munity, and the only thing I wonder, if that is in your testimony. is why it took the courts so long to get where we are, because now in retrospect, it looks so patently clear, that there is where the problem in education was. As I look at these decisions, this is the first significant movement to give some meaning to Brown of 1954. Mr. HATTER. That is correct. Mr. FORD. Mr. Chairman, it is not new. I heard a lecture over 20 years ago, by someone who spoke in the same manner in which the Serrano court spoke, and we heard from many of these people during the Michigan constitutional convention. The main problem is the legislator who proposed this Serrano type first step toward revising the tax structure of any State would not be around for the next election. Mr. PUCINSKI. That is why we have courts, we have Federal courts and that is why Federal judges are appointed for lifetime appoint ments. Mr. QUIE. Will the gentleman yield? That is the point here, about the center city, actually spending more than many of the suburbs. As I understand Serrano, there is no requirement of the State, that they bring them up to the highest level. There is not even a requirement they come to 80 percent. This is just a hope that the push will be so strong from those communities that spend a great deal on their children for education, that they will push the rest of the State up. It is still only a hope. Mr. HATTER. I think it is something more than a hope. It means that the State legislature will have to come up with some sort of for mula that provides a neutral principle for the financing of education As you say, it does not say you have to go up to a certain level, bu once they decided to let a district provide a certain amount, and 5. percent or more comes from property taxes, then the State will have to make up that difference, or come up with some other kind of for mula that allows for siphoning off. Mrs. CAREY. The State has to have a rational basis for having sub stantial differences. It could have a disparity between $1,400 and $1.000, between two dis tricts, if they could show there are reasons for doing that, that ther are more exceptional children, more handicapped children, teachers salaries were high and so on. Mr. HATTER. The cost of living is different in Los Angeles. Mrs. CAREY. But to date, the amount spent was set by the propert wealth of the district. Mr. QUIE. There could also be a reasonable difference in the fac that you need a grandfather clause to let the higher districts stay u there, and I assume the possibilities are there, that a grandfathe clause could be used. The last thing I would like to make a comment on is that the cente city which seems to have so much trouble may find itself at the poir where you are trying to bring so many of the rural and the suburba districts up to the richer districts, that they may be all brought down. Mr. HATTER. Certainly without more commitment of dollars, ye We do not have enough in education now. Mr. PUCINSKI. I wonder if we could get to our other witnesses, an then we can ask other questions. Mrs. CAREY. I think we covered some of the other cases, but the next speaker is Roger Haydock, from legal assistance of Ramsey County, St. Paul, Minn. Mr. PUCINSKI. Mr. Haydock, your prepared statement will be inserted in the record at this point. (The statement referred to follows:) STATEMENT OF ROGER S. HAYDOCK, CHIEF COUNSEL, LEGAL ASSISTANCE OF INTRODUCTION On October 1, 1971, a class of school children in the State of Minnesota filed an action in federal court in Minnesota challenging the constitutionality of the Minnesota public school financing system. Represented by Roger S. Haydock, Dolores C. Orey, Michael A. Wolff, and John E. Branch, attorneys with Legal Assistance of Ramsey County, Inc., a legal services program, the school children sought declaratory relief that the existing Minnesota school financing system for secondary and elementary schools deprived them of equal protection of the laws in that the financing system based the amount of money spent per child for education upon the wealth of the child's local school district. The plaintiff children who lived in a poor school district (a district with a low assessed property valuation) complained of receiving an inferior education measured by the dollar expenditure per pupil compared to the superior education reflected by a higher dollar expenditure per pupil afforded those children who lived in rich school districts (districts with high assessed property valuation). The class of plaintiff children posed the issue: Whether pupils in publicly financed elementary and secondary schools enjoy a right under the equal protection clause of the Fourteenth Amendment to have the level of spending for their education unaffected by variations in the taxable wealth of their school district or their parents. On October 12, 1971, the district court for Minnesota by Judge Miles W. Lord concluded that indeed such a right exists and adopted the constitutional rule formulated by the California Supreme Court in Serrano v. Priest that the level of spending for a child's education may not be a function of wealth other than the wealth of the state as a whole (the principle of fiscal neutrality). This decision represented the first federal court decision in this country recognizing the constitutional right of school children to an education not dependent on the wealth of their school district or residence. Subsequently, on October 30, 1971, the Legislature of the State of Minnesota enacted a revised public elementary and secondary school financing plan greatly increasing state aid to local districts and reducing the need of school districts to rely on widely variant property taxes as a source for school revenue. PUBLIC SCHOOL FINANCING IN MINNESOTA PRIOR TO OCTOBER 1971 The Minnesota system for financing public elementary and secondary schools relied nearly exclusively on two principal sources of revenue: local property taxes and state foundation aids. On a statewide basis, the foundation aid program (coupled with the requisite local effort necessary to receive such state aid) guaranteed to local school districts a maximum equalization grant of $404 per Pupil unit. But the average spending per pupil unit by school districts surpassed $636 in 1969-1970. Such expenditures ranged from a low of $370 per pupil unit In some school districts to over $903 in other school districts. Because of the failure of the state foundation aid program to equalize educational