Source: https://scocal.stanford.edu/opinion/serrano-v-priest-27906
Timestamp: 2019-11-18 04:47:03
Document Index: 14562394

Matched Legal Cases: ['§ 20701', '§ 17300', '§ 17656', '§ 17665', '§ 17920', '§ 20902', '§ 20906', '§ 16', '§ 7', '§ 389', '§ 3', '§ 6', '§ 6', '§ 11', '§ 16', '§ 7', '§ 14', '§ 162', '§ 14', '§ 6', '§ 21', '§ 3', '§ 43', '§ 11252', '§ 17655', '§ 17680', '§ 6499', '§ 6445', '§ 387', 'art 1', '§ 21', '§ 21', '§ 21']

Serrano v. Priest - 18 Cal.3d 728 - Thu, 12/30/1976 | California Supreme Court Resources
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Citation 18 Cal.3d 728
Serrano v. Priest , 18 Cal.3d 728
[L.A. No. 30398.
December 30, 1976.]
(Opinion by Sullivan, J., with Wright, C. J., Tobriner and Mosk, JJ., concurring. Separate dissenting opinion by Richardson, J. Separate dissenting opinion by Clark, J., with McComb, J., concurring.) [18 Cal.3d 730]
Kronick, Moskovitz, Tiedemann & Girard, Edward J. Tiedemann and Mark Paul as Amici Curiae. [18 Cal.3d 735]
The instant proceeding, which involves a constitutional challenge to the California public school financing system, is before us for the second time. In 1971, we reversed a judgment of dismissal entered upon orders sustaining general demurrers and remanded the cause with directions that it proceed to trial. (Serrano v. Priest (1971) 5 Cal.3d 584 [96 Cal.Rptr. 601, 487 P.2d 1241], hereafter cited as Serrano I.) In so doing we held that the facts alleged in plaintiffs' complaint were sufficient to constitute the three causes of action there set forth, and that if such allegations were sustained at trial, the state public school financing system must be declared invalid as in violation of state and federal constitutional provisions guaranteeing the equal protection of the laws. fn. 1
Upon remand answers to the complaint were filed by all existing defendants fn. 2 and certain school districts of the County of Los Angeles were allowed to intervene as defendants, adopting as their own the answers previously filed by the other county defendants. fn. 3 The California Federation of Teachers, AFL-CIO, was permitted to intervene as a plaintiff on condition that its complaint adopt the essential allegations of the original complaint. The trial court declined to accept defendants' [18 Cal.3d 736] suggestion that the Legislature and the Governor be joined as indispensable parties.
Our decision in Serrano I, which due to the then legal posture of the proceeding directed itself only to the sufficiency of allegations of the complaint to state a cause of action and contemplated full trial proceedings for the proof of such allegations, nevertheless attracted the immediate attention of the California Legislature. As a result the lawmakers passed two bills -- Senate Bill No. 90 (S.B. 90) and Assembly Bill No. 1267 (A.B. 1267) -- which, upon becoming law during the pendency of trial proceedings, brought about certain significant changes in the public school financing system then under judicial scrutiny. Recognizing this, all parties to the action thereupon entered into a stipulation that for purposes of trial the California system for the financing of public schools should be deemed to include all law applicable at the time of trial. This agreement was later incorporated as follows among the trial court's conclusions of law: "For purposes of this litigation, the California system of financing public schools, includes not only all pertinent provisions of the California Constitution, statutes, and [18 Cal.3d 737] administrative codes, and all pertinent provisions of federal statutes and regulations, but includes all modifications, amendments, and additions to the California statutes and administrative codes resulting from the California Legislature's enactment of those bills known as S.B. 90 and A.B. 1267." (See Stats. 1972, ch. 1406; Stats. 1973, ch. 208.)
"By far the major source of school revenue is the local real property tax. Pursuant to article IX, section 6 of the California Constitution, the Legislature has authorized the governing body of each county, and city [18 Cal.3d 738] and county, to levy taxes on the real property within a school district at a rate necessary to meet the district's annual education budget. (Ed. Code, § 20701 et seq.) The amount of revenue which a district can raise in this manner thus depends largely on its tax base -- i.e., the assessed valuation of real property within its borders. Tax bases vary widely throughout the state; in 1969-1970, for example, the assessed valuation per unit of average daily attendance of elementary school children fn. 8 ranged from a low of $103 to a peak of $952,156 -- a ratio of nearly 1 to 10,000. (Legislative Analyst, Public School Finance, Part V, Current Issues in Educational Finance (1971) p. 7.) fn. 9
"Most of the remaining school revenue comes from the State School Fund pursuant to the 'foundation program,' through which the state undertakes to supplement local taxes in order to provide a 'minimum amount of guaranteed support to all districts ....' (§ 17300.) With certain minor exceptions, fn. 10 the foundation program ensures that each school [18 Cal.3d 739] district will receive annually, from state or local funds, $355 for each elementary school pupil (§§ 17656, 17660) and $488 for each high school student. (§ 17665.)
"An additional state program of 'supplemental aid' is available to subsidize particularly poor school districts which are willing to make an extra local tax effort. An elementary district with an assessed valuation of $12,500 or less per pupil may obtain up to $125 more for each child if it sets its local tax rate above a certain statutory level. A high school district whose assessed valuation does not exceed $24,500 per pupil is eligible for a supplement of up to $72 per child if its local tax is sufficiently high. (§§ 17920-17926.) fn. 12 [18 Cal.3d 740]
"Furthermore, basic aid, which constitutes about half of the state educational funds (Legislative Analyst, Public School Finance, Part II, The State School Fund: Its Derivation, Distribution and Apportionment (1970) p. 9), actually widens the gap between rich and poor districts. (See Cal. Senate Fact Finding Committee on Revenue and Taxation, State and Local Fiscal Relationships in Public Education in California (1965) p. 19.) Such aid is distributed on a uniform per pupil basis to all districts, [18 Cal.3d 741] irrespective of a district's wealth. Beverly Hills, as well as Baldwin Park, receives $125 from the state for each of its students.
The changes brought about by the passage of S.B. 90 and A.B. 1267, while significant, did not purport to alter the basic concept underlying the California public school financing system. That concept, which we may refer to as the "foundation approach," undertakes in general to insure a certain guaranteed dollar amount for the education of each child in each school district, and to defer to the individual school district for [18 Cal.3d 742] the provision of whatever additional funds it deems necessary to the furtherance of its particular educational goals. As indicated in the foregoing excerpt, the mechanisms by which this concept was implemented prior to the adoption of S.B. 90 and A.B. 1267 were basically four: (1) basic aid, (2) equalization aid, (3) supplemental aid, and (4) tax rate limitations and overrides. The new law retained three of these, the element of supplemental aid (see text accompanying fn. 12, ante) being discontinued. The basic aid component remained the same, i.e., $125 per ADA. Thus it was fundamentally through adjustments and alterations in the remaining two areas -- equalization aid and tax rate limitations and overrides -- that the Legislature sought to bring the system into constitutional conformity. fn. 14
The second major aspect of the new program involved the creation of "revenue limits," or limitations on maximum expenditures per pupil in [18 Cal.3d 743] each school district exclusive of state and federal categorical support and of revenue generated by permissive override taxes. (§ 20902 et seq.) These provisions, generally speaking, allowed a district without a voted override to levy taxes at a rate no higher than would increase its expenditures per pupil over 1972-1973 base revenues by a permitted yearly inflation factor. fn. 15 A district having a school tax rate which produced revenues in excess of foundation levels would receive inflation adjustments which decreased in magnitude as those revenues rose above foundation levels. On the other hand, a district having base revenues which, when added to the full inflation allowance, did not reach the foundation level, could increase its revenues by up to 16 percent of the preceding year's revenue limit per ADA.
The combination of the foregoing rate limitation structure and the ever-advancing foundation levels would, it was contemplated, produce a phenomenon known as "convergence." While poorer districts could move with comparative rapidity toward the rising foundation levels, richer districts, due to the diminished inflation adjustment permitted them, would increase their revenue bases at a much slower rate. fn. 16 This prognosis was complicated, however, by the fact that district revenue limits applied only to revenue generated by the maximum general purpose tax rate available to a district in the absence of voter approval. Such limitations might be exceeded as before (see text following fn. 9, ante) if a majority of the voters in the district voted an override (§ 20906). Permissive overrides (i.e., overrides which can be imposed without voter [18 Cal.3d 744] approval) were also authorized to raise revenue for certain special purposes, such as capital outlay.
The revenue limit feature of the new law has similarly serious defects. By taking 1972-1973 revenues as its base figure, it perpetuates inequities resulting from property tax base differentials. More importantly, it will allow total "convergence" between high-spending revenue limits and rising foundation levels only after many, perhaps as many as 20, years -- even assuming no voted overrides. After five years of functioning -- again assuming that no voted overrides occur, many high-wealth, high-spending districts will still be spending two to three times more per pupil than many low-wealth districts are able to spend. Even when the [18 Cal.3d 745] "convergence" has run its course, there will continue to be a substantial inequality between basic-aid and equalization-aid districts, again assuming no voted overrides, due to the fact that the former districts will be able to achieve the foundation level at a tax rate which is less than the computational rate. Thus, to the extent that equal tax rates can produce differing expenditure levels, or that equal expenditure levels can be produced by differing tax rates, the system will continue to generate school revenue in proportion to the wealth of the individual district. fn. 17
This potential disparity is exacerbated by the continued availability of voted overrides pursuant to section 20906. The passage of such overrides by high-wealth school districts would operate to nullify the contemplated "convergence" effect sought to be achieved by increased equalization aid and the imposition of revenue limits. The operation of the latter feature, in combination with continuing inflation, will make it impossible for high-wealth, high-spending districts to maintain the present quality of their programs, and therefore such districts will have a great incentive to vote tax rate overrides because even a slight rate increase in such districts will raise substantial revenues. In the districts having a relatively low assessed valuation per pupil, on the other hand, the incentive to vote such overrides will be less, for only a substantial increase in the tax rate will be sufficient to produce substantial additional revenues. As a result, the extent of local control (i.e., "the opportunity to go above the foundation program level in pursuit of a higher quality program") will continue to be a function of district wealth under the new law. [18 Cal.3d 746]
In view of all of the foregoing it is clear that substantial disparities in expenditures per pupil resulting from differences in local taxable wealth will continue to exist under S.B. 90 and A.B. 1267. The reason for this is that essentially local wealth is the principal determinant of revenue, that high wealth districts do not need to make the same tax effort as low wealth districts in order to reach, let alone exceed, the level of the [18 Cal.3d 747] foundation program and that in this setting, basic aid becomes antiequalizing and "convergence" of doubtful achievement. fn. 18
Substantial disparities in expenditures per pupil among school districts cause and perpetuate substantial disparities in the quality and extent of availability of educational opportunities. For this reason the school financing system before the court fails to provide equality of treatment to all the pupils in the state. Although an equal expenditure level per pupil in every district is not educationally sound or desirable because of differing educational needs, equality of educational opportunity requires [18 Cal.3d 748] that all school districts possess an equal ability in terms of revenue to provide students with substantially equal opportunities for learning. The system before the court fails in this respect, for it gives high-wealth districts a substantial advantage in obtaining higher quality staff, program expansion and variety, beneficial teacher-pupil ratios and class sizes, modern equipment and materials, and high-quality buildings.
