Case Title: Toledo City Sch. Dist. Bd. of Educ. v. State Bd. of Educ.

Citation: 2016-Ohio-2806

Docket Number: 2014-1769

State: ohio

Court: Ohio Supreme Court

Date: 2016-05-04T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Toledo City School Dist. Bd. of Edn. v. State Bd. of Edn., Slip Opinion No. 2016-Ohio-2806.] 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in an 
advance sheet of the Ohio Official Reports.  Readers are requested to 
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 
South Front Street, Columbus, Ohio 43215, of any typographical or other 
formal errors in the opinion, in order that corrections may be made before 
the opinion is published. 
 
 
SLIP OPINION NO. 2016-OHIO-2806 
TOLEDO CITY SCHOOL DISTRICT BOARD OF EDUCATION ET AL., APPELLEES, v. 
STATE BOARD OF EDUCATION OF OHIO ET AL., APPELLANTS. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Toledo City School Dist. Bd. of Edn. v. State Bd. of Edn.,  
Slip Opinion No. 2016-Ohio-2806.] 
Constitutional law—Article II, Section 28 of the Ohio Constitution—School 
funding—Retroactivity clause does not protect political subdivisions—
General Assembly has constitutional authority to adjust local school 
funding retrospectively. 
(No. 2014-1769—Submitted December 2, 2015—Decided May 4, 2016.) 
APPEAL from the Court of Appeals for Franklin County, 
Nos. 14AP-93, 14AP-94, and 14AP-95, 2014-Ohio-3741. 
_________________ 
 
KENNEDY, J. 
{¶ 1} In this discretionary appeal from the Tenth District Court of Appeals, 
we consider whether the General Assembly has the constitutional authority to 
retroactively reduce the amount of state funding allocated to local school districts 
SUPREME COURT OF OHIO 
 
2
and to immunize appellant State Board of Education of Ohio (“the department”) 
against legal claims by school districts seeking reimbursement for retroactive 
reductions in school-foundation funding.  The department advances the following 
proposition of law: “The General Assembly has constitutional authority to adjust 
local school funding retrospectively.”  We agree. 
{¶ 2} For the reasons that follow, we conclude that the Retroactivity Clause, 
Article II, Section 28 of the Ohio Constitution, does not protect political 
subdivisions like appellees Toledo City School District Board of Education, Dayton 
City School District Board of Education, and Cleveland Metropolitan School 
District Board of Education (“the boards”) that are created by the state to carry out 
the state’s governmental functions.  Therefore, we hold that the General Assembly 
has constitutional authority to adjust local school funding retrospectively.  We 
reverse the judgment of the court of appeals and remand this matter to the trial court 
for further proceedings. 
I.  Facts and Procedural History 
A. 
Public School District Funding for Fiscal Years 2005 through 2007 
{¶ 3} A school district’s revenue is derived primarily from state and local 
funds, with federal funds playing a lesser role.  State funding is determined and 
distributed through the School Foundation Program, R.C. Chapter 3317, which is 
administered by the department.  R.C. 3317.01.  One component used in the 
formula for calculating a school district’s funding is the district’s average daily 
membership (“formula ADM”). 
{¶ 4} For fiscal year 2005, a school district’s formula ADM consisted of the 
total number of students actually receiving the district’s educational services plus 
the total number of students who were entitled to attend school in the district but 
who received educational services elsewhere, including at community schools.  
Former R.C. 3317.03(A)(1) and (2), Am.Sub.H.B. No. 106, 150 Ohio Laws, Part 
III, 4254-4255.  Each school district certified its formula ADM to the department 
January Term, 2016 
 
3
based on a one-time student count conducted in early October (the “October 
count”).  Former R.C. 3317.03(A), Am.Sub.H.B. No. 106, 150 Ohio Laws, Part III, 
4254. 
{¶ 5} Enrollment changes that occurred outside of the October count did not 
increase or decrease a school district’s funding, with one exception: students who 
attended community schools but who were not included in their district’s October 
count were added to the formula ADM.  Former R.C. 3317.03(F)(3), Am.Sub.H.B. 
No. 106, 150 Ohio Laws, Part III, 4262. 
{¶ 6} While community-school students were included in school districts’ 
October counts under former R.C. 3317.03(A)(2)(a), 150 Ohio Laws, Part III, 4255, 
the community schools’ funding was not determined based upon those counts.  
Instead, that funding was based on the number of students in attendance at the 
community schools, which was submitted monthly to the department in an 
enrollment report known as the Community School Average Daily Membership 
(“CSADM”).  Cincinnati City School Dist. Bd. of Edn. v. State Bd. of Edn., 176 
Ohio App.3d 157, 2008-Ohio-1434, 891 N.E.2d 352, ¶ 7 (1st Dist.).  Based upon 
the CSADM report, the funds attributable to a student enrolled at a community 
school were deducted from the student’s school district’s school-foundation funds 
and paid to the community school that reported the student in its CSADM.  Former 
R.C. 3314.08(C), Am.Sub.H.B. No. 95, 150 Ohio Laws, Part I, 1117-1118. 
B. 
Department Adjusts Funding for Fiscal Years 2005 through 2007 
{¶ 7} During fiscal year 2005, the department noticed that the number of 
community-school students reported in some districts’ October counts was greater 
than the number reported in the CSADMs.  Believing the CSADMs to be more 
accurate, the department recalculated those school districts’ school-foundation 
funding for that fiscal year.  The boards respectively allege that the department 
determined the October counts were too high by the following numbers of students: 
Toledo, 561 students; Dayton, 688 students; and Cleveland, 575 students. 
SUPREME COURT OF OHIO 
 