funding, local school districts had to rely on property taxes to raise the balance needed for school revenue. Quite obviously, richer districts (with high assessed property) Collected relatively more for each additional tax mill levied while poorer school districts (with low assessed property) received relatively less for taxing at the same or a substantially higher mill rate. Consequently, poorer school districts had to tax themselves at a much higher mill rate than rich school districts to raise needed revenue. For less local effort, rich school districts raised more money while poor school districts struggled to raise insufficient money to operate their schools. This system for financing schools discriminated in favor of wealthy school districts and against poor ones. Above a guaranteed minimum level of spending, the financing formula invited rich school districts to tax and raise money in a manner closed to the poor school districts. Such poor school districts did not have the sufficient rich property base to raise revenue, though they taxed themselves to the hilt. The several charts included in Appendix I herein indicate quite clearly the results of such discrimination. While rich school districts taxed less and raised more, poor school districts taxed at a high rate and raised less money. Consequently, the children residing in the poor school districts received an inferior education measured by the dollar expenditure per pupil. The evil in such system was clearly the state's reliance upon school districts of unequal wealth and ability to carry out the uniform responsibility of running public schools. School spending was tied directly to the accident of the local property tax base. What amount was spent per pupil depended upon where he or she lived and the wealth of such surrounding property. This system insured that regardless of how committed poorer school districts were to education and regardless of how heavy they taxed themselves, richer school districts could always provide costlier schooling despite far lower tax effort by their residents. Poor school districts had less money to spend but taxed at a higher rate; rich school districts had an abundance to spend and taxed at a low rate. This result created and fostered by the school financing system discriminated against poor school districts and against children living and going to school in those districts. VAN DUSARTZ ET AL. HATFIELD 334 F. SUPP. 370 (D. MINN. 1971) Judge Miles W. Lord analyzed the Minnesota school financing system in his opinion and declared that the plaintiff school children properly asserted their constitutional right to an education not based upon wealth of their respective school districts. PUBLIC SCHOOL FINANCING IN MINNESOTA AFTER OCTOBER 1971 Several weeks after the court decision, the Minnesota Legislature enacted : tax plan and revised public school financing formulas. The Federal court's opinion against the existing system had a signigcant influence on those members of th Legislature who opposed one proposed state aid formula bill which equalize funding. The court decision helped to end a several month stalemate on a schoc aid bill and bring about the passage of the equalized funding school financin bill. The new financing system remains a complicated maze of mathematical com putations and complex aid formulas. On its face, the plan calls for the state t provide equalized foundation aid of $600 per pupil unit during the 1971-197 school year and $750 per pupil unit during the 1972-1973 school year. Thus, th plan appears to guarantee a maximum equalized grant of $600 this year an $750 next year per pupil unit. The plan increases state aid 50% this year (fro $404 equalizing grant) and over 80% for next year. Consequently, school di tricts will have to rely less on property taxes as revenue for school expenditure In effect, the bulk of school expenditures will be provided by the state whil local school districts will have to make up any differences through property taxe Part of the new financing plan puts a maximum on the allowable mill rate to t assessed by school districts to limit reliance on property taxes and provide som tax relief to property taxpayers. In addition, other features of the bill funn additional state aid to school districts through special aid formulas based c the school district's number of children who come from families receiving publ assistance or who are handicapped. Other miscellaneous programs also cha nel supplemental aid to school districts. A copy of the full plan appears i Appendix II. Some proponents of the bill feel quite strongly that the newly enacted syste will remedy the discriminatory effects of the old system. But until the fac and figures come in and are analyzed, no one knows for certain now how f: the bill will go in actually equalizing funding. The estimated average cost providing an adequate education to a school child for this school year runs ov $750; yet the state provides only a $600 maximum equalization grant. Wheth poorer school districts will be able to raise the $150 or more difference (throug special state aid programs) or have the local choice-opportunity to raise su money (through property taxes) remains to be seen. In any event, while ch dren in poor school districts may not yet receive an education based upon fise neutrality, at least this year such children will receive a far better educati (measured by dollar expenditure) than they love for many years past. APPENDIX I.-RESULTS OF SCHOOL FINANCING DISCRIMINATION-Continued Equalized Local property Maintenance Equalized per ADA pupil unit (1969-70) Equalized school 1 See footnote (1), (b), and (c) for explanation of what ADA pupil unit and 1966 EARC figures are. * Maintenance expenditure is all expenditure apart from capital expenditure and debt service for 4 Figures are from: State of Minnesota, Department of Education, State Aids, Statistics and The 1969 EARC valuation per ADA pupil unit is used as the most recent uniform measurement of the actual wealth of the district. It excludes exempt property. It is obtained from the Governor's Proposed State Aid Formula, in evidence as exhibit F. Actual mill rates are unequalized; that is, assessment practices vary widely from district to district and mill rates are on these unequalized nonuniform assessments. 7 The equalized mill rate is constructed in order to take into account the varying assessment practhe contribution of the local district to the equalized by del بمللمع Bounded to next higher figure. |