Since 1971, at least seventeen state supreme courts have found that their states’ school-funding systems are constitutionally deficient. (The “at least” is required because a few decisions are not easily classified.)  These decisions have been a major, if not the major, source of change in school funding in the United States in the last three decades.  In almost all of the court cases in which the plaintiff has prevailed, the state legislature has responded by reducing per-pupil expenditure differences among districts, increasing legislative control over funding, and reducing overall reliance on local property taxes, which were once the mainstay of American school finance.  Centralization and equalization are the hallmarks of this movement.

Anna Lukemeyer’s COURTS AS POLICYMAKERS is an ambitious and informative contribution to the growing scholarly literature that seeks to understand the school-finance litigation movement. The book is an extension of Lukemeyer’s PhD dissertation at Syracuse University, and its provenance is apparent in a writing style that makes the reader work to remember just what question we’re on right now.

For many readers, it will be worth the effort. In addition to a brief review of the literature and the school-finance cases, the book has two major parts that are scholarly innovations.  The first displays Lukemeyer’s skills from her prior career as an attorney.  She has read all of the school-finance cases in the 31 states where there has been at least one state supreme court opinion (as of 1996).  She analyzes the text of each opinion or opinions (there are often more than one per state) in order to classify them according to criteria that may be of interest to lawyers trying to alter their state’s school finance system through litigation.

Lukemeyer's approach does not allow for much story telling.  Readers interested in the three-decade saga of New Jersey school-finance litigation will not be able to piece it together from the 28 separate references to ABBOT v. BURKE and the 55 separate references to its predecessor, ROBINSON v. CAHILL. (This reviewer did not have to count them page by page; Lukemeyer considerately lists their location in her case index.) But readers who want a summary of how courts have dealt with the vexing issue of whether spending affects student achievement can refer to Table 5.2, which runs for nine pages and covers 26 decisions that dealt with the issue. (Most courts assume there is a positive but fuzzy relationship between spending and achievement.) This and numerous other tables like it will undoubtedly be of use to potential litigators and will probably be an aid to more disinterested scholars as well.

Another important question that Lukemeyer addresses in this part is whether plaintiff claims based on the state’s education clause fare better than claims based on state equal protection clauses.  For example, she finds that in SERRANO v. PRIEST (1971), the California Supreme Court denied that the state constitution’s education clause provided a basis for plaintiffs’ claims, but the court found that the federal and state equal protection clauses did. The federal basis was soon undermined by the plaintiff’s loss in SAN ANTONIO v. RODRIGUEZ [1973], but the U.S. Supreme Court has allowed the states to interpret their equal protection clauses differently in this area.  In general, though, Lukemeyer shows that there is no unambiguous answer to equal protection versus education clause question, since most cases invoke similar claims under both clauses.  She convincingly undermines the pat classification of cases into “equality” and “adequacy” claims, and she finds little substance in the law-review literature’s classification of litigation into first, second, and third “waves.” Even where equal protection is rejected and “adequacy” is the basis for a plaintiff victory, the remedies require a more centralized system in which differences in spending (and sometimes tax rates) among districts are expected to become considerably narrower.

Another question arises when a court is asked to decide that education is a fundamental right and must be distributed equally.  What standard of equality do courts use in these cases?  Is it simply equalization of per pupil spending?  Yes in California and Wyoming.  Are student outcomes as measured by test scores to be equalized?  Very seldom, in part because of lingering doubts about the connection between spending and outcomes.  Lukemeyer finds that most courts adopt a flexible standard of equality, focusing on a minimum standard of resources—not just money, but not less than money—for poor districts.  A related question is whether plaintiff-friendly decisions allow or require the state to adjust for differences in costs of acquiring resources—say in high-labor-cost urban areas—and for students with social and economic disadvantages. Lukemeyer concludes that few courts have required such adjustments, but most allow the legislature to make them.

