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United States District Court, Northern District of Illinois, Eastern Division

November 15, 1968


Before Hastings, Circuit Judge, and Decker and Marovitz, District Judges.

The opinion of the court was delivered by: Decker, District Judge.

This is a suit filed by a number of high school and elementary school students attending school within four school districts of Cook County, Illinois, on behalf of themselves and all others similarly situated challenging the constitutionality of various state statutes dealing with the financing of the public school system.*fn1

Plaintiffs claim that these statutes*fn2 violate their fourteenth amendment rights to equal protection and due process because they permit wide variations in the expenditures per student from district to district, thereby providing some students with a good education and depriving others, who have equal or greater educational need. Plaintiffs claim to be members of this disadvantaged group.

To correct this inequitable situation, they seek a declaration that the statutes are unconstitutional and a permanent injunction forbidding further distribution of tax funds in reliance on these laws.

The defendants are state officials charged with the administration of the legislation which allegedly permits this discrimination.

A three-judge district court was convened pursuant to 28 U.S.C. § 2281 and 2284. Defendants then moved to dismiss the complaint (1) for lack of jurisdiction and (2) for failure to state a cause of action.

We conclude that we have jurisdiction. After examining the complaint, and studying the extensive briefs filed by the respective parties as well as the brief of the amici curiae,*fn3 we further conclude that no cause of action is stated for two principal reasons: (1) the Fourteenth Amendment does not require that public school expenditures be made only on the basis of pupils' educational needs,*fn4 and (2) the lack of judicially manageable standards makes this controversy non-justiciable. After explaining the structure of the existing Illinois legislation, this opinion will discuss these two conclusions in detail.

I. Jurisdiction

The federal courts have jurisdiction over the subject matter of this controversy. As stated in Baker v. Carr, 369 U.S. 186, 200, 82 S.Ct. 691, 701, 7 L.Ed.2d 663 (1962):

  "Since the complaint plainly sets forth a case
  arising under the Constitution, the subject
  matter is within the federal judicial power
  defined in Art. III, § 2, and so within the power
  of Congress to assign to the jurisdiction of the
  District Courts."*fn5

Similarly, the allegations do not present a political question because there is no potential conflict between coordinate branches of the federal government.*fn6 Both the equal protection and the due process clauses have long been used to scrutinize state legislative action. See, e.g., Williamson v. Lee Optical of Oklahoma, 348 U.S. 483, 488-489, 75 S.Ct. 461, 99 L.Ed. 563 (1955).*fn7

II. The Financing of Illinois' Public Schools

The General Assembly has delegated authority to local school districts to raise funds by levying a tax on all property within the district. In addition, the school districts may issue bonds for constructing and repairing their buildings. Legislation limits both the maximum indebtedness and the maximum tax rate which localities may impose for educational purposes. In 1966-67, the approximately 1300 districts had roughly $840 per pupil with which to educate their students, of which about 75% came from local sources, 20% was derived from state aid, and 5% was supplied by the federal government. Since the financial ability of the individual districts varies substantially, per pupil expenditures vary between $480 and $1,000. State statutes which permit such wide variations allegedly deny the less fortunate Illinois students of their Constitutional rights.

Article VIII, section 1 of the Illinois Constitution, S.H.A. requires the legislature to "provide a thorough and efficient system of free schools, whereby all children of this state may receive a good common school education." Accordingly, a state common school fund supplements each district's local property tax revenues, guaranteeing a foundation level of $400 per student. The common school fund has two main components: (1) a flat grant to districts for each pupil, and (2) an equalization grant awarded to each district which levies a minimum property tax rate.*fn8 The equalization grant is calculated on the assumption that the district only assesses the minimum rate. Total revenues from the state common school fund account for about 15% — 18% of all districts' income.

The local tax revenue per student which is necessarily generated by the preceding minimum rate*fn9 is added to the flat grant per pupil. If this sum is less than $400, the difference is the equalization grant. Therefore, every district levying the minimum rate is assured of at least $400 per child. On the other hand, if a locality desires to tax itself more heavily than the minimum rate, it is not penalized by having the additional revenue considered before determination of the equalization grant. Since the hypothetical calculation uses the same tax rate for all localities, the assumed revenue per child depends upon the total assessed property value in a district and the number of students. Thus, the equalization grant tends to compensate for variations in property value per pupil from one district to another.

