Opinion ID: 1969525
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: In our view the material facts are not in dispute. Public schools in Vermont are financed principally by two means: funds raised by cities and towns solely through assessments on property within them, as authorized by 16 V.S.A. § 511, and funds distributed by the state under a complex aid formula, currently known as the Foundation Plan. See id. §§ 3441-3449. The purpose of a foundation formula is to enable each school district to spend an amount per pupil that will provide at least a minimum-quality education program, known as the foundation cost. See id. §§ 3492-3494; see generally A. Odden & L. Picus, School Finance: A Policy Perspective 173-82 (1992). In Vermont this is the amount necessary for elementary students to receive an education that complies with public school approval standards. See 16 V.S.A. § 3492. To enable the formula to work, the Legislature annually establishes a foundation tax rate as a reasonable rate of local property taxation to raise the foundation cost. See id. § 3495(a). Basically, state aid is calculated as the difference between the foundation cost for all students in a district and the amount the district can raise itself at the foundation tax rate. See id. § 3497(a). There are a number of adjustments to this basic formula that generally reduce its equalizing effect. Further, a substantial amount of state financing of education is supplied through categorical grant programs based on different distribution formulas which may not reflect the ability of a school district to raise money itself. [3] For example, the state funds all of the employers' share of teachers' retirement pensions for all districts, irrespective of the ability of a district to pay those costs. From an equity standpoint, the major weakness of a foundation formula distribution system is that it equalizes capacity only to a level of a minimally adequate education program. Odden & Picus, supra, at 175. Vermont has adopted a limited ability for districts to receive some assistance with costs above foundation costs, primarily to help with debt service from capital construction projects. See 16 V.S.A. §§ 3441(9), (16), 3497(d). School districts with greater property wealth, however, can more easily spend above foundation costs to improve education, and the record before us shows that they usually make these expenditures. Thus, a foundation-formula, state-aid program can boost the capacity of the poorest districts, but still leave substantial deficiencies in overall equity. See Odden & Picus, supra, at 175-77. Many of the states in which the highest court has held that the educational financing system does not meet constitutional minimums had foundation state-aid programs in effect at the time of the decision. See Roosevelt Elementary Sch. Dist. No. 66 v. Bishop, 179 Ariz. 233, 877 P.2d 806, 809-10 (1994); Tennessee Small Sch. Sys. v. McWherter, 851 S.W.2d 139, 143, 156 (Tenn. 1993); Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391, 392, 397 (Tex.1989). Although the foundation state-aid plan was adopted fairly recently, the criticism of it has grown in recent years. [4] It is, however, well beyond our limited role to evaluate the imperfections in the state-aid formula. Even if we are to assume that it is working adequately to accomplish its purpose, we must confront the constitutionality of the system in light of the limited nature of the Foundation Plan's purpose. The object of the Plan is not equality of educational opportunity generally, or even equality of local capacity to facilitate opportunity. It is only to equalize capacity to produce a minimally adequate education, assuming the voters can sustain the state-selected tax rate. That the foundation formula does not eliminate wealth disparities is shown dramatically by the record before us. Notwithstanding the fact that state aid has increased substantially in recent years, the percentage of the local contribution to education revenues has remained exceptionally high. In fiscal year 1994, public education revenues raised through local property taxes represented over 60% of the total cost of public education, one of the highest local shares in the nation. Furthermore, notwithstanding the considerable financial commitment by the state, there remain wide differences among school districts in per-pupil spending. At the extremes, in fiscal year 1995 the Town of Eden spent $2979 per student, compared with the Town of Winhall, which spent $7726, or 160% more than Eden. [5] In December 1994, the top 5% of school districts spent from $5812 to $7803 per student, while the bottom 5% spent from $2720 to $3608. Thus, some school districts in Vermont commonly spend twice as much or more per student as other districts. The correlation between spending disparities and taxable property wealth within the districts is also well established. As summarized in a recent Department of Education analysis of school financing during fiscal year 1995, A statistically significant relationship exists between [the] wealth of a school district and its spending per student. Based largely on this relationship, there continue[] to be large disparities in per pupil spending across school districts. Vermont Department of Education, A Scorecard for School Finance FY 95, at i (1996). The data dramatically bear this out. In fiscal year 1995, for example, the Town of Richford's property tax base was approximately $140,000 per student, second lowest in the state, and its average student expenditure was also among the lowest at $3743. By contrast, the Town of Peru enjoyed a tax base of approximately $2.2 million per student, and its per-pupil expenditure was $6476. Of course, property wealth does not invariably correlate with student expenditures. Standard's property tax base in fiscal year 1995 was somewhat over $118,000 per student, compared with Sherburne's of $2.5 million. Notwithstanding the vast disparity in property wealth, Stannard's average expenditure per pupil, $5684, was nearly equal to Sherburne's of $5731. Not surprisingly, however, there was a huge disparity in their effective tax rates: on an $85,000 home, the tax in Sherburne was $247; in Stannard, it was $2040. It is thus readily apparent, as the Department of Education has noted, that spending per pupil ... tends to be highest in resource-rich districts who benefit further with low school tax rates ... [while] [c]onversely, towns with limited resources spend less per student [and] pay higher tax rates. Id. at 11. The undisputed evidence thus amply supports plaintiffs' claim that wide disparities in student expenditures exist among Vermont school districts and that these disparities correlate generally with taxable property wealth within the districts. The record is relatively less developed with respect to plaintiffs' further assertion that funding disparities result in unequal educational opportunities, and specifically that [c]omparatively low expenditures for education cause comparatively diminished educational opportunities for the students attending the affected schools. The essential point, however, is undisputed. The trial court noted the State had concede[d] that the present funding scheme denies children residing in comparatively property-poor school districts the same `educational opportunities' that are available to students residing in wealthier districts. The State has not only failed to challenge this finding, it affirmatively relies on it to demonstrate that, contrary to the judgment of the court below, no genuine issue of material fact remains to be resolved at trial. Having conceded that the current funding system fails to afford Vermont schoolchildren equal educational opportunities, it is immaterialthe State contendswhether the parties agree on the precise nature of the educational opportunities affected by the disparities. Indeed, in their oral arguments before this Court the parties assumed that unequal funding yields, at a minimum, unequal curricular, technological, and human resources. School districts of equal size but unequal funding would not have the capacity, for example, to offer equivalent foreign language training, purchase equivalent computer technology, hire teachers and other professional personnel of equivalent training and experience, or provide equivalent salaries and benefits. In this respect the State concedes the obvious. While we recognize that equal dollar resources do not necessarily translate equally in effect, there is no reasonable doubt that substantial funding differences significantly affect opportunities to learn. To be sure, some school districts may manage their money better than others, and circumstances extraneous to the educational system may substantially affect a child's performance. Money is clearly not the only variable affecting educational opportunity, but it is one that government can effectively equalize.