Amicus Curiae Brief — San Antonio Independent School Dist. v. Rodriguez

No, 71-1332

In Tue recat

- ‘Court of the United States

Ocroszr Term, 1971

SAN ANTONIO INDEPENDENT SCHOOL

DISTRICT, er At.,

rome Appellants,

4

I-N-D-E-X

Inrerests OF Amici CURIAE

STATEMENT OF THE CASE

STATEMENT OF FAcTS

CONCLUSION

Appendix A—Order of Court in Guerra v. Smith

(W.D. Tex. July 20,1971) la

Appendix B—Lawyers Committee for Civil

Rights Under Law, Memorandum

of October 29, 1971, filed by plain-

tiffs in Milliken v. Green 3a

Appendix C—Hearings before the Select Com-

mittee on Equal Educational Op-

portunity of the United States Sen-

ate, 92nd Congress, Ist Session,

Part 16 B, September 28, 1971

(testimony of Mrs. Sarah Carey) 10a

Appendix D—Shanks, Educational Financing and

Equal Protection. 1 Journal of Law

and Education 73 (1972)... sts 29a

TABLE OF CITATIONS \

Cases

Abernathy v. Carpenter, 208 F. Supp. 793 (W.D.

Mo.), aff’d 373 U.S. 241 (1963) 12

Adickes v. Kress and Company, 398 U.S. 144 (1970) 12, 15

Alemite Manufacturing Co. v. Staff, 42 F. 2d 832

(2d Cir.1930) te 15

Askew v. Hargrave, 401 U.S. 476 (1971) __ 13, 14, 23

Board of Education of Muskogee v. State of Okla-

homa, 409 F. 2d 665 (10th Cir. 1969) 2.0, 12, 15

PACE

Burress v. Wilkerson, 397 U.S. 442 (1970) soivias Sig ee

Bussie v. Long, 383 F. 2d 766 (5th Cir. 1967) ... 12

Carmichael v. Southern Coal Company, 301 USS.

495 (1937) 10, 11,23

Dandridge v. Williams, 397 US. 471 (1970). 11,2

Employees of Dept. of Public Health v Dept. of

Public Health, 452 F. 2d 820 (8th Cir. 197 1) 13

Georgia Ry. Co. v. Redwine, 342 U.S. 299 (1952)... 2B

Gordon v. Lance, 403, U.S. 1 (1971) as 10,23

Great No. Life Ins. Co. v. Reed, 322 U.S. 47 (1944) 13

Grey v. Morgan, 371 F. 2d 172 (7th Cir. 1966) ...... 12

Griffin v. Breckinridge, 403 U.S. 88 (1971) 12

Guerra v. Smith, W.D. Tex. No. A-69-CA-9 (W.D.

MINA? oe 10

Gunn v. Committee to End the War, 399 U. Ss. 383

(1970) . cae 14

Hornbeak v. “Hamm, 283 F Supp. 549 (MD. ‘Ala.

1967), aff’d 393 U.S. 9 (1968) ......... 12

International Longshoremen’s Association Vv. _ Phila-

delphia Marine Trade Association, 389 U.S. 64

COE ok cee eee 14

James v. Valtierra, 402 US. tee 10878) 6 “1, 13, 23

Lindsey v. Normet, 40 L.W. 4189 (U.S. Sup. Ct.

MAY ces i oe ee ll

Lynch v. Household Finance Co., 40 L.W. 4335 (U.S.

Bem. CR 20S) occ... ne

McInnis v. Ogilvie, 394 U.S. 322 (1969) oiiaens ‘* 13,23

McInnis v. Shapiro, 293 F. Supp. 327 (N.D. Ill.

1968), aff'd 394 U.S. 322 (1969) ._. 13

MeMillan v. Board of ee 430 F. 2d 1145 (2nd

Cir. 1970) .

Milliken v. Green (ED. Mich. 1971) - BI 12

Rodriguez v. San Antonio School District, 337 F.

Supp. 280 (W.D. Tex. 1971) ........ .1,3,4,9, 1

Samuels v. Mackall, 401 U.S. 41 (1971) ........ Nae ee 12,23

iii

PAGE

Serrano v. Priest, 5 Cal. 3d 584, 487 P. 2d 124 (1971)

1, 3,9, 10, 11

Snowden v. Hughes, 321 U.S. 1 ( 1944) 12

Spano v. Board of Education, 328 N.Y.S. 2d 229 (Sup.

Ct. Westchester Co. 1972) 8,11

United States v. Haley, 358 U.S. 644 (1958) 23

United States v. Ohio, 385 U.S. 9 (1966) 23

Van Dusartz v. Hatfield, 334 F. Supp. 870 (D. Minn.

1971) 10, 11

Watson v. Buck, 313 U.S. 387 (1941) 14

Westbrook v. Mihaly, 2 Cal. 3d 765, 471 P. 2d 487,

vacated 403 U.S. 915 (1971) 10

Constitutional Provisions, Statutes, and Rules

Federal Rules of Civil Procedure, Rule 65 (d) 14

28 U.S.C. §1341 12

#22 U.S.C. §1983 _ le, 12

_ United States Constitution, Article IV 4

Miscellaneous

Advisory Commission on Intergovernmental Rela-

tions, Who Should Pay for Public Schools (1971) 19

Andrews, Tax ‘Revolution’, Wall. Street Journal,

cousin 0. Geka Ge eeumem

Bassett, Leaders of Urban Schools Oppose Dollar-A-

Scholar, Baltimore News American, March 16,

meee, 1 .....:..: ome cos, 4

Central Advisory Council on Education of Great

Britain, Children and Their Primary Schools

Coleman, Equality of Educational Opportunity

ie a 17

9

iv

PAGE’

Coleman, The Struggle for Control of Education, in

Bowers (ed.), Education and Social Policy: Local

Control of Education (1970) at64 19

Coons, Clune and Sugarman, Private Wealth and

Public Education (1969) . ae 4,9, 11

Emerson, Haber’ and Dorsen, Political and Civil

Rights in the United States (2d Ed., 1967) . 12

Hazard, Social Justice Through Civil Justice, 36

U. Chi. L. Rev. 699 (1969) 2

Hearings Before the Select Committee on Equal Edu-

cational Opportunity, United States Senate, 90th

Congress, 2nd Session (1971) ... 2, 3, 4, 5, 6,89

Kirp, The Poor, The Schools, and Equal Protection,

in Harvard Educational Review, =e Educa-

tional Opportunity (1969) .............. 6

Kurland, Equal Educational Opportunity: The Limits

of Constitutional Jurisprudence Undefined, 35

U. Chi. L. Rev. 583 (1968) 0, 13

Lutz, Can the Property Tax Be Replaced? Wall

Street Journal, Feb. 9, 1972, pg. 14................. 16

Michelman, On Protecting the Poor Through the

Fourteenth Amendment, 83 Harv. L. Rev. 7

6 |) 1

Myers, Second Thoughts on the Serrano Case, City:

The Magazine of the National Urban Coalition,

Vol. 5, No. 6 (Winter 1971) on... 4

President’s Commission on School Finance, Schools,

People, and Money, Final Report (1972) | 7,17

Simons, Economic Policy for a Free Society ( 1948) 7

Taylor, The Richmond Ruling, Washington Post

January 16, 1972, pg. Bel ns. 2

United States Office of Education, Finances of Large-

City School Systems: A Comparative Analysis

6 | 7} nan 3

Wise, The California Doctrine, Saturday Review,

November 20; 1971, pg. 78 ees 7

_ ,

a

:

In THE

Supreme Court of the United States

Ocroser TERM, 1971

No. 71-1332

SAN ANTONIO INDEPENDENT SCHOOL

DISTRICT, er at.,

Appellants,

v.

DEMETRIO P. RODRIGUEZ, er A .,

Appellees.

On APPEAL FROM THE UNITED States District Court FOR

THE WESTERN District or TExAs

BRIEF OF AMICI CURIAE IN SUPPORT

OF JURISDICTIONAL STATEMENT

INTERESTS OF AMICI CURIAE

Amici Curiae are representatives of state governments,

o political subdivisions, in States which have sys-

tems of school financing which can be viewed as incon-

sistent with the Serrano-Rodriguez rule. In most of these

States suits are pending as part of a coordinated campaign

attacking the nation’s school financing system. In con-

sequence of time limitations amici have not been able to

cure the joinder in this brief of all forty-nine of the

2

American states with systems of school finance inconsistent

with the supposed constitutional principle.!

The state and local governments represented by amici

curiae all in varying degrees suffer from severe budgetary

and financial stringency. The school systems in each and all

of the states, including the school systems in the so called

“wealthier” districts, have contractual commitments to sup

pliers of services, bondholders, and teachers and/or teach-

ers’ unions foreclosing any possibility of significant reduc-

tion in expenditures in such districts. It has been authori-

tatively estimated that the cost of increasing expenditures

in each state to the level of the higher districts in the

state would approximate 8 billion dollars per annum. In

some states this outlay would result in immediate and

severe revenue crises while in others it would result merely

in an exhaustion of state taxing resources to the detri-

ment of the state’s ability to provide other essential health

and welfare services.” For all practical purposes, the only

recourse of the states would be a quest for relief from the

federal government and a resulting reduction in state and

local control over local school systems.

In each and all of the 49 states fiscal control of expendi-

tures beyond the state foundation program is vested in

local legislative bodies or school boards. The Serrano-

Rodriguez rule would shift control of almost all save minor

increments to educational expenditures to state legislative

bodies and would result in an enforced fiscal unification

of state school systems and drastic restructuring of the

1 Only Hawaii has a school finance system meeting this newly in-

vented “imperative”, and that system was not the product of demo-

cratic choice but.an inheritance from territorial government.

2 See the testimony of Dr. Charles Benson, Hearings Before the

Select Committee on Equal Educational Opportunity, United States

Senate, 90th Congress, 2nd Session, at pages 76-79 (1971) (herein-

after referred to as ““Mondale Committee Hearings”’).

, 3

political institutions and processes of all but one of the

fifty states.

The undersigned local school districts would be con-

fronted in the event of application of the Rodriguez rule

with either the need to carry out drastic reductions in edu-

cational expenditures, with concurrent wholesale teacher

firings, disruptions, and teacher strikes or with a vastly

increased tax burden for education wholly unanticipated

by municipal officials and residents and ruinous to num-

erous property owners, including elderly property own-

ers, with fixed incomes.

Many of the undersigned states have within their bor-

ders large cities with severe urban problems and substan-

tial numbers of disadvantaged residents. According to

recent studies the interests of most large cities would

suffer from application of the Serrano-Rodriguez rule, since

most large cities have higher than average tax bases and

lower than average tax effort for education in relation to

assessed valuation. These states and cities would be hin-

dered and impaired in their ability to address urban prob-

lems by a constitutional requirement that they devote huge

sums of money to elevating rural districts without pressing

educational needs or social problems to the spending levels

of the “wealthiest” suburbs. See United States Office of

Education, Finances of Large-City School Systems: A Com-

parative Analysis, D.H.E.W. Publication + OEF7229 ( 1972);

Select Committee on Equal Educational Opportunity,

United States Senate, The Financial Aspects of Equality

of Educational Opportunity and Inequities in School Fi-

nance (January 1972), pages 66-73; Hearings Before the

Select Committee on Equal Educational Opportunity,

United States Senate, 92nd Congress, First Session, part 21,

pages 10897, 10905 (Statement of Norman J. Chachkin,

NAACP Legal Defense and Educational Fund, Inc., Novem-

os

4

ber 30, 1971); Myers, Second Thoughts on the Serrano Case,

City: The Magazine of the National Urban Coalition, Vol-

ume 5, No. 6, page 38 (Winter 1971); Taylor, The Rich

mond Ruling, The Washington Post, January 16, 1972

pages B 1, B 5;3 Bassett, Leaders of Urban Schools Op-

pose Dollar-A-Scholar, Baltimore News American, March

16, 1972, page 1, column 4.

Each~and all of the undersigned states possesses a re

publican form of government within the meaning of Arti-

cle Four of the United States Constitution. Each and all *

desires to maintain that system of goverment, and opposes

transfer of the power of the purse of state legislatures to

courts, either their own or those not of their creation.

STATEMENT OF THE CASE

The decision of the District Court in the Rodriguez case

purports to impose as a constitutional imperative the prop-

osition, discoverable nowhere in any constitutional provi-

sion, congressional debate, or even congressional bill that

“the educational opportunities afforded the * * * children

of the state of Texas are not made a function of wealth

, other than the wealth of the state as a whole, as required

by the equal protection clause of the Fourteenth Amend-

ment to the United States Constitution.” (Rodriguez v. San

Antonio Independent School District, 337 F. Supp. 280 at

286.) This “principle” has been somewhat differently formu-

lated by the “constitutional convention” originating it, the

meeting of the minds of the authors of Coons, Clune and

Sugarman, Private Wealth and Public Education (1969):

that a system is invalid which makes “the quality of a

child’s education a function of the wealth of his parents and

neighbors”. See also Serrano v. Priest, 5 Cal. 3d 584, 487

a in Mondale Committee Hearings, supra, part 21, pp. 10465,

1 ;

4

4

5

P. 2nd 1241.4 The first branch of this formulation, that

quality of education should not be a function of parental

wealth constitutes a direct threat, not merely to differences

among and local’ control in school districts but to private

schooling, and indeed all family provided supplements to

education. The second branch of this formulation, that

seeking constitutionally to divorce educational quality

from neighborhood characteristics, constitutes a threat not

merely to existing systems of school financing but to the

survival of the independent powers of local and, indeed,

state governments as well as to rights of free association

and migration.

These possibilities and dangers are not fanciful. The

present school financing litigation is being coordinated

throughout the country through the Lawyers Committee

for Civil Rights under Law, assisted by the framers of the

Serrano thesis, Professor Coons and his colleagues. The

Assistant Director of the Lawyers Committee, Mrs. Sarah

Carey, has outlined the impending attack on private

schools:

“(Mrs. Carey) Now if the constitution declares edu-

cation to be a fundamental interest it might be you

could attack private schools on that ground.

(Senator Mondale) The key to the Green case was

deliberate segregation, white flight, designed to es-

cape the court order.

(Mrs. Carey) That is right.

(Senator Mondale) You might say that there is a

similar constitutional principle, and that no one can

escape the public schools. Maybe that will be the law.

Go ahead.

_ ‘The Serrano court conceded “Plaintiff’s contention — that educa-

tion is a fundamental interest which may not be conditioned on

wealth — is not supported by any direct authority.” (487 P. 2d at

1255) It reached its conclusion in an opinion replete with quotations

from the Coons book.

(Mrs. Carey) That is roughly what I wanted to say”

(Mondale Committee Hearings at page 6884, Appen-

Gix C hereto) (App. 28a).

Dr. Coons has also suggested that in light of the fiscal

requirements imposed by Serrano:

“I think the amount that would already be taken in

personal income and other statewide taxes for the

general support of education would be enough so that

most people would not be able to afford the support

of public education and private education. * * * And of

course, it is up to the state as to whether they can do

that. The state, after all, would set some kind of ade-

quate minimum which every child should have avail-

able in public education. A district would have to

stay in the system.” (Mondale Committee Hearings

pages 6883-84, Appendix C hereto) (emphasis added)

(App. 27a).

Other writers have acknowledged that there is little stop

ping place in plaintiffs’ logic short of compulsory state

run boarding schools on the early Soviet model. See Kirp,

The Poor, The Schools and Equal Protection, in Harvard

Educational Review, Equal Educational Opportunity (1969),

at 155-56. It is integral to the Serrano-Rodriguez principle

that local school districts are to be forceably prevented

from spending additional funds on education beyond those

authorized by the State.5

5 Professor Coons, in a minor qualification of this, has proposed a

system of “power equalizing” which would allow districts to supple-

ment state authorized funds from local property taxes provided that

rich districts surrendered a portion of the taxes raised for this pur-

pose to the poorer districts. He has acknowledged ‘‘of course, there

are certain problems inherent in that, not the least of them the political

problem of recapture from the local district. I am informed by people

who know these things that it is politically difficult to establish a sys-

tem in which, if Beverly Hills is to spend $1,000, it may raise $1,500.

It is cosmetically bad politically.” (Mondale Hearings (App. 24a)

page 6882). Even this largely cosmetic modification of the equal-

spending rule has drawn violent criticism from some zealots for ju-

7

The effect of the principle and its allied conception of

education as a “fundamental interest” is to proclaim that

education is so “fundamental” that parents and local gov-

ernments must be prevented from spending their money on

it. “The application of this principle to all areas of cori

sumption would do away in effect with income differences,

destroying the whole system of incentives on which every

society is fouxded;’., Coleman, Preface to Coons, Private

Wealth and Public Education (1969) at XIV. See Simons,

Economic Policy for a Free Society (1948) at 28-29:

“A society based on free responsible individuals or

families must involve extensive rights of property.