The trial court held that the California public school financing system for elementary and secondary schools as it stood following the adoption of S.B. 90 and A.B. 1267, while not in violation of the equal protection clause of the Fourteenth Amendment to the federal Constitution, fn. 19 was invalid as in violation of former article I, sections 11 and 21, of the California Constitution (now art. IV, § 16 and art. I, § 7 respectively; see and compare Serrano I, supra, at p. 596, fn. 11), our state equal [18 Cal.3d 749] protection provisions. fn. 20 Indicating the respects in which the system before it was violative of our state constitutional standard, fn. 21 the court set a period of six years from the date of entry of judgment fn. 22 as a reasonable time for bringing the system into constitutional compliance; it further held and ordered that the existing system should continue to operate until such compliance had been achieved. The judgment specifically [18 Cal.3d 750] provided that it was not to be construed to require the adoption of any particular system of school finance, but only to require that the plan adopted comport with the requirements of state equal protection provisions. Finally, the trial court retained jurisdiction of the action and over the parties "so that any of such parties may apply for appropriate relief in the event that relevant circumstances develop, such as a failure by the legislative and executive branches of the state government to take the necessary steps to design, enact into law, and place into operation, within a reasonable time from the date of entry of this Judgment, a California Public School Financing System for public elementary and secondary schools that will fully comply with the said equal-protection-of-the-law provisions of the California Constitution."
[4a] Before taking up the foregoing contentions, we first dispose of a preliminary procedural matter. Defendants urge that the trial court was [18 Cal.3d 751] without jurisdiction to proceed in this matter because two allegedly indispensable parties -- the Legislature and the Governor -- were not joined. (See Code Civ. Proc., § 389.) It is pointed out that "the operative and directory provisions" of the judgment "are addressed solely to the Legislative and Governor," and that the parties defendant in the action lack all power to bring about the relief sought by plaintiffs and awarded by the trial court -- i.e., the restructuring of the state public school financing system in a manner which will comply with provisions of our state Constitution guaranteeing equal protection of the laws. Reference is made to certain legislative reapportionment cases, notably Silver v. Brown (1965) 63 Cal.2d 270 [46 Cal.Rptr. 308, 405 P.2d 132], and to the fact that the Governor and the members of the Legislature were there made parties. To do otherwise in this case, it is urged, "would deny [the] people who created this financing system through their elective representatives of their day in Court ...."
This contention is based on several misconceptions and inaccurate statements of the record. [5] First, it is clear that the trial court -- wholly cognizant of the well-established principle, rooted in the doctrine of separation of powers (Cal. Const., art. III, § 3), that the courts may not order the Legislature or its members to enact or not to enact, fn. 23 or the Governor to sign or not to sign, fn. 24 specific legislation -- by no means addressed the "operative and directory provisions" of its judgment to the Legislature and Governor. [4b] On the contrary it simply declared that the public school financing system before it, which was administered by the parties defendant, was in violation of state constitutional provisions guaranteeing equal protection of the laws. The trial court also indicated that it would retain jurisdiction over the matter so that any party might apply for "appropriate relief" fn. 25 in the event that the lawmakers and the Governor had failed within a reasonable time, set by [18 Cal.3d 752] the judgment at six years, "to take the necessary steps to design, enact into law, and place into operation" a system which would comply with those provisions. However, it explicitly and properly refrained from issuing directives to the lawmakers and the chief executive, stating in its judgment: "... [T]his judgment is not intended to require, and is not to be construed as requiring, the adoption of any particular plan or system for financing the public elementary and secondary schools of the state ...."
[6] Secondly, as the reapportionment cases themselves indicate, it is the general and long-established rule that in actions for declaratory and injunctive relief challenging the constitutionality of state statutes, state officers with statewide administrative functions under the challenged statute are the proper parties defendant. (See Yorty v. Anderson (1963) 60 Cal.2d 312, 317-318 [33 Cal.Rptr. 97, 384 P.2d 417], and cases there cited; cf. D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1 [112 Cal.Rptr. 786, 520 P.2d 10]; City of Carmel-by-the-Sea v. Young (1970) 2 Cal.3d 259 [85 Cal.Rptr. 1, 466 P.2d 225, 37 A.L.R.3d 1313].) The fact that in the reapportionment context the Legislature and its members may also be considered proper parties stems from the direct institutional interest of those parties in the determination. (See and cf. fn. 26 Silver v. Jordan (S.D. Cal. 1964) 241 F.Supp. 576, 579, affirmed (1965) 381 U.S. 415 [14 L.Ed.2d 689, 85 S.Ct. 1572]; Minnesota State Senate v. Beens (1972) 406 U.S. 187, 194 [32 L.Ed.2d 1, 8, 92 S.Ct. 1477].) [4c] In the instant case, on the other hand, as in the great majority of cases brought against state administrative officers to challenge the constitutionality of a statute or statutes administered by them, the Legislature and the Governor lack any similar interest. The interest they do have -- that of lawmakers concerned with the validity of statutes enacted by them -- is not of the immediacy and directness requisite to party status; it may thus be fully and adequately represented by the appropriate administrative officers of the state.
Moreover, even should the Legislature and the Governor be considered proper parties to this litigation (i.e., parties subject to permissive joinder or capable of intervention), it is clear that they could in no case be considered indispensable parties, or parties without whom the action could not fairly proceed. [7] Indispensable parties, as we said in Bank of California v. Superior Court (1940) 16 Cal.2d 516, at page 521 [106 [18 Cal.3d 753] P.2d 879], are parties "whose interests, rights, or duties will inevitably be affected by any decree which can be rendered in the action. Typical are the situations where a number of persons have undetermined interests in the same property, or in a particular trust fund, and one of them seeks, in an action, to recover the whole, to fix his share, or to recover a portion claimed by him. The other persons with similar interests are indispensable parties. The reason is that a judgment in favor of one claimant for part of the property or fund would necessarily determine the amount or extent which remains available to the others. Hence, any judgment in the action would inevitably affect their rights." [4d] Manifestly, the Legislature and the Governor have no interest in this proceeding which is remotely comparable to that contemplated by this language.
Moreover, as we also said in the Bank of California case, in dealing with the doctrine of indispensable and necessary parties "we should ... be careful to avoid converting a discretionary power or a rule of fairness in procedure fn. 27 into an arbitrary and burdensome requirement which may thwart rather than accomplish justice." (16 Cal.2d at p. 521; see also Muggill v. Reuben H. Donnelley Corp. (1965) 62 Cal.2d 239, 241 [42 Cal.Rptr. 107, 398 P.2d 147].) In the instant case it is quite clear that no governmental interest has lacked for able and willing advocates in the absence of the Legislature and Governor as parties. This case has been well-known to those entities since its inception, yet they have at no point sought intervention or indicated any interest in doing so. Even more significantly, this is a matter whose resolution has been anxiously awaited by the parties and the public at large for more than seven years. In light of these considerations we are convinced that to invoke the doctrine of indispensability, and thus require the renewal of trial proceedings on this ground, would indeed be to "thwart rather than accomplish justice."
[1b] Defendants' first substantive contention, as indicated above, concerns the criteria employed by the trial court in its examination of the school finance system before it. The trial court, it is urged, by confining its inquiry to the matter of wealth-related disparities among the several school districts, improperly ignored certain other factors -- for example, [18 Cal.3d 754] the "adequacy" and "equality" of educational programs fn. 28 -- and thus oversimplified the problem before it. This point of view, it is claimed, is reflected in the terms of the judgment itself. (See par. 4 of the judgment set forth ante in fn. 21.) The application of proper criteria, defendants argue, would require the trial court to look not merely to the operation of particular "mechanisms" utilized by the system but to the overall results achieved in terms of "a fair balance, statewide, between equal educational opportunities and local supplementation." To do otherwise, it is urged, is to adopt a nearsighted approach which, in its zeal to perfect one "mechanism" in the system, imposes a standard of "neutrality" upon all its other elements. "Municipal overburden," with its attendant problems, also covered by trial court findings, is cited by defendants as a particular example of an area requiring not "neutrality" but special efforts according to the circumstances. fn. 29
Defendants offer two formulations of what they consider to be adequate criteria for the assessment of the public school financing system. In their opening brief they suggest a tripartite test which is less an alternative to the "fiscal neutrality" approach of the trial court than what turns out to be defendants' description of the system at issue from the standpoint of its overall effect. fn. 30 Perhaps realizing the unwieldiness [18 Cal.3d 755] of this formulation, they proceed in their reply brief to state the apparent kernel of their position in more straightforward terms: of the three types of revenues available to school districts -- foundation funds, categorical aids, and local supplements -- only the third, it is asserted, is "unequalized," or dependent upon taxable district wealth and the capacity or willingness of the voters to pay additional school taxes. The percentage of total state school district revenues represented by these "unequalized" revenues, defendants assert, "provides an objective measure of the relative weights given by the system in a given year to equal educational opportunities and local participation in school fiscal affairs." So long as this figure is sufficiently low -- defendants suggest 10 percent as an appropriate figure -- the relevant competing interests are adequately accommodated. This, then, is the "optimum balance" criterion which defendants would suggest that we utilize in preference to the "fiscal neutrality" approach of the trial court. If we were to do so, it is asserted, we would find that the subject system, as improved by the provisions of S.B. 90 and A.B. 1267, is in approximate compliance with the suggested standards. fn. 31
The fundamental defect in this argument is that it flies in the face of our holding in Serrano I and also of the findings of the trial court, which were carefully grounded on that holding. In Serrano I we held that if the allegations of the complaint were sustained -- which allegations dealt not only with district disparities in revenue-producing capability but also with the effect of such disparities on the quality of education in the various districts (see Serrano I, supra, at p. 601, fn. 16) -- then "the financial system must fall and the statutes comprising it must be found unconstitutional" as in violation of equal protection. (Serrano I, supra, at p. 615.) We described the system in question (i.e., the system alleged to exist in the complaint) as one which "conditions the full entitlement to [the interest in education] on wealth, classifies its recipients on the basis of their collective affluence[,] and makes the quality of a child's education depend upon the resources of his school district ...." (Id. at p. 614.) It follows, therefore, that any system in which the two basic [18 Cal.3d 756] elements of this description are present -- i.e., (1) the conditioning of the availability of school revenues upon district wealth, with resultant disparities in school revenue, and (2) the dependency of the quality of education upon the level of district expenditure -- must be declared invalid unless it finds justification sufficient to satisfy the applicable equal protection test. fn. 32
In the first place, the figures upon which defendants base their assertion of present compliance with the suggested standard (see fn. 31, ante, and accompanying text) are drawn from 1973-1974 fiscal data, that is, data reflecting the immediate impact of the post-Serrano I enactments. [18 Cal.3d 757] It is clear, however, that in 1973-1974 the various pressures -- notably increasing inflation and declining enrollment fn. 34 -- tending to augment the district ratio of local supplements to other revenues had not fully manifested themselves. Under the present system which, according to the trial court's findings, makes the ability of particular school districts to cope with such pressures vary according to the taxable wealth of the particular district, it can be expected that future years will see an increase statewide in the ratio of local supplements to other revenues. In such circumstances, the extent of an individual district's participation in the statewide increase will be geared to its taxable wealth. To ask, as defendants do, that we defer our notice of such probable future disparities to the time of their actual occurrence is to ask that we ignore inherent defects in the system which we are called upon to examine.
