Opinion ID: 1331701
Heading Depth: 1
Heading Rank: 2

Heading: The Georgia Public School Financing System.

Text: Public education in Georgia is financed through federal, state and local funds. In the decade of the 1970's, the relationship between these sources was as follows: 1970-71 1974-75 1977-78 Amount Percentage Amount Percentage Amount Percentage (in millions) Local 151 23.9 260 27.9 358 27.5 State 367 58.0 516 55.3 719 55.3 Federal 115 18.1 157 16.3 224 17.2 Total 633 100.0 933 100.0 1301 100.0 Most federal funds for public education are earmarked for specified purposes and may be termed categorical grants. (See, e.g., Education for All Handicapped Children Act, 20 USC § 1401 et seq.) As the state's control over these funds is limited, they are not a basic part of the State financing system. When federal funding is removed, the above table can be recomputed as follows: 1970-71 1974-75 1977-78 Amount Percentage Amount Percentage Amount Percentage (in millions) Local 151 29.2 260 33.5 358 33.2 State 367 70.8 516 66.5 719 66.8 Total 518 100.0 776 100.0 1077 100.0 Some state funding is also categorical and is frequently distributed in conjunction with federal programs. Programs for superintendents' salaries, teacher retirement, compensatory education, staff development, school lunches, assistance to the handicapped and cooperative educational service agencies fall under this general heading. The great bulk of state support for local school systems, approximately 80 per cent, is allocated under the Adequate Program for Education in Georgia (APEG). See Code Ann. Chapter 32-6A. In fiscal year 1981, APEG was funded at a level of almost $800 million. APEG sets forth thirteen items for cost calculation purposes: (1) salaries of special education teachers, (2) salaries of pre-school (i.e. kindergarten) teachers, (3) salaries of classroom teachers and vocational education teachers, (4) purchase of instructional media, (5) purchase and repair of instructional equipment, (6) maintenance and operation expenses, (7) payment of sick and personal leave expenses, (8) travel expenses of personnel, (9) student services support personnel, salaries, (10) salaries of administrative and supervisory personnel, (11) salaries of clerical personnel, (12) pupil transportation expenses, and (13) expenses of maintaining isolated schools. The APEG items, of course, are not funded equally  over half of APEG funding is for Item 3 alone. [3] APEG is designed to meet basic educational needs. Because the basic needs of school districts vary, the amounts allocated to a particular school district within a particular APEG item also vary. Most allotments are based upon the number of pupils in the district in average daily attendance. [4] See, e.g. Code Ann. §§ 32-605a, 610a. Others, such as transportation, take other factors into account. See Code Ann. § 32-625a. None of the parties to this litigation challenge the propriety of the APEG classifications. APEG is not simply a grant from the state to local school districts. As a condition to participation in APEG, each local school district must contribute an amount obtained from ad valorem taxation. This amount is referred to as required local effort (RLE). Each school district's RLE is calculated on the basis of its proportionate share of the equalized adjusted school property tax digest [5] multiplied by a total statewide local effort figure of 78.6 million. [6] Because the RLE is determined on the basis of a school district's proportionate share of property wealth, the property tax rate imposed by each school district for RLE is virtually the same, approximately 2.15 mills. (A one mill rate imposes a tax of 1/10 cent on each dollar's worth of property.) After a district's RLE is determined, it is deducted from the total amount to which the district is entitled under APEG. The remainder is provided by the state. With the total statewide RLE fixed at $78.6 million, APEG is currently funded 90% by state funds and 10% by RLE. Theoretically, RLE is an equalizing component in the APEG system  the state provides less funds to school districts which, by virtue of local property values, are more capable of financing public education at the local level. Suppose there were two school districts in the state, each with 1,000 students in ADA. If District A with $100,000 in assessed valuation per student in ADA had twice the assessed valuation of District B (which thus has $50,000 in assessed valuation per student in ADA), District A would have an RLE of $1,000 per student in ADA and District B would have an RLE of $500 per student in ADA, if both districts imposed an RLE ad valorem tax of 10 mills. If both districts had an APEG cost of $1,000 per student in ADA, District A would receive no funds from the state, while District B would receive $500 per student in ADA from state APEG funds. In reality, however, RLE does little to equalize property rich and property poor districts. As indicated above, the total statewide RLE has been fixed at approximately $78.6 million. Meanwhile, educational costs have risen. Whereas, in the early 1970's, total