a way as to permit

an —e | transition from an unconstitutional to a constitytional

system of school financing. As in the cases of school desegrega-

tion (see Brown v. Board of Education (1955) 349 US.

294 [99 L.Ed. 1083, 75 St.Ct. 753]) and legislative rea

portionment (see Silver v. Brown (1965) 63 Cal.2d 270, 281

[46 Cal.Rptr. 308, 405 P.2d 132]), a determination that an

existing plan of governmental operation denies equal protection

does not necessarily require invalidation of past acts undertaken

pursuant to that plan or an immediate implementation of a

constitutionally valid substitute. Obviously, any judgment invali-

dating the existing system of public school financing should

make clear that the existing system is to remain operable

until an appropriate new system, which is not violative of

equal protection of the laws, can be put into effect.” (Serrano

I, at pp. 618-619.)

*The defendants at the time of the first appeal were the

occupants of the state offices of Treasury, Superintendent of

Public Instruction and Controller, and the Los Angeles County

offices of tax collector, treasurer, and superintendent of schools.

’The intervening school districts were Burbank Unified, El

Segundo Unified, Beverly Hills Unified, Long Beach Unified,

San Marino Unified, Glendale Unified, and South Bay Union

High School.

union

April 10, 1974, and on August 30 of the same year

filed its findings of fact and conclusions of law, there

being 299 of the former and 128 of the latter. Judgment

was entered on September 3, 1974, and defendants’

motion for a new trial was denied on October 28,

1974. This appeal followed.*

I

Our decision in Serrano I, which due to the then

legal posture of the proceeding directed itself only

to the sufficiency of allegations of the complaint to

state a cause of action and contemplated full trial

proceedings for the proof of such allegations, neverthe-

less attracted the immediate attention of the California

Legislature. As a result the lawmakers passed two

bills—Senate Bill No. 90 (S.B. 90) and Assembly

Bill No. 1267 (A.B. 1267)—which, upon becoming

law during the pendency of trial proceedings, brought

about certain significant changes in the public school

*Two notices of appeal were filed in the trial court, one

by the county defendants and the defendant-in-intervention

school districts (see fn. 3, ante) and one by the then state

Treasurer, Ivy Baker Priest. The remaining state defendants

have not appealed. The appeals of the state Treasurer and

defendants-in-intervention South Bay Union High School District

and Glendale Unified School District were subsequently aban-

doned. Thus the only parties appellant are the county defendants

and the remaining five intervening school districts.

With the permission of the court, briefs amicus curiae have

been filed by defendant Wilson Riles, Superintendent of Public

Instruction of the State of California; the Pacific Legal Founda-

tion, San Francisco Unified School District; The Association of

Concerned Teachers (ACT); The Childhood and Govern-

ment Project (Earl Warren Legal Institute, Boalt Hall, University

of Cal., Berkeley); The Education Finance & Governance Re-

form Project (Research Institute, Nairobi College, East Palo

Alto); The California Taxpayers’ Association; and the California

School Finance Task Force (Graduate School of Public Policy,

University of Cal., Berkeley). Jesse Unruh, the present state

treasurer, has also filed a brief.

anibien

financing system then under judicial scrutiny. Recogniz-

ing this, all parties to the action thereupon entered

into a stipulation that for purposes of trial the California

system for the financing of public schools should be

deemed to include all law applicable at the time of

trial. This agreement was later incorporated as follows

among the trial court’s conclusions of law: “For pur-

poses of this litigation, the California system of financ-

ing public schools, includes not only all pertinent pro-

visions of the California Constitution, statutes, and

administrative codes, and all pertinent provisions of

federal statutes and regulations, but includes all modi-

fications, amendments, and additions to the California

statutes and administrative codes resulting from the

California Legislature’s enactment of those bills known

as §.B. 90 and A.B. 1267.” (See Stats. 1972, ch.

1406; Stats. 1973, ch. 208.)

In view of these developments we think it appropriate

at this point, before undertaking a description of the

particulars of the trial court’s judgment, to review

in some detail the specific nature of the changes in

the financing system which were wrought by the Legisla-

ture following our decision.’ Because our understand-

ing of these changes depends in large part on an

understanding of the system as it existed at the time

of Serrano I, we begin by reiterating the description

of that system, based on the allegations of the complaint

and certain matters judicially noticed, which we set

5Following oral argument in this case the Legislature enacted

and the Governor signed into law a school finance bill adding

some $272 million to the state budget for these ee

(Sen. Bill No. 1641, signed by the Governor on July 2, 1976.)

This bill, of course, was not before the trial court, and we

do not consider it today.

—

forth in our earlier opinion. Clarity of exposition dic-

tates that the following excerpt be extensive.°

A. The System Prior to S.B. 90 and A.B. 1267

In Serrano I, we described the prior financing system

as follows:

“We begin our task by examining the California

public school financing system which is the focal point

of the complaint’s allegations. At the threshold we

find a fundamental statistic—over 90 percent of our

public school funds derive from two basic sources:

(a) local district taxes on real property and (b) aid

from the State School Fund.’

“By far the major source of school revenue is the

local real property tax. Pursuant to article IX, section

6 of the California Constitution, the Legislature has

authorized the governing body of each county; and

city and county, to levy taxes on the real property

within a school district at a rate necessary to meet

the district’s annual education budget. (Ed. Code, §

20701 et seq.) The amount of revenue which a district

can raise in this manner thus depends largely on its

tax base—i.e., the assessed valuation of real property

within its borders. Tax bases vary widely throughout

the state; in 1969-1970, for example, the assessed valu-

*For pu s of convenience we have renumbered the foot-

notes in the following excerpt from Serrano I in order to

conform with the sequence of the instant opinion. Hereafter,

unless otherwise indicated, all section references (including those

in excerpts from Serrano 1) are to the Education Code.

7California educational revenues for the fiscal year 1968-

1969 came from the following sources: local property taxes,

55.7 percent; state aid, 35.5 percent; federal funds, 6.1 percent;

miscellaneous sources, 2.7 percent. (Legislative Analyst, Public

School Finance, Part. I, Expenditures for Education (1970)

p. 5. Hereafter referred to as Legislative Analyst.)

2 cenamee vemeetenn baer —~

a

ation per unit of average daily attendance of elementary

school children* ranged from a low of $103 to a

peak of $952,156—a ratio of nearly 1 to 10,000.

(Legislative Analyst, Public School Finance, Part V,

Current Issues in Educational Finance (1971) p. 7.)°

“The other factor determining local school revenue

is the rate of taxation within the district. Although

the Legislature has placed ceilings on permissible district

tax rates (§ 20751 et seq.), these statutory maxima

may be surpassed in a ‘tax override’ election if a

majority of the district’s voters approve a higher rate.

(§ 20803 et seq.) Nearly all districts have voted

to override the statutory limits. Thus the locally raised

funds which constitute the largest portion of school

revenue are primarily a function of the value of the

realty within a particular school district, coupled with

the willingness of the district’s residents to tax them-

selves for education.

8Most school aid determinations are based not on total

enrollment, but on ‘average daily attendance’ (ADA), a figure

computed by adding together the number of students actually

present on each school day and dividing that total by the

number of days school was taught. (§§ 11252, 11301, 11401.)

In practice, ADA approximates 98 percent of total enrollment.

(Legislative Analyst, Public School Finance, Part IV, Glossary

of Terms Most n Used in School Finance (1971) p. 2.)

When we refer herein to figures on a ‘per pupil’ or ‘per

child’ basis, we mean per unit of ADA.

*Over the period November 1970 to January 1971 the

legislative _—— oo to the Legislature a series of five

reports which ‘deal with the current system of public school

finance from kindergarten through the community college and

are designed to provide a working knowledge of the system

of school finance.’ (Legislative alyst, Part I, supra, p.

1.) The series is as follows: Part I, Expenditures for Education;

Part II, The State School Fund: Its Derivation and Distribution;

Part III, The Foundation Program; Part IV, Glossary of Terms

Most Often Used in School Finance; Part V, Current Issues

in Educational Finance.

enlifiin

“Most of the remaining school revenue comes from

the State School Fund pursuant to the ‘foundation

program,’ through which the state undertakes to supple-

ment local taxes in order to provide a ‘minimum amount

of guaranteed support to all districts. . . .. (§ 17300.)

With certain minor exceptions,” the foundation pro-

gram ensures that each school district will receive

annually, from state or local funds, $355 for each

elementary school pupil (§§ 17656, 17660) and $488

for each high school student. (§ 17665.)

“The state contribution is supplied in two principal

forms. ‘Basic state aid’ consists of a flat grant to

each district of $125 per pupil per year, regardless

of the relative wealth of the district. (Cal. Const.,

art. IX, § 6, par. 4; Ed. Code, §§ 17751, 17801.)

‘Equalization aid’ is distributed in inverse proportion

to the wealth of the district.

“To compute the amount of equalization aid to

which a district is entitled, the State Superintendent

of Public Instruction first determines how much local

property tax revenue would be generated if the district

were to levy a hypothetical tax at a rate of $1 on

each $100 of assessed valuation in elementary school

10Districts which maintain ‘unnecessary small schools’ receive

$10 A ah pupil less in foundation funds. (§ 17655.5 et seq.)

oe Gas < school districts are eligible for ‘bonus’ founda-

entary — receive an additional $30 for

ees ie ae through 3; this sum is intended

to reduce ae > a G ge tes Unified school

an extra per child in foundation support.

(8§ ($8 17671-17673. )

—

A Ney A is Yt aI A oa

See Ge

districts and $.80 per $100 in high school districts.”

(§ 17702.) To that figure, he adds the $125 per

pupil basic aid grant. If the sum of those two amounts

is less than the foundation program minimum for that

district, the state contributes the difference. (§§ 17901,

17902.) Thus, equalization funds guarantee to the poor-

er districts a basic minimum revenue, while wealthier

districts are ineligible for such assistance.

“An additional state program of ‘supplemental aid’

is available to subsidize particularly poor school districts

which are willing to make an extra local tax effort.

An elementary district with an assessed valuation of

$12,500 or less per pupil may obtain up to $125

more for each child if it sets its local tax rate above

a certain statutory level. A high school district whose

assessed valuation does not exceed $24,500 per pupil

is eligible for a supplement of up to $72 per child

if its local tax is sufficiently high. (§§ 17920-17926.)

“Although equalization aid and supplemental aid tem-

per the disparities which result from the vast variations

in real property assessed valuation, wide differentials

remain in the revenue available to individual districts

11This is simply a ‘computational’ tax rate used to measure

the relative wealth of the district for equalization purposes.

It bears no relation to the tax rate actually set by the district

in levying local real property taxes.

Some further equalizing effect occurs through a special

areawide foundation program in districts included in reorganiza-

tion plans which were disapproved at an election. (§ 17680

et seq.) Under this program, the assessed valuation of all

(This footnote is continued on next page)

—_— =

and, consequently, in the level of educational expendi-

tures.” For example, in Los Angeles County, where

plaintiff children attend school, the Baldwin Park Uni-

fied School District expended only $577.49 to educate

each of its pupils in 1968-1969; during the same year

the Pasadena Unified School District spent $840.19

on every student; and the Beverly Hills Unified School

District paid out $1,231.72 per child. (Cal. Dept.

of Ed., Cal. Public Schools, Selected Statistics

1968-1969 (1970) Table IV-11, pp. 90-91.) The

source of these disparities is unmistakable: in Bald-

the individual districts in an area is pooled, and an actual

tax is levied at a rate of $1 per $100 for elementary districts

and $.80 for high school districts. The resulting revenue is

distributed among the individual districts according to the ratio

of each district’s foundation level to the areawide total. Thus,

poor districts effectively share in the higher tax bases of their

wealthier neighbors. However, any district is still free to tax

itself at a rate higher than $1 or $.80; such additional revenue

is retained entirely by the taxing district.

13Statistics compiled by the legislative analyst show the follow-

ing range of assessed valuations per pupil for the 1969-1970

sc year:

Elementary High School

Low $ 103 $ 11,959

Median 19,600 41,300

High 952,156 349,093

(Legislative Analyst, Part V, supra, p. 7.)

“Per pupil expenditures during that year also varied widely:

Elementary High School Unified

Low $ 407 $ 722 $ 612

Median 672 898 766

High 2,586 1,767 2,414

(Id., at p. 8.)

“Similar ing disparities have been noted throughout the

country, particularly when suburban communities and urban

ghettos are compared. (See, e.g., Report of the National Advisory

Commission on Civil Disorders (Bantam ed. 1968) 434-

436; U.S. Commission on Civil Rights, Racial ation in

the Public Schools (1967) Pp. 25-31; Conant, Slums and

Suburbs (1961) Pp. 2-3; Levi, The University, The Professions,

and the Law (1968) 56 Cal.L.Rev. 251, 258-259.)

Po Settee ge eG ou

—j13—

win Park the assessed valuation per child totaled

only $3,706; in Pasadena, assessed valuation was $13,-

706; while in Beverly Hills, the corresponding figure

was $50,885—a ratio of 1 to 4 to 13. (/d.) Thus,

the state grants are inadequate to offset the inequalities

inherent in a financing system based on widely varying

local tax bases.

“Furthermore, basic aid, which constitutes about half

of the state educational funds (Legislative Analyst,

Public School Finance, Part II, The State School Fund:

Its Derivation, Distribution and Apportionment (1970)

p. 9), actually widens the gap between rich and poor

districts. (See Cal. Senate Fact Finding Committee

on Revenue and Taxation, State and Local Fiscal Rela-

tionships in Public Education in California (1965)

p. 19.) Such aid is distributed on a uniform per pupil

basis to all districts, irrespective of a district’s wealth.

Beverly Hills, as well as Baldwin Park, received $125

from the state for each of its students.

“For Baldwin Park the basic grant is essentially

meaningless. Under the foundation program the state

must make up the difference between $355 per elemen-

tary child and $47.91, the amount of revenue per

child which Baldwin Park could raise by levying a

tax of $1 per $100 of assessed valuation. Although

under present law, that difference is composed partly

of basic aid and partly of equalization aid, if the

basic aid grant did not exist, the district would still

receive the same amount of state aid—all in equalizing

funds.

For Beverly Hills, however, the $125 flat grant has

real financial significance. Since a tax rate of $1 per

$100 there would produce $870 per elementary student,

asiitinn

Beverly Hills is far too rich to qualify for equalizing

aid. Nevertheless, it still receives $125 per child from

the state, thus enlarging the economic chasm between

it and Baldwin Park. (See Coons, Clune & Sugarman,

Educational Opportunity: A Workable Constitutional

Test of State Financial Structures (1969) 57 Cal.L.Rev.

305, 315.)” (Serrano I, at pp. 591-595.)

It was the above-described system, then, which con-

cerned us in Serrano I. If, we held, the allegations

of the complaint upon trial were found to be true,

thus establishing that the system described was the

one actually existing in California, that system would

be invalid as in violation of state and federal equal

protection provisions. The Legislature, apparently recog-

nizing the likelihood of such a finding, decided not

to await the outcome of such proceedings but to address

itself immediately to the problem. (For an early com-

ment on the practical economics confronting the Legis-

lature in its response to Serrano I see Post & Brandsma,

The Legislature’s Response to Serrano v. Priest, 4

Pacific L.J. 28.) It is to the changes resulting from

these legislative efforts that we now proceed to direct

our comments.