The economic responsibilities of families are an essen-

tial part of their freedom, and like the inseparable

moral responsibility are necessary to moral develop-

ment. Family property in the occidental sense of the

primary family, moreover, is largely the basis of pre-

ventive checks on population and of the effort to in-

crease personal capacity from generation to genera-

tion, that is, to raise a few children hopefully and well

or to sacrifice numbers to quality in family reproduc-

tion.”

Counsel associated with the committee coordinating the

Serrano-Rodriguez litigation have not merely acknowl-

edged its relevance for family-provided supplements to

education, but also its implications for the remaining other

powers of local government. Thus Mrs. Carey has told us

that the rule sounds. the doom of the locally collected and

locally assessed property tax:

dicial intervention in these matters. See Wise, The California Doc-

irine, Saturday Review, November 20, 1971, 78 at 82: Michelman,

On Protecting the Poor Through the Fourteenth Amendment, 83

Harvard Law Review 7 at 54-59 (1970) ; President’s Commission on

School Finance, Schools, People and Money, Final Report (1972) at

33. In light of this, the Serrano-Rodriguez principle realistically

viewed, demands full state funding, or at least fully state controlled

funding, as a matter of constitutional compulsion.

wi

8

“The decision does not invalidate the property tax,

but it requires that if that tax is to be retained, the

distribution of the income generated by it must be

reformed. This probably cannot be done unless the

manner in which the tax is collected is also reformed.”

(Mondale Committee Hearings at 6867) (App. 1la).

Further, once the fundamental objective of the propon-

ents of this litigation is achieved — a declaration from the

court that education is a “fundamental interest” — a fur-

ther wholesale assault on state treasuries will begin:®

“And then finally — and this is an issue the press has

ignored totally — if education is a fundamental in-

terest, as the Serrano court declared it to be, what

flows from that? * * * There are a whole lot of things

in different directions that flow from the finding of

fundamental interests. In other law suits which raise

the point directly — which this case didn’t —it may

well be that you will find fundamental interest in-

terpreted as requiring whatever kinds of support a

student needs to exercise that interest the same as a

criminal defendant may need counsel. The student

may need transportation, he may need lunches, or

special instructional aids. Ultimately, five or ten years

down the road, there will be cases that flow from the

fundamental interest interpretation just as there have

been in the voting rights and criminal defense areas.”

(Mondale Committee Hearings at page 6868) (Testi-

mony of Mrs. Carey) (App. 12a).

Still others associated with this litigation have noted

that the implications of this case are not confined to edu-

cation but extend to all the surviving powers and respon-

sibilities of state and local government, and indeed to the

® In Spano v. Board of Education, 328 N.Y.S. 2d 229, 234 (Sup. Ct.

Westchester Co. January 17, 1972), the court, in declining to follow

the Serrano and Rodrigues cases, perceptively referred to them as “ex-

ercises in a forensic ‘game plan’ ”’.

9

federal budgeting process. Thus Professor Coons has ex-

pressed the view that the cases render constitutionally

vulnerable such programs as the federal impacted area

aid program. (Mondale Committee Hearings, at 6848-49).

Further, we are told:

“Serrano ‘opens a very large door’, says John Silard,

a Washington, D. C. attorney involved in school tax

litigation. For the first time, he says, the courts are

requiring ‘equal protection’ in public programs. They

are holding states accountable for how and where

they spend public money. In his view, this means ‘a

revolution in public services, the schools, he predicts,

are merely ‘the first bite at the big apple. Welfare obvi-

ously comes next, and I guess health, too.’ * * * Some

lawyers predict that if education is accepted as a fun-

damental interest, other public services are bound to

follow. But they don’t like to Say it out loud. ‘They

want this to stick’, one attorney says. ‘You stress that

education isn’t like garbage. We are playing a game

here. You have to (in order) not to frighten the

courts away from a proposition that’s sound.’” An-

drews, Tax “Revolution”, Wall Street Journal, March

13, 1972, pages 1, 12.

Nor is this all. Professor Coons and his collaborators

have included in their book an appendix entitled “The

State — Nation analogy to the District — State picture”,

suggesting a constitutional obligation to equalize educa-

tional spending in all states. Coons, et al., supra at 465-68.

Indeed the assumed constitutional requirement of Serrano

and Rodriguez of a relationship between benefits and taxes

jeopardizes not merely finance systems for various public

Services, state and national, but all regressive taxes (the

sales tax, the property tax, etc.), all regressive expendi-

ture programs (expenditures for national parks and for

higher education, for example), and all association of re

gressive taxes with regressive expenditures (e.g. use of

-

—

a cigarette tax for purposes of higher education and the

catalogue of other examples contained in Mr. Justice Car-

dozo’s opinion in Carmichael v. Southern Coal Company,

301 U.S. 495 (1937)). Such are the implications of the

principle at issue in this case.

10

STATEMENT OF FACTS

In the brief compass of an amici curiae memorandum

in support of a jurisdictional statement, a comprehensive

statement of the facts of Rodriguez is not in order. A num-

ber of features of the case should, however, be noted.

1. The case followed, and in large measure uncritically

relied upon, the decisions of the Supreme Court of Cali-

fornia in Serrano v. Priest and of Judge Miles Lord in the

United States District Court of Minnesota in Van Dusartz

v. Hatfield, 334 F. Supp. 870 (D. Minn. 1971). Indeed the

Rodriguez opinion is inconsistent with a prior order by one

of the members of the Rodriguez court in Guerra v. Smith,

(W.D. Tex. No. A-69-CA-9), appeal pending, handed down

on July 20, 1971 prior to the Serrano and Van Dusartz

cases (Appendix A hereto). The opinion of the California

court in Serrano is representative of that court’s unre

strained approach to equal protection cases. See West-

brook v. Mihaly, 2 Cal. 3d 765, 471 P. 2nd 487, unanimously

vacated 403 U.S. 915, invalidating a two-thirds majority

requirement for school bond issues.? The opinion rested in

T Notwithstanding this unanimous reversal, the California court re

lied on its own opinion in Westbrook as precedent for Serrano, 487 P.

2nd at 1249. This court in Gordon v. Lance, 403 U.S. 1 clearly re

jected the proposition that educational finance was a fundamental in-

terest activating a strict equal protection standard-a proposition urged

upon it by the appellees and by the National Education Association 3

amicus curiae in Gordon v. Lance. The pertinence of Gordon v. Lance

and of this Court’s decision in the Westbrook case for Serrano-typ

litigation has been acknowledged by one of the leaders of the Lawyers

Committee for Civil Rights sponsoring the present school financing

litigation, Herschel Shanks, Esquire. (See Appendix D, 57a).

aa

| 11

large measure upon cases and doctrines peculiar to Cali-

fornia and was discounted in advance by Professor Coons

and other proponents of the Serrano principle. See Coons,

Clune and Sugarman, op..cit. supra at 452. The Van Du-

sartz case, the first intervention by the federal judiciary in

these matters, was decided barely a month after its filing,

by a procedure characterized by successful counsel as a

‘nonappealable declaratory judgment’ upon preliminary

motion, after thirty minutes of oral argument, upon frag-

mentary briefs, on the day of the convening of a special

session of the state legislature.

Upon this fragile judicial foundation, a vast superstruc-

ture of propaganda has been erected in recent months.

2. The Serrano opinion totally failed to cite, and the

Van Dusartz opinion cited only to disparage, this Court’s

recent and clearly relevant opinions in Dandridge v. Wil-

liams, 397 U.S. 471 (1970) and James v. Valtierra, 402 U.S.

137 (1971). The Rodriguez opinion, true to form, failed

even to cite either of these cases (to which may now be

added Lindsey v. Normet, 40 L.W. 4189). As recognized

by the court in Spano v. Board of Education, 328 N.Y‘S.

2d 229 (Sup. Ct. Westchester Co., Jan. 17, 1972), the Ser-

rano and Rodriguez decisions misconceived and disre-

garded this court’s decisions in McInnis v. Ogilvie, 394

US. 322 (1969) and Burruss v. Wilkerson, 397 U.S. 442

_ (1970) in both of which cases the so-called ‘Serrano prin-

ciple’ was urged upon this Court in the briefs of parties

and amici curiae, including Professor Coons, and in both

of which summary affirmances over dissent resulted.

_ 3. None of these opinions cite or even consider the prin-

ciples relating to taxation and benefits enunciated by Jus-

_ tice Cardozo for this Court in Carmichael v, Southern Coal

_ Company, 301 U.S. 395 (1937).

12

4. The Rodriguez court totally failed to consider and

discuss the problems of federal jurisdiction presented by

the claims asserted before it including the following prob-

lems, all related to the refusal of courts to interfere with

state taxing and budgetary decisions:

a) the problems presented by the Tax Injunction

Act, 28 U.S.C. Section 1341, see Samuels v. Mackall, 461

U.S. 41 at 66 (1971); Lynch v. Household Finance Co.. 40

L.W. 4335, 4337 n. 6 (Sup. Ct. March 21, 1972) and av-

thorities there cited;

b) the problems presented by the fact that the only

pecuniary interest at issue was essentially that of state tax-

. payers in light of Lynch v. Household Finance Co., 40 L.W.

4335, 4337 n. 6; Abernathy v. Carpenter, 208 F. Supp. 793

(W.D. Mo.), aff'd 373 U.S. 241 (1963); Grey v. Morgan, 371

F. 2d 172 (7th Cir. 1966); Hornbeak v. Hamm, 283 F. Supp.

549 (M.D. Ala. 1967), aff’d 393 U.S. 9 (1968); and the

Fifth Circuit’s own decision in Bussie v. Long, 383 F. 2d

766 (5th Cir. 1967);

c) the problems presented by the limited scope of 42

U.S.C. Section 1983, see Snowden v. Hughes, 321 US. 1

(1944); Board of Education of Muskogee v. State of Okla-

homa, 409 F. 2nd 665 (10th Cir. 1969); McMillan v. Board

of Education, 430 F. 2nd 1145 (2nd Cir. 1970) (Friendly J.);

Griffin v. Breckenridge, 403 U.S. 88, 102 note 9 (1971):

and Adickes v. Kress and Company, 398 U.S. 144, 167 note

39 (1970). See also Emerson, Haber and Dorsen, Political

and Civil Rights in the United States, (2nd Edition 1967)

at 1435.

The substantiality of these jurisdictional questions has

been acknowledged even by counsel associated with the

Lawyers’ Committee for Civil Rights in a memorandum

filed in court as an exhibit by plaintiffs in Milliken v.

13

Green, a school financing case pending in Michigan. (Ap-

pendix B hereto).

d) Further, the Rodriguez court did not consider the

applicability of the abstention doctrine, in light of this

court’s clearly revelant decision in Askew v. Hargrave,

401 U.S. 476 (1971);8

e) In addition, the Rodriguez court did not consider

the general question of lack of federal equity jurisdiction

that the absence of viable remedies presents. See McInnis

v, Shapiro, 293 F. Supp. 327, 335-36 (N.D. Ill. 1968) aff'd

394 U.S. 322 (1969); Kurland, Equal Educational Oppor-

tunity: The Limits of Constitutional Jurisprudence Unde-

fined, 35 U. Chi. L. Rev. 583 at 597-98, 600: and see the

Mondale Committee Hearings, Supra at Part 16 B., pages

6747-48.

f) Nor were questions of justiciability considered,

notwithstanding Gordon v. Lance, 403 U.S. 1, 6 (1971);

James v. Valtierra, 402 U.S. 137, 142 (1971) and the

McInnis and Burruss cases.

8) Thraddition, there was no diseussion of the appli-

cability of the Eleventh Amendment. See Great No. Life

Ins. Co. v. Read, 322 U.S. 47, 51-52 (1944); Georgia Ry. Co.

v. Redwine, 342 U.S. 299, 304 n. 15 (1952); Employees of

Dept. of Public Health v. Dept. of Public Health, 452 F.

2nd 820 (8th Cir. 1971).

5. The procedure followed in determining these grave

questions, including the allowance to plaintiffs of leave to

file‘a lengthy last minute affidavit containing numerous

factual allegations and the disallowance to defendants of

* Even Mr. Shanks of the Lawyers’ Committee for Civil Rights has

acknowledged that this court’s decision in Askew puts the Rodrigues

plaintiffs out of federal court. (Appendix D, infra.,-p.’ 60a).

Me

14

an effective opportunity to controvert the affidavit failed

to comport with the principles of this court’s decision in

Askew v. Hargrave.

6. The delayed injunction entered by the court has a

generality and breadth violating the requirements of Rule

65 (d) of the Federal Rules of Civil Procedure, derived

from Section 13 of the Clayton Act, providing that any

order granting an injunction ‘shall be specific in terms’

and ‘shall describe in reasonable detail * * * the act or

acts sought \to be restrained’. See Gunn v. Committee to

End the War, 399 U.S. 383, 388-89 (1970); International

Longshoremen’s Association v. Philadelphia Marine Trade

Association, 389 U.S. 64, 74-76 (1967); Watson v. Buck, 313

U.S. 387 (1941). In addition it should be noted that the de

layed injunction ordered defendant state officials to reallo-

cate the funds available for financial support of the school

system “including without limitation, funds derived from

taxation of real property by school districts” notwithstand-

ing the fact that the school districts whose funds were being

reallocated were not parties to the suit. This element of

the court’s order is patently violative of Rule 65. “No

court can make a decree which will bind anyone but a

party; a court of equity is as much so limited as a court of

law; it cannot lawfully enjoin the world at large, no mat-

ter how broadly it words its decree. If it assumes to do so,

the decree is pro tanto brutum fulmen, and the persons

enjoined are free to ignore it. It is not vested with sov-

ereign powers to declare conduct unlawful; its jurisdic-

tion is limited to those over whom it gets personal service,

and who therefore can have their day in court. * * * This

is far from being a formal distinction; it goes deep into

powers of a court of equity. * * * It is by ignoring such

procedural limitations that the injunction of a court of

equity may by slow steps be made to realize the worst

> 15

fears of those who are jealous of its prerogative.” Alemite

Manufacturing Corporation v. Staff, 42 F. 2nd 832 (2nd

Cir. 1930) (L. Hand, J.).

7. Subsequent to the rendition of its opinion the Rod-

riguez court passed a subsequent order purporting to ex-

empt from its dect e payments for debt service. No ra-

tionale was tenderea ‘or distinguishing between such pay-

ments and other vested obligations such as payments under

teacher contracts in “wealthy” districts.

ARGUMENT

1, The burden of plaintiffs’ complaint is not that the

state has not equalized but rather that it has not equal-

ized enough. Insofar as the relief sought is directed

against the use by local school districts of the proceeds of

local property taxation, the complaint is founded not on

state action but upon the failure of the state to correct

consequences of differences in private wealth. The very

title of the Coons work acknowledges this. The equal pro-

tection clause and Section 1983 “was [not] meant to pro-

vide a remedy in circumstances where the state had failed

to take affirmative action to prevent widespread private

discrimination”, nor are these provisions available to rec-

tify “the inaction implicit in the failure to enact correc-

tive legislation”. Adickes v. Kress and Company, 398 U.S.

144, 167 note 39 (1970).

2. There is nothing unconstitutional about permitting

revenues to be spent where they are raised. See the dis-

cussion in Muskogee v. Oklahoma, 409 F. 2nd 665 (10th

Cir. 1969).

3. There is no classification on the basis of wealth at

issue but merely a normal consequence of the division of .

—

16

the nation into state and local governments. As a Pro-

fessor Emeritus of Public Finance at Princeton has noted:

“It comes as quite a shock to be told that the property

tax, workhorse of the tax system, is unconstitutional

after so many years of reliable service. * * * The ‘rich’

and ‘poor’ municipality must levy different rates of

property tax for the support of all other local func-

tions, but apparently the disparities of tax rates for

these purposes are still constitutional; moreover, every

state provides more or less state aid to local schools.

* * * Mother Nature is primarily responsible for the

differences in real property values * * * topography,

location and other natural features result in value dif-

ferences that cannot be eliminated. A given millage

levy will obviously produce more revenue for a gov-

ernmental unit that contains high value property

than it will for a unit that contains low value prop-

erty. It would be as reasonable to hold that the Rocky

Mountains are unconstitutional because they are not

flat enough to plow as it is to indict the property tax

because a given rate of tax will not produce the same

revenue in every district * * * we may not have to

wait long before some court will decide that a low

income family is denied equal protection of the law

because it can buy less than another family with more

income. Inequality of personal income would then be

unconstitutional.” Lutz, Can the Property Tax be Re-

placed? Wall Street Journal, February 9, 1972, page 14.