Finally, we offer some comments upon the complex problems associated with "municipal overburden," which defendants and some of [18 Cal.3d 758] the amici curiae, notably the San Francisco Unified School District, see as a critical problem under any system of school financing. It is important to recognize at the outset that "municipal overburden" is a banner under which many armies march. Strictly speaking, the term relates to the phenomenon, prevalent in concentrated urban areas, of high property tax rates for governmental services other than education. Such a phenomenon, it is suggested, must be taken into account when comparing school tax rates in various districts; a lower school tax rate in an urban area, it is urged, cannot be realistically compared with higher tax rates in suburban or rural areas in terms of "equal tax effort" because the taxpayers residing in districts in the latter areas may bear a lighter overall tax burden in terms of a total rate. fn. 36 As the trial court found, however, the phenomenon in question is not limited in its occurrence to districts such as San Francisco where a relatively high assessed valuation (due to a concentration of business and industry) combined with a comparatively small ADA permits a relatively low school tax rate. On the contrary, the residents of districts in Los Angeles, San Diego, and San Jose, for example -- with a much lower assessed valuation per ADA fn. 37 -- suffer from the same typically urban problems and require similarly high nonschool tax rates to meet them. The system before us, by tying a district's ability to respond to its educational needs and desires to its taxable wealth per ADA, clearly discriminates among equally beleaguered urban districts from the point of view of their respective [18 Cal.3d 759] capacities to bring educational benefits to the students resident within their borders. fn. 38
The term "municipal overburden" is also sometimes used to designate certain problems related not to high nonschool tax rates but to additional burdens of school expenditure imposed upon urban districts by the facts of urban life. When there is widespread poverty, disadvantaged youth, and bilingualism in a district, it is argued, not only do purely educational costs rise due to the necessity for increased effort to overcome motivational and adaptive problems, but costs related to matters like vandalism rise as well. Again, however, the incidence of these problems is not [18 Cal.3d 760] limited to districts of any particular level of wealth per ADA. From the point of view of providing education, those districts which are able to meet the above problems because of a relatively high assessed valuation per ADA are clearly favored over districts which lack that advantage.
In Serrano I this court, in its determination of whether or not the allegations of the complaint stated a cause of action, was faced at the [18 Cal.3d 761] outset with the task of choosing the proper equal protection standard to be applied. "[T]he United States Supreme Court," we pointed out, "has employed a two-level test for measuring legislative classifications against the equal protection clause. 'In the area of economic regulation, the high court has exercised restraint, investing legislation with a presumption of constitutionality and requiring merely that distinctions drawn by a challenged statute bear some rational relationship to a conceivable legitimate state purpose. ... [¶] On the other hand, in cases involving "suspect classifications" or touching on "fundamental interests," ... the court has adopted an attitude of active and critical analysis, subjecting the classification to strict scrutiny. ... Under the strict standard applied in such cases, the state bears the burden of establishing not only that it has a compelling interest which justifies the law but that the distinctions drawn by the law are necessary to further its purpose.'" (Serrano I at p. 597, quoting from Westbrook v. Mihaly (1970) 2 Cal.3d 765, 784-785 [87 Cal.Rptr. 839, 471 P.2d 487], vacated on other grounds (1971) 403 U.S. 915 [29 L.Ed.2d 692, 91 S.Ct. 2224].)
[2b] During the progress of trial proceedings below, the United States Supreme Court rendered its decision in San Antonio School District v. Rodriguez, supra, 411 U.S. 1. There, addressing itself to an [18 Cal.3d 762] equal protection attack on the Texas public school financing system -- which like the system here in question is based on the "foundation approach" -- the high court held that that system (1) did not result in a suspect classification based upon wealth, and (2) did not affect any fundamental interest, education being less than fundamental for these purposes because it was not explicitly or implicitly guaranteed or protected by the terms of the federal Constitution. (Id., at pp. 33-34, 61-62 [36 L.Ed.2d at pp. 42-43, 59-60].) Accordingly, the court held, the so-called "strict scrutiny test" for equal protection review of state laws under the Fourteenth Amendment to the United States Constitution was inappropriate. Reinforced in this conclusion by the fact that the case before it involved peculiarly local questions of taxation, fiscal planning, and educational policy -- and thus raised serious considerations of federalism and deference to local decision (id., at pp. 40-44 [36 L.Ed.2d at pp. 47-50]) -- the high court proceeded to examine the Texas system under the less stringent "rational relationship" test, concluding that such a relationship to the state purpose of local control was shown. fn. 39 (Id., at pp. 48-55 [36 L.Ed.2d at pp. 51-56].)
Our footnote 11 read as follows: "The complaint also alleges that the financing system violates article I, sections 11 and 21 [now in substance article IV, section 16 and article I, section 7(b)] of the California Constitution. Section 11 provides: 'All laws of a general nature shall have a uniform operation.' Section 21 states: 'No special privileges or [18 Cal.3d 763] immunities shall ever be granted which may not be altered, revoked, or repealed by the Legislature; nor shall any citizen, or class of citizens, be granted privileges or immunities which, upon the same terms, shall not be granted to all citizens.' We have construed these provisions fn. 40 as 'substantially the equivalent' of the equal protection clause of the Fourteenth Amendment to the federal Constitution. (Dept. of Mental Hygiene v. Kirchner (1965) 62 Cal.2d 586, 588 [43 Cal.Rptr. 329, 400 P.2d 321].) Consequently, our analysis of plaintiffs' federal equal protection contention is also applicable to their claim under these state constitutional provisions." (Serrano I at p. 596.) The first question here facing us is that of the proper interpretation of the foregoing two sentences in light of Rodriguez.
Three possible interpretations of this language have been suggested to us. All proceed on the premise properly embraced by all parties hereto, that the footnote's citation of our second Kirchner opinion forecloses any argument that a classification which satisfies federal equal protection standards by the same token satisfies our own constitutional provisions. fn. 41 Granting this, however, defendants argue that our reliance in Serrano I on United States Supreme Court cases dealing with the proper application of the strict scrutiny standard of review must be reexamined in light of Rodriguez, and that such reexamination must result in the conclusion that neither a "suspect classification" nor a "fundamental interest" is here involved, precluding use of a strict scrutiny standard for purposes of resolving the state constitutional question. Plaintiffs, on the other hand, urge that removal of the federal ground by Rodriguez leaves our Serrano I rationale wholly intact on state grounds. Alternatively they argue that if Rodriguez is to be utilized by analogy in applying our state constitutional provisions -- so that, for example, a "fundamental interest" for state purposes would be held to exist only if the right in question is explicitly [18 Cal.3d 764] or implicitly guaranteed by the state Constitution -- the interest in education will be seen to meet this test. fn. 42 This, it will be recalled, was the theory adopted by the trial court (see fn. 19, ante, and accompanying text).
The primary position adopted by plaintiffs on this point is the correct one. [8] As Serrano I makes clear through its reference to our second Kirchner opinion (and as all parties hereto are agreed), our state equal protection provisions, while "substantially the equivalent of" the guarantees contained in the Fourteenth Amendment to the United States Constitution, are possessed of an independent vitality which, in a given case, may demand an analysis different from that which would obtain if only the federal standard were applicable. We have recently stated in a related context: "[I]n the area of fundamental civil liberties -- which includes ... all protections of the California Declaration of Rights -- we sit as a court of last resort, subject only to the qualification that our interpretations may not restrict the guarantees accorded the national citizenry under the federal charter. In such constitutional adjudication, our first referent is California law and the full panoply of rights Californians have come to expect as their due. Accordingly, decisions of the United States Supreme Court defining fundamental rights are persuasive authority to be afforded respectful consideration, but are to be followed by California courts only when they provide no less individual protection than is guaranteed by California law." (People v. Longwill (1975) 14 Cal.3d 943, 951, fn. 4 [123 Cal.Rptr. 297, 538 P.2d 753]; see also People v. Disbrow (1976) 16 Cal.3d 101, 114-115 [127 Cal.Rptr. 360, 545 P.2d 272]; People v. Norman (1975) 14 Cal.3d 929, 939 [123 Cal.Rptr. 109, 538 P.2d 237]; People v. Brisendine (1975) 13 Cal.3d [18 Cal.3d 765] 528, 548-552 [119 Cal.Rptr. 315, 531 P.2d 1099]; Burrows v. Superior Court (1974) 13 Cal.3d 238, 245-246 [118 Cal.Rptr. 166, 529 P.2d 590]; Mandel v. Hodges (1976) 54 Cal.App.3d 596, 615-617 [127 Cal.Rptr. 244]; State v. Kaluna (1974) 55 Hawaii 361 [520 P.2d 51, 58-59]; Baker v. City of Fairbanks (Alaska 1970) 471 P.2d 386, 401-402; fn. 43 see generally Note, Project Report: Toward An Activist Role for State Bills of Rights (1973) 8 Harv. Civ. Rights -- Civ. Lib.L.Rev. 271; Falk, Foreword: The State Constitution: A More Than "Adequate" Nonfederal Ground (1973) 61 Cal.L.Rev. 273; Note, Rediscovering the California Declaration of Rights (1974) 26 Hastings L.J. 481.)
For these reasons then, we now adhere to our determinations, made in Serrano I, that for the reasons there stated and for purposes of assessing our state public school financing system in light of our state constitutional provisions guaranteeing equal protection of the laws (1) discrimination [18 Cal.3d 766] in educational opportunity on the basis of district wealth involves a suspect classification, and (2) education is a fundamental interest. Because the school financing system here in question has been shown by substantial and convincing evidence produced at trial to involve a suspect classification (insofar as this system, like the former one, draws distinctions on the basis of district wealth), and because that classification affects the fundamental interest of the students of this state in education, we have no difficulty in concluding today, as we concluded in Serrano I, that the school financing system before us must be examined under our state constitutional provisions with that strict and searching scrutiny appropriate to such a case. fn. 45
We are fortified in reaching this conclusion by language appearing in the Rodriguez decision itself. The high court, in passing upon the validity of the Texas system under the federal equal protection clause, repeatedly emphasized its lack of "expertise" and familiarity with local problems of school financing and educational policy, which lack "counsel[ed] against premature interference with informed judgments made at the state and local levels." (Rodriguez, supra, at p. 42 [36 L.Ed.2d at p.48].) These considerations, in conjunction with abiding concerns from the standpoint of federalism, fn. 46 in the high court's view "buttress[ed] [its] conclusion that Texas' system of public school finance is an inappropriate candidate for strict judicial scrutiny." (Id., at p. 44 [36 L.Ed.2d at p. 49].) This court, on the other hand, in addressing the instant case occupies a position quite different from that of the high court in Rodriguez. The constraints of [18 Cal.3d 767] federalism, so necessary to the proper functioning of our unique system of national government, are not applicable to this court in its determination of whether our own state's public school financing system runs afoul of state constitutional provisions. Moreover, while we cannot claim that we have achieved the perspective of "expertise" on the subjects of school financing and educational policy, our deliberations in this matter have had the benefit of a thoughtfully developed trial record (comprising almost 4,000 pages of testimonial transcript, replete with the opinions of experts of various accomplishments and persuasions, and a clerk's transcript of almost equal size), comprehensive if not exhaustive findings on the part of an able trial judge, and voluminous briefing by the parties and no less than nine amici curiae, among which are included the state Superintendent of Public Instruction. We believe that this background amply equips us to undertake the searching judicial scrutiny of our state's public school financing system which is required of us under our state constitutional provisions guaranteeing equal protection of the laws.