4
{¶ 8} This recalculation resulted in the department’s determination that the 
boards had been overpaid for fiscal year 2005.  The department recouped the 
overpayment by deducting the overpaid amounts from the boards’ school-
foundation funding during fiscal years 2005, 2006, and 2007.  The boards allege 
that the department reduced funding during these years by the following amounts: 
Toledo, $3,576,948; Dayton, $2,548,120; and Cleveland, $1,857,311. 
C. 
Cincinnati Board of Education Litigation  
{¶ 9} In 2007, the Cincinnati School District sued the department over its 
fiscal-year-2005 adjustment of Cincinnati’s school-foundation funding.  Cincinnati 
City School Dist. Bd. of Edn., 176 Ohio App.3d 157, 2008-Ohio-1434, 891 N.E.2d 
352.  The trial court determined that Ohio law mandated that the formula ADM 
from the October count be used to calculate school-foundation funding—not the 
monthly CSADM data from the community schools.  Id. at ¶ 2.  The First District 
Court of Appeals affirmed.  Id. 
{¶ 10} The department appealed to this court and we accepted review.  119 
Ohio St.3d 1443, 2008-Ohio-4487, 893 N.E.2d 515.  The action, however, was 
dismissed before briefing because the parties reached a settlement.  119 Ohio St.3d 
1498, 2008-Ohio-5500, 895 N.E.2d 562. 
D. 
General Assembly Amends Statute 
{¶ 11} During the pendency of the Cincinnati litigation, the General 
Assembly amended R.C. 3317.03 to authorize the department to adjust formula 
ADM if an error was discovered.  Former R.C. 3317.03(K), 2007 Am.Sub.H.B. No. 
119.  Additionally, in the 2009 biennial budget bill, the General Assembly 
immunized the department from liability for any legal claim for reimbursement 
brought by a school district for the reduction of school-foundation funding for fiscal 
years 2005, 2006, or 2007 (“budget provision”).  See 2009 Am.Sub.H.B. No. 1, 
Section 265.60.70. 
 
 
January Term, 2016 
 
5
E. 
Toledo, Cleveland, and Dayton Litigation 
{¶ 12} In 2011, four years after the last reduction in funding resulting from 
the 2005 adjustment of their formula ADMs, the boards filed complaints seeking 
an order that the department had to pay their respective funds for fiscal years 2005 
through 2007 using only the formula ADMs from the October counts and not from 
the CSADMs.  The boards also sought equitable restitution for funds they claimed 
that the department had wrongfully withheld.  Parents of some children in the 
school districts joined the suits but did not allege separate claims.  The three cases 
were transferred to the Franklin County Court of Common Pleas and consolidated. 
{¶ 13} The department moved for judgment on the pleadings, arguing in 
part that the budget provision barred the boards’ claims and insulated the 
department from liability.  The trial court held that the budget provision’s 
elimination of potential state liability was unconstitutionally retroactive.  The Tenth 
District Court of Appeals affirmed.  2014-Ohio-3741, 18 N.E.3d 505.  It held that 
the budget provision was unconstitutionally retroactive because it impaired the 
boards’ “substantive right to School Foundation funds that accrued under the 
statutory law in place for FY 2005 through FY 2007.”  Id. at ¶ 42. 
II.  Law and Analysis 
A. 
Positions of the Parties 
{¶ 14} The department argues that the Retroactivity Clause protects private 
parties, not arms of the state, and that therefore, the boards’ claims that the budget 
provisions are unconstitutionally retroactive fails.  The department sets forth 
numerous bases for its position.  First, when the 1851 Constitution was adopted, 
the settled meaning of “retroactive laws” did not reach laws affecting government 
entities, and debate during the 1850-1851 constitutional convention reveals the 
intention to incorporate the settled meaning into the Constitution.  Second, the Ohio 
Constitution’s structure reinforces the conclusion that the phrase “retroactive laws” 
does not apply to laws affecting the state’s political arms.  Third, decisions of this 
SUPREME COURT OF OHIO 
 
6
court after the Constitution’s ratification hold that the Retroactivity Clause does not 
prohibit retroactive laws negatively affecting state subdivisions.  Lastly, the 
department argues that the Tenth District relied upon cases that did not squarely 
address this issue. 
{¶ 15} In response, the boards argue that the Retroactivity Clause is 
absolute in its prohibition and, as such, there is no reason to engage in historical 
analysis.  Nevertheless, if historical context is considered, they argue, the intention 
of the framers was for the clause to protect all parties, not just private ones.  The 
boards posit that the framers’ discussion regarding the prohibition of retroactive 
laws was discussed as an all-or-nothing proposition.  They also contend that this 
court has afforded political subdivisions the protections of the Retroactivity Clause. 
B. 
Constitutionality; General Considerations 
{¶ 16} Generally speaking, in construing the Constitution, we apply the 
same rules of construction that we apply in construing statutes.  Miami Cty. v. 
Dayton, 92 Ohio St. 215, 223, 110 N.E. 726 (1915).  Therefore, the intent of the 
framers is controlling.  State v. Jackson, 102 Ohio St.3d 380, 2004-Ohio-3206, 811 
N.E.2d 68, ¶ 14.  To determine intent, we must begin by looking at the language of 
the provision itself.  State ex rel. Maurer v. Sheward, 71 Ohio St.3d 513, 520, 644 
N.E.2d 369 (1994).  “Where the meaning of a provision is clear on its face, we will 
not look beyond the provision in an attempt to divine what the drafters intended it 
to mean.”  Id. at 520-521.  Words used in the Constitution that are not defined 
therein must be taken in their usual, normal, or customary meaning.  State ex rel. 
Herman v. Klopfleisch, 72 Ohio St.3d 581, 584, 651 N.E.2d 995 (1995); see also 
R.C. 1.42.  If the meaning of a provision cannot be ascertained by its plain language, 
a court may look to the purpose of the provision to determine its meaning.  See 
Castleberry v. Evatt, 147 Ohio St. 30, 67 N.E.2d 861 (1946), paragraph one of the 
syllabus. 
 
 
January Term, 2016 
 
7
C. 
Retroactivity Clause 
{¶ 17} The Retroactively Clause of the Ohio Constitution, Article II, 
Section 28, remains unchanged from its adoption in 1851: 
 
The general assembly shall have no power to pass retroactive 
laws, or laws impairing the obligation of contracts; but may, by 
general laws, authorize courts to carry into effect, upon such terms 
as shall be just and equitable, the manifest intention of parties, and 
officers, by curing omissions, defects, and errors, in instruments and 
proceedings, arising out of their want of conformity with the laws of 
this state. 
 