On its face the Texas system of school financing imposes

no wealth classifications. Any distinctions which exist re-

late not to the wealth of individuals but to the average

wealth of subdivisions, average wealth not necessarily co-

inciding wth average income because of commercial and

industrial property and the fact that persons can be prop-

erty-rich and income-poor and vice-versa. The statutes

make no distinctions among individuals based upon their

wealth. Even if they did they would not be unconstitu-

tional in a nation the Fifth and Fourteenth Amendments

—

17

to whose constitution protect private property. Education

is no more a fundamental interest than health, welfare,

police protection, sanitation, or virtually all save the most

ephemeral activities of local government. The fact that it

is an important governmental function does not warrant

the application of a strict standard of review with respect

to non-racial distinctions in its finance, unless it is to be

supposed even with respect to fiscal matters that legis-

latures exist only to decide unimportant questions. Nor

does this case involve state-imposed criminal disabilities

and deprivations of liberty and procedural due process to

which the Fourteenth Amendment is directly addressed

or the First Amendment and voting rights questions vital

to the survival and functioning of the political process as

to which strict judicial scrutiny may be appropriate. The

present case is not an effort to protect the political process

but to remove one of the most important areas of public

policy from political decision making.

4. The decision of the court below rests upon pre-

suppositions as to the relationship between educational

expenditure and educational quality that are contrary to

the best available evidence on the subject. See Coleman,

et al., Equality of Educational.Opportunity, (1966) (the so-

called “Coleman Report” published pursuant to the terms

of the Civil Rights Act of 1964, finding negligible relation-

ship between educational cost and educational quality);

Central Advisory Council on Education (of Great Britain)

Children“and Their Primary Schools (Two volumes 1967)

(the so-called Plowden Report also finding no significant

relationship between educational accomplishment and edu-

cational spending and class size); and see President’s

Commission of School Finance, Schools, People and Money,

Final Report (1972) at X-XI and 59. (“The relationship

between cost and quality in education is exceedingly com-

=

18

plex and difficult to document. Despite years of research

by educators and economists, reliable generalizations are

few and scattered * * * The conviction that class size has

an important or even a measurable effect on educational

quality cannot be presently supported by evidence.”) In

light of such findings Texas and other states have not acted

irrationally in declining to appropriate the approximately

8 billion dollars per year necessary to raise all school dis-

tricts to the level of the higher districts in each state. Nor

have they — or the President’s Message to Congress of

March 16, 1972 — been irrational in regarding other social

needs, including concentration of additional available funds

on truly needy urban districts and such other programs

as higher education, welfare, and mass transit as deserving

of higher priorities. It is not the function of courts to

choose between competing objects of public expenditure

or competing educational theories. The effect of the present

decisions if generally followed will be to precipitate

fiscal crises first for state governments and for presently

“wealthier” local districts and second and derivatively for

the federal government, and to detract from the ability of

all governments to address other pressing social problems.

The compelling interests of the state are apparent.

5. Only a brief summary can be given of the other ob-

jections to the Draconian decree of the Texas court. The

court’s principle that educational differences between sepa-

rate governments must be justified by a “compelling in-

terest” would lead to efforts constitutionally to compel the

national government to relieve interstate differences. It

would open to constitutional attack the federal impacted

area aid program, among other programs. It would open

to attack any disparity in spending between different

schools in the same district and result in judicial second-

guessing of the detailed administration of local school sys-

-

19

tems. It would open to constitutional attack government

programs relating to medical care, higher education, police

funds, transportation funds and library funds. It would

result in a shift in legislative struggles from struggles be-

tween subdivisions in a country whose political constitu-

encies have been, with good reason, geographically rather

than functionally defined, to struggles between program

and program and social class and social class. There is no

reason to believe that these struggles will be less divisive:

rather the contrary. The Rodriguez rule may precipitate

a flight to private education in the formerly “wealthy”

districts. Local fiscal control of schools will be eliminated

or greatly curtailed with resulting implications for educa-

tional policy and with resulting increasing use of the

schools as instruments for political change.” Great diffi-

culty will arise in taking account of variations in local

needs and costs. The writings of proponents of judicial

intervention indicate that the courts will inflict upon

themselves not merely a generation of litigation but liti-

gation in perpetuity. Judicial intervention will result in

a welter of conflicting legal commands, state, federal and

local, and resulting financial crises and school closings.

Intervention will result in massive immediate increases

in education costs similar to those that have taken place

in New Brunswick to the detriment of the state’s capacity

to address other problems.!° Any flight to private schools

in wealthier districts will decrease the political attractive-

ness of increased educational appropriations in the future

since the public schools would lose part of their most

articulate constituency. The relief sought may result in

*See Coleman, The Struggle for Control of Education, in Bowers

(ed.), Education and Social Policy: Local Control of Education 64, at

77-78 (1970).

**See Advisory Commission on Inter-Governmental Relations,

Who Should Pay for Public Schools? (1971), Chapter 1.

ee

20

use of non-property taxes and in either substantially lower

property taxes resulting in windfalls for commercial and

industrial enterprises and land speculators or a possible

shift to more regressive sales and value added taxes. The

claims rest upon prerrises as to the desirability of educa-

tional levelling that are not universally shared, since even

the disadvantaged may benefit from the consequences of

a measure of educational inequality or the existence of

bellwether school districts. The Rodriguez rule would

lead to evasions by local subdivisions by transfer of edu-

cational functions to other agencies such as library and

park boards and/or to a proliferation of the Rodriguez

principle as these evasions are pursued. The Rodriguez

rule will prevent: introduction of innovations command-

ing local but not statewide or national support, as has al-

ready begun to happen in New Brunswick, and will in the

end result in a reduction in society’s total expenditures

for education and in the total investment by the older gen-

eration in the education of the younger.!! The underlying

principles of Rodriguez cast in jeopardy the entire federal

and state budgeting process, and presuppose constitutional

limitations on regressive taxes and expenditures and “un-

fair” relationships of tax and expenditure that do not exist

and have never been held to exist. The principle advanced

is inconsistent with the delegation of powers to local gov-

ernment and with local home rule and will, if accepted, have

consequences for differences in regulatory legislation be-

tween home rule subdivisions and differences in the legis-

lation of states exercising power delegated to them by

11“The history of education since the industrial revolution shows

a continued struggle between two forces; the desire by members of

society to have educational opportunity for all children, and the desire

of each family to provide the best education it can afford for its own

children. Neither of these desires is to be despised, they both iead to

investment by the older generation in the younger.” Coleman, Preface

to Coons, supra at vii.

21

Congress. The principle advanced will impair the tradi-

tion of close fiscal accountability of local boards of educa-

tion and will in large cities terminate a process which

hitherto has given varying racial and ethnic groups a

voice in fisca} control of their educational system.

It has hitherto been thought to be an advantage of our

system of government that states and localities are not

precluded by the absence of a national majority or by the

lack of means to carry out reforms on a national scale,

from addressing needs that command majority support in

their own jurisdictions. Similarly it has been thought to

be an advantage of our system of government that local

governments may address needs not recognized by a state-

wide majority without being open to charges that their

greater means or interest constitutes a denial of equal pro-

tection of the laws. It has also been thought to be an ad-

vantage of our system that private individuals including

private individuals of comparatively modest means can

spend funds for social purposes not recognized by a ma-

jority at even the local level. Plaintiffs’ premises about

equality in education are sharply at odds with these prin-

ciples, and will make educational change in the future de-

pendent upon statewide or even national majorities.

6. As in all the school finance cases decided to date

plaintiffs failed to serve with the complaint the real

parties in interest in the litigation — those school dis-

tricts that would be disadvantaged by adoption of the

Serrano-Rodriguez rule. The court did not direct that

notice be given to such school districts; in consequence no

such districts intervened and the adversary process which

would have operated in the event that such districts, or

some of them, had been parties to the case did not come

into operation, to the detriment of the quality of the record

~~

-_,

and the presentation of the case for the present system of

school finance. Integral to the relief that plaintiffs pro-

pose is the prevention, or at least substantial burdening,

of additional local educational expenditures in so-called

“wealthier” districts, Integral to it also is an immediate

and artifically generated demand for massive public ex-

penditures on abstract equalization of rural areas at a

time of other more real and pressing social problems. ,

22

The Rodriguez decision is a recipe for a society in which

political controversies are fought out at ever higher levels

for ever higher stakes, by ever more violent. means and in

which the safety valves inherent in federal, pluralistic,

and limited government will have been constricted to the

point of extinction. Reached by processes and in reliance

upon case authorities which cannot command considered

approval, unsupported by substantial study or reasoning

and based upon strongly disputed educational theory, neg-

lectful of the jurisdictional limitations which history has

imposed upon the powers of federal courts and all courts

of equity, it constitutes an interference by the judiciary

with the legislative power of the purse running counter

to seven centuries of Anglo-American history. It consti-

tutes an unparalleled affront to the fundamental principles

of government of a nation whose very Declaration of In-

dependence contains a remonstrance against a ruler with

life tenure who “has combined with others to subject us

to a jurisdiction foreign to our constitution and unac-

knowledged by our laws; giving his assent to their acts

of pretended legislation for imposing taxes on us without

our consent”.!2

12 See Hazard, Social Justice Through Civil Justice, 36 U. Chi. L.

Rev. 699, 710-11 (1969).

23

CONCLUSION

In light of the failure of the Rodriguez opinion to cite

or even consider this court’s opinions in Carmichael v.

Southern Coal Company, 301 U.S. 495 (1937): Dandridge

v. Williams, 397 U.S. 471 (1970); James v. Valtierra, 402

US. 137 (1971); and Samuels v. Mackall, 401 U.S. 41 (1971)

and in light of its clear misconstruction of the effect of

this court’s summary affirmances in McInnis v. Ogilvie, 394

U.S. 322 (1969) and Burruss v. Wilkerson, 397 U:S. 442

(1970), its failure to give effect to this court’s pertinent

decision in Askew v. Hargrave, 401 U.S. 476 (1971), and

its failure to discuss applicable jurisdictional limitations,

summary reversal, and not merely notation of probable

jurisdiction, is in order. United States v. Haley, 358 U.S.

644; United States v. Ohio, 385 U.S. 9.

Respectfully submitted,

GEORGE W. LIEBMANN, DUKE W. DUNBAR,

SHALE D. STILLER, Attorney General of Colorado.

Special Counsel for Montgomery '

County, Marytand. ROBERT K. KILLIAN,

Attorney General of Connecticut,

RICHARD S. McKERNON, F. MICHAEL AHERN,

County Attorney for Montgomery :

County, Maryland. Assistant Attorney General

of Connecticut.

FRANCIS B. BURCH,

W. ANTHONY PARK,

Attorney General of Maryland, Attorney General of Idaho.

HENRY R. LORD,

Deputy Attorney General JAMES R. HARGIS,

a Morvend ey General

E. STEPHEN DERBY,

Assistant Attorney General THEODORE L. SENDAK,

of Maryland. Attorney General of Indiana.

GARY K. NELSON, CHARLES M. WELLS,

Attorney General of Arizona, Counsel for Bartholomew, Indiana

Consolidated School Corpora-

JAMES G. BOND, tion, its Trustees and the Seser

Assistant Attorney General intendent of Schools of Barthol-

of Arizona. omew County, Indiana,

HARRY T. ICE,

GEORGE B. GAVIT,

Special Counsel for Bartholomew,

Indiana } Consolidated School

Corporation, et al.

RICHARD C. TURNER,

Attorney General of Iowa,

_ GEORGE W. MURRAY,

Assistant Attorney General

of Iowa.

VERNON MILLER, :

Attorney General of Kansas,

MATTHEW J. DOWD,

ED COLLISTER,

JOHN JGHNSTON,

Assistant Attorneys General

of Kansas.

ED W. HANCOCK,

Attorney General of Kentucky,

CARL T. MILLER,

Assistant Attorney General

of Kentucky.

JAMES S. ERWIN,

Attorney General of Maine,

JOHN W. BENOIT, JR,

Deputy Attorney General

of Maine.

CHARLES F. CLIPPERT,

FRED W. FREEMAN,

Counsel for Bloomfield Hills,

Michigan School District.

ROBERT B. WEBSTER,

Counsel for Grosse Pointe, Michi-

gan Public School System.

WARREN SPANNAUS,

Attorney General of Minnesota,

JOHN M. MASON,

Chief Deputy Attorney General

of Minnesota,

DOUGLAS L. SKOR,

Special Assistant Attorne

General of Minnesota. ”

A. L. SUMMER,

Attorney General of Mississippi.

24

JOHN DANFORTH,

Attorney General of Missouri,

D. BROOK BARTLETT,

Assistant Attorney General

of Missouri.

CLARENCE A. H. MBYER,

Attorney General of Nebraska,

HAROLD MOSHER,

Assistant Attorney General

of Nebraska.

ROBERT LIST,

Attorney General of Nevada,

JULIAN C. SMITH, JR.,

Deputy Attorney General

of Nevada.

WARREN B. RUDMAN,

Attorney General of New

Hampshire.

GEORGE F. KUGLER, JR.,

Attorney General of New Jersey,

STEPHEN SKILLMAN,

Assistant Attorney General

of New Jersey.

E. P. RIPLEY,

General Counsel, New Mexico

State Department of Education

ROBERT B. MORGAN,

Attorney General

of North Carolina,

BURLEY B. MITCHELL, JR,

Assistant Attorney General

of North Carolina,

HEEGI JOHANNESON,

Attorney .General

of South Carolina.

WILLIAM J. BROWN,

Attorney General of Ohio.

THOMAS V. MARTIN,

Assistant Attorney General

.

of Ohio.

DANIEL R. McLEOD,

Attorney General

of South Carolina,

C. T. GOOLSBY, JR.,

Deputy Attorney. General

of South Carolina,

G. LEWIS ARGOE, JR.,

Assistant Attorney General

of South Carolina,

GORDON MYDLAND,

Attorney General

of South Dakota,

C. J. KELLY,

Assistant Attorney General

of South Dakota.

DAVID M. PACK,

Attorney General of Tennessee,

MILTON P. RICE,

ie! Attorney General

of Tennessee.

VERNON B. ROMNEY,

Attorney General of Utah,

ROBERT B. HANSEN,

Deputy Attorney General of Utah.

Lee Johnson

Attorney General

of Oregon

Peter s. Herman

Senior Counsel,

State of Oregon

JAMES M. JEFFORDS,

Attorney General of Vermont.

ANDREW P. MILLER,

Attorney General of Virginia.

SLADE GORTON,

Attorney General of Washington,

RICHARD MONTECUCCO,

Senior Assistant Attorney

General of Washington.

CHAUNCEY H. BROWNING, JR.,

Attorney General

of West Virginia,

VICTOR A. BARONE,

Assistant Attorney General

of West Virginia.

ROBERT W. WARREN,

Attorney General of Wisconsin,

BETTY R. BROWN,

Assistant Attorney General

of Wisconsin.

ee

la

APPENDIX A

United States District Court

Western District of Texas

Austin Division

A-69-CA-9

Janell Guerra, et al.

Vv.

Preston H. Smith, et al.

ORDER

Plaintiffs, as a class of students and taxpayers, seek a

declaratory judgment to the effect that the Texas educa-

tional financing scheme is unconstitutional because it vio-

lates their constitutional right to equal protection of the

laws under the Fourteenth Amendment in two respects:

(1) Plaintiffs receive a substantially inferior education

_ than do students in many other districts because of a lack

of funds; (2) Plaintiffs must pay a substantially higher tax

rate because of the low property value in their school dis-

trict, while still having less money per pupil to spend.

While the extensive exhibits which the Plaintiffs pre-

sented at hearing persuasively indicate that the State is

not providing substantially equal educational opportunities

to all its citizens, this Court can afford no relief. McInnis v.

Shapiro, 293 F. Supp. 327, 336 (N.D. Ill. 1968), aff'd sub.

nom., McInnis v. Ogilvie, 394 U.S. 322 (1969), held that

There is no Constitutional requirement- that public

school expenditures be made only on the basis of

pupil’s educational needs without regard to the finan-

cial strength of local school districts. Nor does the Con-

stitution establish the rigid guideline of equal dollar

expenditures for each student.

2a

This Court considers that binding upon the determination

of the instant- action.

Accordingly, It Is OrpErED that Defendants’ Motion to

Dismiss for failure to state a claim upon which relief can

be granted be, and is hereby, GRANTED. The above styled

case is DISMISSED.

Entered this 20th day of July, 1971, in Austin, Texas.

JAcK ROBERTS,

United States District Judge.

3a

APPENDIX B

Lawyers’ Committee

For Civil Rights Under Law

Suite 520—732 Fifteenth Street, Northwest

Washington, D. C. 20005

Phone (202) 628-8730

To: Attorneys Interested in School Finance Litigation

From: R. Stephen Browning [initials]

Subject: Request for Pleadings

Date: October 29, 1971

As of Tuesday, October 26, 1971, I have been notified

of the suits listed on the attached sheet. If your suit is

not on my list, please notify me at once and send me a copy

of your complaint. If your suit is on the list, please check

to see that I have all the pleadings. If I don’t, please send

me everything I am missing.

I am also enclosing a very timely memorandum pre-

pared by Michael A. Wolff, the lead counsel for the Min-

nesota case. Van Dusartz v. Hatfield. I suspect you may

find Mr. Wolff’s conclusions to be helpful in developing

your litigation strategy.

Hope this is helpful, and please send me at your earliest

convenience those pleadings that I lack from your case.