We point out in closing, however, that our application of the strict scrutiny test in this case should in no way be interpreted to imply an acceptance of the theory, adopted by the trial court and advanced as an alternative rationale by plaintiffs and some of their supporting amici, by which the Rodriguez approach to assessing "fundamentalness" in affected rights is applied by analogy in the state sphere. (See fn. 20, ante, and accompanying text.) Suffice it to say that we are constrained no more by inclination than by authority to gauge the importance of rights and interests affected by legislative classifications wholly through determining the extent to which they are "explicitly or implicitly guaranteed" (Rodriguez, supra, at p. 33 [36 L.Ed.2d at p. 43]) by the terms of our compendious, comprehensive, and distinctly mutable state Constitution. fn. 47 In applying our state constitutional provisions guaranteeing equal protection of the laws we shall continue to apply strict and searching judicial scrutiny to legislative classifications which, because of their impact on those individual rights and liberties which lie at the core of [18 Cal.3d 768] our free and representative form of government, fn. 48 are properly considered "fundamental."
For the reasons above stated, we have concluded that the state public school financing system here under review, because it establishes and perpetuates a classification based upon district wealth which affects the fundamental interest of education, must be subjected to strict judicial scrutiny in determining whether it complies with our state equal protection provisions. [9] Under this standard the presumption of constitutionality normally attaching to state legislative classifications falls away, and the state must shoulder the burden of establishing that the classification in question is necessary to achieve a compelling state interest. (Serrano I at p. 597; see also Weber v. City Council (1973) 9 Cal.3d 950, 958-959 [109 Cal.Rptr. 553, 513 P.2d 601].) [10a] Basing our determination upon the amply supported factual findings of the trial court, which we have summarized in part II above, we conclude without hesitation that the trial court properly determined that the state failed to bear this burden.
The admitted improvements to the system which were wrought by the Legislature following Serrano I have not been and will not in the foreseeable future be sufficient to negate those features of the system [18 Cal.3d 769] which operate to perpetuate this inequity. Foremost among these -- especially in a period of rising inflation and restrictive revenue limits -- is the continued availability of voted tax overrides which, while providing more affluent districts with a ready means for meeting what they conceive as legitimate and proper educational objectives, will be recognized by the poorer districts, unable to support the passage of such overrides in order to meet equally desired objectives, as but a new and more invidious aspect of that "cruel illusion" which we found to be inherent in the former system. (Serrano I at p. 611.) In short, what we said in our former opinion in this respect is equally true here. "[S]o long as the assessed valuation within a district's boundaries is a major determinant of how much it can spend for its schools, only a district with a large tax base [per ADA] will be truly able to decide how much it really cares about education. The poor district cannot freely choose to tax itself into an excellence which its tax rolls cannot provide. Far from being necessary to promote local fiscal choice, the present financing system actually deprives the less wealthy districts of that option." (Id.)
[11a] Defendants' claim of specific state constitutional authorization for the public school financing system before us is primarily based upon [18 Cal.3d 770] the terms of article XIII, section 21, which provides: "Within such limits as may be provided under Section 20 of this Article [allowing the Legislature to provide maximum local property tax rates and bonding limits], the Legislature shall provide for an annual levy by county governing bodies of school district taxes sufficient to produce annual revenues for each district that the district's board determines are required for its schools and district functions." The argument, generally stated, is that a harmonious interpretation of this section along with other provisions requiring equal protection of the laws must operate to insulate distinctions based on district wealth disparities from state equal protection requirements. The argument proceeds on two distinct levels. First, it is urged, we held in Serrano I that the system there before us was "authorized" and "mandated" by the predecessor to article XIII, section 21 (former art. IX, § 6, par. 6); that holding, defendants and their supporting amicus assert, is now the law of the case, and to the extent that the system here in question shares in the shortcomings of the former system related to district wealth disparities, it too is so "authorized" and "mandated." Second, it is pointed out, even if we are not compelled to this conclusion by the doctrine of the law of the case, the terms of the section compel the indicated result. We take up these contentions in order.
We reject such contentions as being utterly devoid of merit. Indeed, as we shall make clear, defendants' seizure upon such fragments of our [18 Cal.3d 771] opinion in Serrano I as a basis of argument not only results in an unreasoned distortion of such language but more unfortunately displays an attempt to circumvent the rationale of Serrano I (now the law of the case) by emphasizing isolated words out of context. It is beyond question -- and beyond cavil -- that in stating that former article IX, section 6 "specifically authorizes the very element of the fiscal system of which plaintiffs complain," we had reference to that "element" of the system permitting variations in expenditures per ADA among the several districts. This is made clear by the context of the statement and the language following it. Former section 5 of article IX (the "common schools" provision) should not, we held, be interpreted to apply to school financing and require "uniform educational expenditures" because such an interpretation would render it inconsistent with former section 6 (the provision here at issue) which allows variation in school district expenditures. This was not to say, however, that former section 6 "authorized" or "approved" a system in which such variation was the product of disparities in district wealth. Any such conclusion would clearly have been at odds with our ultimate conclusion in Serrano I that the system there alleged to exist was violative of state as well as federal equal protection provisions. (5 Cal.3d at 596, fn. 11.) (See generally Part VI, ante.)
We conclude for the foregoing reasons fn. 50 that the doctrine of the law of the case is not helpful to defendants on this point. It remains for us to [18 Cal.3d 772] undertake an interpretation of article XIII, section 21 (former art. IX, § 6, par. 6) in order to determine whether that provision requires a public school financing system which, like that before us, makes local decisions affecting educational opportunity depend for their effectiveness upon the taxable wealth per ADA in the district. We conclude without hesitation that it does not.
Article IX, section 14 of the state Constitution clearly establishes that it is the Legislature which bears the ultimate responsibility for establishing school districts and their boundaries. fn. 51 [10b] By its exercise of this power, and by the concurrent exercise of its powers under article XIII, section 21 to provide for a school financing mechanism based upon county levies of school district taxes, it has created a system whereby disparities in assessed valuation per ADA among the various school districts result in disparities in the educational opportunity available to the students within such districts. Thus, as we said in Serrano I, [18 Cal.3d 773] "[g]overnmental action drew the school district boundary lines, thus determining how much local wealth each district would contain [citations]." (5 Cal.3d at p. 603.) It is that action, which we reiterate is the product of legislative determinations, fn. 52 that we today hold to be in violation of our state provisions guaranteeing equal protection of the laws. fn. 53
[11c] In In re Jacobson (1936) 16 Cal.App.2d 497 [60 P.2d 1001], for example, the Legislature, acting pursuant to its power to create a system of inferior courts (former art. VI, § 11a), did so in a manner which granted greater jurisdiction to city courts in populous townships than to the same class of courts of less populous townships -- regardless of the population of the particular city. This, it was held, was in violation of the fundamental constitutional requirement that laws of a general nature have a uniform application. "The legislature derives its power to create courts from the Constitution," the court stated, "but it may do so only in [18 Cal.3d 774] conformity with the provisions of the Constitution. It doubtless has the right to classify cities according to population, and having made such classification to prescribe different powers and regulations for each of the classes. The powers and regulations must, however, be uniform for each of the classes." (16 Cal.App.2d at p. 500; italics added.)
By the same token, we are here confronted with a situation in which the Legislature has been granted the power to provide for the financing of schools through the mechanism of county levies of school district taxes. Nothing in the constitutional provision establishing that power, however, indicates that its exercise is to be freed from general constitutional limitations applicable to all legislation. Accordingly the Legislature, in its exercise of the subject power in conjunction with other powers possessed by it, was obliged to act in a manner consistent with such limitations. This it has not done. Instead it has undertaken to create a school financing system which, by making the quality of educational opportunity available to a student dependent upon the wealth of the district in which he lives, is manifestly inconsistent with fundamental [18 Cal.3d 775] constitutional provisions guaranteeing the equal protection of the laws to all citizens of this state. That system, we hold today, can no longer endure.
[10c] To recapitulate, we conclude that the trial court properly ordered and decreed that the California public school financing system [18 Cal.3d 776] for public elementary and secondary schools, including those provisions of the S.B. 90 and A.B. 1267 legislation pertaining to this system, while not in violation of the equal protection clause of the Fourteenth Amendment to the United States Constitution, is invalid as being in violation of former article I, sections 11 and 21 (now art. IV, § 16 and art. I, § 7, respectively) of the California Constitution, commonly known as the equal protection of the laws provisions of our state Constitution. This determination and the other related provisions of the judgment we find to be fully supported by the findings and the evidence; indeed, no attack has been made on the findings as lacking evidentiary support. For the reasons we have detailed, we discern no jurisdictional defect in the proceedings below based on the claim -- rejected by us as devoid of merit -- that the Governor and the Legislature should have been joined as indispensable parties. We conclude that the holding of the trial court is grounded solidly and soundly on our earlier decision in Serrano I wherein we determined among other things that the California public school financing system, failing to withstand "strict scrutiny," denied plaintiffs the equal protection of the laws under the relevant provisions of our state Constitution. We therefore confirm that our decision in Serrano I was based not only on the equal protection provisions of the federal Constitution but also on such provisions of our state Constitution, and we emphasize that insofar as the latter provisions are applicable here, Serrano I constitutes the law of the case.
We observe that the trial court so deemed it and properly adhered to the law set forth in our earlier opinion in assessing for state constitutional purposes the same financing system as revised by S.B. 90 and A.B. 1267. [2d] Since such system before the court was shown on substantial evidence to involve a suspect classification (based on district wealth) and to touch upon the fundamental interest of education, the trial court properly followed Serrano I in subjecting it to the "strict scrutiny" test under which the state has the burden of establishing that the classification in question is necessary to achieve a compelling state interest. [10d] Applying this test, the court properly determined on findings supported by substantial evidence that the state had failed to bear its burden and that the financing system before it was invalid as denying equal protection of the laws as guaranteed by the California Constitution. [3d] Finally we hold that, contrary to defendants' claim, there is no conflict between the requirements of our state equal protection [18 Cal.3d 777] provisions and other provisions of the California Constitution so as to compel the former to yield as the determinative law of this case.
