BISMARCK PUBLIC SCHOOL DISTRICT #1 and the following taxpayers and parents residing in and their children enrolled in Bismarck Public School School District # 1: Jeff Geiger, individually and as parent of Matthew Geiger; Sandy Horst, individually and as parent of Jacki Horst and Jessica Horst; George Keiser, individually and as par-ent of Sarah Keiser; Quentin Wangler, individually and as parent of Nicholas Wangler; Robert Penne, individually and as parent of Jonathan Penne; Gary Christenson, individually and as parent of Brandon Christenson; Karen Hooves-tal, individually and as parent of Mark Hoovestal and Keith Hoovestal; Devils Lake Public School District # 1 and the following taxpayers and parents residing in and their children enrolled in Devils Lake Public School District # 1: Jay Klemetsrud, individually and as parent of Eric Klemetsrud; Paul Goulding, in-dividually and as parent of Thomas Goulding; Dickinson Public School Dis-trict # 1 and the following taxpayers and parents residing in and their chil-dren enrolled in Dickinson Public School District # 1: Dennis W. Johnson and Nancy Jo Johnson, individually and as parents of Timothy Johnson, Amie Johnson and Christopher Johnson; Phyllis Dvorak and Alvin L. Dvorak, in-dividually and as parents of Eric Dvo-rak, Jason Dvorak and Deidra Dvorak; LeRoy Fettig, individually and as parent of Alicia Fettig; Lawrence A. Gardner and Marty Odermann, individually and as parents of Megan Gardner; Grafton Public School District # 3 and the fol-lowing taxpayers and parents residing in and their children enrolled in Grafton Public School District # 3: Roger Moe, individually and as parent of James Moe and Susan Moe; Mandan Public School District # 1 and the following taxpayers and parents residing in and their chil-dren enrolled in Mandan Public School District # 1: Pamela Engelhardt, indi-vidually and as parent of Levi Engel-hardt; Herman A. Schafer, individually and as parent of Robert Schafer and Tamera Schafer; Surrey Public School District # 41 and the following taxpay-ers and parents residing in and their children enrolled in Surrey Public School District # 41: Wayne Lukenbach and Roberta Lukenbach, individually and as parents of Gregory Lukenbach; Linda Jung and Gary Jung, individually and as parents of Ezra Jung, Aaron Jung, Nathan Jung, Daniel Jung and David Jung; West Fargo Public School District # 6 and the following taxpayers and parents residing in and their chil-dren enrolled in West Fargo Public School District # 6: Dennis W. Braaten and Carol A. Braaten, individually and as parents of Darcy Lynn Braaten; Rog-er Larsen and Chris Larsen, individually and as parents of Alexia Larsen, Lindsey Larsen, and Matthew Larsen; Dennis S. Gullickson and Tammy S. Gullickson, individually and as parents of Kelly R. Gullickson; Valley City Public School District # 2 and the following taxpayer and parent residing in and his children enrolled in Valley City Public School District # 2: Luther Skogen, individual-ly and as parent of Sarah Skogen and Matthew Skogen; Grand Forks Public School District # 1 and the following taxpayer and parent residing in and her children enrolled in Grand Forks Public School District # 1: Nikki Seabloom, in-dividually and as parent of Jeff Seab-loom and Gregory Seabloom, Plaintiffs and Appellees, v. The STATE of North Dakota, acting By and Through The North Dakota Legisla-tive Assembly; Rosemarie Myrdal, Pres-ident of the Senate; Rick Berg, Speaker of the House of Representatives; Ed Schafer, Governor; Wayne Sanstead, North Dakota Superintendent of Public Instruction; Kathi Gilmore, Treasurer; and Rod Backman, Director of the Of-fice of Management and Budget, Defen-dants and Appellants.
Civ. No. 930079
Supreme Court of North Dakota
Jan. 24, 1994
II. Breach of the Implied Covenant of Good Faith and Fair Dealing
The trial court granted summary judgment to Lake Region on Aaland‘s claim that Lake Region had breached its implied covenant of good faith and fair dealing because it found that our holding in Hillesland, supra, pre-cluded such a claim. States that have recog-nized an implied covenant of good faith and fair dealing in at-will employment have done so to alleviate the harshness of the doctrine that at-will employment may be terminated for any reason or no reason. See Hillesland, supra. In Hillesland, we declined to follow those states which have recognized a bad-faith exception to the at-will doctrine. We stated, “We refuse to recognize a cause of action for breach of an implied covenant of good faith and fair dealing where, as in this case, the claimant relies upon an employment contract which contains no express term specifying the duration of employment.” Id. at 215.