RSB: JAB

Enclosures

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5a

Law Offices 20 West Sixth Street

Legal Assistance St. Paul, Minnesota 55102

of Ramsey County, Inc. 612-227-7858

JouN E. BRAUCH October 21, 1971

GENE T. ECKER

MICHAEL F.. PeTscH

RIcHARD H. BENEDICT

Rocer S. Haypock

Dotores C. OreEyY

REED C. RICHARDS

MicHAEL A. WoLFF

Epwarp W. BEARSE

Rosert M, Spector

RicHarD A, KAPLAN

Mark REINHARDT

Mr. R. Stephen Browning

Lawyers Committee for Civil Rights

Suite 520, 733 15th St. N.W.

Washington, D.C. 20005

Dear Steve:

Following Jack Coons’ suggestion, more or less, I have

done some inquiry and research concerning school-financing

cases in federal court. I conferred with Professor David

Louisell, a Berkeley colleague of Jack’s who is visiting pro-

fessor at the University of Minnesota Law School, and read

some cases and textual materials. I apologize that I have

not the time to write this as a thorough memorandum of

law; however, in this letter I shall try to outline briefly

the points of law involved, tactical considerations, etc.,

with the hope that such information will be useful to other

lawyers who have brought or plan to bring their school-

financing cases in federal court. The answers given here are

by no means final; the points conveyed here should be used

as a starting point for lawyers’ research.

1, Jurisdiction. In our case, Van Dusartz v. Hatfield (D.

Minn., Oct. 12, 1971), the plaintiff schoolchildren’s cause of

action arises under the Civil Rights Act, 42 U.S.C. 1983, in

“=

6a

that the schoolchildren in poor districts are deprived of

equal protection guaranteed by the 14th Amendment by the

fact that educational expenditures, and thus quality of edu-

cation, were lower because of their districts’ inability to

raise greater sums of money from local property taxes. Jur-

isdiction in such 1983 actions is based on 28 U.S.C. 1343 _

(3) and (4). The legal theory, propounded by the Court in

Serrano and accepted by the Court in Van Dusartz, is that

education is a fundamental right and that classification on

the basis of wealth is constitutionally suspect.

We believe that in federal court actions, the only viable

cause of action is the above-described schoolchildren’s cause

of action. Taxpayers, parents, school districts, local gov-

ernments, etc., would have great difficulty invoking juris-

diction. Section 1983 and the 14th Amendment do not seem

to reach such purely fiscal problems. Nor does 28 U.S.C.

1331, the general federal question statute, confer jurisdic-

tion both because of the 14th Amendment-reach problem

and because, as to individual taxpayers, the amount-in-

controversy problem.

2. The McInnis Problem. McInnis v. Shapiro, 293 F.

Supp. 327 (N.D. Ill. 1968), aff’d sub nom. McInnis v. Oglivie

(394 U.S. 322 (1969) and Burress v. Wilkerson, 310 F.Supp.

572 (W.D.Va. 1969) aff'd nom. 397 U.S. 74 (1970) preclude

cases brought that are based upon the educational needs

of the children. This problem is discussed at great length

elsewhere (Coons et al., Private Wealth and Public Educa-

tion). However, it needs to be emphasized that, despite the

fact that the U.S. District Court in Van Dusartz ably dis-

tinguished McInnis and Burress, the greatest danger to

cases brought in federal courts is that the courts will con-

sider McInnis and Burress to be binding precedent. Not

every court will be willing, as the Minnesota federal court

was, to draw the kind of fine line needed to distinguish

McInnis and Burress. For that reason alone, these cases

generally should be kept in state courts.

3. The Abstention Problem. In Askew v. Hargrave, 401

U.S. 476 (1971), the Supreme Court indicated that the ab-

_

:

Ta

stention doctrine might apply to cases in this area. If there

is an action pending in state court which would obviate the

need for consideration of federal claims in federal court, the

Supreme Court indicated that the U. S. District Court

might very well abstain. The language of the Court in

Hargrave should give pause to those who would bring their

actions in federal court. For one thing, if a complaint bases

its claims alternatively or primarily on grounds involving

state laws or constitution, a federal court might abstain

until the state courts have ruled on such issues.

Basing a plaintiff’s complaint, as we did in Van Dusartz,

solely on the claim of deprivation of civil rights in the

denial of equal protection might protect against federal

court abstention, but there is no assurance that it will. See

Reetz v. Bozanich, 397 U.S. 82 (4970): Wisconsin v. Con-

stantineau, 400 U.S. 433 (1971), McNeese v. Board of Edu-

cation, 373 U.S. 668 (1963) and Monroe v. Pape, 365 U.S.

167 (1961).

4. Declaratory Relief Only. In Van Dusartz, we asked

only for a declaratory judgment declaring that the consti-

tutional rights of the plaintiff schoolchildren are being vio-

lated by the state’s system of school financing. By doing

this, we avoid a three-judge court. The case law is nearly

unanimous that where only declaratory relief is sought, a

three-judge court cannot be convened. Fremed v. Johnson,

311 F. Supp. 1116 (D.C. Colo. 1970, three-judge court) at

p. 1118, footnote 7 summarizes the cases on point. See also

Mitchell v. Donovan, 398 U.S. 427 (1970), where the Su-

preme Court said that denial of a declaratory judgment

was not the same as denial of injunction under 28 U.S.C.

1253 which permits direct appeal to the Supreme Court.

There are two clear advantages to this approach: 1.) If

relief is denied, appeal is to the Court of Appeals. Thus,

we avoid repeating the disastrous result of a summary

affirmance as in McInnis. 2.) Declaratory relief arguably

is a much more modest request than to ask a federal court

to enjoin the operation of a myriad of statutes and to com-

pel the Legislature to establish a non-discriminatory sys-

8a

tem. The latter request would seem to many courts to be

nonjusticiable, as the courts for many years considered

reapportionment cases.

The objection can be raised, of course, as to what happens

if the Legislature refuses or fails to heed the declaratory

judgment of the federal court. We believe the appropriate

time to be concerned about this is when it happens: In

other words, plaintiffs are in a much better position after a

declaratory judgment has been entered to move to amend

their complaint and seek a three-judge court to enjoin the

statutes. To move at the outset for a three-judge court to

make sweeping changes in the financing system is to ask

the court to bite off more than it probably feels it can chew.

5. A Motion to Dismiss. As the Van Dusartz case indi-

cates, probably the best thing that can happen to your law-

suit is for the defendants to move to dismiss for failure to

state a cause of action. Then the claims of the plaintiffs

are in roughly the same posture as in Serrano which arose

on a demurrer. In Van Dusartz, Judge Lord assumed the

truth of plaintiffs’ allegations in testing the cause of action.

Thus he in effect said that if plaintiffs’ allegations are true,

the financing system is unconstitutional.

What the Judge really has done is issue a “declaratory

judgment” that is nonappealable. His opinion came at a

time when the Legislature was meeting to consider school

financing. The opinion sets forth a constitutional standard

that must be followed. This advice is given in a memo-

randum and order denying a motion to dismiss; from this

order, no appeal can be taken without the court’s approval.

See Moore’s Federal Practice, Para. 12.14n.16. If the Legis-

lature satisfies the standard set forth, the litigation will be

ended without any appeal because of mootness. Whether

this result can be reached is uncertain but it clearly is

worth a try.

6. A Nonappealable Declaratory Judgment? In drafting

our complaint, we tried another device that we hoped

might avoid an appeal if declaratory relief were granted

to us. In our prayer for relief, we asked the court merely

9a

to enter an order declaring that the system violated the

constitutional rights of the plaintiffs and retaining jurisdic-

tion of the case until the Legislature responds to such

declaration in order to determine what further relief (i.e.

convening of a three-judge court would be appropriate.

However, such retention of jurisdiction would not be effec-

tive to deprive the defendants of their right to appeal; the

declaratory judgment statute (28 U.S.C. 2201) clearly states

that “any such declaration shall have the force and effect

of a final judgment or decree and shall be reviewable as

such.” Clearly, to proceed in this manner in order to avoid

appellate review is fruitless.

As I said at the outset, this letter is not intended to pro-

vide definitive answers to the problems facing litigants in

federal court; it may, however, be used as a starting point

for lawyers’ research. In that regard, I hope these thoughts

will be helpful.

Very truly yours,

MiIcHaEL A. WOLFF,

Attorney at Law.

MAW:bme

ec: Prof. John E. Coons

Prof. David Louisell

10a

APPENDIX C

( 6866 )

STATEMENT OF Mrs. SARAH CAREY, ASSISTANT DIRECTOR,

LAWYERS COMMITTEE FOR CIvIL RIGHTS UNDER LAw

(Mrs. Carey) Thank you. My point of view in discussing

the Serrano decision is that of an organization that has

been coordinating and stimulating similar kinds of law-

suits around the country, and in many cases being involved

in litigation ourselves.

I think at the outset I should state that the impact of

Serrano has been absolute'y phenomenal. In a way that

far exceeds the limited nature of the decision. It is, as the

professors have pointed out, a decision of the California

Supreme Court, not the U.S. Supreme Court. It will ap-

ply to California only if it passes a whole series of remain-

ing judicial proceedings.

Yet, despite these various restrictions, it has had at least

as much impact, if not more, than a number of the major

U.S. Supreme Court decisions in past years.

I think, trying to explain the reaction — you have touched

on it earlier, Senator — that the whole spirit of this Nation

has been that (6867) we are committed to a universal,

equal form of education that helps all children, poor or

rich. And then, suddenly we find out through this decision

and the resultant publicity that, in fact, we are not doing

that; we are providing education resources very much

along class lines and discriminating against those*who

need it the most.

That is just a preface.

The Serrano decision..has been a real mindblower in

terms of the issues it has raised and the activity it has pro-

voked, legislative and legal.

Similar Suits Filed in 26 States

At our latest count, we figured that something like 43

attorneys in 26 States have either filed or are planning to

a

file similar kinds of lawsuits. There is a great danger, as

Professor Coons has mentioned, that some of these suits

will not be adequately prepared and could prejudice the

consideration of the issues by the Supreme Court.

lla

(Senator Mondale) There is a conference scheduled on

October 16.

(Mrs. Carey) That is a conference the lawyers commit-

tee is sponsoring, and we are trying to pull together—

(Senator Mondale) In Washington.

(Mrs. Carey) That is right. But, as you probably know,

lawyers are difficult to control. They hide behind their

clients.

(Senator Mondale) I was once a lawyer myself.

(Mr. Carey) I would like to point out that our feeling is

that the Serrano case has raised more questions than it has

answered. It is very exciting in that respect, in terms’ of

ushering in an era of reform that will challenge the educa-

tional establishment.

Many of the questions that it raises are touched upon by

the other suits that are now pending. I would like to just

briefly summarize these questions, and then run through

the three major categories of lawsuits that are now pend-

ing, so you have an idea of some of the issues being pre-

sented.

Three Major Questions Raised

Serrano set a negative standard. It did not say what the

State had to do. It just said what it could not do; and, in so

doing, it raised a number of very complicated questions,

including what ought to be done about the property tax.

The decision does not invalidate the property tax, but it

requires that if that tax is to be retained, the distribution

of the income generated by it must be reformed. This prob-

ably cannot be done unless the manner in which the tax

is collected is also reformed.

12a

The second major question is: Should school districts be

redrawn? The Serrano decision indicates that as long as the

inequalities in resource allocation among districts are cor-

rected, there is no need to alter present district boundaries.

(Senator Mondale) It could well be that that judgment,

if sustained, would have a bearing politically in the long

run about_how school district lines are drawn.

(Mrs. Carey) That is right. In a number of cases now

pending, the plaintiffs request redistricting as a means of

sharing the wealth among various units of government.

The third one is — well, I guess, Professor Yudof has

really taken care of this issue — how can intradistrict dis-

crimination be prevented, once (6868) the money gets

handed down by the State, assuming the State corrects its

allocation pattern?

And then finally — and this is an issue the press has

ignored totally — if education is a fundamental interest, as

the Serrano court declared it to be, what flows from that?

In the criminal area, where the right to an adequate de-

fense, has been declared a fundamental right, the Supreme

Court has held that the State has to put the defendant in a

position where he can actually fully exercise that right.

This has been translated to mean if he is poorshe must be

furnished defense counsel; his trial transcript must be

paid for; and he must be given other support to put him in

an equal position with more well-to-do citizens.

Serrano Decision Deals with Fiscal Equity

(Senator Mondale) As I understand Dr. Coons’ interpre-

tation of the Serrano case, the court specifically was not

asked to deal with the question of need; they were asked

to deal with the question of what he calls “fiscal equity.”

So in no way does that deal with the need question. But

there have been two cases, in Virginia and Illinois which

sought to deal with the fairness principle, the need princi-

ple and both were lost.

a

13a

(Mr. Carey) I am getting at it from a different way. The

Serrano decision did declare education to be a fundamental

- interest, and it said, as a result of that, we have to do cer-

tain things with the way we spend money for education,

But there are a whole lot of things in different directions

that flow from the finding of fundamental interest.

In other lawsuits which raise the point directly — which

this case didn’t — it may well be that you will find funda-

mental interest interpreted as requiring whatever kinds of

support a student needs to exercise that interest, the same

way a criminal defendant may need counsel. The student

may need transportation, he may need lunches, or special

instructional aids.

(Senator Mondale) I understood Dr. Coons to say he

hopes no one would bring a lawsuit of that kind now.

Did I understand you correctly?

(Dr. Coons) Yes, sir.

(Mrs. Carey) Dr. Coons does not want to have Serrano

fouled up on its way to the Supreme Court.

(Senator Mondale) That is going to be quite a conference

in October.

(Mrs. Carey) Ultimately, 5 or 10 years down the road,

there will be cases that flow from the fundamental interest

interpretation just as there have been in the voting rights

and criminal defense areas.

To get a little more specific on these questions, I would

like to outline the kinds of cases that are now pending.

Questions on Property Tax

In the property tax area, there are a number of suits. a

whole line of new law, that in effect are challenging the

way jurisdictions assess and administrate their property

taxes. As you probably know, nationwide around half of

school funds are funded through the property tax. The

tax generates $33 billion, which makes it second only to

the Federal income tax and the Social Security Tax. And

oe ee

l4a

yet, the (6869) manner in which it is administered in

most states is an outrage. It is steeped in corruption and

subject to tremendous political abuse.

Even though State constitutions generally define the

level of required assessment, this varies tremendously

locally, so even though a State may require in its consti-

tution assessment at full market value, the local assessors

will be assessing anywhere from 5 to 10, to 25 percent of

value.

Many States — and Illinois, Indiana, and Wisconsin are

among the worst — have such a proliferation of assessing

districts, with elected assessors who are untrained and un-

scrutinized and unreviewed by State agencies that they

are literally tied into the local political system which ne-

gates effective assessment. Further, the number of tax

exemptions granted have gone way out of control.

In Boston and in other major cities where the exempt

private and public property cuts severely into potential

tax bases — the loss that results from this maladminis-

tration of property taxes hits the schools the hardest, al-

though it affects other local services. _

The National League of Cities and the U.S. Conference

of Mayors has estimated that maladministration of the

property tax costs the cities between 30 and 50 percent of

their total potential revenues.

This could mean that — in a city like Newark, the loss

through the city’s failure to administer the property tax

properly is greater than the funds it gets through Title I,

ESEA. So the Federal program, in effect, is merely mak-

ing a dent in the misfeasance of local officials.

In regard to the cases that are pending, there is a major

case in Texas involving as plaintiffs the school districts of

Fort Worth,. Dallas, and Houston. These school districts

are claiming that the manner in which Texas assesses taxes

is so divergent, from district to district, that they are being

assessed at three or four times the amount of neighboring

districts — which are being assessed below the statutory

15a

level. That, since the State contribution to the local schools

depends on the value of the property assessment in the dis-

trict, they are getting hit on the other end, too. More is

being taken from them and less being given back as a re-

sult of the way their properties are being assessed.

They also claim that the tax exemptions from State and

Federal buildings in their jurisdictions — and these are

facilities which benefit the State as a whole and not just

the locality — also cut unfairly into their revenues and

discriminate against them by imposing a higher tax bur-

den.

The Fort Worth case is before a three-judge Federal

court in Texas and has survived a motion to dismiss; pre-

sumably it will be decided sometime this fall. It points

up very directly the second phase of the Serrano effort. A

State may take the step that California appears to be

taking, of cleaning up the manner in which it distributes

its revenues once they have been collected, but, unless it

also cleans up the way in which the revenues are collected,

it will be hit by a second equal protection suit down the

road.

This summer in June a Federal court in Alabama con-

sidered a similar issue. Schoolchildren in that case claimed

that inequities in the administration of the property tax —

from 6 percent of market value to 26 percent of market

value — deprived them of much needed resources for

their school. In other words, because the State assessors

were not following the statutory level of 100 percent, they

were, in (6870) effect, cutting into the school budget

by several million dollars. This was the first case to hold

that under the Federal Constitution that kind of diver-

gence in the administration of property tax violates both

the due process and the equal protection clauses.

The property tax reform effort is a movement that must

be watched. It is really another part of the kind of thing

Serrano is trying to accomplish.