The majority do not now rely upon the equal protection clause of the federal Constitution. Contrary to our holding in Serrano v. Priest (1971) 5 Cal.3d 584 [96 Cal.Rptr. 601, 487 P.2d 1241] (Serrano I), it is now established by the highest authority that school district financing systems such as ours do not offend federal equal protection principles. (San [18 Cal.3d 778] Antonio School District v. Rodriguez (1973) 411 U.S. 1 [36 L.Ed.2d 16, 93 S.Ct. 1278].) Indeed, the majority herein candidly admit that the Rodriguez decision clearly "undercuts" Serrano I's reliance upon the national charter. (Ante, p. 762.) Among other things, the high court in Rodriguez held that the "strict scrutiny" standard of review was inapplicable, since no "fundamental interest" or "suspect classification" was involved; that the present traditional method of local district financing, though perhaps unfair in some respects, nevertheless operates in a rational fashion, without invidious discrimination; and that the courts should defer to the state legislatures in these matters of policy, since these bodies alone have the necessary expertise and familiarity with local problems. One may differ, as I do, with the high court's conclusion that education is not a fundamental interest. Yet, the question of whether the school financing plan here at issue violates federal equal protection has been laid to rest in Rodriguez.
In broad, general language the Constitution guarantees both equal protection of the laws and uniform operation of the laws, and forbids irrevocable special privileges or immunities. Since, as we have previously observed, these provisions are "substantially the equivalent" of the federal equal protection clause (Serrano I, 5 Cal.3d at p. 596, fn. 11), although not required to do so, we might defer to the Rodriguez equal protection analysis rather than create our own different interpretation of substantially identical constitutional language. (See People v. Disbrow (1976) 16 Cal.3d 101, 119, dis. opn. [ 127 Cal.Rptr. 360, 545 P.2d 272].) Indeed, a number of state courts in post-Rodriguez cases have done just that -- namely, declined to invalidate comparable school financing systems in reliance upon state constitutional provisions. (See Northshore School District No. 417 v. Kinnear (1974) 84 Wn.2d 685 [530 P.2d 178, 200-202]; Shofstall v. Hollins (1973) 110 Ariz. 88 [515 P.2d 590]; Thompson v. Engelking (1975) 96 Idaho 793 [537 P.2d 635]; cf. Hootch v. Alaska State-Operated School System (Alaska 1975) 536 P.2d 793, 804; [18 Cal.3d 779] but see Robinson v. Cahill (1973) 62 N.J. 473 [303 A.2d 273].) The present majority are, for reasons which I fully respect but do not accept, unwilling to follow the lead of Rodriguez and the foregoing cited cases.
Paraphrased, section 21 requires the Legislature to adopt a school financing system in which each county may levy annually a school district tax in an amount sufficient to provide the revenues deemed necessary by each district board. Since under our Constitution property must be assessed in, and taxed only by, the county, city and district in which it is situated (art. XIII, § 14; see San Francisco etc. Ry. Co. v. Scott (1904) 142 Cal. 222, 229 [75 P. 575]; Smith-Rice Heavy Lifts, Inc. v. County of Los Angeles (1967) 256 Cal.App.2d 190, 200 [63 Cal.Rptr. 841]; [18 Cal.3d 780] Ehrman & Flavin, Taxing Cal. Property (1967) § 162, at pp. 145-146), it necessarily follows that article XIII of the Constitution, section 21 in conjunction with section 14, contemplates a school financing system in which each individual district's needs are satisfied from the taxable wealth of that district, namely, the present system which the majority find unconstitutional. The majority describe the foregoing reasoning as a "non sequitur." If, however, section 21 empowers the Legislature to provide for district tax levies to assure adequate school revenues, and if under section 14 the property subject to tax by the district to generate those revenues must repose within the district, wherein lies the "non sequitur"? Do not sections 14 and 21, in combination, authorize, constitutionally, a system whereby levy of taxes on local property within the district, supplemented by state aid, shall constitute the source of school financing?
The central theme of the majority is that the Legislature has somehow abused its constitutional authority by drawing school district boundary lines in a manner permitting variations in district wealth. As the majority put it, "It is that action [drawing district boundary lines], which we reiterate is the product of legislative determinations, that we today hold to be in violation of our state provisions guaranteeing equal protection of [18 Cal.3d 781] the laws." (Ante, p. 772, italics in original.) Yet, again it is manifest that the Legislature derives its power to create and classify school districts from the same Constitution (art. IX, § 14). Furthermore, we ourselves have long held that "The power of the legislature over school districts is plenary. [Citations.] It may divide, change, or abolish such districts at pleasure .... [Citation.]" (Worthington S. Dist. v. Eureka S. Dist. (1916) 173 Cal. 154, 156 [159 P. 437], italics added; see Hughes v. Ewing (1892) 93 Cal. 414, 417 [28 P. 1067].) It seems to me self-evident that if the framers of our Constitution had intended to impose substantial restrictions upon the plenary power of the Legislature over school district boundaries, they would have expressly so provided. They did not do so. I suggest that it is highly unlikely that such a drastic and dramatic restriction on plenary power as the majority now impose would have been intended to occur wholly by implication. With due deference, I suggest that, to the contrary, we must presume that those who adopted section 21 (and its predecessor sections) were fully aware of the fact that there existed for years disparities in district wealth and that the effect of the continued exercise of such plenary legislative power would result in continued disparities, which permitted wealthier districts to allocate more funds for educational purposes. (Undoubtedly, the existence of such disparities was a motivating factor in creating the state school fund to supplement local revenues. (Art. IX, § 6.)) The inequitable result of district wealth disparities is forcefully and eloquently demonstrated by the majority. Nevertheless, once we determine that the action in question is constitutionally authorized, the sociologically unsatisfactory or, indeed unacceptable, consequences are matters for legislative correction.
We have often insisted that a constitutional enactment be viewed in the "light of its historical context and the conditions existing prior to its enactment." (Mulkey v. Reitman (1966) 64 Cal.2d 529, 534 [50 Cal.Rptr. 881, 413 P.2d 825], and cases cited.) Section 21 of article XIII, was adopted as recently as 1974. We have been told that its purpose was to restate "without change in meaning" the provisions of former article IX, section 6, adopted in 1946. (See Cal. Const. Revision Com., Proposed Revision of the Cal. Constitution (1971) pt. 6, p. 36.) Section 6 provided: "The Legislature shall provide for the levying annually by the governing body of each county, and city and county, of such school district taxes, .... as will produce in each fiscal year such revenue for each school district as the governing board thereof shall determine is required in such fiscal year for the support of all schools and functions of said district authorized or required by law." [18 Cal.3d 782]
Second, in Serrano I, plaintiffs had argued that the present system was invalid under article IX, section 5, of the state Constitution, which section requires the Legislature to provide for a system of common schools. In rejecting the argument we said that, "While article IX, section 5 makes no reference to school financing, section 6 of that same article [the predecessor to art. XIII, § 21] specifically authorizes the very element of the fiscal system of which plaintiffs complain." (5 Cal.3d at p. 596, italics [18 Cal.3d 783] added.) What was the "element of the fiscal system of which plaintiffs complain"? The majority insist that this phrase related to "variations in expenditures per ADA." I think it arguable, however, that this "element" in question had broader implications and included not only expenditure inequalities but district wealth disparities as well. For, on the page previous to the above quotation, we had described plaintiffs' preliminary contention as follows: "Plaintiffs' argument is that the present financing method produces separate and distinct systems, each offering an educational program which varies with the relative wealth of the district's residents." (Id., at p. 595, italics added.) I think that it is this element which section 6 of article IX authorizes, and not merely the existence of "variations in expenditures per ADA" (as suggested by the majority herein).
In summary, we must reconcile two separate provisions of the state Constitution, first, a general expression guaranteeing our citizens "equal protection of the laws," and second, a specific constitutional provision [18 Cal.3d 784] authorizing the Legislature to adopt a school financing system whereby each district finances its own educational needs. The majority, purporting to follow the well established rule that conflicts between constitutional or statutory provisions should be avoided, construe article XIII, section 21, I respectfully suggest, in a manner which contradicts its plain meaning, ignores the "historical context" of the section, and conflicts with our own recent construction of that section in Serrano I. The irreconcilable conflict arising from the majority's rejection of the Rodriguez analysis necessarily leads to a result which is not palatable to them -- namely, in accordance with Serrano I, the conflict can be resolved in only one manner: the more specific provision of the Constitution must prevail. (5 Cal.3d at p. 596.) I am unable to accept the majority's conclusion that the present system of school financing in this state, whose essential elements are expressly authorized by specific provisions of the state Constitution, is at the same time in violation of the general equal protection clause of the same Constitution.
Few constitutional principles are more firmly established and accepted than the rule that all presumptions and intendments favor the validity of legislation. The case for invalidity of statutes must reach beyond mere doubt to the level at which we fairly can say that "'"... their unconstitutionality clearly, positively, and unmistakeably [sic] appears."'" (In re Ricky H. (1970) 2 Cal.3d 513, 519 [86 Cal.Rptr. 76, 468 P.2d 204].) Similarly, it is equally well settled that there exists a strong presumption in favor of the Legislature's interpretation of a provision of the Constitution. (Methodist Hosp. of Sacramento v. Saylor (1971) 5 Cal.3d 685, 692 [97 Cal.Rptr. 1, 488 P.2d 161].) Thus, we must presume that the Legislature properly construed the scope of its authority under article XIII, section 21, of the Constitution, and we must further presume that the resulting school financing legislation is constitutional. The foregoing principles must be accorded great weight in determining the constitutional validity of the present school financing scheme.
I am wholly sympathetic toward the majority's efforts to achieve a more fair and equitable result in this case. I also fully acknowledge the vital role which education must play in our modern society, and the absolute necessity of assuring an adequate education for all of our citizens. There could be no more worthy goal. Yet, and I say this with the utmost deference, as I conceive our role we are not free to roam in search of administratively acceptable answers, but must work within the confines of constitutional limitations, leaving to the Legislature the selection of those particular responses which are most appropriate to a [18 Cal.3d 785] developing need. (Cal. Const., art. III, § 3.) So long as the Legislature has operated under its constitutional authority we should withhold intervention. It is this principle, I believe, which prompted the wise and pertinent admonition of the United States Supreme Court in the closing sentences of its Rodriguez decision: "These matters merit the continued attention of the scholars who already have contributed much by their challenges. But the ultimate solutions must come from the lawmakers and from the democratic pressures of those who elect them." (San Antonio School District v. Rodriguez, supra, 411 U.S. at pp. 58-59 [36 L.Ed.2d at p. 58], italics added.)
Our present system of school financing has three abilities or goals: (a) to provide a high level of equality in access to resources; fn. 3 (b) to maintain [18 Cal.3d 786] a high level of local control over the nature and amount of expenditure; and (c) to require a substantial level of fiscal responsibility. In a system where one branch of government finances in whole or in part another branch which is given control over the expenditure, the three goals are frequently in conflict. The majority's goal of absolute equitable opportunity for school financing means sacrificing either local control or fiscal responsibility. Our legislative and executive branches, no doubt based on their experience with numerous federal-state financing programs, have established a system in which the level of equal opportunity cannot be significantly increased without major sacrifice of local fiscal or administrative control.
