Last week, the Missouri Supreme Court upheld the adequacy of the school funding formula established by the state Legislature that determines how much money state government provides to public school districts.
The formula relies on an “adequacy” amount – initially $6,117 per pupil –which averages per-pupil spending by a number of school districts that are performing well.
However, in an impassioned dissenting opinion, Judge Michael A. Wolff declares unconstitutional the way the state Legislature mandates funding for public schools – and all but calls for a new, more direct legal challenge to its constitutionality.
Wolff writes, “I read today’s principal opinion as keeping the door open to a direct challenge to the state’s failure to equalize property assessments properly.”
The details of his argument concern minutiae of property assessments and how school districts manage their money, but the argument is fundamentally based on a conviction in equal opportunity and social justice that is thrilling to read coming from a Missouri Supreme Court judge.
Wolff notes “stunning” disparities in per-pupil spending from district to district, despite Missouri government’s guarantee of statewide “adequacy.” “The highest spending district spends $15,251 per pupil and the lowest-spending district spends $4,704 per pupil,” Wolff writes.
This is due to the funding base for public education in property taxes, which vary widely across the state. Wolff notes that “the property tax wealth per pupil in the wealthiest districts is 15 to 20 times that of the property tax wealth per pupil in the poorest districts.”
The direct financial connection between property taxes and investment in education, Wolff argues, creates a cycle that is either benevolent or vicious, depending on the relative wealth of the district. In poorer per-capita urban areas like St. Louis, the cycle is vicious.
“Those of us who live in urban areas are aware that residential real estate prices are affected by the perceptions about the quality of the schools in a district,” Wolff writes.
“The rich districts get richer because desirable schools help to raise property values, and higher property values make it easier for the schools to get more property tax revenue.”
This is where the sense of social justice in Wolff’s argument bursts to the fore, when he writes, “These unequal results pose a simple question that is hard to avoid and even harder to answer: What makes the children of one school district deserving of only about one-third of the education money available for the schools of the children in the highest-spending district?”
Wolff argues that the “gross disparities” that result from Missouri’s funding structure for public school districts “ought to make courts especially attentive to particular constitutional requirements such as taxation of property tax wealth” – and this is where he delves into the details.
He finds two ways in which inequality between public school districts in Missouri is structural, though he uses the more alarmist term “rigged.”
The first argument is based on the fact that poorer districts have to use more of their revenues for operational logistics that do not directly impact education than wealthier districts do.
“When it comes to spending adequacy-based local and state revenues, districts may spend up to 12 percent of these revenues for debt service and capital purposes, Wolff writes.
“This means that districts that depend on the state funding formula … always will be spending less for operating costs than the adequacy-based formula provides. The formula, therefore, always will be funded inadequately for operating costs when districts use some of their adequacy-based revenues for debt service and capital purposes.”
Property-rich districts, on the other hand, will not have to spend as much operating revenue on debt service and capital purposes, so they will spend more of their ‘adequacy’ funds on actual education than poorer districts.
Wolff adds, sarcastically, “Perhaps this inequity – and inadequacy – of ‘adequacy’ was unintended, or perhaps the legislature deemed a difference of up to 12 percent to be close enough for government work.”
‘A flawed foundation’
Wolff then proceeds to find blatant fault in the 2005 law in language that all but begs for a new, direct challenge to its constitutionality.
“The 2005 law builds the school funding system on a flawed foundation that operates contrary to the constitution and to the laws under which property tax assessments are to be equalized,” Wolff writes.
The problem is, the 2005 school funding law adopts the 2004 property valuations and freezes them until 2013. So what?
“Because the tax commission’s adjusted property assessments among counties is based on appraisal rather than market values based on sales data, the 2004-2005 property tax assessment valuations are not truly equalized as required by … the Missouri Constitution. As such, it is constitutionally impermissible for the state to rely on these values in allocating state funding for public schools,” Wolff writes.
“By disproportionately taxing some Missourians but not others, the current property tax assessment system also violates the constitutional requirement that taxes ‘be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax.’ A school funding system based on unconstitutionally disparate taxation cannot be upheld.”
Without framing a class conspiracy in the 2005 legislation, Wolff does ask “the age-old question: Who benefits?” from locking in 2004 property valuations until 2013. He comes up with an interesting answer: rapidly growing, affluent suburban areas.
“School districts in rapidly growing areas of the state would seem to do well because they would continue to get state aid based on their 2004 valuations even though newly built properties are coming onto the tax rolls and producing local revenue without having that revenue deducted from their state aid entitlements,” Wolff writes.
By contrast, “slow-growing or declining areas” – Wolff mentions rural districts, but also urban cores and ring suburbs – suffer.
Having already spoken sarcastically of “this inequity – and inadequacy – of ‘adequacy,’” Wolff adds a final, stinging rhetorical flourish: “For some districts, the 2005 law will not provide adequacy, only delusions of adequacy.”
Wolff urges, “When the system is rigged unconstitutionally, the losers should have a judicial remedy.” It’s safe to say a more direct constitutional challenge to this aspect of the school funding formula is one vote toward being upheld by the Missouri Supreme Court.