16a

Questions on Effects of Revenue Sharing

I think without going into it too specifically that there

is clearly a Federal role in this area. If the Federal Gov-

ernment is going to accept some form of revenue sharing,

then the funds generated under that program should not

be handed out unless the States are willing to clean up

their own tax mess, and, in effect, reform the property tax

and other laws that generate taxes.

As I understand’ it, neither S. 1669 or H.R. 7796, the

special revenue-sharing bills for education, includes any

such provisions at present.

Suits Seeking Redistricting

A second line of cases, which is of tremendous relevance

to where we go in education and what happens with school

finances, are the suits that are seeking redistricting. These

suits have two goals. Some of them have a fiscal goal. The

plaintiffs are asking that their school district be merged

with a richer neighboring district in order to share the

wealth. These suits have a second goal sometimes, the

separate, distinct goal of seeking desegregation of what

have become racially segregated districts.

While Serrano promises to eliminate economic distinc-

tions betwen rich and poor districts, this line of cases seeks

to redraw district lines altogether, so you can merge rich

white communities with poor minority communities. As

far as school reform movement is concerned, it seems clear

these suits can only provide a tenfporary form of relief:

sooner or later there is going to have to be an overhaul of

the State laws to provide for a greater State contribution.

But in the short run the suits may help integrate the poorer

school districts with their richer neighbors and get some

additional funding into them.

To touch on the cases briefly, one of them is pending in

Federal court in Texas: Rodriguez v. San Antonio Inde-

pendent School District. In the San Antonio area, the

school districts have been drawn with great skill so the

17a

Chicanos are in one area and the whites are in another.

The suit alleges that the higher the white population, the

more money available. They are asking for alternative

relief, either a correction of the fiscal distribution at the

State level, or redistricting so that the Edgewood School

District, in which the plaintiffs live, would be merged with

a nearby richer district.

(Senator Mondale) I think they have something like 12

school districts within the city of San Antonio, each sepa-

rately funded. And, in addition, the city fathers put all

the public housing in the Edgewood School District. They

are located next to an Air Force base. The children all go

by Edgewood, they go somewhere else with their impact

aid. The superintendent of Edgewood testified before us.

(Mrs. Carey) The San Antonio case is probably one of

the worst ones. But it is clear the power to develop school

districts has been greatly (6871) abused, in the same way

zoning laws have been exercised to exclude poverty sec-

tors or predominantly minority sectors. .

A second case that is presently pending is the one in

Richmond, Va., which I am sure everyone has read about.

This is a case that follows an initial order from a Federal

court ordering the city of Richmond to desegregate its

schools. The plaintiffs cme back a few years later and

said, “Court, we cannot desegregate; the only way we can

effectively integrate is by merging with the counties.” The

courts brought in the surrounding counties as defendants

and is presently considering a metropolitan redistricting

scheme. The Richmond case alleged both racial discrimi-

nation and the discriminatory exercise of State districting

powers which. resulted in the distribution of school re-

sources of an unequal basis. There are several similar

suits, one in New Jersey, Robinson v. Cahill. ° .

There is one pending in Hartford, Conn., Lumpkin v.

Dempsey; where the city of Hartford is claiming the only

way you can integrate education is by reaching into the

surrounding counties.

18a

In Wilmington, Del., and Grand Rapids, Mich., there are

suits similar to the Richmond suit, where an initial de-

segregation order was granted, and the plaintiffs came

back for further relief, saying it is impossible to desegre-

gate unless we join the surrounding areas as defendants.

(Senator Mondale) Do you think those cases are likely

to be successful, in the absence of evidence of discrimina-

tion and segregation in the development of the lines them-

selves?

(Mrs. Carey) That is the issue that is being litigated,

whether or not there was discrimination in the drawing

of those lines. Of course, the Detroit case, from what the

press says — which may or may not be accurate — seemed

to find there was State action in the zoning practices and

the way that resources were allocated.

(Senator Mondale) Within the district?

Metropolitan Desegregation Cases

(Mrs. Carey) Within the city. But also suggesting the

only way — the State has the power in the entire metro-

politan area, naturally, since it controls cities and can take

away their powers and give them additional power. But

that court seemed to be saying that the State is responsi-

ble because the situation resulted from the delegation of

its zoning and financing powers.

The metropolitan desegregation cases, which are also

growing in number very rapidly, raise important questions

that relate to Serrano.

Among these are — and these are questions, I think, the

committee should consider — have the States overdele-

gated their districting powers in such a manner as to be-

come unwitting accomplices to local discrimination? Can

the districting mess be cleared up by a simple reallocation

of resources? Will the Serrano principle, with its elimina-

tion of economic distinctions between districts encourage in

areas of de facto racial segregation a system of separate

but equal schools, in effect ignoring the principles enunci-

:

19a

ated 15 years ago in Brown v. Board of Education? Can the

schools be equal if they are racially segregated? And,

finally, will the remedies fashioned on the basis of Serrano

include integrated classrooms as part of the definition of

“equalization of resources”?

(6872) These are all questions way down the road. But,

in the two lines of cases, each take care of only part of

the problems. Serrano really does only get at the fiscal

problem, and the metropolitan desegregation ones get

at the racial issues. It would seem, unless the two are

combined in some manner, we are not going to fulfill our

constitutional principles.

Some of the language in the first Hobson decision, I

think, illustrates the problem that Serrano could lead to,

of separate but equal schools where you would make fund-

ing, the allocation of funding sufficiently equal to meet

the constitutional standard, and yet the communities

would still remain segregated.

other about to be filed in New York. Intracity discrimi-

nation is, again, a pattern across the country. These cases

all reflect very real personal situations

Relationship of Wealth to Educational Achievement

There are, among the post-Serren: cases cases that are

going a bit further in teres of es-ime adhditional related

issues. The case filed initia. » “etre? School

—_ - &

about to be reinstituted — attempted te deal with one

of the questions raised by Serreme. which is the relation-

ship, if any, that wealth has to actual educational achieve-

ment.

I think many of the journalists raised this question. If

you keep on increasing the money, can you

20a

a difference in education? Aren’t these children so dis-

advantaged that pouring more money isn’t going to make

any difference?

Well, the Detroit case tries — through a massive study

based on Michigan school data — to show that there are

» very direct correlations between the resources provided to

a school, the background of the children, and educational

achievement. There are figures showing that educational

achievement does at least correlate with the money in-

vested. And, finally, the study shows the relationship of

all of this to career opportunities. As we understand it,

this case is going to attempt to bring to proof—

(Senator Mondale) Where is that case? Did I under-

stand from your testimony that the plaintiff’s case in Michi-

gan was dropped?

(Mrs. Carey) It was dismissed for lack of prosecution,

but it is going to be reinstated.

(Senator Mondale) This is the Urban Coalition case?,

(Mrs. Carey) It is the case for which the Urban Coali-

tion did a study.

(Senator Mondale) Yes, I read the study. I thought it

was going forward. I was surprised to hear it had been

dropped.

(Mrs. Carey) Detroit got so involved in other issues

that the school board did not pursue it.

But these suits are going to be moving into some of

these areas of proof that raise still more questions.

Based on this background, I would like to suggest a

number of actions that the Federal Government should

consider.

(6873) There is, from our point of view, a tremendous

need of research and hard data on which to base the vari-

ous remedies that are being recommended. Such questions

as the cost of municipal overburden, the differentials be

tween city and suburban areas, are not too difficult to an-

a

: 2la

swer. The ACIR has taken care of a lot of that. But there

are very basic questions about the real costs of educating

children that nobody knows about, and perhaps if the

Office of Education could develop a 5- or 10-year research

plan that could direct itself to this problem, it would

help the results of these cases.

(Senator Mondale) I agree that we ought to have a

much better and more sophisticated program of research

and experimentation. But I think, if we have a 10-year

plan, the Congress would await the results of that study

before it helped schoolchildren. There would be one more

generation down the drain.

Need Long-Term Commitment

(Mrs. Carey) Some form of long-term commitment. The

performance contracts, for example, that some cities are

turning to really should be watched closely from the Fed-

eral level so that other States can benefit from them if

they actually work.

(Senator Mondale) I agree with you.

(Mrs. Carey) The present measurements are also

focused so much on the speed, on the efficiency with which

the child is moved, through the system rather than the

) end result, the learning.

As I think has been touched upon by the professors, I

think that a lot of things ought to be done about Title I.

If the Serrano movement really takes fire and the legis-

lative renaissance that Professor Coons has predicted

takes place, there is clearly going to be a gap period be-

tween the time when the States assume their responsi-

bilities and the present. During that time Title I really

should be used to help make up the differences in the

needs of poor students in the inner city:

Beyond that, if the States do really correct their financ-

ing schemes, Title I should probably be used as a source

of funds for continuing experimentation with regard to

the educational needs of the poor.

22a

An additional action that we have kicked around that

might be useful at some point — would be some kind of

special Federal legislation that would give individuals the

right to serve as enforcement tools in seeing that the States

comply with the equal allocation of resources requirement.

We felt perhaps something along the lines of the Voting

Rights Act, that would put in the office of the Attorney

General and in the hands of private individuals a right

to enforce compliance with the constitutional standards

established by Serrano. I think that is quite a way down

the road, but those kinds of enforcement efforts, where

you allow private individuals to do what the Federal Gov-

ernment may not do, even though it is its duty, are really

tremendously helpful in moving in this kind of area.

One final comment. We have found in following these

suits that many of them are outrageously expensive. Re-

form litigation, particularly litigation that is massive, can

be extraordinarily expensive. Legislative action is far

more efficient, less patchwork, and really can do the job

faster.

(6874) Just to give you a specific example, the suit that

was brought in the District of Columbia to enforce the

initial decision in the Hobson case, that is, the followup

suit, has cost, if you include attorneys’ fees, somewhere

around $200,000 to $300,000 for the appellants alone. So

that is something that must be kept in mind. Marvelous

as the constitutional issues are for lawyers, they are al-

most prohibitively expensive.

[Written Prepared Statement Omitted]

(6881) (Senator Mondale) Thank you very much for a

most useful statement.

We will take about a 10-minute break here, and then I

have some other questions.

(Recess. )

(Senator Mondale) Dr. Coons, in your statement you

set forth a formula that you think might be used, for ex-

ample, in California, based on the Serrano principle. On

pe :

pages 7 and 8, you have an example of how California

might respond to the Serrano rule and equalize the finan-

cial power of each school district.

Would you describe that for the record, if you will?

(Dr. Coons) Basically, the idea is to provide each dis-

trict with the same opportunity and capacity to spend

so that, irrespective of whether districts were par in tax-

able wealth, that the tax rate locally chosen would have

the same effect as it would everywhere else in the State.

For example, if the poorest district in the State were

to tax itself at 33 mills, hypothetically, and the richest

district were to tax itself 33 mills on its local property,

that each would have the same number of dollars per pupil

to spend.

It could be thought of rather simply, as a table of equiva-

lents. The legislature might enact a table of equivalents

in which the left side is a column of permissible tax levies,

locally chosen by the local board ranging, let’s say, from

a minimum of $600 or $700 up to a maximum of, say $1,800.

For each amount that the district might choose to spend

on its students, there would be an appropriate local tax

levy. Let’s say that for 2 percent a district would be per-

mitted to spend $1,000 per pupil. If the 2-percent levy did

not raise that much locally, that district would then be

subsidized to the extent of the difference. If it raised more

in a rich district, the excess over $1,000 would be redis-

tributed to pay for the poorer districts.

(Senator Mondale) So, under that formula, the poorer

the district, the more subsidy; the richer the district, per-

haps the greater it would subsidize others?

Equality of School District’s Effort

(6882) (Dr. Coons) That is correct. “But, in any event,

for each and every tax rate, the same spending would be

permitted so that there would be an equality of sacrifice

among the districts for any given level of expenditure. If

you want to spend more, you have to try harder. That

is the ethical principle that is involved.

24a

(Senator Mondale) So, the political effect would be that

a poor district could not go out and campaign for a higher

effort, since there will be a nice bundle of State money

coming in to match the district’s effort, because its valua-

tion is so low that even though it tries, it cannot obtain

adequate funds from local sources. The State will make

up the difference between the $400, say, it raises per capita

and the $1,400 developed in the State formula. The dis-

trict will get $1,000 per head from the State government.

(Dr. Coons) Exactly.

(Senator Mondale) But there is just the reverse incen-

tive, however, for the rich district. Are the politicians

there going to say, “Let’s try harder so more of our money

will go somewhere else.” And how is that going to work?

(Dr. Coons) We have no idea.

(Senator Mondale) How would you like to try it?

(Dr. Coons) I would like very much to.

It seems to me, looking at today’s pattern of spending,

Senator, we see poorer districts trying much harder than

rich districts. We see them willing to tax themselves to

the bone in order to support spending at one-third of one

fourth of the level of the rich districts.

Rich districts are in the habit of saying, “Look how much

we care about education; we spent so much here.” It would

be interesting to find out whether they really do care and

are willing to tax themselves at the same rate as the poor

districts for that same level of expenditure.

Of course, there are certain problems inherent in that,

not the least of them the political problem of recapture

from the local district. I am informed by people who know

these things that it is politically difficult to establish a

system in which, if Beverly Hills is to spend $1,000, it may

raise $1,500. It is cosmetically bad politically.

(Senator Mondale) You would get a big meeting the

night you proposed that.

_

25a

(Dr. Coons) Right. There are, however, ways to dimin-

ish this highly visible redistribution.

One of them is first to remove industrial and commercial

property from the local tax base — a form of legislation

which has been frequently suggested, anyway, and one

which is inherently rational.

Tax Industry/Commerce Statewide

That is to say, take a statewide tax of 3 or 4 percent and

apply it to all industrial and commercial property. The

local levy then would only be on residential property.

And the range of wealth among districts would have been

squeezed to such a narrow spectrum, compared to the pres-

ent spectrum, that there would be no problem of recap-

ture.

(6883) If you took all the industrial and commercial

_ wealth out of Beverly Hills and the other rich districts in

California, the range of local residential wealth per pupil

would be sufficiently narrow that you could operate the

kind of system that I outlined in my testimony, without

having to take any money away from Beverly Hills. That,

it seems to me, would be a highly desirable political

z

apparatus.

(Senator Mondale) In the absence of some kind of ad-

justment, in the rich district, would you not actually be

encouraging private schools for the rich? Would they not

say, “Well, we are in this trap where we can raise a lot

of money to be sent elsewhere, or we can put downward

pressure on revenue for our local schools and simply

spend all of our money on private schools for our chili-

dren.” Since all the capital costs of constructing private

schools is deductible from the taxes anyway, it is sort of

publicly supported.

In other words, I am trying to think how the incentives

of your program would work. I see the one point you

make.

26a

Would not a statewide income tax make more sense

than trying to depend principally upon the real estate tax

or some other form?

(Dr. Coons) Let me say this, that a statewide income

tax could certainly be employed either in a centralized

or a decentralized manner to provide the necessary funds.

There is no question about that.

If you are asking, in a decentralized model, should a

local income tax be preferred over local property tax,

the answer is likewise “Yes,” in my view. Because it seems

to me that the income tax—

(Senator Mondale) I am talking about a statewide in-

come tax.

(Dr. Coons) You could have both, as a matter of fact.

No reason you could not have both.

(Senator Mondale) The income tax has additior.al ad-

vantages. I think it is a better reflection of wealth than a

property tax.

Prefers Local Income Tax

(Dr. Coons) At least as the property tax is presently

structured, there is no question, and that is why we would

prefer a local income tax.

May I answer that other question which you had before

about the rich district and its disincentives? It is an im-

portant question.

It depends entirely upon the formula adopted. That is

to say, if the relationship between spending and tax is

carefully adjusted, and, if industrial and commercial are

removed from the local tax base so as to squeeze the

wealth spectrum down, it is my judgment that there is |

no stage at which you would have a powerful incentive

for rich districts to opt out of the system. But I think the

amount that would already be taken out in personal in-

come and other statewide taxes for the general support of

education would be enough so that most people would

27a ‘

not be able to afford both the support of public education

and private education. At least there would not be a suffi-

cient number of such people that there would be any but

a fringe of districts in which the demography would be

such that there would be so many very rich people that

they would opt out of public education altogether.

And, of course, it is up to the State as to whether they

can do that. The State, after all, would set some kind of

adequate minimum which every child should have avail-

able in public education. A district could (6884) simply

drop out, as it were; it would have to stay in the system.

Being in and paying for that system, people are going to

use it — they are going to have to carry the burden of that

local system, and so, there is a powerful incentive to stay

in it and make it all work as a public system.

Was I responsive?

(Senator Mondale) Yes.

Would either of the other two witnesses care to respond

to this question of what the States should do if the Ser-

rano principle becomes law?

(Mrs. Carey) I have a couple of comments on the basis

of what Professor Coons has said.

I think the issue you have raised about income taxes

is a key one. The experts on property tax, who I gather

you are hearing next week, all can tell you how this tax

can be administered in a progressive manner, but they

cannot point to any community where it is being so ad-

ministered. So, we have all bought that mythology for

10, 20, or 30 years, and the evidence is piling up that, per-

haps the property tax cannot, in fact, be a progressive tax.