RLE constituted almost 20 percent of APEG, it now amounts to only 10 percent. Total RLE is at such a low level, relative to total APEG expenditures, that it cannot have a significant equalizing effect as between property rich and property poor districts. Thus, to an extent, APEG has become a flat grant from the state to local districts wherein considerations relating to local wealth have no place. If APEG were the only source of public school funding in this state, there would be no significant disparities between school districts insofar as revenues per student in ADA is concerned. However, APEG is not the only source of school revenues. In addition to the categorical aid referred to above, all 187 local school districts in Georgia supplement APEG with funds derived from local property tax assessments. See Constitution of 1976, Art. VIII, Sec. V, Par VI (Code Ann. § 2-5306); Art. VIII, Sec. VII, Par. I (Code Ann. § 2-5501)); Art. VIII, Sec. VII, Par. II (Code Ann. § 2-5502); see also Code Ann. § 32-656a. It is this feature of the Georgia public school finance system which is largely responsible for the present action. The amount of local supplement per student in ADA available to a particular school district is dependent upon that district's property tax base. If District A, with $100,000 property tax base per student in ADA were to impose a 10 mill property tax above RLE, it would have $1,000 available per pupil in local supplement. If District B, with a $50,000 property tax base per student in ADA, were to impose the same tax, it would only obtain $500 per pupil in local supplement. The following table illustrates the effect of disparate assessed valuation per student in ADA for 1977-78: [7] AV Per Effective State APEG APEG Incl. Local Supp. Total APEG & Student Local Supp. Per Student RLE Per Funds Per Local Supp. Per In ADA Mills In ADA Student In Student In Student In ADA ADA ADA Decile 1 $68970 7.59 $609 $814 $481 $1295 Decile 2 45472 7.67 617 794 349 1143 Decile 3 39563 8.84 605 793 349 1142 Decile 4 37693 8.28 625 757 311 1068 Decile 5 34605 8.04 634 798 277 1075 Decile 6 31543 8.06 619 776 253 1029 Decile 7 29382 8.67 629 815 254 1069 Decile 8 27671 7.82 615 772 215 987 Decile 9 25219 9.75 622 775 246 1021 Decile 10 21896 9.21 642 795 200 995 Assessed Valuation From this table, the following can be observed: 1) in terms of total APEG and local supplemental funding, a disparity of $300 per student in ADA exists between students in the top decile and those in the lowest decile; [8] 2) these disparities would be even greater if school districts in the lower deciles did not impose higher effective millage rates for local supplement than school districts in higher deciles; 3) regardless of decile, the lion's share of funds available through APEG and local supplements comes from APEG alone  62.8 per cent in Decile 1 and 79.9 per cent in Decile 10; and 4) local supplements, and not APEG, are responsible for existing disparities in educational expenditures. The evidence in this case establishes beyond doubt that there is a direct relationship between a district's level of funding and the educational opportunities which a school district is able to provide its children. Due to differences in funding, instructional staffs in low wealth districts tend to have less formal training and experience than those in wealthy districts. Larger salary supplements and employee benefits provide wealthier districts with a substantial competitive edge. Furthermore, wealthy school districts are financially capable of hiring more teachers than poor districts and thus have a lower student-teacher ratio. The curriculum in high wealth districts is also superior to that of low wealth districts. The evidence in record establishes that, in low wealth districts, opportunities are limited (or in some cases non-existent) in such areas as foreign language, higher mathematics and science, art, music, physical education, vocational education, special education and remedial education. Disparities in funding also affect the availability of textbooks, library books, audio-visual equipment, supplies, counseling and testing services, and extra-curricular activities as well as the condition of school buildings and grounds. The effect of major disparities between school districts is compounded when, as is sometimes the case, poor and wealthy school districts are in close proximity to one another. The superintendent of low wealth Whitfield County testified as follows: We are compared with [neighboring] Dalton constantly and because of the tremendous difference in financial resources available we come out `second-class.' This has a devastating impact on our children  educationally, psychologically and otherwise. Based on the foregoing, the following conclusion of the trial court is unassailable: [S]imilarly situated children receive very different amounts of educational resources as a result of disparities among school districts in taxable property wealth per pupil... The inequalities in the school finance system deny students in property poor districts equal educational opportunities.