B. The New System

The changes brought about by the passage of S.B.

90 and A.B. 1267, while significant, did not purport

to alter the basic concept underlying the California

public school financing system. That concept, which

we may refer to as the “foundation approach,” under-

takes in general to insure a certain guaranteed dollar

amount for the education of each child in each school

district, and to defer to the individual school district

for provision of whatever additional funds it deems

. —

A cae? La

Rr. sclera nina ea En eaten ete ermine ttm Seen

— =

necessary to the furtherance of its particular educational

goals. As indicated in the foregoing excerpt, the mech-

anisms by which this concept was implemented prior

to the adoption of $.B. 90 and A.B. 1267 were basically

four: (1) basic aid, (2) equalization aid, (3) supple-

mental aid, and (4) tax rate limitations and overrides.

The new law retained three of these, the element of

supplemental aid (see text accompanying fn. 12, ante)

being discontinued. The basic aid component remained

the same, i.e., $125 per ADA. Thus it was fundamental-

ly through adjustments and alterations in the remaining

two areas—equalization aid and tax rate limitations

and overrides—that the Legislature sought to bring

the system into constitutional conformity."

Perhaps the most dramatic aspect of the new law was

a substantial increase in the foundation level. For the

fiscal year 1973-1974 this figure, which constitutes

the minimum amount per pupil guaranteed to each

district by the state, was in general raised for elementary

school districts from the previous level of $355 per

ADA to the sum of $765 per ADA, and for high

school districts from $488 to $950 per ADA. (&§

17656, 17665.) Corresponding increases were provided

-_C Ce

‘Although the following text confines itself to a description

of the basic operational features of the new law from the

standpoint of ongoing foundational a h on which it

is based, it is appropriate to note at this point that S.B.

90 and A.B. 1267 also introduced certain modifications of

a rical nature. The most important of these was the

establi t of the Educationally Disadvan Youth Pro-

on Pro 6499.230 et seq.) and of the Early Childhood Educa-

(§ 6445 et seq.). oe ae Gnae emannt

in state assistance, to be awarded on a project

bai to tics with'a ean, Incience of fam poverty,

transiency, while the latter authorized

$25 Omillion - 973-1974 and $40 million for 1974-1975

also on a project basis, to restructure primary education in

grades K through 3.

nalts

for small schools (see fn. 10, ante), and areawide

foundation programs (fn. 12, ante) were retained. Pro-

vision was also made to offset the so-called “slippage

factor,” which has been the result of yearly increases

in the assessed valuation of real property within the

districts (leading to an increase in the amount of

local contribution through application of the “computa-

tional tax rate” (fn. 11, ante) and a corresponding

decrease in state contribution). Thus, a yearly increase

in the foundation level of approximately 7 percent

for the first three years and 6 percent thereafter was

prescribed. (§ 17301, former subd. (e); see present

§ 17669.) At the same time, however, the “computa-

tional tax rate” was raised from $1 to $2.23 at the

elementary level and from $0.80 to $1.64 at the high

school level. (§ 17702.)

The second major aspect of the new program involved

the creation of “revenue limits,” or limitations on maxi-

mum expenditures per pupil in each school district

exclusive of state and federal categorical support and

of revenue generated by permissive override taxes. (§

20902 et seq.) These provisions, generally speaking,

allowed a district without a voted override to levy

taxes at a rate no higher than would increase its

expenditures per pupil over 1972-1973 base revenues

by a permitted yearly inflation factor.” A district

‘For the year 1973-1974, several alternatives were provided

for determining the allowable increase in expenditures:

(a) A district may add to the 1972-1973 revenue base

per pupil a flat $70 inflation allowance, or a percentage thereof,

or a district below the foundation program may instead move

toward the foundation program at a maximum of 116 percent;

or

(b) A district may add the unused portion of a voted override

tax rate to the revenue limit computational tax rates, and

use a $65 inflation allowance per pupil, or a percentage thereof,

anfiiiun

having a school tax rate which produced revenues

in excess of foundation levels would receive inflation

adjustments which decreased in magnitude as those

revenues rose above foundation levels. On the other

hand, a district having base revenues which, when

added to the full inflation allowance, did not reach

the foundation level, could increase its revenues by

up to 16 percent of the preceding year’s revenue limit

per ADA.

The combination of the foregoing rate limitation

structure and the ever-advancing foundation levels

would, it was contemplated, produce a phenomenon

known as “convergence.” While poorer districts could

move with comparative rapidity toward the rising foun-

dation levels, richer districts, due to the diminished

inflation adjustment permitted them, would increase

their revenue bases at a much slower rate.’* This

prognosis was complicated, however, by the fact that

district revenue limits applied only to revenue generated

by the maximum general purpose tax rate available

or a district below the foundation program may instead move

toward .he foundation program at a maximum of 115 percent;

or

(c) A district may add to the 1972-1973 revenue base

the unrestricted balances used to balance income to expenditures

in 1972-1973, but not to exceed 3 percent of the total expen-

ditures in certain expenditures classifications of the state general

fund for 1972-1973, and use the $65 inflation allowance per

pupil, or a percentage thereof, or a district below the foundation

may instead move toward the foundation program

at a maximum of 115 percent.

The result of this process in many of the richer districts

(barring tax rate overrides, to be discussed below) will be

a reduction in the general purpose tax rate: To the extent

that annual growth in assessed valuation in such districts in-

creases the amount of revenue to be obtained under the existing

tax rate to a sum in excess of the prior year’s revenue limit

7 the permitted inflation adjustment, the rate will have to

lowered.

— =

to a district in the absence of voter approval. Such

limitations might be exceeded as before (see text follow-

ing fn. 9, ante) if a majority of the voters im the

district voted an override (§ 20906). Permissive over-

rides (i.e., overrides which can be imposed without

voter approval) were also authorized to raise revenue

for certain special purposes, such as capital outlay.

II

With this background in mind we turn to a considera-

tion of the trial court’s findings and judgment.

As indicated above, the trial court issued voluminous

and comprehensive findings in support of its judgment.

While we do not here undertake to present a complete

summary of those findings, especially as they duplicate

what has been pointed out above, it is important for

present purposes to indicate their substance as they

relate to the effect and validity of the system as it

now stands following the legislative alterations enacted

after our decision in Serrano I.

A. Findings oj Fact

The court found in substance as follows:

The California public school financing system follow-

ing the adoption of S.B. 90 and A.B. 1267 continucs

to be based upon the foundation concept. Although

there have been substantial increases in foundation

levels, those increases, considered alone, do not eliminate

any of the unconstitutional features which existed at

the time of Serrano I. The retention of the basic-

aid element in the foundation program, for example,

continues to have an anti-equalizing effect by benefitting

only those districts not eligible for equalization aid.

Moreover, basic-aid districts continue to be favored

_— =

over equalization-aid districts insofar as they may reach

the foundation level with a tax rate less than the

computational rate or by using the computational rate

raise revenue in excess of the foundation level.

The revenue limit feature of the new law has similar-

ly serious defects. By taking 1972-1973 revenues as

its base figure, it perpetuates inequities resulting from

property tax base differentials. More importantly, it

will allow total “convergence” between high-spending

revenue limits and rising foundation levels only after

many, perhaps as many as 20, years—even assuming

no voted overrides. After five years of functioning—

again assuming that no voted overrides occur, many

high-wealth, high-spending districts will still be spending

two to three times more per pupil than many low-

wealth districts are able to spend. Even when the

“convergence” has run its course, there will continue

to be a substantial inequality between basic-aid and

equalization-aid districts, again assuming no voted over-

rides, due to the fact that the former districts will

be able to achieve the foundation level at a tax rate

which is less than the computational rate. Thus, to

the extent that equal tax rates can produce differing

expenditure levels, or that equal expenditure levels can

be produced by differing tax rates, the system will

continue to generate school revenue in proportion to

the wealth of the individual district.”

"To illustrate, assume for a given district a $1,000 per

ADA foundation level and a $3 per $100 computational tax

rate. Assume further that one district has an assessed valuation

of $50,000 per ADA while another has an assessed valuation

of one-third that, or $16,667. In the first district the application

of the computational tax rate will produce $1,500 per ADA,

while in the second it will uce only $500 per ADA.

The first district would not entitled to equalization aid

(This footnote is continued on next page)

a Me

—20—

This potential disparity is exacerbated by the contin-

ued availability of voted overrides pursuant to section

20906. The passage of such overrides by high-wealth

school districts would operate to nullify the contemplat-

ed “convergence” effect sought to be achieved by in-

creased equalization aid and the imposition of revenue

limits. The operation of the latter feature, in combina-

tion with continuing inflation, will make it impossible

for high-wealth, high-spending districts to maintain the

present quality of their programs, and therefore such

districts will have a great incentive to vote tax rate

overrides because even a slight rate increase in such

districts will raise substantial revenues. In the districts

having a relatively low assessed valuation per pupil,

on the other hand, the incentive to vote such overrides

will be less, for only a substantial increase in the

tax rate will be sufficient to produce substantial addi-

tional revenues. As a result, the extent of local control

but would still receive the $125 per ADA basic aid payment.

The second district would be entitled to equalization aid in

the amount of $375 per ADA—i.e., the figure by which the

sum of the amount available under the computational rate

($500 per ADA) and the basic aid payment ($125 per ADA)

is exceeded by the foundation level ($1,000 per ADA), but

in order to spend at the foundation level it would have to

tax at the computational rate. If it wished to exceed the founda-

tion level, it would be required to tax at a rate (up to

the allowable limit) in excess of that rate.

The richer district, on the other hand, would be able to

maintain the foundation level of expenditure by taxing at a

mere $1.75 rate (i.e., that percent of $50,000 which when

added to the basic aid allowance yields $1,000 per ADA).

If applicable revenue limits allowed it to tax at the full compu-

tational rate (i.e., that rate at which the poorer district would

be required to tax merely in order to achieve the foundation

level) it would have the sum of $1,625 per ADA ($1,500

per ADA plus the basic aid pas of $125 per ADA)—or

1% the amount available to poorer district—at its disposal.

[This example, although not explicitly contained in the find-

ings of the trial court, is based upon them. |

afin

(i.e., “the opportunity to go above the foundation

program level in pursuit of a higher quality program” )

will continue to be a function of district wealth under

the new law.

The effect of disparities in district wealth also con-

tinues to be felt in the area of capital outlay. Permis-

sive override taxes for this purpose, authorized by

the new law for the repayment of bonded indebtedness

and state aid loans, generate more revenue at a given

tax rate in districts with a high assessed valuation

per pupil than in districts with lower assessed valuation

per pupil. Moreover, wealthier districts, being generally

able to generate sufficient funds for capital outlay

purposes within their bonding capacities, are often not

required to levy permissive override taxes for the pay-

ment of state aid loans, which is the only source

of assistance for districts whose bonding capacity is

insufficient to finance needed capital improvements.

Municipal tax overburden, which “refers to high

property tax rates for other governmental services than

education,” is a phenomenon of low-wealth, low-spend-

ing districts as well as high-wealth, high-spending dis-

tricts. The problems associated with this phenomenon—

such as vandalism, bilingualism, old buildings, disad-

vantaged youth, and poverty—are present in all such

districts, but the wealthier districts from the point of

view of assessed valuation per pupil are better able

to respond to such problems than the poorer districts.

Similarly, the presence of small districts, which re-

quire greater expenditures because of “diseconomies

of scale,” is not confined to wealthier districts, and

wealth differences among such districts create substan-

tial disparities in both tax rates and expenditures.

_ = —_—e

offtivn

While federal revenue grants to school districts in

which federal tax-exempt facilities are located must

be considered in evaluating wide disparities in assessed

wealth per pupil, the availability of such revenue under

Public Law 81-874 has been substantially curtailed,

accounts for only a negligible amount of total educa-

tional revenue in California, and affects only a small

number of districts. Even among such districts wide

variations in assessed wealth create inequity in tax

rates and spending levels.

In view of all of the foregoing it is clear that

substantial disparities in expenditures per pupil resulting

from differences in local taxable wealth will continue

to exist under S.B. 90 and A.B. 1267. The reason

for this is that essentially local wealth is the principal

determinant of revenue, that high wealth districts do

not need to make the same tax effort as low wealth

districts in order to reach, let alone exceed, the level

of the foundation program and that in this setting,

basic aid becomes anti-equalizing and “convergence”

of doubtful achievement.”*

18The court found that: “Substantial disparities in expendi-

tures per pupil from district to district that are the result

of differences in local taxable wealth will continue to exist

under S.B. 90 and A.B. 1267 in that:

“(a) High-wealth, basic-aid districts do not make the same

tax effort to reach the foundation program as do low-wealth,

equalization-aid districts.

“(b) Above the foundation program, local wealth is the

primary determinant of the amount of revenue generated for

a given tax rate.

“(c) The amount of revenue from permissive override taxes

is solely determined by the amount of wealth available to

a school district.

“(d) The amount of revenue from voted override taxes is

solely determined by the amount of wealth within a particular

school district.

“(e) Low-wealth districts are denied an equal opportunity

to exceed the foundation program by utilizing voted overrides

under Section 20906.

— 93

There exist several alternative potential methods of

financing the public school system of this state which

would not produce wealth-related spending disparities.

These alternative methods, which are “workable, prac-

tical and feasible,” include: “(1) full state funding,

with the imposition of a statewide property tax; (2)

consolidation of the present 1,067 school districts into

about five hundred districts, with boundary realignments

to equalize assessed valuations of real property among

all school districts; (3) retention of the present school

district boundaries but the removal of commercial and

industrial property from local taxation for school pur-

poses and taxation of such property at the state level;

(4) school district power equalizing|,] which has as

its essential ingredient the concept that school districts

could choose to spend at different levels but for each

level of expenditure chosen the tax effort would be

the same for each school district choosing such level

whether it be. a high-wealth or a low-wealth district;

(5) vouchers; and (6) same combination of two or

more of the above.” |

Substantial disparities in expenditures per pupil

among school districts cause and perpetuate substantial

disparities in the quality and extent of availability

of educational opportunities. For this reason the school

financing system before the court fails to provide equal-

ity of treatment to all the pupils in the state. Although

an equal expenditure level per pupil in every district

is not educationally sound or desirable because of differ-

“(f) Revenue from local permissive taxes to repay local

bonded indebtedness depends upon local wealth.

“(g) Basic aid is anti-equalizing, actually widening the gap

between low-wealth and high-wealth districts.

“(h) Convergence of revenue limits with the foundation pro-

gram occurs slowly, and may never occur as a result of the

voted override provision.”

=

ing educational needs, equality of educational opportu-

nity requires that all school districts possess an equal

ability in terms of revenue to provide students with

substantially equal opportunities for learning. The sys-

tem before the court fails in this respect, for it gives

high-wealth districts a substantial advantage in obtaining

higher quality staff, program expansion and variety,

beneficial teacher-pupil ratios and class sizes, modern

equipment and materials, and high-quality buildings.