This would be a strong persuasion for income tax.

On the suggestion of removing industrial and commer-

cial properties from the local assessment base, I think it

would meet with tremendous resistance from the indus-

trial and commercial interests. They have no desire at all

to be assessed and taxed at the State level. You look at

7

: “ a

United States Steel in Gary, Ind., they would fight it tooth

and nail to prevent Indianapolis from doing the assess-

ment, as opposed to the local assessor, who works part time |

for them.

On the private school issue, that is one that everyone

kicks around. As a factual matter, I am not sure there’s

any difference right now between the Scarsdale school

system and Scarsdale with a private school system. It is

just the admission practices that are slightly different. At

present it is a question of buying a house rather than

getting into a school.

So, I am not sure that will change things from the way

they are at present.

Are Private Schools Nonprofit?

Another thing to consider is whether, if private schools

are actually set up as nonprofit corporations and so on,

whether there would not be grounds for attacking them.

There is a case, a Lawyers Committee case in Mississippi,

Green v. Kennedy, where white parents tried to set up a

school, a private school, for the purpose of avoiding inte

gration, and the court knocked down their tax exemption

on the ground that it was a deliberate evasion of the con-

stitutional mandate.

Now, if the Constitution declares education to be a fun-

damental interest, it might be you could attack private

schools on that ground. >

(Senator Mondale) The key to the Green case was de-

liberate segregation, white flight, designed to escape the

court order.

(Mrs. Carey) That is right.

(Senator Mondale) You might say there is a similar

constitutional principle, and that no one can escape the

public schools. Maybe that will be the law.

Go ahead.

(Mrs. Carey) That is roughly what I wanted to say.

29a

APPENDIX D

EDUCATIONAL FINANCING AND EQUAL PROTECTION: WILL

THE CALIFORNIA SUPREME CouRT’s BREAKTHROUGH .

BECOME THE LAW OF THE LAND? a

Hershel Shanks*

The California Supreme Court handed down a decision

last Fall which, if made applicable to other states of the

Union, will require a thorough revamping of education

financing laws in all states except Hawaii.!

The California Court held for the first time that a state

educational financing system which requires local school

districts of varying wealth to raise even a part of their

own education funds from local property taxes violates

the equal protection clause of the Fourteenth Améend-

ment. This result followed, said the Court, because such

a system discriminates on the basis of wealth in the dis-

tribution of educational resources. To the extent the

local school district is required to assume the burden of

supporting its public schools from its own taxes, the poorer

districts are unable to provide the same level of financial

support as their richer neighbors, even though the poorer

district often impose on themselves higher tax rates than

wealthier districts. Thus the educational opportunity —

at least in economic terms — available to any child within

the state depends on the wealth of the district in which he

lives. “[S]uch a system cannot withstand constitutional

challenge and must fall before the equal protection

clause,””2

apa with Glassie, Pewett, Beebe and Shanks, Washington,

’ Hawaii already has a single unified school district.

1 * Serranto v. Priest, L.A. No. 29820, California Supreme Court,

August 30, 1971, slip op. 2..On October 12, 1971, a federal district

judge in Minnesota, relying on the Serrano decision, came to the

same conclusion. Van Dusartz v. Hatfield, No. 3-71 Civ. 243 (D.

Minn.). This ruling came in a denial of a motion to dismiss. The

Court will retain jurisdiction but defer further action in the case

30a

California’s School Finance Formula

The California system for financing public education is

typical of that which prevails throughout the United

States. About one-third of the support for the public

school system comes from the State. Ovér one-half is

provided by local property taxes imposed by local school

districts. Six percent comes from federal funds, and the

remainder from miscellaneous sources.

State aid consists of two types of grants from the State

to the local school district. The first type is known as the

fiat grant and consists of a payment to the local school dis-

trict of $125 per pupil. It is distributed on a uniform per

pupil basis to all districts, irrespective of their wealth.

The flat grant constitutes about half of the funds distrib-

uted by California to its local school districts.

The second type is an equalization grant intended at

least partially to ameliorate the disparities arising out of

the differing abilities of districts of varying wealth to

support local schools from local taxes. The equalization

grant assures that every school district regardless of its

poverty will have available to it a certain minimum

- amount per pupil — $355 for each elementary school pupil

and $488 for each high school student. This minimum

amount would supposedly fund a so-called minimum

“foundation program” .§

To compute the size of the equalization grant, two items

are subtracted from the minimum foundation program

amount: (1) the State’s flat grant and (2) the sum the

local school district is expected to raise from its own

taxes. The remainder is the equalization grant per pupil.

In other words, the equalization grant consists of $355

for each elementary school pupil and $488 for each high

pending action by the Minnesota legislature, so the ruling is not

presently appealable. Since the Serrano decision, approximately 30

other states have filed or are considering filing Serrano-type suits. _

*In fact, far more is needed per pupil to fund an adequate pro-

gram.

|

3la

school student less the $125 flat grant and less a hypo-

thetical amount which would be raised by minimal local

tax rates — 1 percent in elementary school districts and

8 percent in high school districts. In practice, however,

only the poorer districts receive equalization grants under

this formula. “For the wealthier districts, the flat grant of

$125 plus minimal local taxes raises more than the mini-

mum foundation program amount.

While equalization grants are to some extent equalizing

in their effects, the flat grant is anti-equalizing. For the

poor district,.the flat grant is essentially meaningless be-

cause anything taken away from the flat grant would be

made up by an increased equalization grant of the same

amount. The flat grant could be repealed without having

any effect on the poor district. This is of course not true

of wealthier districts who do not get an equalization

grant. If the flat grant were repealed, the wealthier dis-

tricts would lose $125 per pupil. Accordingly, the flat ©

grant actually widens the gap between rich and poor

districts.

The result of the California system of educational financ-

ing — partially because the equalization grant does not

go nearly far enough and partially because of the anti-

equalizing effects of the flat grant — is a wide variation

in per pupil expenditures from the poorer to the wealthier

California school districts. Thus, the Baldwin Park Unified

School District in Los Angeles spends only $577 to educate

each of its students. By contract, the Beverly Hills Unified

a District, also in Los Angeles, spends $1,231 per

student.

The fundamental injustice underlying this system is

highlighted by the fact that the tax rate in Beverly Hills

is just over 2 percent, while the tax rate in Baldwin Park

is more than 5 percent. Thus, Beverly Hills can raise far

more per pupil with far less effort than Baldwin Park.

‘California also. has an additional State program of “supple-

mental aid” which is available to subsidize particularly poor school

districts which are willing to make an extra local tax effort by setting

their tax rates above a certain statutory level.

: 32a

The source of the disparity in per pupil funds available

to the two districts is clear: The assessed valuation per

pupil in Beverly Hills is thirteen times more than the

assessed valuation per pupil in Baldwin Park. The assessed

-valuation per pupil is $50,885 in Beverly Hills and $3,706

in Baldwin Park.

The Court found “irrefutable” the contention that the

foregoing system classifies students on the basis of the

wealth of the district in which they happen to live. Indeed,

“(t]he wealth of a school district, as measured by its as-

sessed valuation, is the major determinant of educational

expenditures.”’5

Requirements Under Serrano

Assuming that this decision becomes the law of the land,

what are its implications for educational financing and

public education administration?

It is of course clear that such a decision would require

the revamping of educational financing systems through-

out the country. But beyond this lie a number of questions.

Will compliance with this decision require, or lead to,

state control, if not actual operation of, local schools? In

other words, does this decision spell the end of the local

school district, locally controlled? Does the decision mean

the end of local property taxes as a source of revenue to

support public education? Does the decision require 100

percent state financing of public education? Does the de

cision require equal dollar expenditures per pupil for each

student within a state?

Many educators and even some lawyers have assumed

that the answer to all of these questions is “yes”. In fact,

however, the answer to all of these questions is “no”. It

is therefore important, at the outset, to understand what

compliance with the decision will, and will not, require.

The contention that the decision will result in state

control and perhaps even state operation of local schools —

5 Slip Op. 240.

4

33a

and thereby doom the local public school — is based on

the assumption that the decision will require 100 percent

state financing of public education. The argument is that

whoever pays the piper will call the tune. Yet the assump-

tion is incorrect. To be sure, a state may, but need not,

comply with the decision by a system in which the state

provides all of the funds for the public schools on a per

pupil basis. But even if a state were to adopt a 100 percent

state financing as its method of compliance, this would

not necessarily mean state operation or control of local

schools. Even now, local school districts are creatures of

the state, created by state legislatures, and subject to all

valid rules and regulations which the state legislature may

decide to adopt. A state has the right under the present

system of school financing to control or operate the local

public schools. But in fact states have not done this,

despite the fact that they provide a very substantial part

of the local school districts’ educational budget.

It could, of course, be argued that if states were to supply

100 percent of the local school budget, they would be more

inclined to control the operations of the local school dis-

tricts. This seems doubtful. Given the long history of

doggedly independent local school control and operation,

it is unlikely that the states would undertake to exert sub-

stantially more control over local school systems simply

because the extent of their financial support of these sys-

tems increases from, say, 40 percent to 100 percent. But, in

any event, the signal point to keep in mind for this purpose

is that 100 percent state financing of public education is

not required by the decision.

Whether state educational financing systems may still

rely on local property taxes, and, if so, whether at varying

tax rates, locally determined, require a SO6mewhat fuller

discussion of the Court’s reasoning.

The evil which the Court found in the present system is

that to some extent the number of dollars available per

pupil in any given school district depends on the wealth —

as measured by the assessed valuation per pupil — within

that district. The Court condemned the relation between

34a

educational offering (at least as measured in economic

terms)® and wealth (as measured in assessed valuation

per pupil). That is all the Court condemned. Compliance

with the Court’s decision requires only that there be a

divorce in this relationship of wealth with educational

offering. The Court did not say how the divorce shall take

® Whether per pupil expenditures are in fact closely related to

educational oleue of educational achievement has been hotly de-

bated since the Coleman Report’s finding that “differences in school

facilities and curriculum, which are the major variables by which

attempts are made to improve schools, are so little related to differ-

ences in achievement levels of students that, with few exceptions,

their effects fail to appear even in a survey of this magnitude.”

(James S. Coleman, et al., Equality of Educational Opportunity

[ Washington: U. S. Government Printing Office, 1966]). Other

distinguished critics question this finding. See Guthrie, Kleindorfer,

Levin & Stout, Schools and Inequality (1971) and Bowles, “To-

wards Equality of Educational Opportunity”, 38 Harv. Ed. Rev.

(1968), reprinted in Equal Educational Opportunity (Cambridge:

Harvard University Press, 1969). Although a definitive answer

may not be available, it is difficult to disagree with Henry S. Dyer,

who writes:

We strongly suspect that the amount of money spent on in-

struction can make a considerable difference in the quality of

pupil performance, but how the funds are deployed and used

probably makes even more of a difference. It seems reasonably

clear that the effectiveness of schools is very, largely a function

of the characteristics of the people in them — the pupils and

their teachers — but we are still a long way from knowing in

useful detail what specific changes in the people or in the edu-

cational mix will produce what specific eatin for what spe-

cific kinds of children [Dyer, “School Factors and Equal Edu-

cational Opportunity”, 38 Harv. Ed. Rev. 38 (1968), reprinted

in Equal Educational Opportunity (Cambridge: Harvard Uni-

versity Press, 1969) ].

Nevertheless, it is difficult to imagine a court denying equal funds to

the poor because differences in per pupil expenditures have not been

shown to make a difference. On the contrary, courts appear to have

assumed that dollars will make a difference see McInnis v, Shapiro,

293 F. Supp. 327, 331 (N.D. Ill. 1968), affirming mem. sub nom.

McInnis v. Ogilvie, 394 U.S. 332 (1969); Hargrave v. Kirk, 313

F. Supp. 944 (M.D. Fla. 1970), vacated on other grounds, sub nom.

Askew v. Kirk, 401 U.S. 476 (1971)), although successful, plain-

tiffs may find themselves put to the proof, see Serrano v. Priest, slip

op. 26-27 ; Hobson v. Hansen, 269 F. Supp. 401, 437 (D.D.C. 1967),

affirmed sub nom. Smuck v. Hobson, 408 E . 2d 175 (D.C. Cir. 1969),

and especially Hobson v. Hansen, 327 F. Supp. 844 (D.D.C. 1971).

35a

place, or what systems of educational financing will meet

this test of “non-relatedness of wealth and educational

offering”.

There are many ways of breaking this relationship which

do not require abandonment of local taxes — even prop-

erty taxes — as a source of support for local school sys-

tems. For example, a state could provide that $1,000 per

student will be available in each district within a state

and that the local district must raise as much of this

amount as would be produced by a 2 percent property tax.

If that would produce in any particular district less than

$1,000 per pupil, the state would make up the difference.

If such a tax would produce more than $1,000 per pupil,

the excess would be required to be paid to the state. This

is a true 100 percent equalization formula.?

The system just described breaks the relationship be-

tween wealth and educational offering, but it retains a

significant reliance on local property taxes to support local

schools. It may be argued, however, that this system,

like the system in which the state provides all of the funds

for local education, produces an educational straight-

jacket in which every school district is limited to $1,000

per pupil regardless of the importance which a particular

local school district places on education and regardless of

the effort which the residents of a particular district are

willing to make to support their public schools. This is

true, but the system may be varied so as to provide for

different amounts depending on the effort (as expressed

in its tax rate) the local district is willing to make to

support public education. In other words, under the hold-

ing in the Serrano case, it is constitutionally permissible

to allow a variation in educational offering to depend on

‘In the example, the state requires the local district to impose the

tax on real estate. However, the state need not make this re-

quirement : The local district may be permitted to raise the money

any way it wishes — by a real property tax or by any other form of

taxation. Or it may be permitted to raise less than the amount that

would be produced by a 2% property tax, in which event the 2%

property tax would be used only as a measure of the state’s equali-

zation obligation.

effort the local district is willing to make. Remember

at only disparities emanating from variations in wealth

are forbidden by the Serrano decision.

Suppose the formula is varied somewhat, to provide a

differential in per pupil expenditures available to any dis-

trict based on variations in local effort (i.e., local tax rates).

Consider a system which provides that for each mill of

local tax imposed by the local district, the local district

would receive $50 per pupil. If one mill of tax produces

less than $50°per pupil, the state will make up the differ-

ence. If it produces more than $50 per pupil, the excess

must be paid to the state. Under this system, the local

district decides how many dollars per pupil it wishes to

provide for public education. The greater effort it makes,

as expressed in its tax rate, the greater per pupil expendi-

tures it will have for its public education system. But the

amount available to the local district does not depend on

its wealth. A 30 mill tax will produce the same revenue

per pupil ($1,500) in the poorest as in the wealthiest dis-

trict. This system has been described as “district power-

equalizing”’® because under it each district has the same

power to produce educational funds for its own local school

system, regardless of its wealth. ©

However, there are likely to be vociferous political ob-

jections to a district power-equalizing system because of

the effect of such a system on the wealthier districts.9

To understand where the political outcry will come from

in any district power-equalizing scheme, consider the fol-

lowing scenario, which is summarized in Table I. Assume,

as is now the case, that each district raises its own school

funds through local taxation but, for simplicity, without

any state contribution. Assume further that District B,

the wealthiest district in the state, is five times as wealthy

in assessed valuation per pupil as District A, the poorest

8 See Coons, Clune & Sugarman, Private Wealth and Public Edu-

cation. Cambridge: Harvard University Press (1971).

® However, such an effect necessarily results from any system

which withdraws from the wealthier districts the advantages they

previously had as a result of their wealth.

37a

district in the state. District A imposes a 6 percent tax

which produces $600 per pupil (1 percent tax — $100 per

pupil). District B, however, imposes only a 3 percent tax,

but this produces $1,500 per pupil (1 per cent tax -— $500

per pupil). Now suppose (see Hypothetical 1 in Table I)

TABLE I

Present System

(Each District Retains What is Produced By Its Own Taxes)

District A District B

(Poor) (Wealthy )

Tax Rate Expenditures Per Pupil Tax Rate Expenditures

6% = $600 3% = $1,500

Hypothetical 1, Using A District Power-Equalizing System

(All Districts Raised to Level of Best System)

(1% Tax Rate = $500 Per Pupil)

District A District B

(Poor) (Wealthy )

Tax Rate Expenditures Per Pupil Tax Rate Expenditures

(Including State Grant) Per Pupil

3% = $1,500 , 3% = $1,500

(i.e., $300 in local taxes and $1,200

State grant)

Hypothetical 2, Using A District Power-Equalizing S ‘ystem

(1% Tax Rate = $250 Per Pupil)

District A District B

(Poor) (Wealthy)

Tax Rate Expenditures Per Pupil Tax Rate Expenditures

(Including State Grant) Per Pupil

6% = $1,500 3% = $750

(i.e., $600 in local taxes and $900 or ~

state grant) 6% = $1,500

that this hypothetical state decides to comply with the

Serrano decision by a district power-equalizing formula.