{¶ 18} The literal meaning of the clause is that the legislature is absolutely 
prohibited from passing any law that is “ ‘made to affect acts or facts occurring, or 
rights accruing, before it come into force.’ ”  Bielat v. Bielat, 87 Ohio St.3d 350, 
353, 721 N.E.2d 28 (2000), quoting Black’s Law Dictionary 1317 (6th Ed.1990).  
This court, however, has recognized that “retroactivity itself is not always forbidden 
by Ohio law.”  Id.  Instead, “there is a crucial distinction between statues that merely 
apply retroactively * * * and those that do so in a manner that offends our 
Constitution.”  Id., citing Rairden v. Holden, 15 Ohio St. 207, 210-211 (1864), and 
State v. Cook, 83 Ohio St.3d 404, 410, 700 N.E.2d 570 (1998).  Accordingly, we 
must look to the purpose of the Retroactivity Clause to determine whether the 
statute at issue offends it. 
D. 
Meaning of Retroactivity in 1851  
  
{¶ 19} We begin by examining whether “retroactive laws” was a term of art 
with an established meaning at the time of the ratification of the 1851 Constitution.  
Compare Collins v. Youngblood, 497 U.S. 37, 41, 110 S.Ct. 2715, 111 L.Ed.2d 30 
(1990) (“ex post facto law” was a term of art with an established meaning at the 
SUPREME COURT OF OHIO 
 
8
time of the framing of the United States Constitution).  If so, the meaning may have 
been incorporated from common law, see Richardson v. Doe, 176 Ohio St. 370, 
372-373, 199 N.E.2d 878 (1964) (discussing the origin of the term “malpractice” 
and noting that “where a statute uses a word which has a definite meaning at 
common law, it will be presumed to be used in that sense”), or from other state 
constitutions or laws at the time, see State ex rel. Durbin v. Smith, 102 Ohio St. 
591, 599, 133 N.E. 457 (1921) (noting that the debates at the Ohio constitutional 
convention show that Ohio’s referendum provision was copied from the Oregon 
Constitution and that a decision of the Oregon Supreme Court regarding that 
provision was considered at the convention). 
 
1. 
Other States’ Constitutions  
{¶ 20} Prior to 1851, New Hampshire, Missouri, Tennessee, and Texas had 
adopted constitutional provisions prohibiting retroactive laws.  See New Hampshire 
Constitution, Part 1, Article 23 (1784); Missouri Constitution, Article XIII, Section 
17 (1820); Tennessee Constitution, Article 1, Section 20 (1834); Texas 
Constitution, Article 1, Section 14 (1845).  By 1851, the supreme courts of both 
New Hampshire and Texas had had the opportunity to construe the meaning of their 
respective provisions.  See Merrill v. Sherburne, 1 N.H. 199, 212-213 (1818); 
DeCordova v. Galveston, 4 Tex. 470, 479 (1849).  The Merrill court, in concluding 
that an act was unconstitutionally retroactive, stressed that only those retrospective 
acts that “operate on the interests of individuals or of private corporations” violate 
the constitution, explaining that “all public[] officers impliedly consent to 
alterations of the institutions in which they officiate, provided the public[] deem it 
expedient to introduce a change.”  (Emphasis sic.)  Merrill at 213, 217.  The 
DeCordova court noted Merrill’s statement about individuals and private 
corporations and found that Merrill “illustrate[d] the intention of the [Texas] 
convention in imposing the restriction.”   DeCordova at 479. 
 
 
January Term, 2016 
 
9
2. 
Established Common-Law Principles 
{¶ 21} At the time of the Ohio constitutional convention, it was an 
established principle that an act was not unconstitutionally retroactive “unless [it] 
impair[ed] rights which are vested:  because most civil rights are derived from 
public[] laws; and if, before the rights become vested in particular individuals, the 
convenience of the state produces amendments or repeals of those law, those 
individual have no cause of complaint.”  (Emphasis sic.)  Merrill at 213-214; see 
also DeCordova at 470, 479-80 (law was unconstitutionally retrospective if it 
“destroy[ed] or impair[ed] vested rights or rights to do certain actions or possess 
certain things”); Proprietors of Kennebec Purchase v. Laboree, 2 Me. 275, 295 
(1823) (finding a law unconstitutionally retroactive “because such operation would 
impair and destroy vested rights” [emphasis sic]). 
{¶ 22} By 1851, it was understood that both individuals and private 
corporations could acquire vested rights.  The Supreme Court of the United States 
had held that the charter founding a college that was a private corporation was a 
contract between the government and the corporation and that the legislature could 
not repeal, impair, or alter the rights and privileges conferred by the charter.  
Trustees of Dartmouth College v. Woodward, 17 U.S. 518, 643-644, 650-654, 4 
L.Ed. 629 (1819). 
{¶ 23} This court had, however, concluded that public corporations did not 
enjoy vested rights: 
 
[A] public corporation, created for the purposes of government, can 
not be considered as a contract. * * * “In respect to public 
corporations, which exist only for public purposes, as counties, 
cities, and towns, the legislature, under proper limitations, have a 
right to change, modify, enlarge, or restrain them, securing, 
SUPREME COURT OF OHIO 
 
10 
however, the property, for the uses of those for whom it was 
purchased.” 
 
Marietta v. Fearing, 4 Ohio 427, 432 (1831), quoting 2 Kent’s Commentaries on 
American Law (1st Ed.1827) 245. 
{¶ 24} The supreme courts of Louisiana and Indiana had espoused the same 
principle.  The Louisiana court had stated:    
 
The questions as to the violation of contracts or vested rights under 
the Constitution of the United States, or of the State, does not arise. 
Those questions grow entirely out of the violation of contracts with, 
or the vested rights of individuals or private corporations established 
for individual profit. 
The corporation of a town is established for public purposes 
alone, and to administer a part of the sovereign power of the State 
over a small portion of its territory. It is created by the Legislature 
and is entirely subject to Legislative will. 
 