The discipline of hermeneutics, the science of textual interpretation, was originally applied to religious texts. Lukemeyer does not acknowledge this precedent, but her treatment of court opinions seems similar in that it never raises the question of how courts decided to get into this line of work.  Such deference is appropriate for hermeneutic investigation of holy writ, since divine origins have to be taken (or rejected) as matters of faith. But it seems more dubious for court opinions, especially since courts faced with similar facts can make considerably different decisions.  Lukemeyer has parsed only the decisions, not the state constitutional provisions that supposedly back them up.  Her work should be viewed as supplementing that of other scholars, who have been unable to find a rational pattern between constitutional language and court holdings in this area (McUsic 1991; Underwood 1994).

It may not have been Lukemeyer’s intention to expose the courts as amazingly inconsistent policymakers — even the same court can adopt quite different standards over relatively brief time periods — but that is one conclusion that this reviewer takes from the first part of her work. As for whether the policies that are adopted as a result of the plaintiff victories have worked out as hoped, readers will have to consult other sources, some of which Lukemeyer provides in her brief overview of the literature.  A literature for which no references are offered is the evidence on student achievement after plaintiff victories.  Peltzman (1996) and Husted and Kenny (2000) find that the decisions lower test scores; while Dee (2000) and Card and Payne (2002) present more optimistic evidence.

Nor does Lukemeyer inquire about the strategies that state legislatures have adopted in anticipation of litigation (Fischel 2001, chap. 5).  Ever since Serrano in 1971, governors and state legislators have been on notice that the seemingly hortatory language about education in their constitutions might become a license for judges to second-guess what had for centuries been the domain of the branches of government whose members must stand for re-election. Accounts of pre-emptive surrender by governors and legislatures in the face of litigation are widespread — in Kansas, a lower-court judge has been setting school finance policy for years (Berger 1998) — but Lukemeyer’s book does not deal with this larger political context.

The latter part of her book shifts to a more technical, economics-based inquiry.  Lukemeyer takes one of the adequacy/equality standards that she identified in the first part and simulates it for New York State’s situation in the early 1990s.  Simulation is required because New York has not (yet) had a plaintiff victory in its highest court.  Lukemeyer’s core standard involves a judicially-established minimum level of support.  Unlike the California and Wyoming decisions, this standard would let high-demand districts spend more than the minimum. State aid and a required local tax effort induce districts to reach the minimum, but after that there is no penalty for spending more from local taxes.

This type of system, called “foundation aid,” actually came into widespread use prior to the school-finance litigation movement.  What distinguishes Lukemeyer’s simulations are her invocation of social-science findings about cost differences among districts, something few foundation formulas have employed.  She applies the cost adjustments to three scenarios of judicially-required minimum-spending standards. The difference between low and high minimum levels of spending is the amount necessary for an average district to get a given level of student accomplishment.  She characterizes the levels as “high minimum” (the education obtained at a decent, though hardly outstanding suburban high school), “basic plus” (fewer honors programs), and “basic” (no honors program, just the basics).

In order to adjust for student and district characteristics, Lukemeyer uses as her preferred method the work of two of her Syracuse advisors, William Duncombe and John Yinger.  They estimated how much more must be spent to overcome student disadvantages such as parental poverty, lack of fluency in English, and having only one parent at home, and district disabilities such as a high-cost labor market.  As even the casual observer might guess, the adjustment formula moves state-aid funds away from downstate suburban districts and towards New York City and, to a lesser extent, toward other older cities (Syracuse, Rochester, Buffalo, and Yonkers) and poor rural areas.

What is more surprising — startling, even — is how much more New York City would get under the Duncombe-Yinger cost-adjustments than under current state aid.  The city has 42 percent of the state’s population and its schools contain 37 percent of all public-school students.  I shall use some round-number comparisons from Lukemeyer’s Table 6.6 to convey the magnitudes.  The downstate suburbs (mainly Long Island and Westchester) in 1991 actually spent $9000 per student; New York City spent $6100.  For Lukemeyer’s “basic” judicial standard — no honors programs, just basic skills — the Duncombe-Yinger adjustments would have the suburbs spend $4200 per student, about a third less than they were actually spending.  But New York City would require $12,000, almost twice what it was actually spending at the time.

