Judge Gives Green Light to Schools’ Funding Suit (IN)

December 1, 2010

Indiana school districts can challenge the way the state distributes funds for public education, a Hamilton County judge said Monday.

Hamilton Superior Court Judge Steven Nation’s ruling allows a lawsuit over the school funding formula filed by the Hamilton Southeastern (Hamilton County), Franklin Township (Marion County) and Middlebury (Elkhart County) school districts to go forward.

Indiana Attorney General Greg Zoeller said Monday he has not decided whether to appeal Nation’s decision not to dismiss the lawsuit — as the state had requested — but some Central Indiana school officials and parents are heartened by the ruling.

"We’re obviously pretty pleased that the judge found in our favor on all points," said Walter Bour ke, superintendent of Franklin Township Schools, which is facing possible teacher layoffs and program cuts because of a budget gap tied to the property tax cap and less funding from the state.

"I think we’ve got good points to be made that the school funding formula doesn’t meet the constitutional standard for uniformity," Bourke said.

Officials and several parents claim the state’s funding formula causes an inequity in funding per student from district to district, which they say is unconstitutional. They also say the funding formula particularly hurts growing school districts.

Zoeller said in a prepared statement that he recognizes school districts are facing budget problems and that some parents think state funding for education is insufficient. However, he said, the case should have been dismissed because political subdivisions such as school corporations have no sovereign authority and cannot challenge the constitutionality of state law.

"This public policy debate belongs in the budget session of the legislature, not in court," Zoeller said. "I have also proposed that legislators prohibit school corporations from using state dollars to sue the state."

Both Bourke and Brian Smith, Hamilton Southeastern’s superintendent, said they support a "complexity index" that is used to funnel more money to districts with higher percentages of low-income or at-risk populations. But that factor is not the reason for statewide disparity, they said.

West Lafayette Schools, for example, has demographic and socioeconomic characteristics similar to Hamilton Southeastern’s, said Michael Reuter, HSE’s chief financial officer, but it collects about $1,100 more per stud ent in annual state revenue.

"We have 18,000 students," Reuter said. "That’s $18 million more per year we could have."

The amount of money Indiana districts receive per student ranges from about $5,000 to about $13,000 annually, said Terry Spradlin, director of education policy for the Center for Evaluation and Education Policy at Indiana University.

"These three school districts have some pretty good arguments," Spradlin said. "I don’t agree with all of them, but I agree it’s a topic worthy of some conversation."

Spradlin said a legislative solution to the funding dilemma might be a better solution than leaving it up to the courts.

HSE’s Smith also said he would prefer to see a legislative solution but added that politics always has derailed efforts in the past to make school funding more fair.

"The uniformity has not improved over the last 10 years," he said. "It’s timely that the courts get involved."

Nation rejected all of the state officials’ arguments in their efforts to get the case dismissed.

"Governmental entities such as plaintiff school corporations do have standing to challenge a statute where they demonstrate a significant interest in the outcome and some direct injury," Nation wrote in his decision, which was filed Wednesday but not released until Monday.

A Hamilton Southeastern parent who is a party to the lawsuit said she has taken an interest in the issue of inequitable state funding for more than a decade.

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"I am just thrilled at this point to see the possibility of light at the end of the tunnel," said Holly Kincaid, 49, Fishers. Her daughter is a sophomore at Fishers High School in the HSE district.