Police Jury of Bossier v. Corp. of Shreveport, 5 La.Ann. 661, 665 (1850).  The 
Indiana court had stated:  
 
 
The special powers conferred upon [public or municipal 
corporations] are not vested rights as against the State, but being 
wholly political exist only during the will of the general Legislature 
* * *.  Such powers may at any time be repealed or abrogated by the 
Legislature, either by a general law operating upon the whole State, 
or by a special act altering the powers of the corporation. 
 
January Term, 2016 
 
11 
 Sloan v. State, 8 Blackf. 361, 364 (Ind.1847). 
{¶ 25} Around this time, the Supreme Court of the United States also 
recognized that public corporations did not enjoy the same protections as 
individuals and private corporations:   
 
[the legislature] had unquestionably the power to change its policy, 
and allow the company to pursue a different course, and to release 
it from its obligations both as to the direction of the road and the 
payment of the money. For, in doing this, it was dealing altogether 
with matters of public concern, and interfered with no private right; 
for neither the commissioners, nor the county, nor any one of its 
citizens, had acquired any separate or private interests which could 
be maintained in a court of justice. 
 
Maryland v. Baltimore & Ohio RR. Co., 44 U.S. 534, 549-50, 11 L.Ed. 714 (1845) 
(upholding a state legislature’s ability to revoke a previous grant of funds to a 
county, because it had been made for public, not private, purposes and to a public 
body).   
  
{¶ 26} Accordingly, at the time of the 1850-1851 constitutional convention, 
two key principles were established.  First, unconstitutional retroactive acts were 
those that operated on the vested rights of individuals or of private corporations.  
Second, political subdivisions as creatures of the state did not have vested rights. 
E. 
Debates of the 1850-1851 Constitutional Convention of Ohio  
{¶ 27} We have previously noted the function of the proceedings of the 
constitutional convention in revealing the intent of a provision in the Constitution.  
“ ‘[D]ebates of the convention * * * may fortify [the court] in following the natural 
import of [the provision’s] language, and legitimately aid in removing doubts.’ ”  
Steele, Hopkins & Meredith Co. v. Miller, 92 Ohio St. 115, 122, 110 N.E. 648 
SUPREME COURT OF OHIO 
 
12 
(1915), quoting Cass v. Dillon, 2 Ohio St. 607, 621 (1853).  An examination of the 
debates from the 1850-1851 constitutional convention confirms that the intent of 
the framers was to incorporate the aforementioned principles regarding “retroactive 
laws” into Article II, Section 28.   
 
{¶ 28} The debate regarding the retroactivity provision reveals that 
delegates to the convention saw a need to provide private individuals with certainty 
in the law.  One delegate expressed his approval of the provision as it “settles 
forever and conclusively one or two questions of controversy, which exist in this 
State and leave the law in a most distressing uncertainty.  It matters not whether it 
is right or wrong—it has left the law in uncertainty and the rights of individuals 
dependent upon the opinions of the Supreme Court.”  1 Report of the Debates and 
Proceedings of the Convention for the Revision of the Constitution of the State of 
Ohio, 1850-1851 (“Debates”) 268.  The delegate also expressed his belief “in the 
principle that men’s rights are to be settled by the law in force at the time they 
accrued.”  Id. at 270. 
{¶ 29} Similarly, another delegate expressed that 
 
it is indispensably necessary that the exercise of [the] power [to 
prescribe the rules of civil action] should only look ahead, that it 
should be only prospective in its operation, for the idea of making a 
rule to punish the action of men, or to affect their rights and interests, 
already past and accrued, would be as bad as the practice of the 
Roman despot, when he wrote his laws in small characters, and stuck 
them up so high that the people could not read them. 
 
 
2 Debates 591. 
{¶ 30} The debate concerning the legislature’s ability to enact “curative” 
laws was also centered on individuals.  One delegate “intended merely to call 
January Term, 2016 
 
13 
attention to the difficulty that might arise out of the adoption of this section; and 
which might go far to affect the rights of a citizen.”  1 Debates 265.  Other delegates 
stressed the desire to protect the legislature’s ability to pass curative laws as “they 
are laws of peace and affording security to the rights of the citizen,” id. at 274, and 
they “may be used for the protection of private rights—for the purpose of curing 
those evils which sometimes arise in society, and which, if not cured, would work 
immense mischief and wrong,” 2 Debates 240. 
{¶ 31} The delegation was also cognizant of the New Hampshire 
Constitution’s retroactivity provision and its interpretation by the Merrill court.  A 
delegate in favor of adopting the retroactivity provision stated: 
 
the New Hampshire constitution contains a prohibition against retro-
spective, or, as called here, retro-active laws[.]  The[s]e two are 
equiv[a]lent terms.  It * * * precludes [the legislature] from in 
terfering [sic] with any right already vested; from making any law 
which, instead of looking to the future, interferes with the rights of 
persons and property which are already vested.  If gentlemen will 
look [at Merrill] they will find an opinion * * * which * * * discusses 
the whole subject of retro-active legislation, and the effect of this 
term retrospective. 
 
  
1 Debates 269. 
{¶ 32} There was also an acknowledgment of the distinction that had 
developed in case law between private and public corporations.  Referencing 
Trustees of Dartmouth College, 17 U.S. 518, 4 L.Ed. 629, and this court’s decision 
in Fearing, 4 Ohio 427, one delegate stated that unlike private corporations, 
municipal corporations “were always liable to repeal.”  2 Debates 270. 
SUPREME COURT OF OHIO 
 
