Schools suit to target spending Strategy in Md. may differ from those in other states

May 17, 1992|By Michael A. Fletcher | Michael A. Fletcher,Staff Writer

If Baltimore moves ahead with legal action to try to force the state to spend more money on poor school districts, Maryland would join at least 22 other states that have been dragged into court by lawsuits over education financing.

Education-funding experts say the lawsuits are being spawned by wide gaps between poor and rich school systems -- gaps they say will not close so long as schools are financed mainly by local property taxes.

"These suits, if successful, result in an increasing reliance on state sales taxes and income taxes for school funding and less reliance on property taxes," said G. Alan Hickrod, director of the Center for the Study of Educational Finance at Illinois State University.

In Maryland, where 39 percent of school funding was provided by the state in 1989, there are wide disparities in school district spending. The gaps mirror the relative wealth of the jurisdictions in the state.

Montgomery County, Maryland's wealthiest school district, spent an average of $7,590 per pupil last school year.

Baltimore, the state's sixth poorest school system, spent an average of $4,947 per student despite having a much higher property tax rate. The statewide average was $5,814 last year.

The gaps will only worsen with the continued exodus of the middle class from places such as Baltimore, analysts say. And, typically, as the middle class flees, a school system needs more money to do a good job but finds itself with less.

Wealth disparities sparked the education-funding lawsuits that have been won by plaintiffs in recent years. Kentucky, Texas and Montana are some of the states where, since 1989, lawsuits have won more money for education. In each case, the courts have ordered a wide range of remedies that have a common thread: more state money for the cash-strapped school districts. But with the new aid have come higher taxes and new political antagonisms between rich and poor districts.

"What happens when plaintiffs win is that there is usually a pretty good shot of money which the state puts into the system," said John G. Augenblick, an education-funding consultant based in Denver.

The Kentucky Supreme Court ruled that that state's school-financing formula was unconstitutional because all students did not receive adequate educations.

Mr. Augenblick said the ruling forced Kentucky to increase spending for education by about 25 percent. That boost in spending resulted in a sales tax increase and changes in the state income tax. There was another result: The school-spending gap between rich and poor counties narrowed by one-third. The ruling also led to the unusual step of capping spending by local school districts. In addition, the state legislature restructured the education system, he said.

"They re-created the education system from the ground up," he said. "They changed the way the board operated, the commissioner operated, school boards were appointed. . . . they changed everything down there in ways the plaintiffs who brought that case never anticipated."

Montana, after a 1989 court ruling, set a goal of funding 85 percent of its schools' revenue by creating a formula that set up a guaranteed tax base and allowed some districts that boosted local taxes to tap into a state pool of money. The state came close to meeting its goal in the first year but wound up back in court when budget difficulties forced it to slow state education spending.

In Texas, a court ruling resulted in lawmakers passing a school-financing bill that shifted hundreds of millions of dollars in property tax money from richer districts to their poor neighbors. But the state Supreme Court declared the plan unconstitutional in January, and the Legislature has until next year to come up with a new scheme.

"In some cases, it may not be enough for a state just to pay more" to satisfy a legal claim, Mr. Augenblick said. "You sometimes can overcome the problem by the way you allocate the money you have, so you have winners and losers. And it's the losers who are very difficult to deal with politically. So, typically, you have to at least hold them harmless. And that's going to cost money."

The proponents of a school-funding lawsuit in Maryland say it is hard to predict how a successful lawsuit might be resolved here. To some extent, the remedy would hinge on who the plaintiffs are. Mayor Kurt L. Schmoke has said that the city would join a suit, and several other poor school districts in Maryland would be expected to do likewise, but the legal strategy is still evolving.

Also, a Maryland lawsuit is not expected to focus on spending equalization across the state -- a legal approach that was thrown out in Maryland in 1983.

A suit would instead demand that poor school districts receive the resources necessary to provide students with a "thorough and efficient" education. That legal claim is likely to bring a remedy different from those prescribed in most other states, said lawyers who have spent more than a year researching a possible lawsuit.

"To some degree, we're operating in uncharted water," said Susan Goering, legal director of the Maryland chapter of the American Civil Liberties Union.

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