Coalition for Equitable School Funding, Inc. v. State

*318FADELEY, J.,

concurring.

I concur in the holding that the second amended complaint, filed in April 1990,1 fails to plead sufficient facts to support the claim that the legislatively designed method of financing public schools violates any state constitutional provision relied on in that complaint. The school finance system is perilously close to the edge of the cliff of unconstitutionality, under the allegations of the complaint, but has not yet gone over the edge.

Three types of plaintiffs filed the complaint: first, a corporate association of 55 out of the 300 school districts in Oregon; second, a group of citizens owning property subject to locally levied property taxes; third, pupils from various school districts, represented by legally related adults for the purposes of the complaint. All three join in the claim that, in April 1990 and during the 1989-90 school year, the legislature (and the state government), violated the express provisions of Article VIII, section 3, of the Oregon Constitution.

That section requires that the legislature “shall provide by law for the establishment of a uniform, and general system of Common [i.e., public] schools.”

That constitutional provision is unusual because it states an.affirmative duty which the legislature must perform. Most constitutional provisions limit governmental actions, restricting government from infringing guaranteed rights of the people. But the public school guarantee in section 3 is different. It requires action by the legislative branch of government to establish the means by which the right to a public school education may be enjoyed by all. Before turning to plaintiffs’ specific allegations and arguments in support of their claims that this right has been violated, a selective review of the historical creation and development of this right, and of the funding necessary to its enjoyment in Oregon, is in order.

*319HISTORY OF THE PUBLIC EDUCATION RIGHT

When this nation was founded, its leaders recognized the importance of the contribution that each of its citizens must make if the nation and its novel philosophy of government were to succeed and survive. If governmental decisions were to reflect the consent of the governed citizenry and if those citizens were to express that consent by voting for or against their leaders and representatives, the citizens must be informed sufficiently to make wise choices. If the general citizenry were to be informed, they must be educated adequately in order to obtain, evaluate, publicly discuss, and then act upon the information about the problems facing the nation or one of its states or communities. It was seen by the founders that an education is necessary to the capacity for self-government; assuring the general availability of that educational ingredient for self-determination was seen as the duty of government.

As Thomas Jefferson put it:

“Establish the law for educating the common people, that is the business of the state to effect and on a general plan.”2

Many of the early Oregon pioneers brought with them the concept that public schools promoted the public weal. Before Oregon statehood, the territorial inhabitants and government provided for common schools open to the public. II Bancroft, Oregon History 35; I id. at 201, 325. Astoria maintained such a school, insufficiently funded by taxes and fines we may note, in 1855-56, see 4 Oregon Historical Society Quarterly 25 (March 1903).

At statehood in 1859, Oregon’s constitution contained Article VIII, section 3, in its present form and separate provisions establishing the common school fund and dedicating the proceeds from certain public lands to the support of *320public schools. Proceeds from this source soon proved inadequate to the task. By 1865, the public school at Astoria had developed to a nine-month school of over 100 pupils with a program “beyond the ordinary grades.” Id. at 27.

At Eugene by 1871, a high school was a regular part of the public school offering. 2 Oregon Historical Society Quarterly 55, 69, 75 (1901). State law provided a two-mill property tax for public school support by that time, which was increased by 50 percent to three mills by a change in the law in 1872. Id. at 74. Finances for the Eugene public school consisted of a state apportionment, a significantly larger county apportionment, a substantial share of the “rate bill” money and “subscriptions,” and some other funds. Id. at 75.

By the time of World War I, Oregon voters had decided to limit the rate of growth of local property tax levies to a percentage of the prior year’s dollar levies. As Oregon entered the depression of the 1930s, state government, comforted by the new tax on incomes, started to wean itself away from property tax rate levies for state governmental purposes. At the end of World War II, an initiative statute mandated that the state pay basic school support of $50 per pupil to local districts from the income tax or other state general fund revenues. By the 1961-63 budget period, state appropriations to basic school support accounted for over one-third of the state general fund expenditure. By the 1989-91 budget period, state appropriations for public school support were well over $1,000 per pupil. However, local school district property tax levies greatly exceeded that amount, on a statewide average, for the same period.