The present system of school finance assures that every school district shall have access to certain funds per student at a fair local tax rate regardless of district wealth. The combination of the guaranteed amount and categorical aid not challenged in this action is equal to roughly 90 percent of the school budget in California -- the equalized portion -- leaving only about 10 percent which is affected by our current source of concern -- district wealth. The potential 10 percent disparity in tax support among districts is small when viewed in light of the total educational commitment, and is fully justified by the traditional governmental interest in preserving local decision-making with local fiscal responsibility. The majority's attempt to abolish this small disparity, and [18 Cal.3d 787] in offering no substitute, will create greater inequality, frustrate local decision-making, or eliminate local fiscal responsibility.
This litigation has travelled through our courts for many years, having been before this court more than five years ago. (Serrano v. Priest (1971) 5 Cal.3d 584 [96 Cal.Rptr. 601, 487 P.2d 1241, 41 A.L.R.3d 1187].) If the absolute equality demanded by the majority (see, ante, fn. 2) can be achieved without sacrificing local fiscal responsibility or local control and taxation required by article XIII, section 21, the majority have a duty to tell us how. They have not because they cannot.
(1) The simplest method would appear to be total state financing of the district with the district given full control of the level of expenditure. Absolute equality of financial resources is assured because each district need only ask for funds and the state will comply. Local control is assured by definition. However, fiscal responsibility fails and the result is bankruptcy. A local district, being able to transfer all but insignificant costs to the state, will be unrestricted in spending for the benefit of its citizens on any school-related activity. Conceivably, every school district will have a performing arts center rivaling Los Angeles', resulting in insolvency. [18 Cal.3d 788]
To illustrate the impact of the system on the districts, let us look at the effect on three kinds of districts, one having assessed valuation producing [18 Cal.3d 789] the exact amount of money set forth above, the second having half that assessed valuation (a poor district), and the third having double the assessed valuation (a rich district). In the first district fiscal responsibility is assured because school board members, considering expenditures, will have to tax their constituency for all expenditures. In the second or poor district an element of fiscal irresponsibility is introduced. For there, every dollar the school board members decide to spend, only a half dollar need be raised from the constituency, the state paying the other half. The poor district is encouraged to raise its tax rate to obtain state funding for the community, purchasing educational opportunity at the half-price sale. Because the higher the tax rate, the more state money and the greater bargain, the poor district is encouraged to adopt a high tax rate, funding programs the first district would not undertake. This, of course, is the basic spending incentive involved in partial federal support for state programs.
Viewed from the standpoint of dollar cost to the district, rather than tax rate, illustration number 4 presents a mirror image of illustration number 3, not equalizing but presenting an inverse relationship between district wealth and opportunity to fund schools. The rich district will become poor by its disincentive to spend, and the poor will become rich by its substantial incentive to spend. The fact that at any given tax rate, expenditure may be equal in each district does not eliminate either the troublesome disincentive or the incentive. Both render the opportunity for school funding unequal. The opportunity varies with the assessed valuation per student within districts -- inversely it is true -- but by varying with district wealth, it necessarily violates the majority's basic requirement that no such variation be permitted. fn. 6 (See, e.g., ante, p. 747.) [18 Cal.3d 790]
The rational approach to the three conflicting goals of equality, fiscal responsibility and local control, requires rejecting the majority's demand for absolute equality and accepting a combined system to accommodate each. Minor departure from the ideal of absolute equality must be allowed in order to accommodate the two other compelling interests. The existing system does no more. [18 Cal.3d 791]
The power equalizing approach is not carried forward to those districts having assessed valuation of more than $28,700 per student. (Nearly 15 percent of the students are in those districts.) The Legislature determined not to apply the penalizing factor discussed above. This means that a district having, for example, double the $28,700 per student assessed valuation could provide $765 per student at a tax rate of little over half the computational rate of $2.23. About 2 1/2 percent of the elementary students are in school districts having double assessed valuation or more. (Table III-8, p. 28.) [18 Cal.3d 792]
By setting the equalization aid figure at such a high number, resulting in aid to more than 85 percent of our students, the present system insures a high degree of equality. Ninety percent of the funding is distributed on an equitable basis with only 10 percent distributed inequitably. Further, even as to the 10 percent, poor school districts may and do obtain part by merely raising their tax rate above $2.23. [18 Cal.3d 793]
The determination whether a district is rich or poor depends upon its assessed valuation per student. Thus, the presence of large tracts of property not occupied by children attending local public schools tends to [18 Cal.3d 794] make a district rich. Absence of such property tends to make a district poor. Bearing this in mind, we can in general identify the so-called rich and poor districts.
The rich districts being primarily poor people districts, and the poor ones composed of people more fortunate economically, I cannot believe [18 Cal.3d 795] that equal protection requires us to take from the poor to give to the more fortunate.
­FN 1. The kernel of our holding was set forth as follows: "In sum, we find the allegations of plaintiffs' complaint legally sufficient and we return the cause to the trial court for further proceedings. We emphasize, that our decision is not a final judgment on the merits. We deem it appropriate to point out for the benefit of the trial court on remand (see Code Civ. Proc., § 43) that if, after further proceedings, that court should enter final judgment determining that the existing system of public school financing is unconstitutional and invalidating said system in whole or in part, it may properly provide for the enforcement of the judgment in such a way as to permit an orderly transition from an unconstitutional to a constitutional system of school financing. As in the cases of school desegregation (see Brown v. Board of Education (1955) 349 U.S. 294 [99 L.Ed. 1083, 75 S.Ct. 753]) and legislative reapportionment (see Silver v. Brown (1965) 63 Cal.2d 270, 281 [46 Cal.Rptr. 308, 405 P.2d 132]), a determination that an existing plan of governmental operation denies equal protection does not necessarily require invalidation of past acts undertaken pursuant to that plan or an immediate implementation of a constitutionally valid substitute. Obviously, any judgment invalidating the existing system of public school financing should make clear that the existing system is to remain operable until an appropriate new system, which is not violative of equal protection of the laws, can be put into effect." (Serrano I, at pp. 618-619.)
­FN 2. The defendants at the time of the first appeal were the occupants of the state offices of Treasurer, Superintendent of Public Instruction, and Controller, and the Los Angeles County offices of tax collector, treasurer, and superintendent of schools.
­FN 3. The intervening school districts were Burbank Unified, El Segundo Unified, Beverly Hills Unified, Long Beach Unified, San Marino Unified, Glendale Unified, and South Bay Union High School.
­FN 4. Two notices of appeal were filed in the trial court, one by the county defendants and the defendant-in-intervention school districts (see fn. 3, ante) and one by the then state Treasurer, Ivy Baker Priest. The remaining state defendants have not appealed. The appeals of the state Treasurer and defendants-in-intervention South Bay Union High School District and Glendale Unified School District were subsequently abandoned. Thus the only parties appellant are the county defendants and the remaining five intervening school districts.
­FN 5. Following oral argument in this case the Legislature enacted and the Governor signed into law a school finance bill adding some $272 million to the state budget for these purposes. (Sen. Bill No. 1641, signed by the Governor on July 2, 1976.) This bill, of course, was not before the trial court, and we do not consider it today.
­FN 6. For purposes of convenience we have renumbered the footnotes in the following excerpt from Serrano I in order to conform with the sequence of the instant opinion. Hereafter, unless otherwise indicated, all section references (including those in excerpts from Serrano I) are to the Education Code.
­FN 7. California educational revenues for the fiscal year 1968-1969 came from the following sources: local property taxes, 55.7 percent; state aid, 35.5 percent; federal funds, 6.1 percent; miscellaneous sources, 2.7 percent. (Legislative Analyst, Public School Finance, Part I, Expenditures for Education (1970) p. 5. Hereafter referred to as Legislative Analyst.)
­FN 8. Most school aid determinations are based not on total enrollment, but on 'average daily attendance' (ADA), a figure computed by adding together the number of students actually present on each school day and dividing that total by the number of days school was taught. (§§ 11252, 11301, 11401.) In practice, ADA approximates 98 percent of total enrollment. (Legislative Analyst, Public School Finance, Part IV, Glossary of Terms Most Often Used in School Finance (1971) p. 2.) When we refer herein to figures on a 'per pupil' or 'per child' basis, we mean per unit of ADA.
­FN 9. Over the period November 1970 to January 1971 the legislative analyst provided to the Legislature a series of five reports which 'deal with the current system of public school finance from kindergarten through the community college and are designed to provide a working knowledge of the system of school finance.' (Legislative Analyst, Part I, supra, p. 1.) The series is as follows: Part I, Expenditures for Education; Part II, The State School Fund: Its Derivation and Distribution; Part III, The Foundation Program; Part IV, Glossary of Terms Most Often Used in School Finance; Part V, Current Issues in Educational Finance.
­FN 10. Districts which maintain 'unnecessary small schools' receive $10 per pupil less in foundation funds. (§ 17655.5 et seq.)
­FN 11. This is simply a 'computational' tax rate used to measure the relative wealth of the district for equalization purposes. It bears no relation to the tax rate actually set by the district in levying local real property taxes.
­FN 12. Some further equalizing effect occurs through a special areawide foundation program in districts included in reorganization plans which were disapproved at an election. (§ 17680 et seq.) Under this program, the assessed valuation of all the individual districts in an area is pooled, and an actual tax is levied at a rate of $1 per $100 for elementary districts and $.80 for high school districts. The resulting revenue is distributed among the individual districts according to the ratio of each district's foundation level to the areawide total. Thus, poor districts effectively share in the higher tax bases of their wealthier neighbors. However, any district is still free to tax itself at a rate higher than $1 or $.80; such additional revenue is retained entirely by the taxing district.
­FN 13. Statistics compiled by the legislative analyst show the following range of assessed valuations per pupil for the 1969-1970 school year:
­FN 14. Although the following text confines itself to a description of the basic operational features of the new law from the standpoint of the ongoing foundational approach on which it is based, it is appropriate to note at this point that S.B. 90 and A.B. 1267 also introduced certain modifications of a categorical nature. The most important of these was the establishment of the Educationally Disadvantaged Youth Programs (§ 6499.230 et seq.) and of the Early Childhood Education Programs (§ 6445 et seq.). The former program authorized $82 million in state assistance, to be awarded on a project basis to districts with a heavy incidence of family poverty, bilingualism, and pupil transiency, while the latter authorized $25 million for 1973-1974 and $40 million for 1974-1975 also on a project basis, to restructure primary education in grades K through 3.
­FN 15. For the year 1973-1974, several alternatives were provided for determining the allowable increase in expenditures:
­FN 16. The result of this process in many of the richer districts (barring tax rate overrides, to be discussed below) will be a reduction in the general purpose tax rate: To the extent that annual growth in assessed valuation in such districts increases the amount of revenue to be obtained under the existing tax rate to a sum in excess of the prior year's revenue limit plus the permitted inflation adjustment, the rate will have to be lowered.
­FN 17. To illustrate, assume for a given district a $1,000 per ADA foundation level and a $3 per $100 computational tax rate. Assume further that one district has an assessed valuation of $50,000 per ADA while another has an assessed valuation of one-third that, or $16,667. In the first district the application of the computational tax rate will produce $1,500 per ADA, while in the second it will produce only $500 per ADA. The first district would not be entitled to equalization aid but would still receive the $125 per ADA basic aid payment. The second district would be entitled to equalization aid in the amount of $375 per ADA -- i.e., the figure by which the sum of the amount available under the computational rate ($500 per ADA) and the basic aid payment ($125 per ADA) is exceeded by the foundation level ($1,000 per ADA), but in order to spend at the foundation level it would have to tax at the computational rate. If it wished to exceed the foundation level, it would be required to tax at a rate (up to the allowable limit) in excess of that rate.