14 
{¶ 33} Accordingly, when Article II, Section 28 was adopted in 1851, the 
delegates knew that similar provisions in other state constitutions had been 
interpreted to “operate on the interests of individuals or of private corporations.”  
Merrill, 1 N.H. at 212-213.  They also comprehended that a legislative enactment 
had to impair the vested rights of individuals or private corporations to be 
unconstitutionally retroactive. 
F. 
Decisions after Adoption of Retroactively Provision 
{¶ 34} This court’s precedent in the years following the enactment of 
Article II, Section 28 provides further support for finding that the Retroactivity 
Clause applies to private citizens and corporations but not to political subdivisions.  
We have rejected retroactivity challenges to legislation that sought to impose a new 
duty and/or create a new obligation upon political subdivisions, consistently finding 
that the state is able to injuriously affect its own rights. 
{¶ 35} A retroactivity challenge was asserted to legislation that imposed a 
new obligation upon cities to pay bounties to Civil War veterans who had reenlisted 
and to whom, at the time of reenlistment, the city had not made any promise or 
pledge to pay a bounty.  State ex rel. Bates v. Richland Twp. Trustees, 20 Ohio St. 
362 (1870).  We found that the legislature had not “transcended their constitutional 
authority” because “counties, townships, and cities are public agencies in the 
system of the State government; and, in the class of laws now under consideration, 
they are employed by the legislature as mere instrumentalities to raise a tax for a 
public object, and to effect its equitable distribution among those for whom it was 
intended.”  Id. at 371. 
{¶ 36} In examining the effect that a legislative amendment had on the 
payment of unused vacation time upon a state employee’s retirement, we noted that 
a “statute which impairs only the rights of the state may constitutionally be given 
retroactive effect.”   State ex rel. Sweeney v. Donahue, 12 Ohio St.2d 84, 87, 232 
N.E.2d 398 (1967), citing State ex rel. Dept. of Mental Hygiene & Correction v. 
January Term, 2016 
 
15 
Eichenberg, 2 Ohio App.2d 274, 207 N.E.2d 790 (9th Dist.1965) (“This law cannot 
be deemed to be a retroactive law for it does not injuriously affect a citizen or 
interfere with a citizen’s vested right”).  Similarly, a challenge to a statute that 
retroactively relieved a public official and his sureties of liability for lost or stolen 
funds was without merit because “the legislature undoubtedly has authority to 
release obligations which could only be * * * prosecuted [in the name of the state].”  
Bd. of Edn. v. McLandsborough, 36 Ohio St. 227, 232 (1880). 
{¶ 37} This court also examined a retroactivity challenge to legislation that 
validated previously ratified municipal ordinances authorizing contractors to lay 
pipes to supply the public with steam heat and power.  The legislation was found 
to be valid because Article II, Section 28 “ ‘does not apply to legislation recognizing 
or affirming the binding obligation of the state, or any of its subordinate agencies, 
with respect to past transactions,’ ” but instead “ ‘is designed to prevent 
retrospective legislation injuriously affecting individuals, and thus protect vested 
rights from invasion.’ ”  Kumler v. Silsbee, 38 Ohio St. 445 (1882), quoting New 
Orleans v. Clark, 95 U.S. 644, 655, 24 L.Ed. 521 (1877). 
{¶ 38} In contrast to the foregoing, there is a body of cases that appears to 
support a finding that political subdivisions are entitled to the protection granted 
under Article II, Section 28.  This court has found legislative acts that have imposed 
new obligations on state subdivisions to be unconstitutionally retroactive.  See 
Hamilton Cty. Commrs. v. Rosche, 50 Ohio St. 103, 33 N.E. 408 (1893), paragraph 
one of the syllabus (law requiring county to refund taxes that had already been 
paid); State ex rel. Crotty v. Zangerle, 133 Ohio St. 532, 534-535, 14 N.E.2d 932 
(1938) (law requiring county to refund tax penalties that had already been paid); 
Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 91 Ohio St.3d 
308, 316-317, 744 N.E.2d 751 (2001) (law allowing parties to correct errors in 
valuation complaints, which would impose new burdens on county officials to 
defend previously dismissed claims). 
SUPREME COURT OF OHIO 
 
16 
{¶ 39} Upon close examination, however, these cases are all silent on the 
threshold issue; that is, whether political subdivisions have rights under Article II, 
Section 28.  Instead, in each case, there is an assumption that the protection afforded 
by the Retroactivity Clause is available to political subdivisions and the analysis is 
solely devoted to whether the law in question is retroactive.  Accordingly, these 
cases lack precedential value and we are not bound by them.  See State ex rel. 
United Auto., Aerospace & Agricultural Implement Workers of Am. v. Bur. of 
Workers’ Comp., 108 Ohio St.3d 432, 2006-Ohio-1327, 844 N.E.2d 335, ¶ 46  
(“ ‘ “when questions of jurisdiction have been passed on in prior decisions sub 
silentio, this Court has never considered itself bound when a subsequent case finally 
brings the jurisdictional issue before us” ’ ”), quoting Grendell v. Ohio Supreme 
Court, 252 F.3d 828, 837 (6th Cir.2001), quoting Hagans v. Lavine, 415 U.S. 528, 
535, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974), fn. 5. 
{¶ 40} Our decision in Avon Lake City School Dist. v. Limbach, 35 Ohio 
St.3d 118, 518 N.E.2d 1190 (1988), provides strong support for determining that 
political subdivisions do not have rights under Article II, Section 28.  In that case, 
two school districts challenged the tax commissioner’s valuation of personal 
property of public utility companies.  The Board of Tax Appeals dismissed the 
appeals, ruling that the school districts did not have standing to file an appeal.  We 
were presented with the issue whether the dismissals by the Board of Tax Appeals 
deprived the school districts of their right to due process of law.  We reviewed cases 
that “conclude[d] that a political subdivision may not invoke the protection 
provided by the Constitution against its own state and is prevented from attacking 
the constitutionality of state legislation on the grounds that its own rights had been 
impaired.”  Id. at 121-122.  “[P]ersuaded that a school district is a political 
subdivision created by the General Assembly and that it may not assert any 
constitutional protections regarding due course of law or due process of law against 
the state, its creator,” we concluded that the school districts could not “assert these 
January Term, 2016 
 