Finally, numerous special programs, both state and federal, supply about 10% of the districts' revenues. This "categorical aid" is allocated for particular purposes such as bus transportation or assistance to handicapped and disadvantaged children. Plaintiffs do not challenge these programs, conceding that they are rationally related to the educational needs of the students.*fn10

III. The Fourteenth Amendment: Equal Protection and Due Process

The underlying rationale of the complaint is that only a financing system which apportions public funds according to the educational needs of the students satisfies the Fourteenth Amendment.*fn11 Plaintiffs assert that the distribution of school revenues to satisfy these needs should not be limited by such arbitrary factors as variations in local property values or differing tax rates.

Clearly, there are wide variations in the amount of money available for Illinois' school districts, both on a per pupil basis and in absolute terms. Presumably, students receiving a $1000 education are better educated that those acquiring a $600 schooling.*fn12 While the inequalities of the existing arrangement are readily apparent, the crucial question is whether it is unconstitutional. Since nearly three-quarters of the revenue comes from local property taxes, substantially equal revenue distribution would require revamping this method of taxation, with the result that districts with greater property values per student would help support the poorer districts.

A. Social Policy

While the state common school fund tends to compensate for the variations in school districts' assessed valuation per pupil, variation in actual expenditures remains approximately 3.0 to 1, 2.6 to 1, and 1.7 to 1 for elementary, high school and unit districts respectively. Though districts with lower property valuations usually levy higher tax rates, there is a limit to the amount of money which they can raise, especially since they are limited by maximum indebtedness and tax rates. Plaintiffs argue that state statutes authorizing these wide variations in assessed value per student are irrational, thus violating the due process clause. Moreover, under the equal protection clause, the students contend that the importance of education to the welfare of individuals and the nation requires the courts to invalidate the legislation if potential, alternative statutes incorporating the desirable aspects of the present system can also achieve substantially equal per pupil expenditures.*fn13

Illustrating how the school financing could be improved, plaintiffs suggest two alternatives:*fn14 (1) all students might receive the same dollar appropriations, or (2) the state could siphon off all money in excess of $X per pupil which was produced by a given tax rate, in effect eliminating variations in local property values while leaving the districts free to establish their own tax rate.*fn15

Without doubt, the educational potential of each child should be cultivated to the utmost, and the poorer school districts should have more funds with which to improve their schools. But the allocation of public revenues is a basic policy decision more appropriately handled by a legislature than a court. To illustrate, the following considerations might be relevant to a financing scheme: state-wide variations in costs and salaries, the relative efficiency of school districts, and the need for local experimentation.

As stated in Metropolitan Casualty Insurance Co. v. Brownell,*fn16 294 U.S. 580, 584, 55 S.Ct. 538, 540, 79 L.Ed. 1070 (1935):

  "[T]he burden of establishing the
  unconstitutionality of a statute rests on him who
  assails it * * * A statutory discrimination will
  not be set aside as the denial of equal
  protection of the laws if any state of facts
  reasonably may be conceived to justify it."

And more recently, the Supreme Court declared that:

  "[T]he Fourteenth Amendment permits the States a
  wide scope of discretion in enacting laws which
  affect some groups of citizens differently than
  others. The constitutional safeguard is offended
  only if the classification rests on grounds
  wholly irrelevant to the achievement of the
  State's objective. State legislatures are
  presumed to have acted within their
  constitutional power despite the fact that, in
  practice, their laws result in some inequality."

McGowan v. Maryland, 366 U.S. 420, 425-426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393 (1961).*fn17 See also Salsburg v. Maryland, 346 U.S. 545, 552-553, 74 S.Ct. 280, 98 L.Ed. 281 (1954).*fn18

Tested by these standards, the existing school legislation is neither arbitrary nor does it constitute an invidious discrimination.*fn19 It therefore complies with the Fourteenth Amendment.

