2 minute read

Education Law

Financing Of Public Education

Public schools in the United States are financed through a system of fiscal federalism—that is, the funds used for their operation have been appropriated on the federal, state, and local levels. Nationally, from the mid-1970s to the

mid-1990s, the combined federal and state support for public education accounted for slightly less than 50 percent of all operating expenses, with the federal treasury providing less than ten percent of the total cost of public education. Therefore, approximately one-half of the money required by school districts has come from local sources, primarily local property taxes. States have constructed myriad property classifications and state-aid distribution formulas in attempts to equalize educational opportunities for students in property-rich and-poor school districts. Further, most states provide special funding for school transportation, for the education of students with disabilities, and for other high-cost services and programs.

As state creations, school boards may only exercise the fiscal powers delegated to them by the state, so they depend heavily on direct state subsidies and legislative authorization to levy school district taxes. The states' options to limit and allocate direct state assistance to different classes of school districts, to fix the sources and limits of school district revenues, and even to transfer school-district funds place the ultimate control of school finance in state legislatures and not in local school boards. Financially stressed school districts and citizen groups have, therefore, resorted to constitutional challenges to overturn state laws that they deem to be unduly restrictive or unfair. These challenges have not fared well under the federal Constitution and have met with mixed success under state constitutions.

The U.S. Supreme Court, in San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 93 S. Ct. 1278, 36 L. Ed. 2d 16 (1993), upheld the use of local property-tax systems to support public schools, against the claim that such systems violate the Fourteenth Amendment equal protection rights of children in impoverished areas. The Court further declared that public education is not a fundamental constitutional interest.

Following Rodriguez, litigation has proceeded in about half of the states, under the equal protection and education clauses of state constitutions. The state constitutional challenges do not have a uniform thrust. The themes of equality (equal protection) and quality (efficient public education) may, depending on the wording and construction of each state's constitution, lead toward different policies and results. Despite adverse court rulings, the school-finance litigation has inspired a trend of legislative reform in many states. The new laws are calculated to balance educational opportunities for all children, regardless of the wealth of their school districts or the income of their parents.

Additional topics

Law Library - American Law and Legal InformationFree Legal Encyclopedia: Doom to EmbargoEducation Law - History, Student Speech And The First Amendment, Searches Of Students And Lockers, Separation Of Church And State