17 
protections against the state by asking [us] to declare the statute unconstitutional 
for these reasons.”  Id. at 122. 
{¶ 41} Accordingly, we have recognized that political subdivisions are not 
entitled to all protections afforded by the Constitution.  Additionally, our precedent 
in the years following the enactment of Article II, Section 28 provides strong 
support for concluding that the Retroactivity Clause does not apply to political 
subdivisions. 
G. 
Decisions by Sister Supreme Courts 
{¶ 42} A number of our sister supreme courts have examined whether the 
prohibition on retroactive laws extends to political subdivisions; their opinions 
provide additional guidance.  The supreme courts of New Hampshire and Texas 
have both reaffirmed their previous holdings.  See Nottingham v. Harvey, 120 N.H. 
889, 898, 424 A.2d 1125 (1980) (a town “is a mere political subdivision of the State 
over which the legislature may exercise complete control”); Deacon v. Euless, 405 
S.W.2d 59, 62 (Tex.1966) (“Municipal Corporations do not acquire vested rights 
against the State”).  The supreme courts of Massachusetts, Idaho, and Tennessee 
have concluded similarly.  See Greenaway’s Case, 319 Mass. 121, 123, 65 N.E.2d 
16 (1946) (no constitutional challenge can succeed where a state enacts retroactive 
legislation impairing its own rights); Garden City v. Boise, 104 Idaho 512, 515, 660 
P.2d 1355 (1983) (legislature has absolute power to change, modify, or destroy at 
its discretion the powers granted to a municipal corporation); State ex rel. Meyer v. 
Cobb, 467 S.W.2d 854, 856 (Mo.1971) (retroactivity provision is for the protection 
of the citizen and not the state, and the state may retroactively impose new liabilities 
on itself or its governmental subdivisions).  The United State Supreme Court has 
also reached the same conclusion with respect to Louisiana’s constitution.  New 
Orleans v. Clark, 95 U.S. at 655, 24 L.Ed. 521 (prohibition against retroactivity is 
to prevent injuriously affecting individuals; it does not apply to recognizing or 
SUPREME COURT OF OHIO 
 
18 
affirming a binding obligation of the state or its subordinate agencies with respect 
to past transactions). 
{¶ 43} A Missouri case is particularly instructive due to its similarities to 
the case now before us.  See Savannah R-III School Dist. v. Pub. School Retirement 
Sys. of Missouri, 950 S.W.2d 854 (Mo.1997).  In that case, the Missouri Public 
Employees Retirement System had notified school districts that the value of health-
insurance premiums provided to teachers was to be included as salary for the 
purpose of calculating the teachers’ contribution amount.  Years later, some 
districts filed a class-action lawsuit seeking a refund of the overpayment, as the 
legislative definition of salary did not include health-insurance premiums.  While 
the action was pending, the Missouri legislature amended the statute so that the 
definition of salary included health-insurance premiums.  The legislation also stated 
that any contributions made before the effective date of the amendment were 
deemed to have been in compliance with the statute. 
{¶ 44} The 
school 
districts 
argued 
that 
the 
amendment 
was 
unconstitutionally retroactive.  The court rejected the challenge, noting that the 
prohibition’s purpose was to protect citizens, not the state.  The court’s statement 
regarding school districts is particularly germane: 
 
“School districts are bodies corporate, instrumentalities of the state 
established by statute to facilitate effectual discharge of the General 
Assembly’s constitutional mandate to establish and maintain free 
public schools * * *.” State ex rel. Independence Sch. Dist. v. Jones, 
653 S.W.2d 178, 185 (Mo. banc 1983) (quotation omitted). As 
“creatures of the legislature,” the rights and responsibilities of 
school districts are created and governed by the legislature.  Id.  
Hence, the legislature may waive or impair the vested rights of 
school districts without violating the retrospective law prohibition.  
January Term, 2016 
 
19 
Dye v. School Dist. No. 32, 355 Mo. 231, 195 S.W.2d 874, 879 (banc 
1946). 
 
Savannah R-III School Dist., 950 S.W.2d at 858. 
III.  Conclusion 
{¶ 45} The avenues examined all converge at the conclusion that political 
subdivisions are not entitled to the protection of Article II, Section 28.  Prior to the 
1850-1851 constitutional convention, the law that had developed in the country was 
that retroactivity provisions protected the vested rights of individuals and private 
corporations and that public corporations did not have vested rights.  The debates 
from the convention reveal that the delegates understood this to be the scope of the 
protection provided by the retroactivity provision.  Our early cases reflect this 
understanding.  Finally, the weight of the authority from our sister supreme courts 
points toward the same conclusion. 
{¶ 46} Accordingly, we hold that the Retroactivity Clause, Article II, 
Section 28 of the Ohio Constitution, does not protect political subdivisions, like 
school districts, that are created by the state to carry out its governmental functions.  
Therefore, the legislature was able to authorize the department to adjust local school 
funding calculations and to retroactively immunize the department from liability 
for any legal claim of reimbursement by a school district for a reduction of school-
foundation funding, without violating the Retroactivity Clause.  We reverse the 
judgment of the Tenth District and remand the matter to the trial court for 
consideration of the issues not addressed in its decision on the department’s motion 
for judgment on the pleadings. 
Judgment reversed  
and cause remanded. 
O’CONNOR, C.J., and O’DONNELL and FRENCH, JJ., concur. 
PFEIFER, J., concurs in judgment with an opinion. 
SUPREME COURT OF OHIO 
 