In the instant case, the General Assembly's delegation of authority to school districts appears designed to allow individual localities to determine their own tax burden according to the importance which they place upon public schools. Moreover, local citizens must select which municipal services they value most highly. While some communities might place heavy emphasis on schools, others may cherish police protection or improved roads. The state legislature's decision to allow local choice and experimentation is reasonable, especially since the common school fund assures a minimum of $400 per student.*fn20

Plaintiffs stress the inequality inherent in having school funds partially determined by a pupil's place of residence, but this is an inevitable consequence of decentralization. The students also object to having revenues related to property values, apparently without realizing that the equalization grant effectively tempers variations in assessed value by using a hypothetical calculation. Furthermore, the flat grants and state and federal categorical aid reduce the school's dependence on local taxes. While alternative methods of distributing school monies might be superior to existing legislation,

  "To be able to find fault with a law is not to
  demonstrate its invalidity. It may seem unjust
  and oppressive, yet be free from judicial
  interference. The problems of government are
  practical ones and may justify, if they do not
  require rough accommodations — illogical, it may
  be, and unscientific. * * * Mere errors of
  government are not subject to our judicial review.
  It is only its palpably arbitrary exercises which
  can be declared void under the Fourteenth

Metropolis Theatre Co. v. City of Chicago, 228 U.S. 61, 69-70, 33 S.Ct. 441, 57 L.Ed. 730 (1913).*fn21

Plaintiffs also attack numerous details of the present legislative scheme, such as the uniform maximum tax rate for both elementary and high schools. Allegedly, high schools need more money than elementary schools; but the answer is the increased number of students attending high schools may provide the additional funds. Also, plaintiffs complain that the maximum tax rate for the City of Chicago is about half that for the remaining school districts. Since the city is so much larger than other districts, however, distinctive legislation is appropriate to adjust for potential efficiencies.*fn22 The maximum tax rates which plaintiffs object to were enacted to avoid another disaster such as that which struck certain localities during the Great Depression; the possibility of similar economic crises supports the statutory ceilings.

In each of the instances where particular statutory provisions have been criticized by plaintiffs we can find a legitimate legislative policy. Where differences do exist from district to district, they can be explained rationally. The charges made in the complaint fall short of demonstrating either an arbitrary exercise of legislative power or an invidious discrimination. Under these circumstances, there can be no denial of any Fourteenth Amendment rights.

Moreover, the legislature is constantly upgrading the quality of education. For example, the foundation level was recently revised from the 1965-66 level of $330 to the present $400. Also, the General Assembly has substantially consolidated the school districts, reducing the 11,955 which existed in 1945 to approximately 1,340 today. Recently a legislative study commission suggested that educational television be introduced in the schools and that the foundation level be raised to $435. See Report of the School Problems Commission No. 9, ch. I (1967); compare Report of School Problems Commission No. 7, p. 76-77 (1963).*fn23

B. Plaintiffs' Legal Precedent

The complaining students rely upon recent Supreme Court decisions in the fields of school desegregation,*fn24 voting rights*fn25 and criminal justice.*fn26 Specifically, they contend that "equal educational opportunity," however that term may be defined, is constitutionally compelled because (1) state discrimination in education may not be based on color, (2) the state may not employ arbitrary geographical lines to establish electoral units within local governments, and (3) wealth may not be used to differentiate among criminal defendants if such discrimination is adverse to the indigent.*fn27

But the plaintiffs' conclusion does not follow so readily from the preceding building blocks. The decided cases established significant, but limited principles. To illustrate, Brown v. Board of Education was primarily a desegregation case. Although placed in the context of public schools, it does not undermine the validity of Illinois' public financing. Similarly, Hobsen v. Hansen, 269 F. Supp. 401 (D.D.C. 1967), struck down variations in expenditures because the classifying factor was race.*fn28 The holding in Douglas v. California, 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811 (1963), derived primarily from its criminal justice setting, rather than the poverty of the defendant. Moreover, Reynolds v. Sims, 377 U.S. 533, 84 S.Ct. 1362, 12 L.Ed.2d 506 (1964), strengthened citizens' voting rights because the Constitution specifically enfranchises all citizens equally, not as a result of general antipathy to historical geographical divisions.