There is a distinct relationship between cost and

the quality of educational opportunities afforded. Qual-

ity cannot be defined wholly in terms of performance

on statewide achievement tests because such tests do

not measure all the benefits and detriments that a

child may receive from his educational experience. How-

ever, even using pupil output as a measure of the

quality of a district’s educational program, differences

in dollars do produce differences in pupil achievement.

B. Conclusions of Law and Judgment

Although we consider it unnecessary to set out a

comprehensive review of the trial court’s 128 conclu-

sions of law, the most fundamental of those conclusions

were incorporated into the judgment, which we now

describe.

The trial court held that the California public school

financing system for elementary and secondary schools

as it stood following the adoption of S.B. 90 and

A.B. 1267, while not in violation of the equal protection

clause of the Fourteenth Amendment to the federal

Constitution,” was invalid as in violation of former

1°This conclusion was based on the decision of the United

States Supreme Court in San Antonio School District v. Rodri-

guez (1973) 411 US. 1 [36 L.Ed.2d 16, 93 S.Ct. 1278},

wherein the high court—in a decision subsequent to Serrano

I—held that the Texas public school financing system, which

—

article I, sections 11 and 21, of the California Constitu-

tion (now art. IV, § 16 and art. I, § 7 respectively;

see and compare Serrano I, supra, at p. 596, fn.

11), our state equal protection provisions.” Indicat-

ing the respects in which the system before it was

violative of our state constitutional standard,” the

like the California system is based on the foundational concept,

was not in violation of the federal equal protection provision.

In so concluding, a majority of the high court held inter

alia that education was not a “fundamental interest” entitled

to strict scrutiny under the federal provision because the right

to education was not explicitly or implicitly guaranteed by

the terms of the Constitution. (/d. at pp. 33-34, 60-62 [36 L.

Ed.2d at pp. 43, 44, 58-60].) Proceeding to examine the

Texas system under the less stringent standard applicable

to cases not demanding strict scrutiny, the majority went on

to conclude that the system in question rationally furthered

the legitimate state pu or interest in local control of educa-

—y (Id. at pp. 44-55, 62 [36 L.Ed.2d at pp. 49-56, 59,

}.)

2°The trial court, using by analogy the Rodriguez maijority’s

standard for the determination of whether the interest affected

by the classification in question was “fundamental” (thus ir-

ing strict scrutiny reviews), concluded that the interest of children

in education was explicitly and implicitly protected and guaran-

teed by the terms of the California Constitution. Applying the

strict scrutiny test, it concluded that the California system was not

necessary to the accomplishment of any compelling state interest

and was therefore invalid.

The court further held that “(t]he school financing system

for the State of California violates the equal-protection provisions

of the California Constitution even under the lesser constitutional

standard of rational relationship.”

21The indicated portions of the judgment provided:

“3. That the following features of said California Public

School Financing System, including the SB 90 and AB 1267

legislation — thereto, are violative of said equal-protec-

tion-of-the-laws provisions of the California Constitution:

“(a) The basic aid payments of $125.00 per pupil to high-

wealth school districts.

“(b) The right of voters of each school district to vote

tax overrides and raise unlimited revenues at their discretion.

“(c) Wealth-related disparities between school districts in per-

pupil expenditures, apart from the categorical aids special needs

programs, that are not designed to, and will not reduce the

(This footnote is continued on next page)

== D6

court set a period of six years from the date of entry of

judgment” as a reasonable time for bringing the system

into constitutional compliance; it further held and or-

dered that the existing system should continue to operate

until such compliance had been achieved. The judgment

specifically provided that it was not to be construed —

to require the adoption of any particular system of

school finance, but only to require that the plan adopted

compo: with the requirements of state equal protection

insignificant differences, which mean amounts considerably

less than $100.00 per pupil, within a maximum period of

six years from the date of entry of this Judgment.

“(d) Wealth-related variations in tax rates between school

districts that are not designed to, and will not reduce to nonsub-

stantial variations within the same maximum six-year period

set forth in subparagraph (c) above for the equalization of

per-pupil expenditure levels.

“4. That wealth-related, per-pupil expenditure disparities be-

tween school districts which are violative of said equal-protection-

of-the-laws provisions of the California Constitution include,

but are not limited to, the following:

“(a) High-wealth, basic-aid school districts do not make the

same tax effort to reach the foundation-program levels as do

low-wealth, equalization-aid school districts.

“(b) Above the foundation-program levels, local property

wealth is the primary determinant of the amount of revenue

generated for a given tax rate.

“(c) The amount of revenue derived from override taxes

is determined solely by the amount of taxable property wealth

within a particular school district.

“(d) Low-wealth school districts are denied an equal op-

portunity to exceed the foundation-program levels utilizing

voted overrides under Section 20906 of the Education .

“(e) The amount of revenue derived from permissive override

taxes is determined solely by the amount of taxable property

wealth within a particular school district.

“(f) Unused voted tax overrides are used to determine maxi-

mum school district revenue limits under the SB 90 and AB

1267 legislation.”

*2The trial court had found as a fact that “Present disparities

. a upil among districts that are the result

of differences in | istrict taxable wealth can be efficiently

and effectively eliminated within six years.”

-_

~~ =

provisions. Finally, the trial court retained jurisdiction

of the action and over the parties “so that any of

such parties may apply for appropriate relief in the

event that relevant circumstances develop, such as a

failure by the legislative and executive branches of

the state government to take the necessary steps to

design, enact into law, and place into operation, within

a reasonable time from the date of entry of this Judg-

ment, a California Public School Financing System for

public elementary and secondary schools that will fully

comply with the said equal-protection-of-the-law provi-

sions of the California Constitution.”

Ill

Defendants advance three substantive contentions on

appeal.

First, it is urged that the trial court employed inap-

propriate criteria insofar as it focussed on the notion

of so-called “fiscal neutrality” to the exclusion of other

factors relevant to its determination. If the trial court

had employed appropriate criteria, it is suggested, the

system as improved by S.B. 90 and A.B. 1267 would

have been seen to be free from constitutional objection

on equal-protection grounds.

Second, defendants urge that an improper legal stand-

ard of equal protection review was utilized. The proper

standard, it is contended, even under our state consti-

tutional provisions, is that requiring no more than

a rational relationship, critically analyzed, between the

financing method chosen and some legitimate state

purpose.

Third, and assuming that the financing system before

the court is to some extent inconsistent with state

constitutional provisions guaranteeing the equal pro-

— =

tection of the laws, it is urged that those provisions

are to that extent in conflict with other provisions

of the state Constitution and, in accordance with the

principle of consistency in constitutional interpretation,

should be made to yield pro tanto in order to avoid

such conflict.

IV

Before taking up the foregoing contentions, we first

dispose of a preliminary procedural matter. Defendants

urge that the trial court was without jurisdiction to

proceed in this matter because two allegedly indispen-

sable parties—the Legislature and the Governor—were

not joined. (See Code Civ. Proc., § 389.) It is pointed

out that “the operative and directory provisions” of

the judgment “are addressed solely to the Legislative

and Governor,” and that the parties defendant in the

action lack all power to bring about the relief sought

by plaintiffs and awarded by the trial court—i.e.,

the restructuring of the state public school financing

system in a manner which will comply with provisions

of our state Constitution guaranteeing equal protection

of the laws. Reference is made to certain legislative

reapportionment cases, notably Silver v. Brown (1965)

63 Cal.2d 270 [46 Cal.Rptr. 308, 405 P.2d 132],

and to the fact that the Governor 2nd the members

of the Legislature were there made parties. To do

otherwise in this case, it is urged, “would deny [the]

people who created this financing system through their

elective representatives of their day in Court. . .”

This contention is based on several misconceptions

and inaccurate statements of the record. First. it is

clear that the trial court—wholly cognizant of the

well-established principle, rooted in the doctrine of

separation of powers (Cal. Const., art. III, § 3), that

—29—

the courts may not order the Legislature or its members

to enact or not to enact,” or the Governor to sign

or not to sign,” specific legislation—- by no means

addressed the “operative and directory provisions” of

its judgment to the Legislature and Governor. On the

contrary it simply declared that the public school financ-

ing system before it, which was administered by the

parties defendant, was in violation of state constitutional

provisions guaranteeing equal protection of the laws.

The trial court also indicated that it would retain

jurisdiction over the matter so that any party might

apply for “appropriate relief’ in the event that the

lawmakers and the Governor had failed within a reason-

able time, set by the judgment at six years, “to take

the necessary steps to design, enact into law, and

place into operation” a system which would comply

with those provisions. However, it explicitly and prop-

erly refrained from issuing directives to the lawmakers

and the chief executive, stating in its judgment: “. . .

[T]his judgment is not intended to require, and is

not to be construed as requiring, the adoption of any

28See French v. Senate (1905) 146 Cal. 604, 606-607

[80 P. 1031]; Myers v. English (1858) 9 Cal. 341, 349;

California State Employees’ Assn. v. State of California (1973)

32 Cal. 3d 103, 108-109 [108 Cal.Rptr. 60]; cf. Igna

v. City of Baldwin Park (1970) 9 Cal.App.3d 909, 915 [88

Cal.Rptr. 581]; Monarch Cablevision, Inc. v. City Council

(1966) 239 Cal.App.2d 206, 211 [48 Cal.Rptr. 550]; City

Council v. Superior Court (1960) 179 Cal.App.2d 389, 394-395

[3 Cal.Rptr. 790].

*See Jenkins v. Knight (1956) 46 Cal.2d 220, 223 [293

P.2d 6]; Harpending v. Haight (1870) 39 Cal. 189, 208:

California State Employees’ Assn. v. State of California, supra,

32 Cal.App.3d 103, 109.

“The conclusions of law issued by the court clearly indicate

that the primary relief contemplated, to be invoked only after

the passage of a “reasonable time,” is an injunction prohibiting

the defendant state officials from operating an unconstitutional

school financing system.

30

particular plan or system for financing the public ele-

mentary and secondary schools of the state. . . .”

Secondly, as the reapportionment cases themselves

indicate, it is the general and long-established rule

that in actions for declaratory and injunctive relief

challenging the constitutionality of state statutes, state

officers with statewide administrative functions under

the challenged statute are the proper parties defendant.

(See Yorty v. Anderson (1963) 60 Cal.2d 312, 317-

318 [33 Cal.Rptr. 97, 384 P.2d 417], and cases

there cited; cf. D’Amico v. Board of Medical Examin-

ers (1974) 11 Cal.3d 1 [112 Cal.Rptr. 786, 520

P.2d 10]; City of Carmel-by-the-Sea v. Young (1970)

2 Cal.3d 259 [85 Cal.Rptr. 1, 466 P.2d 225, 37

A.L.R.3d 1313].) The fact that in the reapportion-

ment context the Legislature and its members may

also be considered proper parties stems from the direct

institutional interest of those parties in the determina-

tion. (See and cf.” Silver v. Jordan (S.D. Cal. 1964)

241 F.Supp. 576, 579, affirmed (1965) 381 USS.

415 [14 L.Ed.2d 689, 85 S.Ct. 1572]; Minnesota

State Senate v. Beens (1972) 406 U.S. 187, 194

[32 L.Ed.2d 1, 8, 92 S.Ct. 1477].) In the instant

case, on the other hand, as in the great majority

of cases brought against state administrative officers

to challenge the constitutionality of a statute or statutes

administered by them, the Legislature and the Governor

lack any similar interest. The interest they do have—

that of lawmakers concerned with the validity of statutes

enacted by them— is not of the immediacy and direct-

mess requisite to party status; it may thus be fully

Although our Califorma statute

(Code Civ’ Proc., § 387) is not in af respects identical

the parallei federal rule (Fed. Rules Civ. Proc Proc., rule 24),

the requirement of significant interest is common to both.

=}

and adequately represented by the appropriate adminis-

trative officers of the state.

Moreover, even should the Legislature and the Gover-

nor be considered proper parties to this litigation (i.e.,

parties subject to permissive joinder or capable of inter-

vention), it is clear that they could in no case be

considered indispensable parties, or parties without

whom the action could not fairly proceed. Indispensable

parties, as we said in Bank of California v. Superior

Court (1940) 16 Cal.2d 516, at page 521 [106 P.2d

879], are parties “whose interests, rights, or duties

will inevitably be affected by any decree which can

be rendered in the action. Typical are the situations

where a number of persons have undetermined interests

in the same property, or in a particular trust fund,

and one of them seeks, in an action, to recover the

whole, to fix his share, or to recover a portion claimed

by him. The other persons with similar interests are

indispensable parties. The reason is that a judgment

in favor of one claimant for part of the property

or fund would necessarily determine the amount or

extent which remains available to the others. Hence,

any judgment in the action would inevitably affect

their rights.” Manifestly, the Legislature and the Gover-

nor have no interest in this proceeding which is remotely

comparable to that contemplated by this language.

Moreover, as we also said in the Bank of California

case, in dealing with the doctrine of indispensable

and necessary parties “we should . . . be careful to

avoid converting a discretionary power or a rule of

fairness in procedure” into an arbitrary and burden-

2"Section 389 of the Code of Civil Procedure, enacted in

1971 to conform ours to the federal practice, describes an

indispensable party as one which “in equity and good conscience”

the court deems essential to the determination of the action.

(See Fed. Rules Civ. Proc., rule 19.)

_ =

some requirement which may thwart rather than ac-

complish justice.” (16 Cal.2d at p. 521; see also Muggill

v. Reuben H. Donnelley Corp. (1965) 62 Cal.2d 239,

241 [42 Cal.Rptr. 107, 398 P.2d 147].) In the instant

case it is quite clear that no governmental interest

has lacked for able and willing advocates in the absence

of the Legislature and Governor as parties. This case

has been well-known to those entities since its inception,

yet they have at no point sought intervention or indi-

cated any interest in doing so. Even more significantly,

this is a matter whose resolution has been anxiously

awaited by the parties and the public at large for

more than seven years. In light of these considerations

we are convinced that to invoke the doctrine of indis-

pensability, and thus require the renewal of trial pro-

ceedings on this ground, would indeed be to “thwart

rather than accomplish justice.”

Vv

Defendants’ first substantive contention, as indicated

above, concerns the criteria employed by the trial court

in its examination of the school finance system before

it. The trial court, it is urged, by confining its inquiry

to the matter of wealth-related disparities among the

several school districts, improperly ignored certain other

factors—for example, the “adequacy” and “equality”

of educational programs”—and thus oversimplified

28Defendants single out for attack the following

from the trial court’s memorandum opinion: “What the Serrano

court imposed as a California constitutional requirement is that

there must be uniformity of treatment between the children

of the various school districts in the State because all the children

of the State in public schools are persons similarly circumscribed.

The equal-protection-of-the-laws provisions of the California

Constitution mandate nothing less than that all such persons

shall be treated alike. If such uniformity of treatment were

aufifiun

the problem before it. This point of view, it is claimed,

is reflected in the terms of the judgment itself. (See

par. 4 of the judgment set forth ante in fn. 21.)