20 
O’NEILL, J., dissents with an opinion that LANZINGER, J., joins. 
_________________ 
PFEIFER, J., concurring. 
{¶ 47} I concur in the judgment of the majority but not in the reasoning 
behind that judgment.  As Justice O’Neill states in his dissent, Article II, Section 
28 of the Ohio Constitution provides “a restraint on the power of the General 
Assembly.”  Dissenting opinion at ¶ 56.  That restraint is a clearly stated, absolute 
prohibition without limitation.  We need not go outside the text of the Ohio 
Constitution to search for meaning.  “Where there is no doubt, no ambiguity, no 
uncertainty as to the meaning of the language employed by the Constitution makers, 
there is clearly neither right nor authority for the court to assume to interpret that 
which needs no interpretation and to construe that which needs no construction.”  
State v. Rose, 89 Ohio St. 383, 387, 106 N.E. 50 (1914). 
{¶ 48} Political subdivisions may successfully sue the state based on 
violations of the Retroactivity Clause.  See, e.g., Hamilton Cty. Commrs. v. Rosche, 
50 Ohio St. 103, 112-113, 33 N.E. 408 (1893); see also State ex rel. Crotty v. 
Zangerle, 133 Ohio St. 532, 534-535, 14 N.E.2d 932 (1938). 
{¶ 49} In a recent case, Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. 
Bd. of Revision, 91 Ohio St.3d 308, 744 N.E.2d 751, this court held that an 
amendment to R.C. 5715.19 that allowed taxpayers to refile previously dismissed 
challenges to real-property-valuation assessments before county boards of revision 
“violate[d] Section 28, Article II of the Ohio Constitution, which prohibits the 
enactment of retroactive legislation.”  Id. at paragraph two if the syllabus.  This 
court had held in Sharon Village Ltd. v. Licking Cty. Bd. of Revision, 78 Ohio St.3d 
479, 678 N.E.2d 932 (1997), that a valuation complaint filed on behalf of a 
corporation by a nonattorney was invalid, affirming the board of revision’s 
dismissal of the corporation’s valuation complaint for lack of jurisdiction.  
Cincinnati at 310.  The General Assembly, through passage of Sub.H.B. No. 694, 
January Term, 2016 
 
21 
set out to ease the effect of that decision.  Among other things, that bill created an 
exception to the general statutory rule that a real-property taxpayer is, in the 
absence of a showing of a change in circumstances, prohibited from filing 
successive valuation complaints in the same three-year period.  Id.  The amendment 
essentially allowed taxpayers adversely affected by the Sharon Village decision a 
“do-over” to refile their complaint, exempting them from the three-year rule. 
{¶ 50} This court held that the General Assembly could relax the three-year 
rule but could not do so retroactively because of the effect of a retroactive 
application on political subdivisions: 
 
The county officials who opposed reduction in assessed valuations 
when the first complaints were dismissed could have concluded that 
those dismissals, followed by exhaustion of judicial review, ended 
the valuation proceedings and established the value of the property 
for the triennium period, thereby creating a “reasonable expectation 
of finality.” Cf. State ex rel. Matz v. Brown (1988), 37 Ohio St.3d 
279, 281, 525 N.E.2d 805, 808.  But Sub.H.B. No. 694 imposes on 
those officials a burden to again defend the value determined by the 
auditor and, potentially, to refund taxes if the complainant is 
successful. Under Bielat [v. Bielat, 87 Ohio St.3d 350, 721 N.E.2d 
28 (2000),] and Crotty, Sub.H.B. No. 694 is unconstitutionally 
retroactive because it creates a new right while, at the same time, 
imposing a new burden on parties who had appeared in opposition 
to the merits of once-dismissed valuation complaints or 
countercomplaints. 
 
Id. at 316-317. 
SUPREME COURT OF OHIO 
 
22 
{¶ 51} Despite the fact that this court held in Cincinnati that Sub.H.B. No. 
694 was unconstitutionally retroactive, the majority states that the holding “lack[s] 
precedential value” because it employs “an assumption that the protection afforded 
by the Retroactivity Clause is available to political subdivisions, and the analysis is 
solely devoted to whether the law in question is retroactive.”  Majority opinion at 
¶ 39.  How could this court find in Cincinnati that Sub.H.B. No. 694 was 
unconstitutionally retroactive because it imposed a new burden on political 
subdivisions without the implicit holding that the protection provided by Article II, 
Section 28 is available to political subdivisions?  Certainly, nothing in the plain 
language of the Ohio Constitution would have suggested otherwise to the court in 
Cincinnati.  Further, none of this court’s precedents cited by the majority comes 
close to establishing a categorical denial of the protections of the Retroactivity 
Clause for political subdivisions. 
{¶ 52} Nonetheless, I would hold that the Retroactivity Clause does not 
apply in this case.  The school districts in this case had no vested right or reasonable 
expectation of finality in the Ohio Department of Education’s treatment of funds 
that were as yet undistributed.  The ODE was not powerless to dispute enrollment 
figures submitted by the districts and to adjust the funds to be distributed. 
{¶ 53} The nuclear option imposed by the majority is not necessary to reach 
a conclusion in favor of the state in this case.  We need only determine whether the 
particular measures passed by the General Assembly “impair[ed] vested rights, 
affect[ed] an accrued substantive right, or impose[d] new or additional burdens, 
duties, obligations or liabilities as to a past transaction.”  Bielat, 87 Ohio St.3d at 
354, 721 N.E.2d 28.  Instead, the majority eliminates even the possibility that the 
General Assembly could ever pass legislation that is unconstitutionally retroactive 
as to political subdivisions.  The majority thus removes an important check on the 
power of the General Assembly.  This court—not our Constitution—has given the 
January Term, 2016 
 
23 
clear green light to the General Assembly to assert a power it had no reason to 
believe it had until today. 
_________________ 
O’NEILL, J., dissenting. 
{¶ 54} Respectfully, I must dissent.  I would hold that the uncodified 
language in the 2009 budget bill that extinguished the public school districts’ cause 
of action against the Ohio Department of Education (“ODE”) violates the 
constitutional prohibition on the passage of retroactive laws. 
{¶ 55} The Retroactivity Clause, Article II, Section 28 of the Ohio 
Constitution, provides:  
 
The general assembly shall have no power to pass retroactive 
laws, or laws impairing the obligation of contracts; but may, by 
general laws, authorize courts to carry into effect, upon such terms 
as shall be just and equitable, the manifest intention of parties, and 
officers, by curing omissions, defects, and errors, in instruments and 
proceedings, arising out of their want of conformity with the laws of 
this state. 
 