One way to do this would be to provide that any district

which taxes itself at the rate which District B presently

38a

taxes itself will receive just as much money as District B.

In other words, for each percent of tax imposed by the

local district, the state will insure that the district wil]

receive $500 per pupil. The effect of this district power-

equalizing formula is to raise the entire state to the level

of the wealthiest district, provided only that the other

districts make the same effort (by imposing the same tax

rate) as the wealthiest district. In the case of District A,

it could reduce its tax rate from 6 percent to 3 percent and

increase its per pupil expenditure 212 times, from $600

to $1,500. District B would retain its present tax rate of

3 percent and present per pupil expenditure of $1,500.

The problem with this district power-equalizing formula

is that it is enormously expensive and is likely to be

regarded politically as prohibitively expensive. The total

cost, the politicians will say, is too high.

The state will then consider a district power-equalizing

system that is pegged at a lower level (see Hypothetical 2

in Table I). The state will insure that the local district will

receive, not $500 for each percent of tax it imposes, but

$250. (Anything raised in excess of $250 for each percent

would of course be paid to the state). This is all right with

District A, the poorest district in the state. District A

retains its 6 percent tax rate and, instead of having $600

per pupil, it will have $1,500 per pupil. However, District

B now has a serious problem which is politically powerful

residents are not likely to welcome. If District B retains

its present 3 percent tax rate, it will find that it now will

receive only $750 per pupil instead of the $1,500 per pupil

which was previously produced by a 3 percent tax rate.

If District B feels strongly that it does not want to lower

the per pupil funds available to it for public education, as

it is likely to feel, it will be faced with the prospect of ©

doubling its tax rate from 3 percent to 6 percent in order

to retain the same per pupil expenditure. In short, Dis-

trict B will either have to increase its tax rates substan-

tially or decrease the quality of education it provides for

its children. This is the fly in the political ointment of

district power-equalizing. However, from a constitutional

point of view, this result follows only because District B

no longer has an advantage because of its wealth.

Some argue that the result of the Serrano decision will

be the destruction of the public school system. Whether

“the state adopts a district power-equalizing system or 100

percent state financing, it is unlikely to raise the level of

all systems to that of the best. The result will mean a

lowering of the quality of our best schools. No longer will

they serve as the beacon light for the future. All those

who have been accustomed to a higher level of educa-

tional quality are likely to abandon the public schools if

they can afford it.

Others argue, with at least equal persuasiveness, that a

judicial command to remove the disparities attributable to

wealth will vastly improve the overall quality of the

schools, without eliminating either diversity or freedom

to experiment. These people argue that as a practical or

political matter those citizens who control both the public

schools and the legislatures, supported by the broad mid-

dle class who are entiely dependent on those schools, will

make a new effort to aspire to the best for all, once they

realize that even the wealthy can have the best only if it

is also available, assuming equal effort, to the poor.

In exploring the latitude in devising school finaricing

systems which is still available under the Serrano deci-

sion, it is clear that variations in per pupil expenditures

are permitted if they result from variations in effort or

tax rate exerted by the local district. However, differences

in per pupil expenditures may be made to depend on a

number of factors in addition to variation in effort. This,

of course, follows from the fact that the Serrano decision

_ forbids only variations which stem from differences in

wealth. Accordingly, state financing systems may, con-

sistent with the Serrano decision, permit differences in

per pupil expenditures resulting from a host of variations

in educational needs. High school students, for example,

may be given more than elementary students. Adjust-

ments may be made for districts whose school population

is geographically dispersed so as to give them special

40a

transportation problems. Other reasonable, and therefore

allowable, adjustments might be made for the differential

purchasing power of the dollar in different parts of the

state, or the state formula may provide additional funds

for any district willing to adopt and support special in-

structions or guidance programs.

In short, the latitude which remains after the Serrano

decision is very wide indeed; the only thing that the deci-

sion condemns is wealth-related discrimination.

Will Serrano Become the Nation’s Law?

The foregoing discussion was based on the assumption

that the Serrano case would become the law of the land.

We now turn to the question of how likely it is that this

will occur. This question will involve a consideration of

the history of the effort to obtain a judicial decree requir-

ing the equalization of school resources, including the story

of some litigation efforts that failed; a consideration of the

constitutional theory on which the Serrano case rests, in-

cluding its strengths and weaknesses; a consideration of

whether the Supreme Court as now constituted is likely

to be receptive to the position of the plaintiffs in the Ser-

rano case, with special attention to straws in the wind pro-

vided by cases during the Court’s last term; and finally to

questions of judicial and litigative strategy which might

affect the result in the United States Supreme Court.

In February 1965 a short notice by Arthur E. Wise en-

titled “Is Denial of Equal Educational Opportunity Con-

stitutional?” appeared in Administrator’s Notebook.!° Al-

though the subject generally was in the air,!! this appears

to be the first published suggestion that the present sys-

tem of financing public education is unconstitutional.

There followed a rash of articles, dissertations, books and

book reviews — criticizing, developing, and sharpening the

10 Volume XIII, p. 1.

11 See, e.g., C. Benson, The Cheerful Prospect: A Statement of

the Future of Public Education (1965).

_

4la

analysis, and providing new materials and ideas.12. Much

of this scholarly output pointed to the conclusion that the

present system of financing public education unconstitu-

tionally discriminated against the poor.

Simultaneously with the publications, a number of law-

suits were instituted to test the validity of the proposition

that the present system of educational financing was un-

constitutional — in Michigan, Illinois, Virginia, California,

Texas, and elsewhere.!3

” Horowitz, “Unseparate but Unequal — The Emerging Four-

teenth Amendment Issue in Public School Education,” 13 U.C.L.A.

L. Rev. 1147 (1966); Wise, “The Constitution and Equality ;:

Wealth, Geography and Educational Opportunity” (Univ. of Chi-

cago, doctoral dissertation, 1967); Kurland, “ qual Educational

Opportunity: The Limits of Constitutional Jurisprudence Unde-

fined,” 35 U. Chi. L. Rev. 583 (1968), reprinted in C. Daly The

Quality of Inequality: Suburban and Urban Public Schools, Chi-

cago: Univ. of Chicago Press (1968); Kirp, ‘The Constitutional

Dimensions of Equal Educational Opportunity,” 38 Harv. Educ.

Rec. 635 (1968), reprinted in Equal Educational Opportunity

(1969); Horowitz & Neitring, “Equal Protection Aspects of In-

equalities in Public Education and Public Assistance Programs from

Place to Place Within.a State,” 15 U.C.L.A. L. Rev. 787 ( 1968) ;

A. Wise, Rich Schools, Poor Schools: The Promise of Equal Edu-

cational Opportunity, Chicago: University of Chicago Press (1969) ;

Coons, Clune and Sugarman, “Equal Educational Opportunity: A

Workable Constitutional Test for State Financial Structures,” 57

Calif. L. Rev. 305 (1969); “Developments in the Law — Equal

Protection,” 82 Harv. L. Rev. 1065 (1969); Kirp, Book Review,

78 Yale L. J. 908 (1969) ; Michelman, “Foreword: On Protecting

the Poor Through the Fourteenth Amendment,” 83 Harv. L. Rey.

7 (1969) ; Shanks, “Equal Education and the Law,” 39 The Ameri-

can Scholar 255 (1970), reprinted in W. R. Hazard, Education and

the Law New York: Free Pian (1971) ; Silard and White, *Intra-

state Inequalities in Public Education: The Case for Judicial Relief

Under the Equal Protection Clause,” 1970 Wisc. L. Rev. (1970) :

Coons, Clune & Sugarman, Private Wealth and Public. Education

Cambridge: Harvard University Press (1970); Shanks, Book Re-

view, 84 Harv. L. Rev. 256. (1970); Goldstein, Book Review, 59

Calif. L. Rev. 302 (1971) ; Kaplan, Note, “Constitutional Law: Fi-

nancing Public Education Under the Equal Protection Clause,” 23

Fla. L. Rev. 590 (1971).

‘8 Many of the cases are listed in Coons, Clune and Sugarman,

Public Education and Private Wealth, p. 289 nn. 4-5.

a.

42a

The first case to reach judgment was the Illinois case,

McInnis v. Shapiro,'4 in which a three-judge federal district

court granted the defendants’ motion to dismiss, thereby

rejecting the equal protection argument advanced by the

plaintiffs. Although the court found that “the inequalities

of the existing arrangement are readily apparent,”!® it con-

cluded that the system was not entirely irrational. The Illi-

nois statutes. allowed local communities to control local

schools, to experiment in educational financing and to de-

termine their own tax burden in terms of the importance

they placed on education. This gave the system sufficient

legislative justification to sustain its constitutionality.

Moreover, the court found that the judiciary was ill-

equipped to order funds allocated on the basis of so nebu-

lous a concept as “educational need,” as was urged by the

plaintiffs. © .

The McInnis decision was a serious setback, especially as

it was a unanimous decision of a three-judge court. How-

ever, the Supreme Court still sat in Washington, and it was

there that the plaintiffs promptly repaired.

However, the Supreme Court just as promptly dealt with

’ the case by affirming, in a per curiam decision, on the basis

of the jurisdictional statement filed by the plaintiffs in sup-

port of their appeal.!6 Apparently, the Supreme Court felt

it could dispose of the case without benefit of briefs on the

merits or oral argument.

Prior to the Supreme Court’s decision in McInnis, the de-

fendants in the Virginia case, styled Burruss v. Wilkerson,"

presented a motion to dismiss to a single district judge who

was thus required to rule on the substantiality of plaintiffs’

constitutional contention. Without the benefit of the Su-

14 293 F. Supp. 327 (N.D. Ill. 1968).

158293 F. Supp. at 331. Per pupil expenditures varied between

$480 and $1,000. ;

» 1 Sub nom. McInnis v. Ogilvie, 394 U.S. 322 (1969). Mr. Jus-

tice Douglas would have noted probable jurisdiction.

1 301 F. My 1237 (W.D. Va. 1968) (denying motion to dis-

ariel 310 F. Supp. 572 (W.D. 1969) (dismissing the case after

trial).

—_—

43a

preme Court’s ruling in McInnis, Chief Judge Dalton ruled

that the question was substantial and that a three-judge

court must therefore be convened:

Poverty does appear to be a factor contributing to the

conditions which give rise to the plaintiffs’. complaint.

It is clear beyond question that discrimination based on

poverty is no more permissible than racial discrimina-

tion. . . .18

A trial was had in the Burruss case and the facts estab-

lished were even more appealing from the plaintiffs’ point

of view than those alleged in the McInnis complaint. Plain-

tiffs established that they were from a poor rural Virginia

county and that their extreme poverty prevented them

from providing an even marginally adequate school sys-

tem, despite the fact that their school tax rates were un-

usually high and far in excess of many counties with well-

financed school systems. es

However, by the time the three-judge court in Burruss

was ready to hand down its decision on the merits, the Su-

preme Court had already ruled on the McInnis case. Never-

theless the district court took the occasion in its opinion dis-

missing the complaint to observe:

The existence of such deficiencies and differences is

forcefully put by: plaintiffs’ counsel. They are not and

cannot be gainsaid!® 5

However, the Court found that

The circumstances of [the McInnis case] are scarcely

distinguished from the facts here2°

Thus, the Court dismissed the case, but added

While we must and do deny the plaintiffs’ suit, we must

notice their beseeming, earnest and justified appeal for

help?1

=>

1° 301 F. Supp. at 1239.

310 F. Supp. at 574.

» Ibid

2 Ibid,

4

44a

The Birruss court seemed to be inviting the Supreme

Court to take another look.

So the Burruss plaintiffs also appealed to the Supreme

Court. But the result was the same, a per curiam affirm-

ance on the basis of jurisdictional papers without the bene-

fit of briefs on the merits or oral argument.*? If anything,

the Supreme Court appeared to have “dug-in” by its de

cision in the Burruss case.

With two Supreme Court rulings against them, lawyers

around the country who had been préssing these suits and

exploring legal arguments to support them, paused for

some serious stocktaking. A number of suits simply

withered away. The Harvard Center for Law and Educa-

tion, one of whose top priorities at its inception only a

short time earlier had been to press equal education law-

suits, now turned its primary focus elsewhere. Interest in

the issue lagged.

But for those who continued’ to press the struggle, a

number of developments seemed to augur well. One was

the expansion of equal protection doctrine in the Supreme

Court itself. Shortly after its per curiam decision in Mc-

Innis, the Supreme Court articulated more explicitly and

in greater detail than it had ever done before a new and

far broader standard for judging the constitutionality of

legislation subject to attack under the equal protection

clause.3 To appreciate this expansion of equal protec-

tion law, a short bit of background is necessary.

Chief Justice Warren has noted that

The concept of equal protection has been traditionally

viewed as requiring the uniform treatment of per-

sons standing in the same relation to the governmental

action questioned or challenged.

22 3907 U.S. 44 (1970). oe Justice Douglas and Mr. Justice

White would have noted probable jurisdiction.

23 Shapiro v. Thompson, 394 U.S. 618 (1969).

™ Reynolds v. Sims)377 U.$. 533, 565 (1964).

}

i

a

gen

Or as Mr. Justice Harlan put it:

The Equal Protection Clause prevents states from ar-

bitrarily treating people differently under their laws.

Whether any such differing treatment is to be deemed

arbitrary depends on whether or not it reflects an

| appropriate differentiating classification among those

: affected.25

Thus, though the equal protection clause does not pre-

vent government from treating people differently, it does

prevent different treatment which is not adequately justi-

fied or whichjis based on inadequate reasons. Accordingly,

in any case where legislation is subjected to attack under

the equal protection clause, the court must decide what

is adequate state justification fur the state’s differing treat-

ment.

Historically, adequate justification meant that the statute

represented a reasonable means to accomplish a valid pur-

pose. In order to mount a successful attack under the equal

protection clause, a suitor had to establish that the dis-

tinctions embodied in the law were arbitrary and unrea-

sonable. As the Supreme Court stated in a 1935 case, “A

statutory discrimination will not be set aside as the denial

of equal protection of the law if any state of facts reason-

ably may be conceived to justifiy it’.26 This has come to

be known as the “rational basis” test.

In recent years, however, a stricter standard appears to

have been applied in some cases. The emergence of this

stricter standard began in cases where the Supreme Court

declined to accept “any reasonable” justification for dis-

tinctions based on race. As early as 1944, the Court said

that classification based on race were “suspect” and there-

fore had to bear a greater burden of justification.2*

45a

3 Harperv. V irginia Board of Elections, 383 U.S. 663, 681 (1966)

(dissenting opinion ).

185 Metwopekion Casualty Insurance Co. v. Brownell, 294 U.S. 580,

584 (1935): see also McGovern v. Maryland, 363 U. S. 420, 425-

426 (1961) and cases there cited.

= Korematsu v. Unite States, 323 U.S. 214, 216 (1944) ; see also

Skinner v. Oklahoma, 316 U.S. 535, 541 Cie) ; ; Yick Wo v. Hop-

kins, 118 U.S. 350, 370 (1886).

46a

Shortly after its decision in the McInnis case, the

Supreme Court ruled more explicitly than it had ever

done before that in certain cases reasonable justification

was no longer enough to sustain a statute. In:these cases,

the standard of review was far stricter; differential treat-

ment would be considered to be adequately justified only

when the government convinces the Court that the dif-

ferential treatment is necessary to promote a compelling

governmental interest.22 This has come to be known as

the “compelling interest” test. Shortly thereafter, the

Supreme Court made it clear that the stricter standard of

review was applicable to cases involving discriminations

based “on wealth”.2® The post-McInnis development

seemed to bode well for another McInnis-type effort.

Then the first educational financing case was won in the

lower court Hargrave v. Kirk.3° Hargrave presented a

much narrower issue than was presented to the court in

McInnis, but it certainly trenched on McInnis ground.

Hargrave involved a Florida statute which provided that

any Florida county that imposes on itself more than 10

mills of property tax for educational purposes will not be

eligible to receive state funds for the support of its public

education system. The plaintiffs there argued that this

statute effected a discrimination based on wealth because

it distributed taxing authority for educational purposes

by a standard related solely to the wealth of the county.

The plaintiffs pointed out that the statute permitted Char-

lotte County to tax itself up to $725 per pupil without

losing state support for its public education system, but

limited Bradford County to only $52 per pupil on pain of

losing state support for its public education system.

In a unanimous opinion invalidating the Florida statute,

Circuit Judge Dyer stated:

28 Shapiro v. Thompson, 394 U.S. 618, 634 (1969).

28 McDonald v. Board of Election Commissioners, 394 U.S. 802,

807 (1969).

80 313 F. Supp. ge Fla. 1970), judgment vacated on other

grounds, sub nom. Askew v. Hargrave, 401 U.S. 476 (1971).

|

*

47a

What apparently is arcane to the defendants is lucid

to us — that the Act prevents the poor counties from

providing from their own taxes the same support for

public education which the wealthy counties are able

to provide.3!