The application of proper criteria, defendants argue,

would require the trial court to look not merely to

the operation of particular “mechanisms” utilized by

the system but to the overall results achieved in terms

of “a fair balance, statewide, between equal educational

opportunities and local supplementation.” To do other-

wise, it is urged, is to adopt a nearsighted approach

which, in its zeal to perfect one “mechanism” in the

system, imposes a standard of “neutrality” upon all

its other elements. “Municipal overburden,” with its

attendent problems, also covered by trial court findings,

is cited by defendants as a particular example of an

area requiring not “neutrality” but special efforts

according to the circumstances.”

Defendants offer two formulations of what they con-

sider to be adequate criteria for the assessment of

the public school financing system. In their opening

brief they suggest a tripartite test which is less an

alternative to the “fiscal neutrality” approach of the

trial court than what turns out to be defendants’ descrip-

tion of the system at issue from the standpoint of

to result in all children being provided a low-quality educational

program, or even a clearly inadequate educational program,

the California Constitution would be satisfied. This court does

not read the Serrano opinion as requiring that there is any

constitutional mandate for the State to provide funds for each

child in the State at some magic level to produce either an

adequate-quality educational _or a high-quality educa-

tional . It is only a ty in treatment between

which runs afoul of the California constitutional mandate

equal protection of the laws.”

Several of the briefs amicus curiae filed herein also evince

serious concern for the problem of “municipal overburden.”

—_34-—

its overall effect.*° Perhaps realizing the unwieldiness

of this formulation, they proceed in their reply brief

to state the apparent kernel of their position in more

straightforward terms: of the three types of revenues

available to school districts—foundation funds, categori-

cal aids, and local supplements—only the third, it

is asserted, is “unequalized,” or dependent upon taxable

district wealth and the capacity or willingness of the

voters to pay additional school taxes. The percentage

of total state school district revenues represented by

these “unequalized” revenues, defendants assert, “pro-

vides an objective measure of the relative weights given

by the system in a given year to equal educational

opportunities and local participation in school fiscal

affairs.” So long as this figure is sufficiently low—de-

fendants suggest 10 percent as an appropriate figure—

the relevant competing interests are adequately accom-

modated. This, then, is the “optimum balance” criterion

which defendants would suggest that we utilize in prefer-

ence to the “fiscal neutrality” approach of the trial

court. If we were to do so, it is asserted, we would

find that the subject system, as improved by the

80The three criteria suggested are these: “I. The system

must assure that every school district in the State has access,

without excessive local taxation, to sufficient general fund rev-

enues to finance the commonly-shared needs of school districts

as perceived by the State, and to such categorical aids as

the State and Federal governments perceive to be required

to meet special, uncommon needs of some districts. II. The

system must permit revenues derived from local taxation to

be used to supplement Type I revenue described above. III.

The system as a whole must generate public school general

fund revenues so as to result in Type 2 revenues. constituting

not more than a court determined percentage of the State

total of all school district general fund revenues.”

~- =

provisions of S.B. 90 and A.B. 1267, is in approximate

compliance with the suggested standards.”

The fundamental defect in this argument is that

it flies in the face of our holding in Serrano I and

also of the findings of the trial court, which were

carefully grounded on that holding. In Serrano I we

held that if the allegations of the complaint were sus-

tained—which allegations dealt not only with district

disparities in revenue-producing capability but also with

the effect of such disparities on the quality of educa-

tion in the various districts (see Serrano I, supra,

at p. 601, fn. 16)—then “the financial system must

fall and the statutes comprising it must be found uncon-

stitutional” as in violation of equal protection. (Serrano

I, supra, at p. 615.) We described the system in

question (i.e., the system alleged to exist in the com-

plaint) as one which “conditions the full entitlement

to [the interest in education] on wealth, classifies its

recipients on the basis of their collective affluences|, |

and makes the quality of a child’s education depend

upon the resources of his school district. . . .” (Jd.

at p. 614.) It follows, therefore, that any system in

which the two basic elements of this description are

present—i.e., (1) the conditioning of the availability

of school revenues upon district wealth, with resultant

*1Defendants concede that had this standard been applied

to the financing system in 1971, at the time of Serrano I,

it would necessarily have been concluded that the then system

was not in compliance. At that time, it is asserted, “the rela-

tive values placed upon equal educational opportunities and

local fiscal control [as reflected in the statewide ratio of ‘equal-

ized’ revenues] were approximately 76.4% and 23.6%, respec-

tively.” On other hand, it is urged, the application of

the standard to the 1973-1974 system (i.e. the system as

it stood following the enactment S.B. 90 and A.B. 1267)

would reveal a ratio of 89.6 percent “equalized” revenues to

10.4 percent “unequalized” revenues.

-_ =

disparities in school revenue, and (2) the dependency

of the quality of education upon the level of district

expenditure—must be declared invalid unless it finds

justification sufficient to satisfy the applicable equal

protection test.”

The trial court, scrupulously adhering to the law

as set forth in our previous opinion, concluded in

essence that the new school financing system, although

considerably improved over that which was before us

in Serrano I, nevertheless retained the foregoing ingredi-

ents of the former system. This determination was

recorded in no less than 299 findings of fact, none

of which is challenged by defendants as lacking in

substantial suppo:t. In these circumstances defendants

cannot now be heard to maintain that different “cri-

teria” should have been employed by the trial court.

The “criteria” utilized by the trial court in assessing

the discriminatory effect of the system before it were

those enjoined upon the court by our opinion in Serrano

I. Clearly there was no error in this respect.

>,

Moreover, even if defendants’ “optimum balance”

argument were not foreclosed by our decision in Ser-

rano I—and if it be further assumed that the recom-

mended 90/10 ratio might be sufficient to satisfy consti-

tutional demands*—it is apparent that the factual prem-

82Jt is contended in this case, of course, that the equal

protection standard utilized by us in Serrano I is no longer r

the U.S. Supreme Court’s Rodriguez decision-——the appropriate

test. We consider this matter in due course. For the

we assert only this limited ope Whatever the applicable

equal protection test, the findings of the trial court establish

that discrimination of the -character condemned in Serrano |

has been shown to exist in the school financing system presently

before us.

33]t was stated by defendants at oral argument that the

current budget statewide is in the neighborhood of $5 billion.

To allow 10 percent of this sum, or $500 million, to be

= =

ises on which such argument is based are open to

serious question.

In the first place, the figures upon which defendants

base their assertion of present compliance with the

suggested standard (see fn. 31, ante, and accompanying

text) are drawn from 1973-1974 fiscal data, that is,

data reflecting the immediate impact of the post-Serrano

I enactments. It is clear, however, that in 1973-1974

the various pressures—notably increasing inflation and

declining enrollment**—tending to augment the district

ratio of local supplements to other revenues had not

fully manifested themselves. Under the present system

which, according to the trial court’s findings, makes

the ability of particular school districts to cope with

such pressures vary according to the taxable wealth

of the particular district, it can be expected that future

years will see an increase statewide in the ratio of

local supplements to other revenues. In such circum-

stances, the extent of an individual district’s participa-

tion in the statewide increase will be geared to its

taxable wealth. To ask, as defendants do, that we

defer our notice of such probable future disparities

to the time of their actual occurrence is to ask that

distributed pursuant to a system rendering access a function

of taxable wealth would be far from an insignificant matter,

especially when it is considered that it is those funds over

and above the assertedly “equalized” level which are critical

to a school district’s ability to raise its program beyond a

marginal level and respond with creativity and freedom of

action to peculiar district needs and desires.

The immediate effect of declining enrollments, of course,

is a lowered ADA and a corresponding reduction in state-

= foundation pr money to the affected district.

cost of education due to declining enrollment does not

decline in the same proportion. Under the system here before

us, the only remedy for this situation, barring dramatic increases

in the amount of taxable wealth in a district, is an increased

tax rate.

=

we ignore inherent defects in the system which we

are Called upon to examine.

More fundamentally, however, we point out that

the basic factual premise upon which defendants posit

the above argument—namely that under the subject

system 90 percent of total statewide school expendi-

tures are “equalized” or, in other words, are not “de-

pendent upon the taxable wealth in a school district

and the capacity and willingness of the voters to pay

additional school taxes”—is flatly and fully contra-

dicted by the factual determinations of the trial court.

The lion’s share of those revenues asserted to be in

the “equalized” category is composed of revenue rep-

resented by the foundation program (approximately

74 percent of all revenue), yet the trial court explicitly

found that the tax effort required of a school district

to attain :he foundation level* varied according to

the taxable wealth of that district. Thus, these revenues

can by no means be considered “equalized” under

defendants’ own definition of that term. If we include

foundation program funds among those funds which

are “unequalized,” the ratio becomes not 10 percent

to 90 percent in favor of “equalized” revenues but

approximately 84 percent to 16 percent in favor of

“unequalized” revenues.

Finally, we offer some comments upon the complex

problems associated with “municipal overburden,” which

defendants and some of the amici curiae, notably the

San Francisco Unified School District, see as a critical

5As we point out later in this opinion, the fact that dispari-

ties in district wealth result in disparities in tax effort required

to reach foundation levels is not by itself determinative of

the issue before us. It is only insofar as such disparities have

the effect of producing disparities in educational opportunity

that they here concern us.

=

problem under any system of school financing. It is

important to recognize at the outset that “municipal

overburden” is a banner under which many armies

march. Strictly speaking, the term relates to the phe-

nomenon, prevalent in concentrated urban areas, of

high property tax rates for governmental services other

than education. Such a phenomenon, it is suggested,

must be taken into account when comparing school

tax rates in various districts; a lower school tax rate

in an urban area, it is urged, cannot be realistically

compared with higher tax rates in suburban or rural

areas in terms of “equal tax effort” because the taypay-

ers residing in districts in the latters areas may bear a

lighter overall tax burden in terms of a total rate.** As

the trial court found, however, the phenomenon in

question is not limited in it occurrence to districts

such as San Francisco where a relatively high assessed

valuation (due to a concentration of business and in-

dustry) combined with a comparatively small ADA

permits a relatively lower school tax rate. On the

contrary, the residents of districts in Los Angeles,

San Diego, and San Jose, for example—with a much

_ *The following statistics comparing San Francisco with neigh-

boring counties, derived from the 1974 California Statistical

Abstract, are provided by defendants in illustration of this

.

point:

Average Average Rate

School Other Avera

Tax Rate Purpose Rate Tota

Contra Costa $6.86 $5.85 $12.71

Marin 6.64 4.63 11.27

San Francisco 4.47 7.30 11.77

San Mateo 6.31 3.55 9.86

State Average $5.91 $5.24 $11.15

—40—

lower assessed valuation per ADA*’—suffer from the

same typical urban problems and require similarly high

nonschool tax rates to meet them. The system before

us, by tying a district’s ability to respond to its educa-

tional needs and desires to its taxable wealth per ADA,

clearly discriminates among equally beleaguered urban

districts from the point of view of their respective

capacities to bring educational benefits to the students

resident within their borders.”

87Statistics published by the California State Department

of Education contain the following oo

assessed valuation per ADA (1973-1974) in the indi areas.

“Modified Assessed Valuation Per Unit Of

Second Period a.d.a., 1973-1974”

Los Angeles Unified $22,857 $ 46,182

San Diego Unified 21,376 52,109

San Jose Unified 21,533 47,722

San Francisco Unified 57,658 116,328

(1973-74 California Public Schools, Selected Statistics,

Table IV-II.)

88Defendants also advance several arguments relating to

ee ee Se ee ee eee

These arguments, generally speaking, relate to the fact

the level of assessed valuation per ADA in a particular school

district tells us little about the income level of families residi

within that district. Thus, in many cases a relatively high

valuation per ADA will accompany a relatively low median

family income; this would normally occur as a result of the

presence a district whose residents suffer from relative poverty

within a district whose residents suffer from relative poverty

from the point of view of average family income. At the

other extreme are districts in which the assessed valuation

fwd ADA is relatively low in spite of a relatively high median

amily income; this combination would typically be present

in a community having no significant business or industry where

the emphasis is on single-family dwellings—i.e., a relatively

“affluent” (from the standpoint of the standard of living of

inhabitants) suburb. A “fiscally neutral” system, def

fear, might result in taking from the “poor” city (which in

spite of a lower median income level has a higher assessed

valuation per ADA) in order to give to the “rich” suburb

(which in spite of a higher median income level has a lower

_—

The term “municipal overburden” is also sometimes

used to designate certain’ problems related not to high

nonschool tax rates but to additional burdens of school

expenditure imposed upon urban districts by the facts

of urban life. When there is widespread poverty, dis-

advantaged youth, and bilingualism in a district, it

is argued, not only do purely educational costs rise

due to the necessity for increased effort to overcome

motivational and adaptive problems, but costs related

to matters like vandalism rise as well. Again, however,

the incidence of these problems is not limited to districts

assessed valuation per ADA). This, it is urged, would be

an intolerable anomaly—especially in view of the fact, adverted

to above (see fn. 36, ante, and accompanying text), that

in many cases under the present system a property-rich city,

in spite of its lower school tax rate, will impose a total tax

rate comparable to or in excess of the total tax rate in an

The dispositive answer to the above arguments is simply

that this court is not now engaged in—nor is it about to

undertake—the “search for tax equity” which defendants pre-

. As defendants themselves recognize, it is the Legislature

ich, by virtue of institutional competency as well as constitu-

tional function (see Haman v. County of Humboldt (1973)

8 Cal.3d 922, oe Cal.Rptr. 617, 506 P.2d 993},

and cases there cited; cf. Community Redevelopment Agency

v. Abrams (1975) 15 Cal.3d 813, 828-832 [126 Cal.Rptr.

473, 543 P.2d 905]), is assigned that difficult and perilous

quest. Our task is much more narrowly defined: it is to deter-

mine whether the trial court committed prejudicial legal error

in determining whether the state school financing system at

issue before it was violative of our state constitutional provisions

guaranteeing equal protection of the laws insofar as it denies

~ educational opportunity to the public school students

this state. If we determine that no such error occurred,

we must affirm the trial court’s judgment, leaving the matter

of achieving a constitutional system to the body equipped and

designed to perform that function. Broad considerations of “tax

equity,” while they will certainly be a matter of immediate

concern to the Legislature in carrying out such a task, are

inent to our present determination only insofar as it is

shown that the system before us, through its imposition

of burdens and bestowal of benefits, results in impermissible

disparity in the level of educational opportunity available to

the st ts of the various school districts of this state.

_—

of any particular level of wealth per ADA. From

the point of view of providing education, those districts

which are able to meet the above problems because

of a relatively high assessed valuation per ADA are

clearly favored over districts which lack that advantage.

The immediately foregoing discussion reveals but

one aspect of a more fundamental and pervasive prob-

lem. As defendants state the matter in their reply

brief: “The weak relationship between expenditures per

pupil and taxable wealth per pupil . . . is explained

in part by factors affecting the cost of offering sub-

stantially equivalent school programs in different school

districts. For example, some school districts have old

buildings which require expensive maintenance; some

have a disproportionate number of older teachers en-

titled to higher salaries; some must spend excessive

amounts for security, and for the repair of vandalized

buildings. Some high schools in remote parts of the

State have only a few students and must maintain

costly classes for less than ten students. Some schools

must insulate rooms to keep out distracting noise from

airports or freeways. Some are located in parts of

the State where climatic conditions require unusually

high expenditures for heating or air conditioning.” Un-

der the system we here examine, however, the ability

of a school district to meet those problems peculiar

to it depends in large part upon the taxable wealth

of that district per ADA. A fiscally neutral system,

if tailored in a responsive and responsible way, would

in no way resemble the specter which defendants raise.

