What Business Leaders Need to Know about the Courts and

School Finance

Alfred A. Lindseth

Sutherland, Asbill & Brennan LLP

Q: Based on your best guess, what is the average amount of money spent each

year for a child in public schools in your school district (with prompt)?

$10,400

$5,262

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Average ActualSpending

Average EstimatedSpending

Source: Howell & West, School Spending, Education Next, Summer, 2008, p. 39.

$47,424

$33,054

$0

$10,000

$20,000

$30,000

$40,000

$50,000

Average ActualTeacher Salaries

Average Estimatefrom Survey

Q: Based on your best guess, what is the average annual salary of a public school teacher in your state?

Source: Howell & West, School Spending, Education Next, Summer, 2008, p. 39.

Types of Litigation

• Federal Court lawsuits to desegregate school districts in south and north.

• State Court “equity” lawsuits designed to equalize spending between school districts of a state.

• State Court educational “adequacy”’ lawsuits to require states to fulfill their obligations under the “education clause” of the state constitution.

Examples of Constitutional Language

• Provide a system of “free common schools” (New York)

• Shall “cherish the interests of literature and the sciences” (Massachusetts)

• Make “suitable provision for finance of the educational interests of the state” (Kansas)

• Establish a “complete and uniform” and “thorough and efficient system” (Wyoming)

Adequacy Cases Dismissed on Separation of Powers Grounds

• Florida• Illinois• Nebraska• Oklahoma• Oregon• Colorado

• Alabama• Rhode island• Pennsylvania• Ohio• Kentucky (II)

Plaintiffs’ Victories(mostly from 1989 to 2005)

• Arizona (facilities)• Arkansas• Connecticut• Kansas• Montana• New Jersey• Kentucky (I)• Maryland (Consent

Order)

• New York• North Carolina• Wyoming• Massachusetts (I)• Vermont• New Hampshire• Washington*

Figure 2: Real Spending per Pupil: Wyoming and U.S. Average

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

1986 1991 1996 2001 2006

Wyoming

U.S. average

court decision

WY

U.S.

Defense Victories(mostly since 2005)

• Arizona (operational expenses)• Texas• Alaska• South Carolina• Massachusetts (II)• Louisiana• South Dakota• Missouri

Did students in states which implemented large scale court-ordered funding increases for K-12 education significantly improve their performance, relative to students in other states, during the period of the remedy?

NAEP Performance of Whites, Wyoming and U.S. Average

200

225

250

275

300

4thRead,92-07

4thMath, 92-

09

8thMath, 92-

09

National average

Wyoming

NAEP Performance of Hispanics, Wyoming and U.S. Average

175

200

225

250

275

4thRead,92-07

4thMath, 92-

09

8thMath, 92-

09

National average

Wyoming

Per Pupil ExpendituresWyoming versus its Neighbors, 2007*

$16,386

$12,424$10,815 $10,607

$0$2,000$4,000$6,000$8,000

$10,000$12,000$14,000$16,000$18,000$20,000

Wyo. Mont. N. Dak S. Dak

Ad

jus

ted

PP

E

*Adjusted for regional cost differences

Source: 2010 Quality Counts Issue, Education Week, Jan. 14, 2010, p. 48

NAEP Performance of Blacks, Kentucky and U.S. Average

175

200

225

250

275

4th Read,92-07

4th Math,92-09

8th Math,92-09

National average Kentucky

NAEP Performance of Whites, Kentucky and U.S. Average

200

225

250

275

300

4th Read,92-07

4th Math,92-09

8th Math,92-09

National average Kentucky

New Jersey and National NAEP Trends for Black Students1992 to 2007/2009

191

203192

222

236

260

198

212

198

228

242

267

150

170

190

210

230

250

270

290

4th Read, 92-07 4th Math, 92-09

8th Math, 92-09

National New J ersey

191

184

192

198197

199

203

198

191

200199

212

170

175

180

185

190

195

200

205

210

215

1992 1994 1996 1998 2000 2002 2003 2005 2007

National New Jersey

New Jersey and National NAEP Trends for Black Students, 4th grade reading,

1992 to 2007

New Jersey and National NAEP Trends for Hispanic Students1992 to 2007/2009

194204 201

227

247

266

195

214204

232

245

272

150

170

190

210

230

250

270

290

4th Read, 92-07 4th Math, 92-09

8th Math, 92-09

National New J ersey

Massachusetts and National NAEP Trends for White Students, 1992 to 2007

Massachusetts and National NAEP Trends for Black Students, 1992 to 2007

Courts have Refused to Consider other

Causes of Poor Performance:

• Teacher compensation unrelated to success in classroom

• Restrictive union work rules• Tenure rules affecting ability to

terminate incompetent teachers• Waste and inefficiency in local

operations• Perverse incentives

The Time is Ripe for True Reform

• Court orders are no longer as dominant as they were in many states

• Fiscal constraints demand solutions, other than increased spending

• The Obama administration is supporting more innovative approaches