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Paul Carr et al v. Christopher Koch

November 29, 2012

PAUL CARR ET AL., APPELLANTS,
v.
CHRISTOPHER KOCH, STATE SUPERINTENDENT OF EDUCATION, ET AL., APPELLEES.



The opinion of the court was delivered by: Justice Thomas

JUSTICE THOMAS delivered the judgment of the court, with opinion.

Chief Justice Kilbride and Justices Freeman, Garman, Karmeier, Burke, and Theis concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiffs Paul Carr and Ron Newell brought a declaratory judgment action seeking a declaration that the Illinois education funding system set forth in section 18-8.05 of the School Code (105 ILCS 5/18-8.05 (West 2010)) (hereinafter the education funding statute) violates the equal protection clause of the Illinois constitution (Ill. Const. 1970, art. I, § 2). Named as defendants were Dr. Christopher Koch, State Superintendent of Education; the Illinois State Board of Education (ISBE); and Patrick J. Quinn, Governor of the State of Illinois.

¶ 2 Plaintiffs alleged that as Superintendent, Dr. Koch was the chief education officer for the Illinois State Board of Education. Plaintiffs alleged that the ISBE is the state agency that sets educational policies, standards, and guidelines for Illinois public schools, and oversees and disburses state monies used to fund public education in Illinois. Finally, plaintiffs alleged that as Governor of the State of Illinois, defendant Quinn is charged with executing the laws of the state and is responsible for developing and allocating the annual budget for the state, including the monies to fund public education in Illinois. In addition, the Governor, with the consent of the state Senate, appoints the members of the ISBE. Defendants Koch and Quinn were sued in their official capacities.

¶ 3 Defendants filed a motion to dismiss in the circuit court of Sangamon County. The motion to dismiss was granted, and plaintiffs' complaint was dismissed with prejudice. The appellate court affirmed. 2011 IL App (4th) 110117. This court allowed plaintiffs' petition for leave to appeal. Ill. S. Ct. R. 315 (eff. Feb. 26, 2010). We now affirm the judgment of the appellate court.

¶ 4 BACKGROUND

¶ 5 As noted, plaintiffs challenge the funding provisions of the School Code. The state's education funding system is "designed to assure that, through a combination of State financial aid and required local resources, the financial support provided each pupil in Average Daily Attendance equals or exceeds a prescribed per pupil Foundation Level." 105 ILCS 5/18-8.05(A)(1) (West 2010).

¶ 6 For the 2009-10 school year, at issue in plaintiffs' complaint, the statute provided that the Foundation Level of support was $6,119 per pupil. 105 ILCS 5/18-8.05(B)(3) (West 2010). The statute uses an "Average Daily Attendance" figure, as well as "Available Local Resources," in calculating general state aid to schools. See 105 ILCS 5/18-8.05(C), (D) (West 2010).

¶ 7 If a school district's Available Local Resources per pupil is less than the product of 0.93 times the "Foundation Level," general state aid for that district is calculated as an amount equal to the Foundation Level, minus Available Local Resources, multiplied by the Average Daily Attendance of the school district. 105 ILCS 5/18-8.05(E)(2) (West 2010). These districts will be referred to as Foundation Level Districts.

¶ 8 If a school district's Available Local Resources per pupil is equal to or greater than the product of 0.93 times the Foundation Level, and less than the product of 1.75 times the Foundation Level, the general state aid per pupil is derived using a linear algorithm, ranging from 0.07 times the Foundation Level to 0.05 times the Foundation Level. 105 ILCS 5/18-8.05(E)(3) (West 2010). These districts will be referred to as Alternative Formula Districts.

¶ 9 Finally, if a school district for which Available Local Resources per pupil equals or exceeds the product of 1.75 times the Foundation Level, the general state aid for the school district is $218 per pupil. 105 ILCS 5/18-8.05(E)(4) (West 2010). These districts will be referred to as Flat Grant Districts.

¶ 10 Plaintiffs filed their complaint on March 24, 2010. The complaint alleged that the state's education funding system had the effect of requiring taxpayers in school districts with low property values to pay property taxes to fund local public schools at a higher rate than similarly situated taxpayers in school districts with high property values. Plaintiff Carr alleged that he owns property in HomewoodFlossmoor Consolidated High School District 233, a Foundation Level High School District in Cook County. Carr paid annual school property taxes on that property in 2006 at a rate of 4.10%, in order to generate instructional expenditures per pupil of $7,292 in the 2007-08 school year.

¶ 11 Plaintiffs' complaint alleged that in contrast to Carr, a similarly situated property owner in New Trier High School District 203, a Flat Grant District, was taxed at a rate of 1.66%, a rate almost two and a half times less than Carr's tax rate. Nonetheless, the students at New Trier High School received $10,641 per pupil in instructional expenditures, $3,349 more per pupil than the students at HomewoodFlossmoor High School. In addition, New Trier High School received a $218 per student grant from the state.

¶ 12 Plaintiff Newell alleged that he owns property in Cairo Unified School District 1, a Foundation Level Unified School District. Newell paid annual school property taxes on that property in 2006 at a rate of 6.95%, in order to generate instructional expenditures of $6,192 per student in the 2007-08 school year. In contrast, a similarly situated property owner in Scales Mound CUSD 211, a Flat Grant Unified District located in Jo Daviess County, was taxed at a rate of 3.33%, less than half that paid by plaintiff Newell in 2006. Nonetheless, the students at Scales Mound received over $2,400 more per pupil in instructional expenditures than the students in Cairo USD 1.

¶ 13 Plaintiffs alleged that in order for a Foundation Level District to achieve Foundation Level funding for its students, it is required to tax its citizens at a statutorily specified rate. If a Foundation Level District taxes at any lower rate, then its local property tax revenues, when combined with general state aid, will be insufficient to reach the Foundation Level. In contrast, a Flat Grant District need not tax itself at the statutorily specified rate in order to achieve Foundation Level funding. Moreover, the state provides a Flat Grant District with an additional $218 per pupil regardless of the tax imposed by the Flat Grant District, and regardless of whether the revenue generated by the tax imposed in that district exceeds the Foundation Level. Plaintiffs alleged that the result of the state's education funding system is to require payment of substantially higher tax rates by residents of property-poor Foundation Level Districts than by residents of property-rich Flat Grant Districts, in order to reach the Foundation Level.

¶ 14 Plaintiffs further alleged that, according to the latest available educational funding data, taxpayers in property-poor K-8 school districts paid a median property tax rate that was 23% higher than that paid by similarly situated taxpayers in property-rich K-8 districts. However, students in those property-poor districts received a median operating expenditure per pupil that was 28% lower than that received by students in property-rich school districts.

¶ 15 Likewise, taxpayers in property-poor high school districts paid a median tax rate that was 36% higher than that paid by similarly situated taxpayers in property-rich high school districts, even though the median operating expenditure per pupil in the property-poor high school districts was 36% lower than that paid by taxpayers in property-rich high school districts.

ΒΆ 16 Similarly, taxpayers in property-poor unified districts paid a median property tax rate that was 3% higher than that paid by taxpayers in property-rich unified districts, even though the medial operating expenditure per pupil in the property-poor districts was 14% ...


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