Rather, it would make the individual district’s ability

to meet its own particular problems connected with

providing educational opportunity depend upon factors

other than the wealth of the district, and thus dissipate

— =

the discrimination which characterizes the system before

us.

For all of the foregoing reasons we reject in its

entirety defendants’ constellation of contentions deal-

ing with the criterion of “fiscal neutrality” adUpted

by the trial court. We have concluded, upom a complete

review of the findings and the evidence, that the discrimm-

ination in public school fimamcing of which plaintiffs

complain has been shown to exist under the system

here at issue, and that the trial court, in so finding,

employed proper criteria. We now proceed to address

the question whether the system as shown to exist

is invalid as in violation of constitutional guarantees.

Vi

In Serrano I this court, in its determination of wheth-

er or not the allegations of the complaint stated a

cause of action, was faced at the outset with the

task of choosing the proper equal protection standard

to be applied. “|T]he Umited States Supreme Court,”

we pointed out, “has employed a two-level test for

measuring legislative classifications against the equal

protection clause. ‘In the area of economic regulation,

the high court has exercised restraint, investing legisla-

tion with a presumption of constitutionality and requir-

ing merely that distinctions drawn by a challenged

Statute bear some rational relationship to a conceivable

legitimate state purpose. .. . [4] On the other hand,

in cases involving “suspect classifications” or touching

on “fundamental interests,” . . . the court has adopted

an attitude of active and critical analysis, subjecting

the classification of strict scrutiny. . . . Under the

strict standard applied in such cases, the state bears

the burden of establishing not only that it has a com-

pelling interest which justifies the law but that the

—44—

distinctions drawn by the law are necessary to further

its purpose.’” (Serrano I at p. 597, quoting from West-

brook v. Mihaly (1970) 2 Cal.3d 765, 784-785 [87

Cal.Rptr. 839, 471 P.2d 487], vacated on other

grounds (1971) 403 U.S. 915 [29 L.Ed.2d 692, 91

S.Ct. 2224].)

Concluding on the basis of the complaint that the

case before us involved both a “suspect classification”

(because the discrimination in question was made on

the basis of wealth) and affected a “fundamental inter-

est” (education), we proceeded to apply the latter

standard. Addressing ourselves to the state interest ad-

vanced by defendants—local decision-making power

and fiscal control—we concluded that it was not incum-

bent upon us to decide whether that asserted uiterest

was “compelling” or whether the existing financial sys-

tem was “necessary” to its furtherance because under

the facts as alleged the notion of local control was

a “cruel illusion for the poor school districts” due

to limitations placed upon them by the system itself.

“In summary,” we held, “so long as the assessed valwa-

tion within a district’s boundaries is a major determinant

of how much it can spend for its schools, only *

district with a large tax base will be truly able to

decide how much it really cares about education. The

poor district cannot freely choose to tax itself into

an excellence which its tax rolls cannot provide. Far

from being necessary to promote local fiscal choice,

the present financing system actually deprives the less

wealthy districts of that option.” (Serrano I at p.

611.)

During the progress of trial proceedings below, the

United States Supreme Court rendered its ‘decision in

San Antonio School District v. Rodriguez, supra, 411

—_—

U.S. 1. There, addressing itself to an equal protection

attack on the Texas public school financing system—

which like the system here in question is based on

the “foundation approach”—the high court held that

that system (1) did not result in a suspect classification

based upon wealth, and (2) did not affect any funda-

mental interest, education being less than fundamental

for these purposes because it was not explicitly or im-

plicitly guaranteed or protected by the terms of the

federal Constitution. (/d., at pp. 33-34, 61-62 [63

}..Ed.2d at pp. 42-43, 59-60|.) Accordingly, the court

held the s-called “strict scrutiny test” for equal protec-

tion review of state laws under the Fourteenth Amend-

meni to the 'nited States Constitution was inappro-

priate. Reinforced im this conclusion by the fact that

the case before it involved peculiarly local questions

of taxation, fiscal planning, and educational policy—and

thus raised serious considerations of federalism and

deference to local decision (id., at pp. 40-44 [36

L.Bd.2d at pp. 47-50}])—the high court proceeded

to examine the Texas system under the less stringent

“ratwonal relationship” test, concluding that such a rela-

tionship to the state purpose of local control was

shown.” (/d., at pp. 48-55 [36 L.Ed.2d at pp. 51-56].)

Among the four dissenters, Justice White specifically

grounded his disagreement with respect to this latter mint

om the very basis upon which we had refused to co... der

local control” as a “compelling state interest” in Serrano I

—i.e., that the notion of local control for less wealthy districts

was chimerical. (/d., at pp. 63-70 [36 L.Ed.2d at pp. 60

ye also dis. Marshall, J., pp. 127-150 [36

L.Ed.2d at pp. 97-100].) difference, course, was that”

we had | to this consideration in our application of

the so-called “strict scrutiny test,” whereas Justice White- -ap-

parently agreeing with the majority that that test was inap-

propriate for federal purposes in the circumstances there present

i it - order to —— — the state had failed

demonstrate any rational relationship between its s

and the asserted interest. , —

ati.

We—along with the trial court and the parties-——think

it is clear that Rodriguer undercuts our decision in

Serrane I t@ the extent that We held the California

public school fimemcing system (if proved to be as

alleged) to be invalid as in violation of the equal

protection clause of the Fourteenth Amendment to

the United States Constitution. However, as we made

clear in footnote 11, owr decision in Serrano |] was

based not only on the provisions of the federal Constitu-

tion but on the provisions of our own state Constitution

as well.

Our footnote 11 read as follows: “The complaint

also alleges that the financing system violates article

I, sections 11 and 21 [now in substance article IV,

section 16 and article I, section 7(b)] of the California

Constitution. Section 11 provides: ‘All laws of a general

nature shall have a uniform operation.’ Section 21

states: ‘No special privileges or immunities shall ever

be granted which may not be altered, revoked, or

repealed by the Legislature; nor shall any citizen, or

class of citizens, be granted privileges or immunities

which, upon the same terms, shall not be granted to

all citizens. We have construed these provisions”

as ‘substantially the equivalent’ of the equal protection

clause of the Fourteenth Amendment to the federal

Constitution. (Dept. of Mental Hygiene v. Kirchner

(1965) 62 Cal.2d 586, 588 [43 Cal.Rptr. 329, 400

P.2d 321].) Consequently, our analysis of plaintiffs’

federal equal protection contention is also applicable

to their claim under these state constitutional provi-

“The of Proposition at the 1974 General Election

added the following provision. to our Constitution as article

—~ =

sions.” (Serrano I at p. 596.) The first question here

facing us is that of the proper interpretation of the

foregoing two sentences in light of Rodriguez.

Three possible interpretations of this language have

been suggested to us. All proceed on the premise

properly embraced by all parties hereto, that the foot-

note’s citation of our second Kirchner opinion forecloses

any argument that a classification which satisfies federal

equal protection standards by the same token satisfies

our own constitutional provisions.*' Granting this, how-

ever, defendants argue that our reliance in Serrano

I on United States Supreme Court cases dealing with

the proper application of the strict scrutiny standard

of review must be reexamined in light of Rodriguez,

and that such reexamination must result in the conclu-

sion that neither a “suspect classification” nor a “funda-

mental interest” is here involved, precluding use of a

strict scrutiny standard for purposes of resolving the

state constitutional question. Plaintiffs, on the other

hand, urge that removal of the federal ground by

Rodriguez leaves our Serrano I rationale wholly intact

on state grounds. Alternatively they argue that if Rod-

riguez is to be utilized by analogy in applying our

*1In the indicated Kirchner opinion this court, responding

mandate of the United States Supreme Court essentially

inquiring whether our decision in Dept. of Mental Hygiene

S

©

v. Kire (1964) 60 Cal.2d 716 [36 Cal.Rptr. 488, 388

P.2d 720, 20 A.L.R.3d 353] had an independent state ground,

held that the — in our view required

conclusion

by the equal ——— & use of the Fourteenth Amendment,

was in any event independently required by our state equa

— provisions. “We so by our construction

and application of California law,” this court said, “regardless

of whether there is or is not compulsion to the same end

by the federal Constitution.” (62 Cal.2d at p. 588; italics

added. (See Karst, Serrano v. Priest: A State Court’s Responsi-

bilities and Opportunities in The Development of Federal Con-

stitutional Law (1972) 60 Cal.L.Rev. 720, 743-748.)

aniline

state constitutional provisions — so that, for example,

a “fundamental interest” for state purposes would be

held to exist only if the right in question is explicitly

or implicitly guaranteed by the state Constitution—the

interest in education will be seen to meet this test.”

This, it will be recalled, was the theory adopted by

‘the trial court (see fn. 19, ante, and accompanying

text).

The primary position adopted by plaintiffs on this

point is the correct one. As Serrano I makes clear

through its reference to our second Kirchner opinion

(and as all parties hereto are agreed), our state equal

protection provisions, while “substantially the equivalent

of” the guarantees contained in the Fourteenth Amend-

ment to the United States Constitution, are possessed

of an independent vitality which, in a given Case,

may demand an analysis different from that which

would obtain if only the federal standard were appli-

42Three sections of our state Constitution are explicitly cited

in support of this proposition. They are:

(1) Article IX, section 1: “A general diffusion of knowledge

and intelligence being essential to the preservation of the rights

and liberties of the people, the Legislature shall —-

by all suitable means the promotion of intellectual, scientific,

moral, and agricultural improvement.”

(2) Article IX, section 5: “The Legislature shall provide

for a system of common schools by which a free school shall

be kept up and supported in each district at least six months

in every year, after the first year in which a school has

been established.”

(3) Article XVI, section 8 (formerly art. XIII, § 15):

“From all state revenues there shall first be set apart the

monies to be applied by the state for support of the public

school system and public institutions of higher education.”

Amicus curiae Childhood and Government Project, which

joins in the instant contention, does not shrink from passionate

imagery in on its position. Whereas, we are told, “the

federal claim of fundamentality had to be argued in Rodriguez

as a remote inference from the general language of the Bill

of Rights{,] [u]nder California law the conclusion thunders

from the words of the [C]onstitution itself.{!\”

—49—

cable. We have recently stated in a related context:

“{I]n the area of fundamental civil liberties—which

includes . . . all protections of the California Declaration

of Rights—we sit as a court of last resort, subject

only to the qualification that our interpretations may

not restrict the guarantees accorded the national citizen-

ry under the federal charter. In such constitutional

adjudication, our first referent is California law and

the full panoply of rights Californians have come to

expect as their due. Accordingly, decisions of the United

States Surpeme Court defining fundamental rights are

persuasive authority to be afforded respectful considera-

tion, but are to be followed by California courts only

when they provide no less individual protection than

- is guaranteed by California law.” (People v. Longwill

(1975) 14 Cal.3d 943, 951, fm. 4 [123 Cal.Rptr.

297, 538 P.2d 753]; see also People v. Disbrow (1976)

16 Cal.3d 101, 114-115 [127 Cal.Rptr. 360, 545

P.2d 272]; People v. Norman (1975) 14 Cal.3d 929,

939 [123 Cal.Rptr. 109, 538 P.2d 237]; People v.

Brisendine (1975) 13 Cal.3d 528, 548-552 [119 Cal.

Rptr. 315, 531 P.2d 1099]; Burrows v. Superior Court

(1974) 13 Cal.3d 238, 245-246 [118 Cal.Rptr. 166,

529 P.2d 590]; Mandel v. Hodges (1976) 54 Cal.App.

3d 596, 615-617 [127 Cal.Rptr. 244]; State v. Kaluna

(1974) 55 Hawaii 361 [520 P.2d 51, 58-59]; Baker

v. City of Fairbanks (Alaska 1970) 471 P.2d 386,

401-402; see generally Note, Project Report: Toward

**We find the language of the Alaska Supreme Court to

be particularly apposite in this respect: “While we must enforce

the minimum constitutional standards imposed upon us by the

United States Supreme Court’s interpretation of the Fourteenth

Amendment, we are free, and we are under a duty, to develop

additional constitutional rights and privileges under our .. .

Constitution if we find such fundamental rights and privileges

(This footnote is continued on next page)

_ =

An Activist Role for State Bills of Rights (1973)

8 Harv. Civ. Rights—Civ. Lib.L.Rev. 271; Falk, Fore-

word: The State Constitution: A More Than “Ade-

quate” Nonfederal Ground (1973) 61 Cal.L.Rev. 273;

Note, Rediscovering the California Declarations of

Rights (1974) 26 Hastings L.J. 481.)

Thus, the fact that a majority of the United States

Supreme Court have now chosen to contract the area

of active and critical analysis under the strict scrutiny

test for federal constitutional purposes** can have no

effect upon the existing construction and application

afforded our own constitutional provisions. Nor can

the additional fact—if it be a fact—that certain of

the high court’s former decisions (which may have

been relied upon by us in Serrano I) may not be

expected to thrive in the shadow of Rodriguez cause

us to withdraw from the principles we there announced

on state as well as federal grounds.

For these reasons then, we now adhere to our deter-

minations, made in Serrano I, that for the reasons

to be within the intention and spirit of our local constitutional

language and to be necessary for the kind of civilized life

and ordered liberty which is at the core of our constitutional

neritage. We n not stand by idly and passively, —~

for constitutional direction from the highest court of the land.

Instead we should be moving concurrently to develop and ex-

und the principles embedded in our constitutional law.” (471

P.2d at pp. 401-402, fns. omitted.)

44We do not think it open to doubt that the Rodriguez

majority had considerable difficulty accommodating its new ap-

proach to certain of its prior decisions, especially in the area

of fundamental rights. Indeed, we share the curiosity of Justice

Marshall, who in his dissent states that he “would like to

know where the Constitution guarantees the right to procreate,

Skinner v. Oklahoma {ex rel. Williamson], 316 U.S. 535,

541 (1942), or the right to vote in state elections, e.g., Rey-

nolds v. Sims, 377 U.S. 533 (1964), or the right to a

from a criminal conviction, e.g., Griffin v. Illinois, 351 U.S.

12 1956).” (Rodriguez, supra, at p. 100 [36 L.Ed.2d at

p. 82].)

oniiitinn

there stated and for purposes of assessing our state

public school financing system in light of our state

constitutional provisions guaranteeing equal protection

of the laws (1) discrimination in educational opportun-

ity on the basis of district wealth involves a suspect

Classification, and (2) education is a fundamental inter-

est. Because the school financing system here in ques-

tion has been shown by substantial and convincing

evidence produced at trial to involve a suspect classifi-

cation (insofar as this system, like the former one,

draws distinctions on the basis of district wealth), and

because that classification affects the fundamental inter-

est of the students of this state in education, we have

no difficulty in concluding today, as we concluded

in Serrano I, that the school financing system before

us must be examined under our state constitutional

provisions with the strict and searching scrutiny approp-

riate to such a case.“

We are fortified in reaching this conclusion by lan-

guage appearing in the Rodriguez decision itself: The

high court, in passing upon the validity of the Texas

system under the federal equal protection clause, repeat-

edly emphasized its lack of “expertise” and familiarity

with local problems of school financing and educational

policy, which lack “counsel[ed] against premature inter-

**In view of this conclusion we need not address the prob-

lem, raised in pointed and lucid fashion by one of the amici

curiae, whether in applying our state equal-protection provisions

we should insist upon strict scrutiny review of all governmental

classifications based on wealth, thus elevating such classifications

to a level of “suspectedness” equivalent to those based on

race. The classification here in question, which is based on

district wealth, clearly affects the fundamental interest of the

children of the state in education, and we hold here, as we

held in Serrano I (see especially pp. 614-615), that this com-

bination of factors warrants strict judicial scrutiny under our

State equal-protection provisions.