{¶ 56} The majority’s conclusion that the Retroactivity Clause does not 
protect school districts created by the state ignores the plain language of the 
provision itself.  The plain language of the Retroactivity Clause does not confer 
protection upon anyone.  Article II, Section 28 of the Ohio Constitution is instead 
a restraint on the power of the General Assembly.  It prohibits the legislature from 
passing laws that are retroactive.  It really is that simple. 
{¶ 57} In our system of government, the people possess all governmental 
power.  In the constitutional distribution of power, the three branches of 
government have areas of overlapping power but none of the three branches is 
SUPREME COURT OF OHIO 
 
24 
subordinate.  Johnson v. Taulbee, 66 Ohio St.2d 417, 422, 423 N.E.2d 80 (1981), 
citing Hale v. State, 55 Ohio St. 210, 213-214, 45 N.E. 199 (1896).  The legislative 
branch decides what the law will be, the executive branch applies the law, and the 
judiciary interprets the law.  As we explained in Bartlett v. State, the General 
Assembly “cannot annul, reverse, or modify a judgment of a court already rendered, 
nor require the courts to treat as valid laws those which are unconstitutional.  If this 
could be permitted, the whole power of the government would at once become 
absorbed and taken into itself by the Legislature.”  73 Ohio St. 54, 58, 75 N.E. 939 
(1905). 
{¶ 58} As the Tenth District pointed out, this court has established the 
analysis required to determine whether the retroactive application of a statute 
violates the Retroactivity Clause.  2014-Ohio-3741, 18 N.E.3d 505, ¶ 26, citing 
State v. White, 132 Ohio St.3d 344, 2012-Ohio-2583, 972 N.E.2d 534, ¶ 27.  The 
first step is to determine whether the law was intended to apply retroactively.  White 
at ¶ 27.  The second step is to determine whether the statute is remedial or 
substantive.  Id.  And if the statute is substantive, retroactive application of the 
statute is forbidden.  Id. 
{¶ 59} In White, this court reiterated that if a statute affects an accrued 
substantive right, the statute is substantive.  Id. at ¶ 34.  Again, we need look no 
further than one of this court’s own decisions.  In State ex rel. Kenton City School 
Dist. Bd. of Edn. v. State Bd. of Edn., 174 Ohio St. 257, 260-262, 189 N.E.2d 72 
(1963), this court determined that the school-funding statute at issue in that case, 
R.C. 3317.02, created a right that was not affected by the subsequent amendment 
of the statute.  Accordingly, the district was entitled to the school-funding formula 
guaranteed by the statute.  And most importantly, the district was entitled to enforce 
the statutory formula by a writ of mandamus.  Id. at 262-263. 
{¶ 60} As this court thoroughly and eloquently explained in State v. Bodyke, 
126 Ohio St.3d 266, 2010-Ohio-2424, 933 N.E.2d 753, protecting the borders 
January Term, 2016 
 
25 
separating the three branches of government preserves the integrity and harmony 
of the government as a whole.  Id. at ¶ 42-49.  Despite the challenge of navigating 
the boundaries between interdependence and independence of the three branches, 
we must be vigilant against provisions of law that impermissibly threaten the 
integrity of the judiciary.  Id. at ¶ 50-53. 
{¶ 61} The simple fact is that for fiscal years 2005 through 2007, the validly 
enacted ADM formula provided the sole means for ODE to distribute funds to 
public schools.  Unlike current law, the law in effect for fiscal years 2005 through 
2007 provided no departmental discretion to modify the statutory formula, yet that 
is what the department did.  There is nothing any of the three branches of 
government can do to change what the law was at the time these funds were 
wrongfully withheld from public schools.  It is the role of the judiciary to interpret 
the law and to order the state to comply with the law.  The uncodified language at 
issue here works to legislatively extinguish the public schools’ causes of action 
under the validly enacted statutory school-funding formula.  In so doing, the 
General Assembly has retroactively eliminated a substantive right and 
impermissibly encroached upon the role of the judiciary. 
{¶ 62} This is not an action for punitive damages or an action to otherwise 
feather the nests of the districts.  This action seeking a writ of mandamus and 
equitable restitution is a means for the public school districts to recover public 
dollars.  Mandamus is one of the means by which courts force governmental actors 
to comply with the law. 
{¶ 63} The framers of the Ohio Constitution were absolutely clear about 
who the Retroactivity Clause applies to.  It applies to the legislature.  Clearly, the 
Ohio legislature has the constitutional authority to adjust school-funding statutes 
prospectively.  However, it is the province of the courts to interpret and apply the 
law as enacted.  It is beyond dispute that the legislature is without the constitutional 
authority to retroactively “adjust” the school-funding statutes in order to extinguish 
SUPREME COURT OF OHIO 
 
26 
a public school district’s substantive ability to enforce a validly enacted statute.  I 
dissent. 
 
LANZINGER, J., concurs in the foregoing opinion. 
_________________ 
 
Michael DeWine, Attorney General, Eric E. Murphy, State Solicitor,  
Michael J. Hendershot, Chief Deputy Solicitor, Hannah C. Wilson, Deputy 
Solicitor, and Todd R. Marti, Assistant Attorney General, for appellants. 
 
Bricker & Eckler, L.L.P., Nicholas A. Pittner, James J. Hughes III, Susan 
B. Greenberger, and Jennifer A. Flint, for appellees Toledo City School District 
Board of Education, Dayton City School District Board of Education, and 
Cleveland Metropolitan School District Board of Education. 
 
Marshall & Marshall, L.L.C., and Amy M. Natyshak, for appellee Toledo 
City School District Board of Education. 
Jyllian R. Guerriero, for appellee Dayton City School District Board of 
Education. 
Wayne J. Belock, for appellee Cleveland Metropolitan School District 
Board of Education. 
Scott, Scriven & Wahoff, L.L.P., Patrick J. Schmitz, and Derek L. Towster, 
urging affirmance for amici curiae Ohio School Boards Association, Buckeye 
Association of School Administrators, Ohio Association of School Business 
Officials, Ohio Education Association, and Ohio Federation of Teachers. 
 
Peck, Shaffer & Williams, Thomas A. Luebbers, and Michael T. Dean, 
urging affirmance for amicus curiae County Commissioners Association of Ohio.  
___________________