­FN 18. The court found that: "Substantial disparities in expenditures per pupil from district to district that are the result of differences in local taxable wealth will continue to exist under S.B. 90 and A.B. 1267 in that:
­FN 19. This conclusion was based on the decision of the United States Supreme Court in San Antonio School District v. Rodriguez (1973) 411 U.S. 1 [36 L.Ed.2d 16, 93 S.Ct. 1278], wherein the high court -- in a decision subsequent to Serrano I -- held that the Texas public school financing system, which like the California system is based on the foundational concept, was not in violation of the federal equal protection provision. In so concluding, a majority of the high court held inter alia that education was not a "fundamental interest" entitled to strict scrutiny under the federal provision because the right to education was not explicitly or implicitly guaranteed by the terms of the Constitution. (Id. at pp. 33-34, 60-62 [36 L.Ed.2d at pp. 43, 44, 58-60].) Proceeding to examine the Texas system under the less stringent standard applicable to cases not demanding strict scrutiny, the majority went on to conclude that the system in question rationally furthered the legitimate state purpose or interest in local control of education. (Id. at pp. 44-55, 62 [36 L.Ed.2d at pp. 49-56, 59, 60].)
­FN 20. The trial court, using by analogy the Rodriguez majority's standard for the determination of whether the interest affected by the classification in question was "fundamental" (thus requiring strict scrutiny review), concluded that the interest of children in education was explicitly and implicitly protected and guaranteed by the terms of the California Constitution. Applying the strict scrutiny test, it concluded that the California system was not necessary to the accomplishment of any compelling state interest and was therefore invalid.
­FN 21. The indicated portions of the judgment provided:
­FN 22. The trial court had found as a fact that "Present disparities in expenditures per pupil among districts that are the result of differences in local district taxable wealth can be efficiently and effectively eliminated within six years."
­FN 23. See French v. Senate (1905) 146 Cal. 604, 606-607 [80 P. 1031]; Myers v. English (1858) 9 Cal. 341, 349; California State Employees' Assn. v. State of California (1973) 32 Cal.App.3d 103, 108-109 [108 Cal.Rptr. 60]; cf. Igna v. City of Baldwin Park (1970) 9 Cal.App.3d 909, 915 [88 Cal.Rptr. 581]; Monarch Cablevision, Inc. v. City Council (1966) 239 Cal.App.2d 206, 211 [48 Cal.Rptr. 550]; City Council v. Superior Court (1960) 179 Cal.App.2d 389, 394-395 [3 Cal.Rptr. 790].
­FN 24. See Jenkins v. Knight (1956) 46 Cal.2d 220, 223 [293 P.2d 6]; Harpending v. Haight (1870) 39 Cal. 189, 208; California State Employees' Assn. v. State of California, supra, 32 Cal.App.3d 103, 109.
­FN 25. The conclusions of law issued by the court clearly indicate that the primary relief contemplated, to be invoked only after the passage of a "reasonable time," is an injunction prohibiting the dendant state officials from operating an unconstitutional school financing system.
­FN 26. Although our California statute governing intervention (Code Civ. Proc., § 387) is not in all respects identical to the parallel federal rule (Fed. Rules Civ. Proc., rule 24), the requirement of significant interest is common to both.
­FN 27. Section 389 of the Code of Civil Procedure, enacted in 1971 to conform ours to the federal practice, describes an indispensable party as one which "in equity and good conscience" the court deems essential to the determination of the action. (See Fed. Rules Civ. Proc., rule 19.)
­FN 28. Defendants single out for attack the following passage from the trial court's memorandum opinion: "What the Serrano court imposed as a California constitutional requirement is that there must be uniformity of treatment between the children of the various school districts in the State because all the children of the State in public schools are persons similarly circumscribed. The equal-protection-of-the-laws provisions of the California Constitution mandate nothing less than that all such persons shall be treated alike. If such uniformity of treatment were to result in all children being provided a low-quality educational program, or even a clearly inadequate educational program, the California Constitution would be satisfied. This court does not read the Serrano opinion as requiring that there is any constitutional mandate for the State to provide funds for each child in the State at some magic level to produce either an adequate-quality educational program or a high-quality educational program. It is only a disparity in treatment between equals which runs afoul of the California constitutional mandate of equal protection of the laws."
­FN 29. Several of the briefs amicus curiae filed herein also evince serious concern for the problem of "municipal overburden."
­FN 30. The three criteria suggested are these: "I. The system must assure that every school district in the State has access, without excessive local taxation, to sufficient general fund revenues to finance the commonly-shared needs of school districts as perceived by the State, and to such categorical aids as the State and Federal governments perceive to be required to meet special, uncommon needs of some districts. II. The system must permit revenues derived from local taxation to be used to supplement Type 1 revenues described above. III. The system as a whole must generate public school general fund revenues so as to result in Type 2 revenues constituting not more than a court-determined percentage of the State total of all school district general fund revenues."
­FN 31. Defendants concede that had this standard been applied to the financing system in 1971, at the time of Serrano I, it would necessarily have been concluded that the then system was not in compliance. At that time, it is asserted, "the relative values placed upon equal educational opportunities and local fiscal control [as reflected in the statewide ratio of 'equalized' to 'unequalized' revenues] were approximately 76.4% and 23.6%, respectively." On the other hand, it is urged, the application of the standard to the 1973-1974 system (i.e. the system as it stood following the enactment of S.B. 90 and A.B. 1267) would reveal a ratio of 89.6 percent "equalized" revenues to 10.4 percent "unequalized" revenues.
­FN 32. It is contended in this case, of course, that the equal protection standard utilized by us in Serrano I is no longer -- after the U.S. Supreme Court's Rodriguez decision -- the appropriate test. We consider this matter in due course. For the present we assert only this limited proposition: Whatever the applicable equal protection test, the findings of the trial court establish that discrimination of the character condemned in Serrano I has been shown to exist in the school financing system presently before us.
­FN 33. It was stated by defendants at oral argument that the current budget statewide is in the neighborhood of $5 billion. To allow 10 percent of this sum, or $500 million, to be distributed pursuant to a system rendering access a function of taxable wealth would be far from an insignificant matter, especially when it is considered that it is those funds over and above the assertedly "equalized" level which are critical to a school district's ability to raise its program beyond a marginal level and respond with creativity and freedom of action to peculiar district needs and desires.
­FN 34. The immediate effect of declining enrollments, of course, is a lowered ADA and a corresponding reduction in state-provided foundation program money to the affected district. The cost of education due to declining enrollment does not decline in the same proportion. Under the system here before us, the only remedy for this situation, barring dramatic increases in the amount of taxable wealth in a district, is an increased tax rate.
­FN 35. As we point out later in this opinion, the fact that disparities in district wealth result in disparities in tax effort required to reach foundation levels is not by itself determinative of the issue before us. It is only insofar as such disparities have the effect of producing disparities in educational opportunity that they here concern us.
­FN 36. The following statistics comparing San Francisco with neighboring counties, derived from the 1974 California Statistical Abstract, are provided by defendants in illustration of this point:
­FN 37 Statistics published by the California State Department of Education contain the following figures relative to comparative assessed valuation per ADA (1973-1974) in the indicated areas.
­FN 38. Defendants also advance several arguments relating to what they term in their brief "the search for tax equity." These arguments, generally speaking, relate to the fact that the level of assessed valuation per ADA in a particular school district tells us little about the income level of families residing within that district. Thus, in many cases a relatively high assessed valuation per ADA will accompany a relatively low median family income; this would normally occur as a result of the presence of substantial business and/or industrial properties within a district whose residents suffer from relative poverty from the point of view of average family income. At the other extreme are districts in which the assessed valuation per ADA is relatively low in spite of a relatively high median family income; this combination would typically be present in a community having no significant business or industry where the emphasis is on single-family dwellings -- i.e., a relatively "affluent" (from the standpoint of the standard of living of inhabitants) suburb. A "fiscally neutral" system, defendants fear, might result in taking from the "poor" city (which in spite of a lower median income level has a higher assessed valuation per ADA) in order to give to the "rich" suburb (which in spite of a higher median income level has a lower assessed valuation per ADA). This, it is urged, would be an intolerable anomaly -- especially in view of the fact, adverted to above (see fn. 36, ante, and accompanying text), that in many cases under the present system a property-rich city, in spite of its lower school tax rate, will impose a total tax rate comparable to or in excess of the total tax rate in an income-rich suburb.
The dispositive answer to the above arguments is simply that this court is not now engaged in -- nor is it about to undertake -- the "search for tax equity" which defendants prefigure. As defendants themselves recognize, it is the Legislature which, by virtue of institutional competency as well as constitutional function (see Haman v. County of Humboldt (1973) 8 Cal.3d 922, 925-926 [106 Cal.Rptr. 617, 506 P.2d 993], and cases there cited; cf. Community Redevelopment Agency v. Abrams (1975) 15 Cal.3d 813, 828-832 [126 Cal.Rptr. 473, 543 P.2d 905]), is assigned that difficult and perilous quest. Our task is much more narrowly defined: it is to determine whether the trial court committed prejudicial legal error in determining whether the state school financing system at issue before it was violative of our state constitutional provisions guaranteeing equal protection of the laws insofar as it denies equal educational opportunity to the public school students of this state. If we determine that no such error occurred, we must affirm the trial court's judgment, leaving the matter of achieving a constitutional system to the body equipped and designed to perform that function. Broad considerations of "tax equity," while they will certainly be a matter of immediate concern to the Legislature in carrying out such a task, are pertinent to our present determination only insofar as it is shown that the system before us, through its imposition of burdens and bestowal of benefits, results in impermissible disparity in the level of educational opportunity available to the students of the various school districts of this state.
­FN 39. Among the four dissenters, Justice White specifically grounded his disagreement with respect to this latter point on the very basis upon which we had refused to consider "local control" as a "compelling state interest" in Serrano I -- i.e., that the notion of local control for less wealthy districts was chimerical. (Id., at pp. 63-70 [36 L.Ed.2d at pp. 60-65]; see also dis. opn. by Marshall, J., pp. 127-130 [36 L.Ed.2d at pp. 97-100].) The difference, of course, was that we had looked to this consideration in our application of the so-called "strict scrutiny test," whereas Justice White -- apparently agreeing with the majority that that test was inappropriate for federal purposes in the circumstances there present -- utilized it in order to conclude that the state had failed to demonstrate any rational relationship between its system and the asserted interest.
­FN 40. The passage of Proposition 7 at the 1974 General Election added the following provision to our Constitution as article I, section 7, subdivision (a): "A person may not be deprived of life, liberty, or property without due process of law or denied equal protection of the laws."