The numbers get even more extreme for the “high minimum” level of education resources, which is what your average suburban district might regard as barely acceptable.  To achieve this, the suburbs are expected to spend $7700, which is still less than the $9000 they were actually spending. (The remedy Lukemeyer simulates does not require them to spend less, though.)  But New York City in 1991 would require an astonishing $21,000 per student to get up to this high minimum.  For perspective, Harvard’s undergraduate tuition in 1991 was $14,000 per year.

Lukemeyer does not seem to find these figures remarkable — the Harvard comparison is mine, nor hers — but she does not shrink from their budgetary implications. Under her simulation formula, suburban property-tax rates for schools go from an average 11 mills (tax dollars per thousand dollars of property-tax base) to 15 mills for the “high minimum,” which achieves less education than most already obtain. The reason for the tax increase is that existing state aid is diverted from the downstate suburbs to NYC and other districts.  A one-third increase in local school taxes, which take more than half of property tax revenues in most suburbs, might seem hard to take in Scarsdale or Great Neck — though Lukemeyer is confident they would pay it — but it’s nothing compared to what New York City taxes would have to raise. They were actually 10 mills in 1991, but NYC taxes would have to rise to 37 mills to accommodate the “high minimum” judicial standard.  That is a 270 percent increase in school property taxes.

The state government would likewise have to drastically increase its expenditure to achieve these goals.  State aid per pupil of $9200 (in 1991) would be required to implement the Duncombe-Yinger cost-adjusted “high minimum” statewide.  That’s almost four times what New York was then providing in state aid.  Even Lukemeyer’s modest “basic plus” standard would more than double the state’s actual contribution.

Lukemeyer, like most school-finance reform advocates, pays little attention to the fiscal and economic implications of such drastic increases in state and local taxes.  The only concession to their magnitude is her remark that even her lower standard of adequacy would still help most poor districts.  So let me put my public-finance and political-economist hat on and offer some general remarks about the side-effects of a New York court buying into this program.

New York State is one of the higher-tax states in the nation. It spends much more on public schools than the national average, and most interstate comparisons give New York’s overall system high marks for student accomplishment.  A doubling of spending would require painful choices on the fiscal front.  Higher taxes would encourage migration to other states both by firms and by higher-income residents.  Unlike California, New York’s neighboring states are in close proximity to its population centers, so migration of the tax base must be taken seriously.

The alternative to higher taxes would be to cut other state expenditure categories, and programs that benefit the poor would most likely not be exempted.  Indeed, one wonders whether some of the additional thousands of dollars per student required in Lukemeyer’s simulations might better be directed to the parents of poor children.  It is well known that a family’s economic condition has at least as strong an influence on student accomplishment as school-based resources.  A poor child attending a well-appointed school with well-paid teachers is still poor at night.

Economists always have two-hands, though, so one cannot neglect the possible benefits of more spending on education.  If the reform were to make New York’s public schools more efficient and effective, then both households and firms might look past the higher taxes and stay in the state to get the benefit of better schools and better-educated workforce.  The reform might end up paying for itself with a more productive workforce.

Alas, the evidence on this is not encouraging. The aforementioned studies by Husted and Kenny and by Peltzman and several others indicate that court-ordered centralization and equalization of school finance seems to cause average NAEP and SAT and Armed Forces Qualifying Test scores to decline, not rise. Even the more optimistic evaluations of school finance reform by Card and Payne find only modest effects for students at the lower end of the accomplishment scale.  A detailed analysis of Kentucky’s much-admired reforms finds that after a decade there is almost nothing to show for it on the comparative test-score front (Clark 2003). From what we know about school-finance reform in other states, there does not appear to be an educational dividend to offset the fiscal shock.