Actually, there is little direct precedent because the contentions now presented are novel. But, the few relevant cases indicate that plaintiffs must resort to the legislature rather than the courts. The students are not deprived of their civil rights under 28 U.S.C. § 1343 because the asserted guarantee does not exist under the Constitution. LeBeauf v. State Board of Education, 244 F. Supp. 256, 260 (E.D.La. 1965), held:

  "There simply is no right, privilege, or immunity
  secured to these plaintiffs by the Constitution
  and laws of the United States being in any way
  denied by these respondents when they allocate
  and disburse funds * * * "*fn29

Similarly, in Hess v. Mullaney, 213 F.2d 635, 15 Alaska 40 (9th Cir. 1954), the Ninth Circuit upheld a property tax which returned a disproportionately small amount of funds to the taxpayers' locality.*fn30 Since this tax also supported the public schools, the plaintiffs' instant claim is analogous. See also General American Tank Car Corp. v. Day, 270 U.S. 367, 46 S.Ct. 234, 70 L.Ed. 635 (1926).*fn31 Compare Dean v. Coddlington, 81 S.D. 140, 131 N.W.2d 700 (1964); Sawyer v. Gilmore, 109 Me. 169, 83 A. 673 (1912); Orleans Parish v. State Board, 215 La. 703, 41 So.2d 509 (1949).*fn32

IV. Lack of Judicially Manageable Standards

Even if the Fourteenth Amendment required that expenditures be made only on the basis of pupils' educational needs, this controversy would be non-justiciable. While the complaint does not present a "political question" in the traditional sense of the term, there are no "discoverable and manageable standards"*fn33 by which a court can determine when the Constitution is satisfied and when it is violated.*fn34

The only possible standard is the rigid assumption that each pupil must receive the same dollar expenditures. Expenses are not, however, the exclusive yardstick of a child's educational needs. Deprived pupils need more aid than fortunate ones.*fn35 Moreover, a dollar spent in a small district may provide less education than one used in a large district. As stated above, costs vary substantially throughout the state. The desirability of a certain degree of local experimentation and local autonomy in education also indicates the impracticability of a single, simple formula. Effective, efficient administration necessitates decentralization so that local personnel, familiar with the immediate needs, can administer the school system. As new teaching methods are devised and as urban growth demands changed patterns of instruction, the only realistic way the state can adjust is through legislative study, discussion and continuing revision of the controlling statutes. Even if there were some guidelines available to the judiciary, the courts simply cannot provide the empirical research and consultation necessary for intelligent educational planning.*fn36 As early as 1919 Mr. Justice Holmes explained that "the Fourteenth Amendment is not a pedagogical requirement of the impracticable." Dominion Hotel v. Arizona, 249 U.S. 265, 268, 39 S.Ct. 273, 274, 63 L.Ed. 597 (1919).

Plaintiffs have assumed that requiring expenditures to be related to the needs of the students will result in better education for deprived students without a corresponding decrease in the quality of education now offered by the affluent districts. The more money the latter districts must supply to the former, however, the less incentive the well-to-do will have to raise their tax rates. If the quality of good public schools declines, affluent children have the option to attend private schools,*fn37 thus completely eliminating the need for the wealthy to raise taxes.*fn38

V. Conclusion.

The present Illinois scheme for financing public education reflects a rational policy consistent with the mandate of the Illinois Constitution. Unequal educational expenditures per student, based upon the variable property values and tax rates of local school districts, do not amount to an invidious discrimination. Moreover, the statutes which permit these unequal expenditures on a district to district basis are neither arbitrary nor unreasonable.

There is no Constitutional requirement that public school expenditures be made only on the basis of pupils' educational needs without regard to the financial strength of local school districts. Nor does the Constitution establish the rigid guideline of equal dollar expenditures for each student.

Illinois' General Assembly has already recognized the need for additional educational funds to provide all students a good education. Furthermore, the legislative School Problems Commission assures a continuing and comprehensive study of the public schools' financial problems. If other changes are needed in the present system, they should be sought in the legislature and not in the courts. Plaintiffs have stated no grounds for judicial relief, and this cause must be dismissed.

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