—52—

ference with informed judgments made at the state

and local levels,” (Rodriguez, supra, at p, 42 [36

L.Ed.2d at p, 48],) These considerations, in conjunc

tion with abiding concerns from the standpoint of feder-

alism,** in the high court's view “buttress[ed] [its]

conclusion that Texas’ system of public school finance

is an inappropriate candidate for strict judicial seru-

tiny.” (/d., at p. 44 [36 L.Bd2d at p, 49],) This

court, on the other hand, in addressing the instant

case occupies a position quite different from that of

the high court in Rodriguez, The constraints of federal-

iam, sO necessary to the proper functioning of our

unique system of national government, are not appli-

cable to this court in its determination of whether

our own state's public school financing system runs

afoul of state constitutional provisions, Moreover, while

we cannot claim that we have achieved the perspective

of “expertise” on the subjects of school financing and

educational policy, our deliberations in this matter have

had the benefit of a thoughtfully developed trial record

(comprising almost 4,000 pages of testimonial tran-

script, replete with the opinions of experts of various

accomplishment and persuasions, and a clerk's tran-

“The high court ey ite misgivings on the federatiam

vestion as follows: “Tt must be remembered, also, that every

claim arising under the Equal Protection Clause has implications

for the relationship between national and state power under

our federal system, Questions of federalism are always inherent

in the process of determining whether a State's laws are to

be accorded the traditional presumption of constitu or

are to be subjected instead to rigorous judicial eeretng, ile

‘{t}he maintenance of the principles of federalism is a foremost

consideration in interpreti any of the pertinent constitutional

provisions under which this Court examines state action,’ it

would be difficult to imagine a case having @ greater tial

impact on our federal system than the one now before us,

in which we are urged to abrogate systems of financing public

education presently in existence in virtually every State,” (/d,,

at p, 44: fo, omitted [36 L.Bd.2d at p, 49}.5

--5j—

script of almost equal size), comprehensive if not ex-

haustive findings on the part of an able trial judge,

and voluminous briefing by the parties and no less

than nine amici curiae, among which are included

the state Superintendent of Public Instruction, We be-

lieve that this background amply equips us to undertake

the searching judicial scrutiny of our state's public

school financing system which is required of us under

our stato constitutional provisions guaranteeing equal

protection of the laws,

We point out in closing, however, that our application

of the strict scrutiny test in this case should in no

way be interpreted to imply an acceptance of the

theory, adopted by the trial court and advanced as

an alternative rationale by plaintiffs and some of their

supporting amici, by which the Rodriguez approach

to assessing “fundamentalness” in affected rights is

applied by analogy in the state sphere, (See fn, 20,

ante, and accompanying text,) Suffice it to say that

we are constrained no more by inclination than by

authority to gauge the importance of rights and interests

affected by legislative classifications wholly through

determining the extent to which they are “explicitly

or implicitly guaranteed” (Rodriguez, supra, at p, 33

[36 L,Bd.2d at p, 43]) by the terms of our com-

pendious, comprehensive, and distinctly mutable state

Constitution,” In applying our state constitutional pro-

‘In the 1970 report of the California Constitution Revision

Commission Spropeees revision 3, part | (introduction) p,

7) it is stated; “Between 1879 and 1964 our Constitution

was amended over 300 times, Its increased from 16,000

to more than 75,000 words, and it was 10 times r than

the United States Constitution,” Largely aa a result of work

of the commission, amendments made subsequent to 1964 have

reduced the sheer size of the document somewhat, but it remains

(This footnote is continued on next page)

ee ek, Leer Tee ORT Ee IA ty gt ea eT

enfitinn

visions guaranteeing equal protection of the laws we

shall continue to apply strict and searching judicial

scrutiny to legislative classifications which, because of

their impact on those individual rights and liberties

which lie at the core of our free and representative

form of government," are properly considered “funda.

mental,”

Vil

For the reasons above stated, we have concluded

that the state public school financing system here under

review, because it establishes and perpetuates a classifi-

cation based upon district wealth which affects the

fundamental interest of education, must be subjected

to strict judicial scrutiny in determining whether it

complies with our state equal protection provisions,

Under this standard the presumption of constitutionality

normally attaching to state legislative classifications

falls away, and the state must shoulder the burden

of establishing that the classification in question is

necessary to achieve a compelling state interest, (Ser

rano I at p, 597; see also Weber v, City Council

(1973) 9 Cal.4jd 950, 958-959 [109 Cal. Rptr, 553,

513 P.2d 601].) Basing our determination upon the

amply supported factual findings of the trial court,

which we have summarized in part Il above, we con-

today, as it was a A eorenee over two decades ago, “A Prolix

And "Pormidable hardly adapted to be a convenient

a bln a symbol f tor the ideologies J ne " (Palmer

vin, The Development of Law in ye

Codes (1984 ed

in Ann, Const, Weat's Ann, Cal,

IV, P pp. 26-27.)

“We do not suggest, of course, that the treatment afforded

tilar rights interests by the provisions of our state

onstitution is not to be accorded significant consideration in

determinations of this kind, We do suggest that this factor

is not to be given conclusive weight,

aaa

clude without hestitation that the trial court properly

determined that the state failed to bear this burden,

Our reasons for this conclusion are essentially those

stated by us on this point in Serrano 71, The system

in question has been found by the trial court, on

the basis of substantial and convincing evidence, to

suffer from the same basic shortcomings as that system

which was alleged to exist in the original complaint-—to

wit, it allows the availability of educational opportunity

to vary as a function of the assessed valuation per

ADA of taxable property within a given district, The

state interest advanced in judtification of this discrimi.

nation continues to be that of local control of fiscal

and educational matters, However, the trial court has

found that asserted interest to be chimerical’ from the

standpoint of those districts which are less favored

in terms of taxable wealth per pupil, and we ourselves,

after a thorough examination of the record, are in

wholehearted agreement with this assessment,

The admitted improvements to the system which

were wrought by the Legislature following Serrano |

have not been and will not in the foreseeable future

be sufficient to negate those features of the system

which operate to perpetuate this inquity, Foremost

among these-—especially in a period of rising inflation

and restrictive revenue limitsis the continued avail-

ability of voted tax overrides which, while providing

more affluent districts with a ready means for meeting

what they conceive as legitimate and proper educational

objectives, will be recognized by the poorer districts,

unable to support the passage of such overrides in

order to meet equally desired objectives, as but a

new and more invidious aspect of that “cruel illusion”

which we found to be inherent in the former system,

anfiinn

(Serrano I at p, 611.) In short, what we said in

our former opinion in this reapect is equally true here,

"[S]o long as the assessed valuation within a district's

boundaries is a major determinant of how much it

can spend for its schools, only a district with a large

tax base [per ADA] will be truly able to decide

how much it really cares about education, The poor

district cannot freely choose to tax itself into an excel-

lence which its tax rolls cannot provide, Far from

being necessary to promote local fiscal choice, the

present financing system actually deprives the less

wealthy districts of that option,” (/d,)

It is accordingly clear that the California public

school financing system here under review, because

it renders the educational opportunity available to the

students of this state a function of the taxable wealth

per ADA of the districts in which they live, has not

been shown by the state to be necessary to achieve

4 compelling state interest,” Defendants, however,

have one more string to their bow; they, joined by

one of the amici curiae, contend that even in the

event of such a holding by this court the financing

system before us cannot be held to be in violation

of state equal protection provisions, because other pro-

visions of our state Constitution specifically authorize

“As has been indicated in footnote 19, ante, the trial

court found that, in addition to being invalid under the strict

scrutiny teat, “(t]he school financing system for the State

of California violates the equal-protection provisions of the

California Constitution even under the lesser constitutional stand-

ard of rational relationship.” While it is unnecessary for us

to direct ourselves to this matter, we do observe that we

perceive no rational relationship between the asserted govern-

mental end of maximizing local initiative and a 6 which

provides realistic options to exercise such initiative only in

sroperuen to district wealth per ADA, (Cf, San Antonto School

District v. Rodriguez, supra, 411 U.S, 1, 63-70 [36 L.Bd.2d

16, 60-65] (dis, opn, of White 1,),)

—_ =

just such a system, It is to this contention that we

now turn,

Il

Defendants’ claim of specific state constitutional au

thorization for the public school financing system before

us is primarily based upon the terms of article XIII,

section 21, which provides; “Within such limits as

may be provided under Section 20 of this Article

lallowing the Legislature to provide maximum local

property tax rates and bonding limits], the Legislature

shall provide for an annual levy by county governing

bodies of school district taxes sufficient to produce

annual revenues for each district that the district's

board determines are required for its schools and district

functions,” The argument, generally stated, is that a

harmonious interpretation of this section along with

other provisions requiring equal protection of the laws

must operate to insulate distinctions based on district

wealth disparities from state equal protection require.

ments, The argument proceeds on two distinct levels,

First, it is urged, we held in Serrano / that the system

there before us was “authorized” and “mandated” by

the predecessor to article XIII, section 21 (former

art, IX, § 6, par, 6); that holding, defendants and

their supporting amicus assert, is now the law of the

case, and to ihe extent that the system here in question

shares in the shortcomings of the former system related

to district wealth disparities, it too is so “authorized”

and “mandated,” Second, it is pointed out, even if

we are not compelled to this conclusion by the doctrine

of the law of the case, the terms of the section compel

the indicated result, We take up these contentions

in order,

= =

At pages 595 and 596 of our opinion in Serrano

/, in rejecting plaintiffs’ contention that the system

there alleged to exist was violative of the provisions

of article IX, section 5 (requiring “a system of common

schools”), we observed that former article IX, section

6, paragraph 6 (now art, XII, § 21), the provision

here at issue, “specifically authorizes the very element

of the fiscal system of which plaintiffs complain,” (/d.,

at p, 596.) At a@ later point in the opinion, rejecting

a contention of defendaris that only de facto discrim-

ination was here involved, we had occasion to observe

that “(t}he school funding scheme is mandated in

every detail by the California Constitution and statutes,”

(/d., at p, 603.) It is urged that these two references,

taken together, represent a holding that the system

there before us was required by the terms of present

article XIII, section 21, Insofar as the system now

under examination shares in the features of the former

system which we found objectionable in Serrano I,

defendants argue, it is equally required by that section

under the doctrine of the law of the case,

We reject such contentions as being utterly devoid

of merit, Indeed, as we shall make clear, defendants’

seizure upon such fragments of our opinion in Serrano

/ as a basis of argument not only results in an un-

reasoned distortion of such language but more unfortun-

ately displays an attempt to circumvent the rationale

of Serrano | (now the law of the case) by emphasiz-

ing isolated words out of context, It is beyond ques.

tionand beyond cavile-that in stating that former

article IX, section 6 “specifically authorizes the very

clement of the fiscal system of which plaintiffs com-

plain,” we had reference to that “element” of the

i

—- s

system permitting variations in expenditures per ADA

among the several districts. This is made clear by

the context of the statement and the language following

it. Former section 5 of article IX (the “com-

mon schools” provision) should not, we held, be in-

terpreted to apply to school financing and require “uni-

form educational expenditures” because such an in-

terpretation would render it inconsistent with former

section 6 (the provision here at issue) which allows

variation in school district expenditures. This was not

to say, however, that former section 6 “authorized”

or “approved” a system in which such variation was

the product of disparities in district wealth. Any such

conclusion would clearly have been at odds with our

ultimate conclusion in Serrano I that the system there

alleged to exist was violative of state as well as federal

equal protection provisions. 5 Cal.3d at 596, fn. 11.)

(See generally Part VI, ante.)

Similarly, by saying later on in our opinion, in

disposing of an entirely different contention, that the

school funding scheme was “mandated in every detail

by the California Constitution and statutes” (id., at

p. 603; italics added), we in no way implied that

the constitutional provision in question “mandated” the

system there alleged to exist. The constitutional pro-

vision, as we shall point out more fully below, “man-

dated” only that there be a system allowing for local

decision as to the level of school expenditures and

that the mechanism to be utilized in providing revenues

to permit such expenditures be a county levy of school

district taxes. It was the statutes enacted under the

aegis of that provision which tied the efficacy of local

decision to district wealth.

—™

We conclude for the foregoing reasons™® that the

doctrine of the law of the case is not helpful to

defendants on this point. It remains for us to under-

take an interpretation of article XIII, section 21 (form-

er art. IX, § 6, par. 6) in order to determine whether

that provision requires a public school financing system

which, like that before us, makes local decisions affect-

ing educational opportunity depend for their effective-

ness upon the taxable wealth per ADA in the district.

We conclude without hesitation that it does not.

As we have noted above, article XIII, section 21

of the state Constitution provides that the Legislature,

within certain limits set by established maximum tax

rates and bonding limits, “shall provide for an annual

levy by county governing bodies of school district taxes

sufficient to produce annual revenues for each district

that the district's board determines are required for

its schools and district functions.” In so doing the

provision both authorizes the Legislature to establish

a mechanism by which the revenues “required” for each

district are to be produced, and describes the character

of that mechanism—i.e., “an annual levy by county

“Two additional points in this respect raised by our es-

teemed colleague in dissent are equally devoid of merit. The

requirements of section 20701 et seq. of the Education Code,

which in the words of Serrano I “authorized the gove on

body... to levy taxes on the real property within a

district at a rate necessary to meet the district’s annual educa-

tion budget” (5 Cal.3d at p. 592) are of course statutory

rather than constitutional in stature. Moreover, as we point

out below, such a requirement would in no wa —

a system, such as that before us, in which through

of districts of varying degrees of wealth per fan the na Ea

would foster disparities in ctemtiend ¢

our statement in Serrano | that hy ide

6 (now art. XIII, § 21), “specifically authorizes ad districts

to levy school taxes” (5 Cal.3d at p. 598, fm. 12) in no

way implies that that section authorizes a system in violation

of the requirements of equal protection.

=_— =

governing bodies of school district taxes.” The provision

does not, however, address itself to the question of

the tax base to which the levy is to be applied, nor

does it speak in terms of assessed valuation in any

respect. Manifestly it does not authorize disparities

in school district expenditures based upon the relative

wealth per ADA of a particular school district. Such

disparities, insofar as they have been here shown to

exist, are the result of legislative action, not constitu-

tional mandate.