As school property tax levies grew, so did voter resistance to approval of increases. In 1987, the legislature responded to the difficulties of obtaining property taxes to fund some local schools by referring to the voters the Safety Net proposal discussed in more detail in the court’s opinion. This proposal did not contain any annual percentage increase in local dollar levy authority for the local schools affected by it.3

*321PLAINTIFFS’ CONTENTIONS

Noting that state government establishes the requirement for a standard public school program and that these requirements are ever-increasing, plaintiffs first contend that the legislature is constitutionally compelled to pay to the school districts whatever amount of money is required to meet the state standards.

This contention is puzzling. School districts are creatures of the state government, created as governmental entities by legislative acts and charged by state law to perform an important state function. They appear to be part of the legislature’s response to its constitutional duty to provide by law for the establishment of a uniform system of common schools. Moreover, the authority of school districts to levy property taxes for educational purposes is derived solely from state legislative acts. The same is true for district authority to spend public funds from state or local sources. Because it is based on a misapprehension of the place and role of school districts in the state governmental structure, plaintiffs’ first contention is not persuasive. Indeed, as to the claim of the pupils that the legislature must assure them a legislatively established standard education — a claim with which I agree — creation of school districts empowered to levy local taxes for public educational purposes is the legislature’s reaction to its duty to assure those pupils, and others, that constitutionally mandated system.4

Plaintiffs next contend that the constitutional duty is measured by equality of educational opportunity and that equality of opportunity is measured by the amounts spent per pupil in the more costly districts.

It is true, of course, speaking theoretically, that the legislature could gather back to itself the power to levy property taxes for educational purposes and, treating the state as a single levying district, exact property taxes at a single rate statewide. The legislature could then disburse the amount collected in equal amounts per pupil statewide. Other *322methods of equalizing funds received with the level of tax effort exerted are also theoretically possible.

Plaintiffs, however, have not argued that the words “uniform * * * system” in the constitution require uniformity in dollars spent per pupil nor that only expenditure equality will provide equal educational results. I am not inclined to establish the constitutional meaning of the word “uniform” absent full argument from the pertinent parties on the point.

It is clear that a floor or minimum educational program may be implied by the term “uniform, and general” in context of a constitutional duty to assure an adequate education. It is also clear that funding per pupil could be so small that it would not pay for a minimally adequate program. (Indeed, the Safety Net only assures adequacy for a brief time. Since its adoption, the purchasing power of a dollar has declined by approximately 20 percent using the consumer price index as a guide.) However, an inadequate amount is not the same thing as an adequate but unequal amount.

Plaintiffs’ pleadings fall short of alleging ultimate facts disclosing absolute inadequacy of the school financing system, as established by law as of April 1990, to fund the minimum adequate educational program, defined as one that meets the state standards. Plaintiffs do allege that various Oregon public school districts “receive from 35 percent to 86 percent of their required revenues” from local property taxes and that some, unnamed, “districts are unable to meet [state] standards and requirements.”

That allegation is but a conclusion, not a pleading of fact about the minimum dollar cost per pupil of a state standard program and the inadequacy of all available tax or in lieu of tax resources provided under law to meet that minimum dollar amount in a specific district. See ORCP 18A.

The Pupil Plaintiffs

The pupil plaintiffs allege that equality greater than that presently provided, even after taking state basic support into account, is required by the provisions of Article I, section 20, of the state constitution. That section prohibits a law “granting to any citizen or class of citizens privileges * * * *323which upon the same terms shall not equally belong to all citizens.” If the “privilege” involved is meant, in these plaintiffs’ section 20 contention, to be that of the right to an adequate public school education, then this contention is not different than the claim under Article VIII, section 3, and it yields the same result.5

On the other hand, if the privilege granted to one pupil but not the other is supposed, for the sake of discussion, to mean the dollar amount spent on a pupil in the most costly program in the state, or even the statewide average dollar amount spent per pupil, then, I note that the parties have not presented argument on that point. Absent focused argument, I am not willing to apply to the words “equal privileges” a purely economic yardstick or to assume that a “class,” for purposes of this section, may be based upon the relative economic wealth of the area where one lives.