­FN 41. In the indicated Kirchner opinion this court, responding to a mandate of the United States Supreme Court essentially inquiring whether our decision in Dept. of Mental Hygiene v. Kirchner (1964) 60 Cal.2d 716 [36 Cal.Rptr. 488, 388 P.2d 720, 20 A.L.R.3d 353] had an independent state ground, held that the conclusion reached, although in our view required by the equal protection clause of the Fourteenth Amendment, was in any event independently required by our state equal protection provisions. "We so conclude by our construction and application of California law," this court said, "regardless of whether there is or is not compulsion to the same end by the federal Constitution." (62 Cal.2d at p. 588; italics added. (See Karst, Serrano v. Priest: A State Court's Responsibilities and Opportunities in The Development of Federal Constitutional Law (1972) 60 Cal.L.Rev. 720, 743-748.)
­FN 42. Three sections of our state Constitution are explicitly cited in support of this proposition. They are:
­FN 43. We find the language of the Alaska Supreme Court to be particularly apposite in this respect: "While we must enforce the minimum constitutional standards imposed upon us by the United States Supreme Court's interpretation of the Fourteenth Amendment, we are free, and we are under a duty, to develop additional constitutional rights and privileges under our ... Constitution if we find such fundamental rights and privileges to be within the intention and spirit of our local constitutional language and to be necessary for the kind of civilized life and ordered liberty which is at the core of our constitutional heritage. We need not stand by idly and passively, waiting for constitutional direction from the highest court of the land. Instead we should be moving concurrently to develop and expound the principles embedded in our constitutional law." (471 P.2d at pp. 401-402, fns. omitted.)
­FN 44. We do not think it open to doubt that the Rodriguez majority had considerable difficulty accommodating its new approach to certain of its prior decisions, especially in the area of fundamental rights. Indeed, we share the curiosity of Justice Marshall, who in his dissent states that he "would like to know where the Constitution guarantees the right to procreate, Skinner v. Oklahoma [ex rel. Williamson], 316 U.S. 535, 541 (1942) [86 L.Ed. 1655, 1660, 62 S.Ct. 1110], or the right to vote in state elections, e.g., Reynolds v. Sims, 377 U.S. 533 (1964) [12 L.Ed.2d 506, 84 S.Ct. 1362], or the right to an appeal from a criminal conviction, e.g., Griffin v. Illinois, 351 U.S. 12 (1956) [100 L.Ed. 891, 76 S.Ct. 585, 55 A.L.R.2d 1055]." (Rodriguez, supra, at p. 100 [36 L.Ed.2d at p. 82].)
­FN 45. In view of this conclusion we need not address the problem, raised in pointed and lucid fashion by one of the amici curiae, whether in applying our state equal-protection provisions we should insist upon strict scrutiny review of all governmental classifications based on wealth, thus elevating such classifications to a level of "suspectedness" equivalent to those based on race. The classification here in question, which is based on district wealth, clearly affects the fundamental interest of the children of the state in education, and we hold here, as we held in Serrano I (see especially pp. 614-615), that this combination of factors warrants strict judicial scrutiny under our state equal-protection provisions.
­FN 46. The high court explained its misgivings on the federalism question as follows: "It must be remembered, also, that every claim arising under the Equal Protection Clause has implications for the relationship between national and state power under our federal system. Questions of federalism are always inherent in the process of determining whether a State's laws are to be accorded the traditional presumption of constitutionality, or are to be subjected instead to rigorous judicial scrutiny. While '[t]he maintenance of the principles of federalism is a foremost consideration in interpreting any of the pertinent constitutional provisions under which this Court examines state action,' it would be difficult to imagine a case having a greater potential impact on our federal system than the one now before us, in which we are urged to abrogate systems of financing public education presently in existence in virtually every State." (Id., at p. 44; fn. omitted [ 36 L.Ed.2d at p. 49].)
­FN 47. In the 1970 report of the California Constitution Revision Commission (proposed revision 3, part 1 (introduction) p. 7) it is stated: "Between 1879 and 1964 our Constitution was amended over 300 times. Its length increased from 16,000 to more than 75,000 words, and it was 10 times longer than the United States Constitution." Largely as a result of the work of the commission, amendments made subsequent to 1964 have reduced the sheer size of the document somewhat, but it remains today, as it was aptly termed over two decades ago, "A Prolix And Formidable Charter ... hardly adapted to be a convenient rallying code or symbol for the ideologies of democracy." (Palmer & Selvin, The Development of Law in Cal., spec. feature in 1 Ann. Const., West's Ann. Cal. Codes (1954 ed.) pt. IV, at pp. 26-27.)
­FN 48. We do not suggest, of course, that the treatment afforded particular rights and interests by the provisions of our state Constitution is not to be accorded significant consideration in determinations of this kind. We do suggest that this factor is not to be given conclusive weight.
­FN 49. As has been indicated in footnote 19, ante, the trial court found that, in addition to being invalid under the strict scrutiny test, "[t]he school financing system for the State of California violates the equal-protection provisions of the California Constitution even under the lesser constitutional standard of rational relationship." While it is unnecessary for us to direct ourselves to this matter, we do observe that we perceive no rational relationship between the asserted governmental end of maximizing local initiative and a system which provides realistic options to exercise such initiative only in proportion to district wealth per ADA. (Cf. San Antonio School District v. Rodriguez, supra, 411 U.S. 1, 63-70 [36 L.Ed.2d 16, 60-65] (dis. opn. of White, J.).)
­FN 50. Two additional points in this respect raised by our esteemed colleague in dissent are equally devoid of merit. The requirements of section 20701 et seq. of the Education Code, which in the words of Serrano I "authorized the governing body ... to levy taxes on the real property within a school district at a rate necessary to meet the district's annual education budget" (5 Cal.3d at p. 592) are of course statutory rather than constitutional in stature. Moreover, as we point out below, such a requirement would in no way mandate a system, such as that before us, in which through the creation of districts of varying degrees of wealth per ADA the Legislature would foster disparities in educational opportunity. Similarly our statement in Serrano I that former article IX, section 6 (now art. XIII, § 21), "specifically authorizes local districts to levy school taxes" (5 Cal.3d at p. 598, fn. 12) in no way implies that that section authorizes a system in violation of the requirements of equal protection.
­FN 51. The section in question provides as here relevant: "The Legislature shall have power, by general law, to provide for the incorporation and organization of school districts, high school districts, and community college districts, of every kind and class, and may classify such districts."
­FN 52. The dissenting opinion, in reaching the opposite conclusion, is guilty of a clear non sequitur. Starting from the proposition that section 21 "requires ... a ... system in which each county may levy annually a school district tax in an amount sufficient (when supplemented by state aid) to provide the revenues deemed necessary by each district in that county," it then proceeds to make reference to article XIII, section 14, of the Constitution which requires that all property taxed by local government be assessed in the county, city and district in which it is situated. From these premises it goes on to conclude that section 21 "necessarily ... contemplates a school financing system in which each individual district's needs are satisfied from the taxable wealth of that district ...." Assuming without conceding this to be so, however, it by no means follows that the system so contemplated is, as the dissent puts it, "the present system which the majority find unconstitutional." The present system, as we have shown, is the product of legislative judgment, not constitutional command.
­FN 53. The learned trial judge disposed of the present contention pointedly and irrefutably: "The rationale which impresses this court is that section 6 of Article IX [now § 21 of Article XIII] of the California Constitution did not create the various school districts with their geographical boundaries and with their differences in property wealth. Section 6, Article IX, [i.e., § 21 of Article XIII] is written to apply to whatever school districts have been created by the California Legislature."
­FN 54. We decline defendants' invitation to address ourselves to the constitutional merits of the various financing alternatives and combinations thereof which have been developed in the scholarly literature on this subject. Our concern today is with the system presently before us. We are confident that the Legislature, aided by what we have said today and the body of scholarship which has grown up about this subject, will be able to devise a public school financing system which achieves constitutional conformity from the standpoint of educational opportunity through an equitable structure of taxation.
­FN 1. The Selected Statistics is an official publication and all page and table references are to it unless otherwise indicated. The 1973-1974 school year is the first analyzed under Senate Bill No. 90 and Assembly Bill No. 1267.
­FN 2. The majority state in a variety of ways that we may not allow the availability of educational opportunity to vary as a function of the assessed valuation per pupil. (E.g., ante, pp. 755-756, 768.)
­FN 3. Equal educational opportunity is an important goal of government. However, the majority do not concern themselves directly with equal educational opportunity. Rather, they are concerned with whether there is equal opportunity for school funding, a test at least one step removed from the basic goal.
­FN 4. For the above reasons, the first system of school support suggested by the trial court, full state funding (ante, p. 747), should be rejected. Moreover, total state funding would violate the requirements of partial local financing and control imposed by article XIII, section 21 of our Constitution.
­FN 5. Theoretically, we could achieve all three goals by redrawing the district lines to have substantial equality of assessed value per student in every district. However, because the number of students and assessed valuations change each year, the boundary lines would have to be redrawn every year or two. A single, successful wildcat oil well might require a statewide redistricting with the consequent reassignment of students and teachers. Each large new subdivision would also require redistricting. Obviously, the system would involve huge waste and the second system suggested by the trial court (ante, p. 747) must be rejected.
­FN 6. The trial court also suggests that commercial and industrial property be removed from local school tax rolls, taxing such property at the state level. (Ante, pp. 755-756, 768.) Apparently, the suggestion is based on the trial court's finding that the principal cause of inequality in the assessed valuation per student is due to the presence in some districts of industrial and commercial property. However, this would still leave inequalities due to the great differences in residential property values and in the ratio of public school students to the total population of a district. There is no indication that the resulting inequalities would be less than under the present system. Baldwin Park and Beverly Hills, the two school districts used in Serrano I to illustrate great inequality, are both primarily residential districts.
­FN 7. The $125 per student is not strictly speaking power equalizing. However, $120 of the $125 allotted on a per student basis is required by article IX, section 6, of our Constitution, the same Constitution imposing equal protection requirements involved here. To the extent this $120 produces inequality it is an exception to the equal protection requirement. It was improper for the trial court (ante, p. 744) to posit its determination of invalidity on this factor.
­FN 8. In addition, the existing system places spending limitations on the rich district. The trial court and the majority discuss at length whether the limitations are real or illusory. The spending limitation is a further equalizing factor if anything, and because I believe the basic factors do not deny equal protection, it is unnecessary to discuss the spending limitations and their exceptions.
­FN 9. When the approximately 15 percent of categorical aid is eliminated from the average of $985.48, the average payment becomes $837.67 which should be compared with the $765 equalization aid figure to roughly measure the inequality of opportunity.
­FN 10. The exceptions are the mature, very wealthy residential areas of Beverly Hills and Hillsborough, and the second home vacation areas of Lake Tahoe and Palm Springs.
­FN 11. San Francisco Unified School District is one of the richest in the state. Besides its large amount of commercial and industrial property, the ratio of school children to general population is smaller than the statewide average, and the percentage of students attending private schools is higher than the statewide average. Per capita income is lower than the statewide average and the surrounding counties.
Thu, 12/30/1976 18 Cal.3d 728 Review - Criminal Appeal Opinion issued
Dec 30 1976 Opinion: Affirmed
SCOCAL, Serrano v. Priest , 18 Cal.3d 728 available at: (https://scocal.stanford.edu/opinion/serrano-v-priest-27906) (last visited Sunday November 17, 2019).