Article IX, section 14 of the state Constitution. clear-

ly establishes that it is the Legislature which bears

the ultimate responsibility for establishing school dis-

tricts and their boundaries.*' By its exercise of this

power, and by the concurrent exercise of its powers

under article XIII, section 21 to provide for a school

financing mechanism based upon county levies of school

district taxes, it has created a system whereby dispar-

ities in assessed valuation per ADA among the various

school districts result in disparities in the educational

opportunity available to the students within such dis-

tricts. Thus, as we said in Serrano I, “|g]overnmental

action drew the school district boundary lines, thus

determining how much local wealth each district would

contain [citations].” (5 Cal.3d at p. 603.) It is that

action, which we reiterate is the product of Jegislative

determinations,” that we today hold to be in viola-

‘1The section in question provides as here relevant: “The

Legislature shall have power, by ral law, to provide for

the incorporation and organization of school districts, high school

districts, and community college districts, of every kind and

class, and may classify such districts.”

52The dissenting opinion, in reaching the opposite conclusion,

is guilty of a clear non sequitur. Starting from the proposition

that section 21 “requires... a... system in which each

(This footnote is continued on next page)

enifiiion

tion of our state provisions guaranteeing equal protec-

tion of the laws.”

It seems to be argued, however, that because article

XIII, section 21 authorizes the financing of schools

by a county levy of school district taxes, the Legisla-

ture is free to structure a system based upon this

mechanism in any way that it chooses. Such a notion,

we hasten to point out, is manifestly absurd. A consti-

tutional provision creating the duty and power to legis-

late in a particular area always remains subject to

general constitutional requirements governing all legis-

lation unless the intent of the Constitution to exempt

it from such requirements plainly appears.

In In re Jacobson (1936) 16 Cal.App.2d 497 [60

P.2d 1001], for example, the Legislature, acting pur-

suant to its power to create a system of inferior courts

(former art. VI, § lla), did so in a manner which

granted greater jurisdiction to city courts in populous

county may levy annually a school district tax in an amount

sufficient (when supplemented by state aid) to provide the

revenues deemed necessary by each district in that county,”

it then proceeds to make reference to article XIII, section

14, of the Constitution which requires that all property taxed

by local government be assessed in the county, city and district

in which it is situated. From these premises it goes on to

conclude that section 21 “ a school

financing system in which each individual district's needs are

satisfied from the taxable wealth of that district. . . .” Assum-

bY A ay gd | however, it by no means

follows that the system so contemplated is, as the dissent puts

it, “the present system which the majority find a

The present system, as we have shown, is the product of

legislative judgment, not constitutional command.

'8The learned trial per -he matioonie heh mpeenee tie

pointedly and irrefu “The rationale which impresses this

Court is that section 6 of Article IX [now § 21 of Article

XIII} of the California Constitution did not create the various

school districts with their geographical boundaries and with

their differences in rty wealth. Section 6, Article IX [i.e.

§ 21 of Article XIII] is written to apply to ar school

districts have been created by the California

ee ee

——

townships than to the same class of courts of less

populous townships—regardless of the population of

the particular city. This, it was held, was in violation

of the fundamental constitutional requirement that laws

of a general nature have a uniform application. “The

legislature derives its power to create courts from the

Constitution,” the court stated, “but it may do so

only in conformity with the provisions of the Constitu-

tion. It doubtless has the right to classify cities accord-

ing to population, and have made such classification

to prescribe different powers and regulations for each

of the classes. The powers and regulations must, how-

ever, be uniform for each of the classes.” (16 Cal.

App.2d at p. 500; italics added. )

Similarly, in Mordecai v. Board of Supervisors

(1920) 183 Cal. 434 [192 P. 40] the Legislature,

acting pursuant to its constitutional power to create

and regulate the affairs of irrigation districts (former

art. XI, § 13), enacted a comprehensive irrigation

plan which exempted from its provisions those districts

located in counties which had adopted a charter prior

to a specific date. This, we concluded, it could not

do. “It is argued, in effect, that this provision [former

art. XI, § 13] empowers the legislature to pass what

laws it sees fit in regard to irrigation districts untram-

meled by the general requirement that laws of a general

nature shall have a uniform operation. We cannot

agree with this. There is nothing to indicate that the

power granted the legislature by this provision was

not to be exercised by it subject to the general require-

ments of the constitution governing the manner in

which the power of legislation when conferred or pos-

sessed shall be exercised. The legislature has the power

enliven

as conferred by the provision of the constitution just

quoted to legislate concerning the affairs of irrigation

districts, but that power, like the power of the legisla-

ture to legislate on other subjects, must be exercised

in the manner in which the constitution provides that

the power of legislation when it exists must be ex-

ercised. Before any grant of power to legislate on a

particular subject can be held to be free of a general

requirement governing all legislation, the intent of the

constitution to that effect must be plain. No such intent

appears in the present instance.” (183 Cal. at pp.

441-442; italics added. )

By the same token, we are here confronted with

a situation in which the Legislature has been granted

the power to provide for the financing of schools

through the mechanism of county levies of school dis-

trict taxes. Nothing in the constitutional provision estab-

lishing that power, however, indicates that its exercise

is to be freed from general constitutional limitations

applicable to all legislation. Accordingly the Legisla-

ture, in its exercise of the subject power in conjunction

with other powers possessed by it, was obliged to

act in a manner consistent with such limitations. This

it has not done. Instead it has undertaken to create

a school financing system which, by making the quality

of educational opportunity available to a student de-

pendent upon the wealth of the district in which he

lives, is manifestly inconsistent with fundamental consti-

tutional provisions guaranteeing the equal protection

of the laws to all citizens of this state. That system,

we hold today, can no longer endure.

We also reject as wholly without merit the contention

that the school financing system before us is somehow

made necessary or permitted by the provisions of article

eeeeeeeeEEeouoeG0uon0Qq<_uyQqueeeeeeeeeeeeeeeeeeeeeee

— =

IX, section 1, of the state Constitution. That section

provides: “A general diffusion of knowledge and intelli-

gence being essential to the preservation of the rights

and liberties of the people, the Legislature shall encour-

age by all suitable means the promotion of intellectual,

scientific, moral, and agricultural improvement.” We

declare ourselves at a loss to understand how this

provision can be said to mandate or authorize the

creation of a system which conditions educational op-

portunity on the taxable wealth of the district in which

the student attends school.

(3c) For the foregoing reasons we cannot accept

defendants’ argument that there exists some irreconcil-

able conflict between the requirements of our state

equal protection provisions and other state constitu-

tional provisions of equal stature—namely article XIII,

section 21, and article IX, section 1. The latter pro-

visions, as we interpret them, neither mandate nor

approve a system such as that before us, and therefore

the only conflict which here appears is that between

the requirements of our state equal protection provisions

and the proven realities of the present, legislatively

created California public school financing system—a

conflict which the trial court, by holding that system

to be invalid, properly resolved.™

‘We decline defendants’ invitation to address ourselves to

the constitutional merits of the various financing alternatives

and combinations thereof which have been develo in the

scholarly literature on this subject. Our concern today is with

the system presently before us. We are confident that the

Legislature, aided what we have said today and the bod

of scholarship which has grown up about this subject, will

be able to devise a public school financing system which achieves

constitutional conformity from the standpoint of educational

opportunity through an equitable structure of taxation.

(This footnote is continued on next page)

anfities

IX

To recapitulate, we conclude that the trial court

properly ordered and decreed that the California public

school financing system for public elementary and sec

ondary schools, including those provisions of the §.B,

90 and A.B, 1267 legislation pertaining to this system,

while not in violation of the equal protection clause

of the Fourteenth Amendment to the United States

Constitution, is invalid as being in violation of former

article I, sections 11 and 21 (now art, IV, § 16

and art, I, § 7, respectively) of the California Consti-

tution, commonly known as the equal protection of

the laws provisions of our state Constitution, This

determination and other related provisions of the judg-

ment we find to be fully supported by the findings

and the evidence; indeed, no attack has been made

on the findings as lacking evidentiary support, For

the reasons we have detailed, we discern no jurisdiction:

al defect in the proceedings below based on the claim-—

rejected by us as devoid of merit--that the Governor

and the Legislature should have been joined as indis-

pensable parties, We conclude that the holding of the

trial court is grounded solidly and soundly on our

earlier decision in Serrano 7 wherein we determined

among other things that the California public school

financing system, failing to withstand “strict scrutiny,”

denied plaintiffs the equal protection of the laws under

the relevant provisions of our state Constitution, We

therefore confirm that our decision in Serrano | was

based not only on the equal protection provisions of

As the dissenting opinion observes, quoting from the Rodriguez

decision, “the ultimate solutions must come from the lawmakers

and from the democratic pressures of those who elect them,”

In this we most heartily agree; we differ with our brethren

only as to the constitutional framework in which that task

must be undertaken,

— =

the federal Constitution but also on such provisions

of our state Constitution, and we emphasize that insofar

as the latter provisions are applicable here, Serrano

/ constitutes the law of the case,

We observe that the trial court so deemed it and

properly adhered to the law set forth in our earlier

opinion in assessing for state constitutional purposes

the same financing system as revised by $.B, 90 and

A.B, 1267, Since such system before the court was

shown on substantial evidence to involve a suspect

classification (based on district wealth) and to touch

upon the fundamental interest of education, the trial

court properly followed Serrano 7 in subjecting it to

the “strict scrutiny” test under which the state has

the burden of establishing that the classification in

question is necessary to achieve a compelling state

interest, Applying this test, the court properly deter-

mined on findings supported by substantial evidence

that the state had failed to bear its burden and that

the financing system before it was invalid as denying

equal protection of the laws as guaranteed by the

California Constitution, Finally we hold that, contrary

to defendants’ claim, there is no conflict between the

requirements of our state equal protection provisions

and other provisions of the California Constitution

80 as to compel the former to yield as the determinative

law of this case,

The judgment is affirmed,

Wright, C. J., Tobriner, J,, and Mosk, J., concurred,

enfifies

RICHARDSON, J,-—-I respectfully dissent, My disagree-

ment with the majority focuses principally on part

VIII of their opinion wherein they consider the appli-

cation of article XIII of the California Constitution

to the present school financing program, concluding

that the system is invalid as violative of the equal

protection provisions of that Constitution, As I develop

more fully below, I have serious reservations about

the constitutional analysis indulged by the majority as

it affects article XIII, My principal problem with the

majority's thesis is that the same Constitution expressly

authorizes the essential elements of the challenged sys-

tem,

The majority's learned and comprehensive review

of the asserted faults and failings of the present scheme

and their holding that another, more equitable, one

must be devised to replace it, may well be consistent

with sound public policy, Doubtless, it represents a

well-intended effort to assure equal educational oppor-

tunity for California's school children, Nonetheless, it

is not our function to formulate public policy, Under

our time-honored, constitutionally founded system of

separation of governmental powers, we are not entrusted

with such difficult tasks as devising or choosing between

alternative educational financing policies, That respon-

sibility is vested in the Legislature, alone, acting within

the confines expressed in our state Constitution, So

long as the Legislature has performed its work in

a manner consistent with overriding constitutional prin-

ciples, we must uphold its efforts regardless of our

personal views as to the fairness or wisdom of those

legislative results, Accordingly, it becomes vital to

analyze with great precision those constitutional limits

on legislative action before we invalidate a system

—_ff—

as important and accepted as the existing California

school financing plan,

The majority do not now rely upon the equal protec:

tion clause of the federal Constitution, Contrary to

our holding in Serrano v, Priest (1971) 5 Cal.3d

584 (96 Cal.Rptr, 601, 487 P.2d 1241] (Serrano

1), it is now established by the highest authority that

school district financing systems such as ours do not

offend federal equal protection principles, (San Antonio

School District v. Rodriguez (1973) 411 US, 1 [36

L.Bd.2d 16, 93 S.Ct. 1278].) Indeed, the majority

herein candidly admit that the Rodriguez decision clear-

ly “undercuts” Serrano I's reliance upon the national

charter, (Ante, p. 762.) Among other things, the high

court in Rodriguez held that the “strict scrutiny” stand.

ard of review was inapplicable, since no “fundamental

interest” or “suspect classification” was involved; that

the present traditional method of local district financing,

though perhaps unfair in some respects, nevertheless

operates in a rational fashion, without invidious dis-

crimination; and that the courts should defer to the

state legislatures in these matters of policy, since these

bodies alone have the necessary expertise and familiar:

ity with local problems, One may differ, as I do,

with the high court's conclusion that education is not

a fundamental interest, Yet, the question of whether

the school financing plan here at issue violates federal

equal protection has been laid to rest in Rodrigues,

The majority herein, disagreeing with Rodrigues’

analysis of the equal protection issue, point to the fact

that Serrano |, in a footnote, stated that its analysis

of plaintiffs’ federal equal protection contention “is

also applicable to their claim under , , , state constitu.

tional provisions.” (5 Cal.3d at p, 596, fn, 11.) The

uals

majority then hold, as we have noted, that California's

school financing system is invalid under the only remain-

ing constitutional refuge-—-the state equal protection

provisions, (Cal, Const,, art, I, § 7, art, IV, § 16,)

In broad, general language the Constitution guar-

antees both equal protection of the laws and uniform

operation of the laws, and forbids irrevocable special

privileges or immunities, Since, as we have previously

observed, these provisions are “substantially the equi-

valent” of the federal equal protection clause (Serrano

1, 5 Cal.3d at p, 596, fn. 11), although not required

to do so, we might defer to the Rodriguez equal

protection analysis rather than create our own different

interpretation of substantially identical constitutional

language, (See People v, Disbrow (1976) 16 Cal.3d

101, 119, dis, opn, [127 Cal.Rptr, 360, 545 P.2d

272]|.) Indeed, a number of state courts in post-Rod-

riguez cases have done just thate—-namely, declined

to invalidate comparable school financing systems in

reliance upon state constitutional provisions, (See

Northshore School District No, 417 v, Kinnear (1974)

84 Wn.2d 685 [530 P.2d 178, 200-202]; Shofstall

v. Hollins (1973) 110 Ariz, 88 [515 P.2d 590];

Thompson v, Engelking (1975) 96 Idaho 793 [537

P.2d 635]; ef, Hootch v, Alaska State-Operated School

System (Alaska 1975) 536 P,.2d 793, 804; but see

Robinson v, Cahill (1973) 62 NJ, 473 [303 A.2d

273)|.) The present majority are, for reasons which

I fully respect but do not accept, unwilling to follow

the lead of Rodriguez and the foregoing cited cases,

My dissent, however, does not rely upon the foregoing

principle of deference, for in my view the majority's

analysis contains a serious, indeed fatal, flaw; the same

elites

California Constitution which generally extends equal

protection also specifically authorizes the essential ele-

ments of California's present system of school financing,

As a matter of interpretive principle, the authority

which the Constitution specifically extends with one

hand cannot be generally withdrawn with the other,

The majority thoroughly explain that our public

schools are financed from two major sources, the state

school fund and local district taxes, As to the former,

state aid to education is authorized by article IX,

section 6, of the state Constitution, which directs the

Legislature to provide a state school fund for apportion-

ment each year in an amount not less than $180

per pupil in average daily attendance; that the fund

shall be apportioned annually as the Legislature may

provide, through the school districts; and that the Legis-

lature must apportion at least $120 per pupil in the

district during the next preceding fiscal year, and at

least $2,400 to each school district in each fiscal year,

As to the /atter, assistance to schools from local

district taxation, the subject of plaintiffs’ challenge

herein, is authorized by article XIII, section 21, of

the Constitution which provides; “Within such limits

as may be provided under Section 20 of this Article

[allowing the Legislature to provide maximum local

property tax rates and bonding limits|, the Legislature

shall provide for an annual levy by county governing

bodies of school district taxes sufficient to provide

annual revenues for each district that the district's

board determines are required for its schools and district

functions,”

Paraphrased, section 21 requires the Legislature to

adopt a school financing system in which each county

aufifine

may levy annually a school district tax in an amount

sufficient to provide the revenues deemed necessary

by each district board, Since under our Constitution

property must be assessed in, and taxed only by, the

county, city and district in which it is situated (art,

XIII, § 14; see San Francisco ete, Ry, Co, v. Scott

(1904) 142 Cal, 222, 229 [75 P, 575]; Smith-Rice

Heavy Lifts, Ine, v, County of Los Angeles (1967)

256 Cal.App.2d 190, 200 [63 Cal.Rptr, 841]; Ehrman

& Flavin, Taxing Cal, Property (1967) § 162, at

pp. 145-146), it necessarily follows that article XIII

of the Constitution, section 21 in conjunction with sec-

tion 14, contemplates a school financing system in which

each individual district's needs are satisfied from the

taxable wealth of that district, namely, the present

system which the majority find unconstituitonal, The

majority describe the foregoing reasoning as a “non

sequitur,” If, however, section 21 empowers the Legis-

lature to provide for district tax levies to assure ade-

quate school revenues, and if under section 14 the

property subject to tax by the district to generate

those revenues must repose within the district, wherein

lies the “non sequitur’? Do not sections 14 and 21,

in combination, authorize, constitutionally, a system

whereby levy of taxes on local property within the

district, supplemented by state aid, shall constitute the

source of school financing?

