Toledo City School Dist. Bd. of Edn. v. State Bd. of Edn. (Slip Opinion)
56 N.E.3d 950
Ohio2016Background
- Ohio school districts receive foundation funding via a state formula (R.C. Chapter 3317) that used an October one-time student count (formula ADM) for FY2005; community schools separately reported monthly CSADM figures and received funding based on CSADM.
- In FY2005 the Ohio Department of Education (department) found discrepancies between districts’ October counts and community-school CSADM data, recalculated formula ADMs, concluded some districts were overpaid, and recouped amounts by reducing funding in FY2005–2007.
- Cincinnati sued the department over a similar FY2005 adjustment; the trial court and First District held the October count controlled; the appeal to this court was dismissed after settlement.
- During litigation, the General Assembly amended R.C. 3317.03 to authorize ADM adjustments and, in the 2009 biennial budget, added an uncodified provision immunizing the department from liability for FY2005–2007 reductions.
- Toledo, Dayton, and Cleveland school boards sued seeking reimbursement and equitable restitution; trial court and Tenth District held the budget provision unconstitutionally retroactive; the state appealed to the Ohio Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Article II, §28 (Retroactivity Clause) prohibits retroactive legislative reductions in school funding and legislative immunization of claims | Boards: Retroactivity Clause is absolute and protects school districts from retroactive laws extinguishing accrued rights to funding and causes of action | State: Retroactivity Clause protects private persons/corporations, not political subdivisions/arms of the state; legislature may retroactively affect political subdivisions, including immunizing the department | Held: Retroactivity Clause does not protect political subdivisions created to carry out state functions; legislature may authorize retroactive funding adjustments and immunize the department for FY2005–2007 reductions |
| Whether historical meaning of "retroactive laws" at 1851 included political subdivisions | Boards: Framers intended a broad, categorical prohibition covering all parties | State: Historical practice and convention debates show retroactivity aimed to protect vested rights of individuals/private corporations, not public/political subdivisions | Held: Historical sources, common law, and convention debates show retroactivity was meant to protect vested private rights, not state-created public corporations |
| Precedent and stare decisis: Do Ohio cases require extending Retroactivity Clause protections to political subdivisions? | Boards: Prior Ohio cases applied retroactivity analysis to political subdivisions, suggesting protection | State: Many cases assumed protection sub silentio or concern different threshold issues; other Ohio precedent and Avon Lake indicate political subdivisions cannot assert constitutional protections against the State | Held: Earlier Ohio cases that assume protection lack precedential weight on the threshold issue; overall Ohio precedent supports excluding political subdivisions from §28 protection |
| Whether the 2009 budget provision is an unconstitutional retroactive extinguishment of accrued rights | Boards: The provision retroactively extinguishes causes of action and impaired accrued statutory rights/funding (substantive) | State: The legislature can retroactively adjust obligations of political subdivisions and immunize the department | Held: Because political subdivisions are not covered by the Retroactivity Clause, the budget provision did not violate Article II, §28; judgment of Tenth District reversed and remanded for further proceedings |
Key Cases Cited
- Bielat v. Bielat, 87 Ohio St.3d 350 (Ohio 2000) (distinguishes permissible retroactivity from retroactivity that offends the Constitution)
- Rairden v. Holden, 15 Ohio St. 207 (Ohio 1864) (early Ohio discussion of retroactive statutes)
- State v. Cook, 83 Ohio St.3d 404 (Ohio 1998) (analysis of retroactivity principles)
- Trustees of Dartmouth College v. Woodward, 17 U.S. 518 (U.S. 1819) (private corporate charters create contractual/vested rights)
- New Orleans v. Clark, 95 U.S. 644 (U.S. 1877) (retroactivity prohibition protects individuals, not state/subordinate agencies)
- Avon Lake City School Dist. v. Limbach, 35 Ohio St.3d 118 (Ohio 1988) (political subdivisions may not assert certain constitutional protections against the State)
- Kumler v. Silsbee, 38 Ohio St. 445 (Ohio 1882) (retroactivity clause does not apply to state or subordinate agencies concerning past transactions)
- Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 91 Ohio St.3d 308 (Ohio 2001) (held statute retroactive in context; discussed in concurrence/dissent regarding applicability to subdivisions)
- Savannah R-III School Dist. v. Pub. School Retirement Sys. of Missouri, 950 S.W.2d 854 (Mo. 1997) (school districts as legislative creatures; retroactivity clause protects citizens, not political subdivisions)