This holding too seemed to provide hope for a future victory

ina broader McInnis-type case.

The third encouraging development was the publication

of Private Wealth and Public Education by John E. Coons,

William H. Clune, III, & Stephen D. Sugarman.®2 As this

writer stated in a review in the Harvard Law Review.33

this book “is clearly the most sophisticated, careful and

thorough analysis of the subject which has yet appeared”.

While the book does not say anything that has not been

said — or, at least, adumbrated — before, it does say it

better. It provided a careful analysis of existing school

financing systems and explains in considerable detail and

with great effectiveness how they operate to the disad-

vantage of poorer districts. It explores at length district

power-equalizing systems. Finally, it stresses the need for

a limited judicial attack on the present system — an attack

which would seek to have the court outlaw wealth-related

discriminations, but would not try to persuade the court

to itself reallocate funds on the basis of a nebulous concept

of educational need, as the plaintiff in the McInnis case

attempted to do.34

*! 313 F. Supp. at 947.

*? Cambridge: Harvard University Press (1970).

84 Harv. L. Rev. 256 (1970).

“It is helpful in any equal protection analysis to understand that

the equal protection does not demand or command equality. It is

in negative, not positive, terms: “No State shall . |. deny

.. +" It forbids inequality. While logically, it is true, equality and

inequality are mutually exclusive and exhaust the universe, it never-

theless makes a great deal of practical difference whether we ask,

on the one And ig whether particular treatment is unequal in a

particular respect, or whether, on the other hand, we ask whether

particular treatment is equal in all other respects. We may be able

to decide what is unequal — an inquiry which can easily be narrowed

and pinpointed — without having the haziest notion as to what is

equal. To determine what is equal requires omniscience with re-

j }

| |

a

48a

However, by all odds the most encouraging development

in the somewhat somber post-McInnis era is the stunning

victory in the Serrano case itself.

Further Analysis of Serrano

Let us turn then to an analysis of the California Supreme

Court’s reasoning: The first question for the Court was

whether the “rational basis” test or the “compelling in-

terest” test should be applied. As previously noted, it

seems clear from explicit United States Supreme Court

statements that the “compelling interest” test applies to

cases involving classifications based on wealth.** That the

California system for financing public education classifies

on the basis of wealth, the Court found plain. Therefore,

on this ground alone, the Court concluded that the ‘“com-

pelling interest” test should apply. However, the Court

also appeared to rule that the “compelling interes ” test

applied for another independent reason. The United States

Supreme Court as indicated that the “compelling interest”

test applies whenever a “fundamental right” is involved.

In the Serrano case the California Supreme Court con-

cluded for the first time that education was a fundamental

right or interest,37 and therefore required the application

spect to the infinite aspects to any particular distribution of benefit

or burden, plus the ability to measure or weigh each aspect in com-

parison to the others — an impossible task, certainly for the

judiciary.

In short, the equal protection clause is a negative command, and

the only relief a successful suitor can legitimately seek is the re-

moval of the inequality he attacks.

38 McDonald v. Board of Election Commissioners, 394 U.S. 802,

807 (1969), citing Harper v. Virginia Board of Elections, 383 U.S.

663 (1968).

36 McDonald v. Board of Election Commissioners, supra, at 807;

citing Kramer v. Union Free School District, 395 U.S. 621 (1969).

37 The Court appears to use right and interest almost interchange-

ably. The Court speaks of the “right to education, which we have de-

termined to be fundamental” (Slip op. 22 n. 13) ; a “number of funda-

mental interests [including] rights of [criminal] defendants” ( Slip

op. 33); the court speaks of comparing “the right to an education

with the rights of defendants\in criminal cases and the right to vote’

“\

\

49a

of the “compelling interest” test. Having concluded on

two grounds that the “compelling interest” test was appli-

cable, the Court then turned to whether the California

system for financing public education met that test. The

Court had no difficulty in concluding that California’s sys-

tem of financing public education was not necessary to

promote a compelling state interest. Accordingly, the

Court condemned the system as a violation of the equal

protection clause.

Both legs of the Court’s analysis have their shortcomings,

but the result is correct.

Taking the second leg first, it is true that the United

States Supreme Court has indicated that the compelling

interest test is applicable when a fundamental right is

involved, but this is patently erroneous. For that reason it

is highly unlikely that the Supreme Court would itself

apply such a rule if that were the only basis for granting

relief. :

Assuming elementary and secondary education to be a

fundamental interest,3* we often discriminate — and prop-

erly so — in its distribution. For example, we discriminate

among students by providing more money for high school

students than for elementary school students. We provide

different courses for students with different interests. We

provide special facilities for the culturally deprived. All

of these instances of differing treatment may be reason-

able, wise and desirable. But they are hardly necessary to

promote a compelling state interest — unless we torture

(Slip op. 29) ; the court concludes that “the distinctive and priceless

function of education in our society warrants, indeed compels, our

treating it as a ‘fundamental i-terest’” (Slip op. 42).

*§ College education may or may not be different from secondary

education. Consider the following example, A state university makes

available to any qualified sudent, upon payment of a $1,000 tuition

fee each year, a university education \which costs the state $3,000

per year. The. qualified student who cannot afford the $1,000 tuition

fee is denied the $2,000 grant which the state in fc makes to the

student who can afford the $1,000 tuition fee. Cf. McMillan v. Gar-

lick, 430 F. 2d 1145 (2d Cir. 1970).

a4

i

50a

those words to encompass. ideas which they do not now

contain.

The same kind of examples could be cited with respect

to any interest whose fundamentality, unlike education,

is unquestioned. Surely the right to vote is a fundamental

interest. Yet convicted felons are commonly denied the

right to vote. No one would suggest, however, that this

form of discrimination must be justified by reference to a

compelling state interest if it is to be sustained against

attack under the equal protection clause. Both the denial

and the grant of the franchise to convicted felons are rea-

sonable rules, and neither rule is unconstitutional even

though a fundamental interest is involved.

That the “compelling interest” test is not applicable sim-

ply because a fundamental right is involved may also be

demonstrated by considering the two constituent elements

involved in any equal protection analysis. The first ele

ment may be denominated as the “basis of classification”,

such as wealth or race. This element has also been de

scribed as “the classifying fact’®® or “the differentiating

classification” .*°

The second element which is involved in any equal pro-

tection analysis is the “benefit” or “detriment” which gov-

ernment is distributing differentially on the basis of the

classifying fact. The benefit or detriment may be the

franchise, a particular educational resource, or a jail term.

In every equal protection analysis the question is, or.

should be, whether the particular classifying fact can ap

propriately be used as a basis for the differential distribu-

tion of the benefit or detriment involved.

To say that the “compelling interest” test is applicable

whenever a fundamental interest is involved is to say that

we can determine whether an equal protection violation

has occurred simply by examining the nature of the benefit

aie Clune & Sugarman, Private Wealth and Public Education,

p. |

49 Mr. Justice ' Fasten in Harper v. Virginia State Board of Elec-

tions, 383 U.S. 663, 681 (1966) (dissenting opinion).

aa ae |

a

or detriment which is differentially distributed, without

regard to the nature or character of the classifying fact.

It is to say that no distinctions with respect to fundamental

interests can be made unless they are necessary to a com-

pelling state interest. This argument falls of it own weight.

This does not indicate, or even imply, that the funda-

mentality of the interest involved is either irrelevant or

unimportant. The fundamentality of the interest has a

significance to another, perhaps crucial, aspect of a proper

analysis of the Serrano problem, to which we shall return.

-

The other leg on which the Serrano decision stands is

that the “compelling interest” test is applicable to wealth

as a differentiating classification, and that wealth is so

used in this case. With the statement of principle that

government should not be permitted to classify on the

basis of wealth unless to do so is necessary to promote

a compelling governmental interest, few could disagree.‘!

Whether the Serrano case involves a discrimination based

on wealth is another question. I believe it does not.

*' Even Mr. Justice Harlan (who has dissented from most of the

equal protection cases on which plaintiffs rely in wealth discrimina-

tion cases) agrees that discrimination based on wealth is unconstitu-

tional :

It is said that a State cannot discriminate between the “rich” and

the “poor” in its system of criminal appeals. That statement of

course commands support . . . Griffin v. Illinois, 351 U.S. 12, 34

(1956) (dissenting opinion).

The States, of course, are prohibited by the Equal Protection

Chuse from discriminating between “rich” and “poor” as such

in the formulation and application of their laws. But it is a far

diferent thing to suggest that this provision prevents the State

from adopting a law of general applicability that may affect the

poor more harshly than it does the rich. Douglas v. California,

372 U.S. 353, 361 (1963) (dissenting opinion) emphasis sup-

plied as to the word “application”).

However, strangely enough, Justice Harlan does not appear to require

the application of the “compelling interest” test to wealth classifica-

tions. See Dandridge v. Williams, 397 U.S. 471, 489 (1970) (con-

curring opinion) ; Shapiro v. Thompson, 394 U.S. 618, 659-61 (1969)

(disserting opinion ).

a

52a

The Serrano case involves, instead, a discrimination

based on ability to pay. The difference is subtle, sometimes

difficult to grasp, but nevertheless important. A law pro-

hibiting all people earning less than $3,000 per year from

using a public park is a discrimination based on wealth;

one forbidding entry to a park unless a three dollar admis-

sion fee is paid is a discrimination based on ability to pay.

In one sense, it may be argued both come to the same

thing: Neither the poor man nor his child can afford the

three dollar admission fee, so they are fenced out just as

surely as if they had been denied admission to the park

because of the father’s failure to earn more than $3,000

per year. However, from the viewpoint of equal protection

theory, it makes a good deal of difference. It is much more

difficult to justify a discrimination based on wealth than

on ability to pay. For example, all would agree that the

“compelling interest” test should be applicable to a law

that forbad poor people from buying tickets to the munici-

pal opera. But what about charging the poor man $15 for

a seat? Or how about charging the poor man the same

toll as the rich man on a state turnpike?

In short, the “compelling interest” test is always appli-

cable to\wealth discriminations.4? But not all discrimina-

tions based-on-ability to pay are to be judged on the basis

of this more stringent test. To argue that all discrimina-

tions based on ability to pay are subject to the “compelling

interest” test would mean that government could never

impose a uniform fee on all citizens.

When is fee paying or discrimination based on ability

to pay unconstitutional? We know that in some cases it

is not permitted. For example, in Harper v. Virginia Board

of Elections*® the Court struck down a $1.50 poll tax. The

case involved, strictly speaking, not a discrimination based

42 Except for so-called benign wealth discriminations, such as wel-

fare payments (which discriminate in favor of the poor) or gradu-

ated income tax (which discriminates inst the rich). On benign

racial classifications, see “Devel ts in the Law — Equal Protec-

tion,” 82 Harv. L. Rev. 1065, 1104-1120 (1969).

48 383 U.S. 663 (1966).

53a

on wealth (although it is widely cited for this proposition),

but a discrimination based on ability to pay (or fee-

paying). Rich and poor alike were charged the $1.50 poll

tax. The statute did not say to the poor man who manages

by dint of great sacrifice to come up with the $1.50 poll

tax, “You are not permitted to pay the $1.50 poll tax.”

The indigent citizen was denied the franchise only if he

did not have the $1.50. The state would clearly have

accepted the fee from an indigent person who was willing

to pay the fee. Therefore, the statute discriminated on

the basis of ability to pay, rather than wealth, although the

effect may be and often is the same; namely, to fence out

indigent voters.

The Court stated:

A State violates the Equal Protection Clause of the

Fourteenth Amendment whenever it makes the afflu-

ence of the voter or payment of any fee an electoral

standard.*

= * * * * *

To introduce wealth or payment of a fee as a measure

of a voter’s qualification is to introduce a capricious

or irrelevant factor.*

* * * et * *

(Wealth or fee paying has, in our view, no relation to

voting qualifications.‘

An analysis similar to the one just undertaken for

Harper can be made of Serrano. In Serrano, the state is

not preventing or forbidding Baldwin Park from raising as

much money for its educational system as Beverly Hills.47

Baldwin Park is free to raise as much money for its educa-

tional system as it wishes. Baldwin Park’s problem arises

from the fact that, like the poor man who wants a seat

** 383 U.S. at 666 ; emphasis supplied.

* 383 U.S. at 668, emphasis supplied.

** 383 U.S. at 670; emphasis supplied. —

“If it did, such a case would be condemned by Hargrave v. Kirk,

313 F. Supp. 944 (M.D. Fla. 1970), judgment vacated on other

grounds, sub nom. Askew v. Hargrave, 401 U.S. 476 (1971).

“=a

ii

54a

to the municipal opera, it can’t afford it. Baldwin Park

doesn’t have the ability to itself pay for the kind of edu-

cational system it would like.

The Harper case and other cases cited in a footnote,‘ in

which fee-paying has been condemned as violative of the

equal protection clause, provide a guideline as to when

discriminations based on ability to pay or fee-paying are

unconstitutional; that is, when fundamentally important

interests are involved.

It is at this point in the analysis that the fundamentality

or importance of education becomes relevant. In short,

fee-paying, or discrimination based on ability to pay, vio-

lates the equal protection clause only when the benefit or

detriment differentially distributed is of fundamental im-

portance. The California Supreme Court’s discussion of

the importance of education is an excellent one and fully

supports the conclusion that the “compelling interest” test

is applicable to the facts of that case because it involves

a discrimination based on ability to pay in the distribution

of a fundamentally important benefit. Needless to say, it

is also obvious that California’s present system of financing

’ public education is not necessary to promote a compelling

state interest, and it must therefore be struck down as

unconstitutional.

The foregoing analysis, indicates that the judgment —

if not all of the reasoning — of the California Supreme

Court should be adopted by the United States Supreme

Court. However, there is great doubt that this will occur. -

The first major obstacle to an adoption of the Serrano

judgment by the Supreme Court is, of course, the McInnis

and Burruss cases. However, McInnis can be distinguished

from Serrano on the ground that in McInnis the plaintiffs

argued, not that the Constitution forbade discrimination

48 For other cases in which fee-paying has been declared unconsti-

tutional as it affects the poor, see Griffin v. Illinois, 351 U.S. 12

(1956) ; Douglas v. California, 372 U.S. 353 (1963); Williams ¢.

Oklahoma City, 392 U.S. 458 (1969) ; and Tate v. Short, 401 US

395 (1971).

55a

based on wealth, but that the Constitution required the

distribution of educational resources based on the “educa-

tional needs” of the students, whatever that is.*” Burruss

simply followed McInnis. Moreover, it may well be, as the

California Supreme Court has suggested, that the McInnis

and Burruss decisions are nothing more than a refusal by

the Supreme Court to deal with the question at that time.

These decisions were not, according to this view, a rejection

of the constitutional position, but simply the practical

equivalent of a denial of certiorari.” In any event, the

Supreme Court knows how to overcome even a series of

per curiam affirmances when it wants to.*!

The second, and perhaps more serious, hesitation in pre-

dicting that the Serrano rule will be adopted by the United

States Supreme Court is the tenor of decisions during the

last term of court. To summarize, the 1970-71 term of the

United States Supreme Court was disastrous from the point

of view of civil rights and civil liberities advocates.**

“The McInnis plaintiffs went so far as to argue — in the first

case dealing with economic equality of educational opportunity — that

the equal protection clause required more than equal per pupil state

expenditure for “culturally and economically deprived areas” in order

to equalize the educational opportunity of children from these areas.

5° The cases came up by way of an appeal from three judge courts.

S'Eg., Baker v. Carr, 369 U.S. 186, 278 (1962); McGowan 1.

Maryland, 366 U.S. 420, 511 (1961). See also Minersville School

District v. Gobitis, 310 U.S. 586 (1940), where the Court gave

plenary consideration to an issue which had previously been ruled on

in a series of per curiam decisions. Gobitis was, of course, overruled

bog Virginia State Board of Education v. Barnette, 319 U.S. 624

).

*? See, for example, the so-called February Sextet, led by Younger

v. Harris, 401 U.S. 37 (1971),.which sapped the vitality of Dom-

browski v. Pfister, 380 U.S. 479 (1965); Askew v. Hargrave, 401

U.S. 179 (1971), which for the first time applied the doctrine of

abstention to a Civil Rights Act (42 U.S.C. §1983) case: H’yman 1.

James, 400 U.S. 309, 324 (1971), Justice Blackmun’s first majority

opinion in which he rejected the welfare claimant's plea to privacy

and stated, {The welfare claimant] has the ‘right’ to refuse the

[social worker’s] home visit, but a consequence in the form of cessa-

tion of aid . . . flows from that refusal. The choice is entirely hers,

and fothing of constitutional] magnitude is involved”, Palmer v.

Thompson, 403 U.S. 217 (1971), holding that a city may close its

More specifically, however, the Court has indicated what

can only be described as an insensitivity to the claims of

the poor. In James v. Valtierra,™ the plaintiffs attacked

under the equal protection clause a provision in the Cali-

fornia Constitution which provided that no low rent hous-

ing project could be constructed by a state public body

unless the project w

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