State law requires a school program meeting minimum state standards. The fact that some districts, with local voter approval, maintain a program going beyond state standards does not, at first blush at least, establish that the “privilege” of a more costly education is thereby created or “granted,” within the constitutional meaning of “privilege.” No section 20 claim is made out by the pleadings.

The Taxpayer Plaintiffs

Taxpayer plaintiffs allege that Article I, section 32, requires equal rates of school property taxation statewide or equal benefits for equal rates statewide. It does not. It expressly requires tax uniformity “within the territorial limits of the authority levying the tax.” State ex rel v. Malheur County Court, 185 Or 392, 412, 203 P2d 305 (1949). That levying authority is the school district. The legislature currently levies no direct school property tax.6

*324APPENDIX

School property tax levies average about 1.7 percent statewide, or $17 per thousand of taxable value. Measure 5, not included in the allegations of plaintiffs’ second amended complaint, will in a few years place a ceiling of 1/2 of 1 percent, or $5 per thousand of taxable value, on school property tax levies. This will be true whether the school property tax is levied statewide or district by district.

At the time plaintiffs filed their last complaint, a school district that had fallen into the Safety Net could climb out of the net by local voter approval of a new tax base authorizing levy of an increased dollar amount. Five out of six districts had avoided falling into the net through local voter approval of modern tax bases or of dollar levies exceeding a 6 percent annual growth rate, as computed on a district’s approved tax base. (Of the 300 Oregon school districts, 48 are in the Safety Net.)

The provisions of Measure 5 purporting to cancel those local options for additional school funding are already effective. Because all school districts presently levy more than $5perthousand — rangingfrom$6.95to $29.01 — the Safety Net, in practical effect, is becoming a dead letter. Strong local voter support of local school tax levies or of new tax bases will no longer produce additional funding.

I agree with the court’s opinion that adoption of Measure 5 does not moot the complaint as a technical legal matter. But the school financing rules will never be the same again. Measure 5 establishes new rules for local property taxation, the bulwark of Oregon public school finance for 150 years. Measure 5 cuts the deck in a different place than ever before and deals new cards to a differing group of players.

Some changes under Measure 5 are numerically portrayed in the attached bar graphs. The graphs reflect the current statewide average school property tax rate of $17 per thousand of taxable value. The first graph depicts an assumed district that levied at the rate of $17 per thousand in the year prior to falling into the net.,

The second graph assumes a district that has not adopted a modern tax base but that has an old tax base *325allowing a levy of $7 per thousand without local voter approval. To reach the $17 statewide average levy, this district obtains local voter approval to levy annually an additional dollar amount “outside the 6 percent limitation” that requires adding $10 per thousand to the rate of levy.

*326SAFETY NET DISTRICT

[[Image here]]

*327OLD TAX BASE DISTRICT

[[Image here]]

That is, before Measure 5 was adopted, amending the state constitution to limit property taxes for public school support to one half of one percent of real value (i.e., $5 per thousand dollars of taxable value).

The quotation appears thus inscribed in marble on Jefferson’s Memorial at Washington, D.C. However, the two parts of the quotation appeared in separate letters to George Washington on June 4,1785, and to George Wythe on August 13, 1786.9 Boyd, The Papers of Thomas Jefferson 151 (1954); 10 id. at 245. The letter to Washington told him of congressional enthusiasm for a bill “for the more general diffusion of knowledge” and opined that it would “supersede” the charity schools that Washington had thought of.

Presently, 48 of the 300 school districts in the state are subject to the Safety Net for the local funding share.

The Safety Net is a state response, not just a local one. It originated in the legislature and was sent out for a referendum. When the people adopted it, they also were the state acting in response.

Under that understanding of the “uniform * * * system” language, the question is whether the system is equal to the task of establishing standard schools throughout the state, not whether expenditures per pupil are substantially equal.

Outcomes of Measure 5 are discussed in the appendix.