One could expect school-finance litigators to respond to this scenario with a shrug: “That’s not our department. If the constitution, as interpreted by the courts, requires it, that’s just the way the chips fall.”  The force of this argument seems much diminished by scholarship such as Lukemeyer’s, which sees the courts making policy-oriented decisions rather than interpreting constitutional commands.  Most of the education provisions in state constitutions have been around for more than a century.  Massachusetts’ education clause, circa 1780, urges legislators to “to cherish the interest of literature and the sciences, and all seminaries and public schools,” causing its supreme court in 1993 to engage in a disquisition on the eighteenth-century meaning of “cherish” in granting the plaintiffs a victory (MCDUFFY v. SECRETARY, 615 N.E.2d at 524).  If such clauses truly compelled state judges to act, it is difficult to see how judges of previous generations, who had less need to inquire about the meaning of “cherish,” had overlooked them.

The spate of school-finance decisions of the last few decades has no serious precedents. The precedent of BROWN v. BOARD OF EDUCATION, which Lukemeyer does not invoke but which many state courts do, works if one thinks that PLESSY v. FERGUSON was about passenger railroad cars whose state-required segregation was at issue, not upholding segregation by race, so that BROWN can be made about schools rather than the demise of legally-enforced segregation everywhere.  State court rulings that overturn school finance can only be explained by Lukemeyer’s title, COURTS AS POLICYMAKERS.  As such, scholars whose work is intended to guide these decisions have to pay attention to the broader implications of their subject.

REFERENCES

Berger, Charles. 1998. “Equity without Adjudication: Kansas School Finance Reform and the 1992 School District Finance and Quality Performance Act.” 27 JOURNAL OF LAW AND EDUCATION 1-46.

Card, David, and A. Abigail Payne.  2002. “School Finance Reform, the Distribution of School Spending, and the Distribution of Student Test Scores.” 83 JOURNAL OF PUBLIC ECONOMICS 49-82.

Clark, Melissa A.  2003. “Education Reform, Redistribution, and Student Achievement: Evidence from The Kentucky Education Reform Act.” PhD Dissertation Chapter, Economics Department, Princeton University.

Dee, Thomas S.  2000.  “The Capitalization of Education Finance Reforms.” 43 JOURNAL OF LAW AND ECONOMICS 185-214.

Fischel, William A. 2001.  THE HOMEVOTER HYPOTHESIS: HOW HOME VALUES INFLUENCE LOCAL GOVERNMENT TAXATION, SCHOOL FINANCE, AND LAND-USE POLICIES. Cambridge, Mass.: Harvard University Press.

Husted, Thomas A., and Lawrence W. Kenny. 2000.  “Evidence on the Impact of State Government on Primary and Secondary Education and the Equity-Efficiency Tradeoff.” 43 JOURNAL OF LAW AND ECONOMICS 285-308.

McUsic, Molly. 1991.  “The Use of Education Clauses in School Finance Litigation.” 28 HARVARD JOURNAL ON LEGISLATION 307-340.

Peltzman, Sam. 1996.  “Political Economy of Public Education: Non-College-Bound Students.” 39 JOURNAL OF LAW AND ECONOMICS 73-120.

Underwood, Julie K. 1994. “School Finance Litigation: Legal Theories, Judicial Activism, and Social Neglect.” 20 JOURNAL OF EDUCATION FINANCE 143-162.

CASE REFERENCES

ABBOTT v. BURKE, 575 A.2d 359 (N.J. 1990)

BROWN v. BOARD OF EDUCATION, 347 U.S. 483 (1954)

MCDUFFY v. SECRETARY, 615 N.E.2d 516 (Mass. 1993)

PLESSY v. FERGUSON, 163 U.S. 537 (1896)

ROBINSON v. CAHILL, 303 A.2d 273 (N.J. 1973)

SAN ANTONIO INDEPENDENT SCHOOL DISTRICT v. RODRIGUEZ, 411 U.S. 1 (1973)

SERRANO v. PRIEST, 96 Cal. Rptr. 601 (1971)

 ************************************************************************
Copyright 2003 by the author, William A. Fischel.