The majority assert that the constitutional provision

at issue was intended to authorize a different, more

equitable, system not based upon disparities in district

wealth. The concede that the state Constitution “allows

variation in school district expenditures” (ante, p, 770,

italics added), One would presume that expenditures

are more closely related to the quality of education

—- =

than generalized equality in the value of properties

subject to district school taxes. However, we emphasized

in Serrano I that the state Constitution did not require

‘an equality of spending between various school dis-

tricts. Our words were “. . . we have never interpreted

the constitutional provision to require equal school

spending; . . .” (5 Cal.3d at p. 596.) Nonetheless,

the majority insist that since the Constitution does

not expressly authorize district wealth disparities as to

the source of district revenues, the present system cannot

be deemed protected by its shield. In the majority's

view, “Such disparities . . . are the result of legisla-

tive atcion, not constitutional mandate.” (Ante, p. 772,

italics in original.) (In this connection, I do not con-

tend, of course, that the California Constitution man-

dates the present system of school financing, but only

that it permits or authorizes that system. )

The central theme of the majority is that the Legisla-

ture has somehow abused its constitutional authority

by drawing school district boundary lines in a manner

permitting variations in district wealth. As the majority

put it, “It is that action [drawing district boundary

lines], which we reiterate is the product of legislative

determinations, that we today hold to be in violation

of our state provisions guaranteeing equal protection

of the laws.” (Ante, p. 772, italics in original.) Yet,

again it is manifest that the Legislature derives its

power to create and classify school districts from the

same Constitution (art. IX, § 14). Furthermore, we

ourselves have long held that “The power of the legisla-

ture over school districts is plenary. [Citations.| It

may divide, change, or abolish such districts at pleasure

. . . . [Citation.]” (Worthington S. Dist. v. Eureka

S. Dist. (1916) 173 Cal. 154, 156 [159 P. 437],

=~ =

italics added; see Hughes v. Ewing (1892) 93 Cal.

414, 417 [28 P. 1067].) It seems to me self-evident

that if the framers of our Constitution had intended

to impose substantial restrictions upon the plenary pow-

er of the Legislature over school district boundaries,

they would have expressly so provided. They did not

do so. I suggest that it is highly unlikely that such

a drastic and dramatic restriction on plenary power

as the majority now impose would have been intended

to occur wholly by implication. With due deference,

I suggest that, to the contrary, we must presume that

those who adopted section 21 (and its predecessor

sections) were fully aware of the fact that there existed

for years disparities in district wealth and that the

effect of the continued exercise of such penary legisla-

tive power would result in continued disparities, which

permitted wealthier districts to allocate more funds

for educational purposes. (Undoubtedly, the existence

of such disparities was a motivating factor in creating

the state school fund to supplement local revenues.

(Art. IX, § 6.)) The inequitable result of district

wealth disparities is forcefully and eloquently demon-

strated by the majority. Nevertheless, once we determine

that the action in question is constitutionally authorized

the sociologically unsatisfactory or, indeed unaccept-

able, consequences are matters for legislative correction.

We have often insisted that a constitutional enactment

be viewed in the “light of its historical context and

the conditions existing prior to its enactment.” (Mulkey

v. Reitman (1966) 64 Cal.2d 529, 534 [50 Cal.Rptr.

881, 413 P.2d 825], and cases cited.) Section 21

of article XIII, was adopted as recently as 1974. We

have been told that its purpose was to restate. “without

change in meaning” the provisions of former article

=~ =

IX, section 6, adopted in 1946. (See Cal. Const. Re-

vision Com., Proposed Revision of the Cal. Constitution

(1971) pt. 6, p. 36.) Section 6 provided: “The Leg-

islature shall provide for the levying annually by the

governing body of each county, and city and county,

of such school district taxes, . . . as will produce

in each fiscal year such revenue for each school district

as the governing board thereof shall determine is re-

quired in such fiscal year for the support of all schools

and functions of said district authorized or required

by law.”

Thus, as early as 1946, the California Constitution

expressly authorized a system of local school district

financing. Indeed, the original 1849 Constitution pro-

vided that any local school district which neglected

to “keep and support” its school might lose its propor-

tion of the interest from the public school fund. (Art.

IX, § 3.) Local school district financing systems in

various forms, but all of them based upon individual

district wealth, have been in operation from this state’s

inception surviving numerous amendments to the consti-

tutional provisions authorizing local support of public

schools. (See Sweet, History of the Public School System

in Cal. (1876) at pp. 60-62, 66.)

The foregoing review of constitutional history is not

-new. A close examination of our own previous analysis

of the problem demonstrates that the same conclusions

I have reached were also necessarily implicit in our

opinion in Serrano I. Respectfully, I find unconvincing

the majority’s attempt to explain away our definitive

disposition in Serrano I of the state constitutional issue

whether district wealth disparities can survive equal

protection analysis.

atin

First, in describing the present school financing sys-

tem, Serrano I acknowledged that wealth-produced var-

iations in district spending are a necessary by-product

of the system authorized by the state Constitution.

We said: “Pursuant to article 1X, section 6 (the prede-

cessor to art. XIII, § 21] of the California Constitution,

the Legislature has authorized the governing body of

each county, and city and county, to levy taxes on

the real property within a school district at a rate

necessary to meet the district’s annual education budget.

(Ed. Code, § 20701 et seq.) The amount of revenue

which a district can raise in this manner thus depends

largely on its tax base—i.e., the assessed valuation

of real property within its borders.” (5 Cal.3d at

p. 592, italics added.) The foregoing, contrary to the

majority view (ante, p. 771, fn. 50), is founded upon

constitutional (art. IX, § 6 (the predecessor to art.

XIII, § 21)), not legislative, authority.

Second, in Serrano I, plaintiffs had argued that the

present system was invalid under article IX, section

5, of the state Constitution, which section requires

the Legislature to provide for a system of common

schools. In rejecting the argument we said that, “While

article IX, section 5 makes no reference to school

financing, section 6 of that same article [the predecessor

to art. XIII, § 21] specifically authorizes the very

element of the fiscal system of which plaintiffs com-

plain.” (5 Cal.3d at p. 596, italics added.) What

was the “element of the fiscal system of which plaintiffs

complain”? The majority insist that this phrase related

to “variations in expenditures per ADA.” I think it

arguable, however, that this “element” in question had

broader implications and included not only expenditure

inequalities but district wealth disparities as well. For,

online

on the page previous to the above quotation, we had

described plaintiffs’ preliminary contention as follows:

“Plaintiffs’ argument is that the present financing meth-

od produces separate and distinct systems, each offering

an educational program which varies with the relative

wealth of the district’s residents.” (Id., at p. 595,

italics added.) I think that it is this element which

section 6 of article IX authorizes, and not merely

the existence of “variations in expenditures per ADA”

(as suggested by the majority herein).

Third, in Serrano I, we stated that “it is clear

that such [locally raised] revenue is a part of the

overall educational financing system. As we pointed

out, supra, article IX, section 6, of the state Constitu-

tion specifically authorizes local districts to levy school

taxes.” (/d., at p. 598, fn. 12.) Once again the question

must be put: If under article IX local district taxes

are specifically authorized for school support, and if,

under article XIII, of that same Constitution, such

taxes necessarily must be assessed upon local wealth,

then how is the system rendered unconstitutional under

article I?

Finally, in Serrano I defendants had argued that

any discriminatory effects arising from the present sys-

tem were “de facto” in origin and accordingly not invidi-

ous in nature. We flatly, and in my opinion wisely, re-

jected the argument, noting that “Indeed, we find the

case unusual in the extent to which governmental action

is [italics in orig.] the cause of the wealth classifica-

tions. The school funding scheme is mandated in every

detail by the California Constitution and statutes.” (Id.,

at p. 603, italics added.) The majority insist that

the constitutional provision mandates “only that there

be a system allowing for local decision as to the level

—_ =

of school expenditures,” (ante, pp. 771-772). I fail,

however, to see how much local decision making, neces-

sarily based upon available local wealth as supplemented

by state aid, differs in any material respect from the

financing system under scrutiny herein.

In summary, we must reconcile two separate pro-

visions of the state Constitution, first, a general expres-

sion guaranteeing our citizens “equal protection of the

laws,” and second, a specific constitutional provision

authorizing the Legislature to adopt a school financing

system whereby each district finances its own educa-

tional needs. The majority, purporting to follow the

well established rule that conflicts between constitu-

tional or statutory provisions should be avoided, con-

strue article XIII, section 21, I respectfully suggest,

in a manner which contradicts its plain meaning, ignores

the “historical context” of the section, and conflicts

with our own recent construction of that section in

Serrano I. The irreconcilable conflict arising from the

majority’s rejection of the Rodriguez analysis necessarily

leads to a result which is not palatable to them—-name-

ly, in accordance with Serrano I, the conflict can

be resolved in only one manner: the more specific

provision of the Constitution must prevail. (5 Cal.3d

at p. 596.) I am unable to accept the majority’s

conclusion that the present system of school financing

in this state, whose essential elements are expressly

authorized by specific provisions of the state Constitu-

tion, is at the same time in violation of the general

equal protection clause of the same Constitution.

Few constitutional-principles are more firmly estab-

lished and accepted than the rule that all presumptions

and intendments favor the validity of legislation. The

case for invalidity of statutes must reach beyond

eee

mere doubt to the level at which we fairly can say

that “‘“. . . their unconstitutionality clearly, positively,

and unmistakeably [sic] appears.”’” (Jn re Ricky

H. (1970) 2 Cal.3d 513, 519 [86 Cal.Rptr. 76, 468

P.2d 204].) Similarly, it is equally well settled that

there exists a strong presumption in favor of the Legis-

lature’s interpretation of a provision of the Constitution.

(Methodist Hosp. of Sacramento v. Saylor (1971)

5 Cal.3d 685, 692 [97 Cal.Rptr. 1, 488 P.2d 161].)

Thus, we must presume that the Legislature properly

construed the scope of its authority under article XIII,

section 21, of the Constitution, and we must further

presume that the resulting school financing legislation

is constitutional. The foregoing principles must be ac-

corded great weight in determining the constitutional

validity of the present school financing scheme.

I am wholly sympathetic toward the majority’s efforts

to achieve a more fair and equitable result in this

case. I also fully acknowledge the vital role which

education must play in our modern society, and the

absolute necessity of assuring an adequate education

for all of our citizens. There could be no more worthy

goal. Yet, and I say this with the utmost deference,

as I conceive our role we are not free to roam in

search of administratively acceptable answers, but must

work within the confines of constitutional limitations,

leaving to the Legislature the selection of those parti-

cular responses which are most appropriate to a develop-

ing need. (Cal. Const., art. III, § 3.) So long as the

Legislature has opcrated under its constitutional author-

ity we should withhold intervention. It is this principle,

I believe, which prompted the wise and pertinent ad-

monition of the United States Supreme Court in the

closing sentences of its Rodriguez decision: “These

matters merit the continued attention of the scholars

who already have contributed much by their challenges,

But the ultimate solutions must come from the law-

makers and from the democratic pressures of those

who elect them,” (San Antonio School District v, Rod-

riguez, supra, 411 U.S, at pp, 58-59 [36 L.Bd.2d

at p. 58], italics added, )

I would reverse the judgment,

—

CLARK, J.—I dissent,

Our schools serve nearly 5 million students, spending

over $5 billion, (1973-1974, Cal, Public Schs, Selected

Stats,, pp, 84-85, tables [V-1 B, [V-2 B.)' The educa-

tional system works amazingly well, considering its

huge size, the complexity of its support, and the great

diversity of geography, population and commerce within

our state, The system provides a high and relatively

uniform level of educational opportunity,

Approximately half our schools’ budget of $5 billion

comes from local real property tax, Eliminating this

resource would be unfair to our youth, jeopardizing

the quality of their education, It is questionable whether

raising an additional $24 billion through other taxes

is politically feasible, The answer lies with the legisla-

tive and executive branches of state government, While

neither urging abolition of local property tax nor invali-

dating article XIII, section 21, of our Constitution

providing for local property taxes and local control

of the spending level, the majority's requirement for

absolute equality in the opportunity for school finances®

will have this effect.

Our present system of school financing has three

abilities or goals; (a) to provide a high level of equality

in access to resources;’ (b) to maintain a high level

'The Selected Statistics is an official publication and all

pose and table references are to it unless otherwise indicated,

he 1973-1974 school year is the first analyzed under Senate

Bill No, 90 and Assembly Bill No, 1267,

"The majority state in a variety of ways that we may not

allow the availability of educational opportunity to vary as

a function of the assessed valuation per pupil, (Bg., ame, pp.

ae 756, 768.)

Equal educational rtunity is an important goal of govern

om However, the mafority do not concern themacives diseet-

(This footnote is continued on next page)

—=§2—-

of local control over the nature and amount of expendi-

ture; and (c) to require a substantial level of fiscal

responsibility, In a system where one branch of govern:

ment finances in whole or in part another branch

which is given control over the expenditure, the three

goals are frequently in conflict, The majority's goal

of absolute equitable opportunity for school financing

means sacrificing either local control or fiscal responsi-

bility, Our legislative and executive branches, no doubt

based on their experience with numerous federal-state

financing programs, have establi

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