Aaland argues that because his em-ployment was for a specified term, Hillesland does not apply and therefore his em-ployment contract must contain an implied covenant of good faith and fair dealing. Al-though we agree that this case is distinguish-able from Hillesland, we are not convinced that that alone requires us to recognize an implied covenant of good faith and fair deal-ing. Aaland tells us only that Hillesland does not apply to his case; he does not tell us what law does apply. He offers no authority to support his proposition that an implied covenant of good faith and fair dealing exists in every employment contract for a specific duration. Indeed, the language of
Affirmed in part and reversed in part.
VANDE WALLE, C.J., SANDSTROM, MESCHKE, JJ., and JAMES A. WRIGHT, District Judge, concur.
JAMES A. WRIGHT, District Judge, sit-ting in place of NEUMANN, J., disqualified.
Laurie J. Loveland (argued), Sol. Gen., Mary Norum Hoberg (appearance), Sp. Asst. Atty. Gen., and Karrie Helm (appearance), Legal Asst., Attorney General‘s Office, Bis-marck, for defendants and appellants.
NEUMANN, Justice.
We hold that the funding of the previously recognized fundamental constitutional right to education, see, e.g., State v. Rivinius, 328 N.W.2d 220 (N.D. 1982), cert. denied, 460 U.S. 1070, 103 S.Ct. 1525, 75 L.Ed.2d 948 (1983), and other cases cited herein, is an important substantive right. We further hold that the widely disparate effect of the State‘s method of accomplishing this important substantive right fails to bear a close correspondence to the achievement of the constitutionally man-dated goal of an equal educational opportuni-ty, which was previously recognized by this Court in Lapp v. Reeder Public School District, 491 N.W.2d 65, 67 (N.D. 1992), and in In Interest of G.H., 218 N.W.2d 441, 447 (N.D. 1974).
In this appeal, we consider the constitu-tionality of North Dakota‘s statutory method
In June 1989, nine public high school dis-tricts and thirty-one resident taxpayers and parents of children who attend public school in those districts [hereinafter collectively re-ferred to as plaintiffs], brought this action for declaratory relief against the State and the legislative and executive officials constitution-ally charged with establishing and maintain-ing North Dakota‘s public elementary and secondary schools [hereinafter collectively re-ferred to as defendants]. The plaintiffs chal-lenged the constitutionality of the statutory method for distributing funding to public schools, alleging it was based predominantly upon each school district‘s property tax base, which resulted in these nine “property poor” school districts and their pupils receiving fewer educational resources per pupil than “property wealthy” school districts. The plaintiffs alleged that the statutory method for distributing funding for education, as a whole, failed to equalize local property tax disparities and resulted in substantial inequi-ties in educational opportunities in property poor districts in violation of the education [
The district court held that the statutory method for distributing funding for education violated both the education and the equal protection provisions of our state constitu-tion, and retained jurisdiction to monitor the enactment of a constitutional method for dis-tributing funding. The defendants appealed.
I
Relying on Dickinson Pub. School Dist. v. Sanstead, 425 N.W.2d 906 (N.D. 1988), and County of Stutsman v. State Historical Society, 371 N.W.2d 321 (N.D. 1985), the defen-dants assert that the nine school districts, as political subdivisions, do not have standing to challenge the constitutionality of the statuto-ry method for distributing funding for public education.
In Sanstead, this court concluded that
School districts are political subdivisions created by the state. Baldwin v. Board of Education, 76 N.D. 51, 33 N.W.2d 473 (1948);
Before evaluating the parties’ constitution-al arguments, we trace the contours of the statutory method for distributing funding for public elementary and secondary education in North Dakota, keeping in mind that the State is responsible for implementing our public school system, and that all taxes for education purposes, including local property taxes, are State taxes. Dornacker v. Olson, 248 N.W.2d 844 (N.D. 1976); State ex rel. Haig v. Hauge, 37 N.D. 583, 164 N.W. 289 (1917).
A.
North Dakota has four types of school districts: high school districts which offer instruction in kindergarten through twelfth grade; elementary districts which offer in-struction in kindergarten through sixth or eighth grade; rural districts which usually offer instruction to small enrollments in one classroom with one teacher; and nonoperat-ing districts which do not offer instruction and which pay tuition for children residing within their borders to attend school in a neighboring district.
During the 1990-1991 school year, approxi-mately 118,000 students attended public ele-mentary and secondary schools in 269 school districts in North Dakota. Total enrollments ranged from 10,625 students in the Bismarck high school district to no students in some nonoperating districts. The plaintiff school districts generally have some of the state‘s largest total enrollments with Bismarck, 1st with 10,625 students; Grand Forks, 3rd with 9,227 students; West Fargo, 5th with 4,267 students; Mandan, 6th with 3,589 students; Dickinson, 7th with 3,144 students; Devils Lake, 10th with 2,016 students; Valley City, 13th with 1,399 students; Grafton, 14th with 1,153 students; and Surrey, 58th with 382 students.
The statutory method for distributing funding for public schools uses a mix of revenues from state, local, and federal sources. The trial court found that, exclud-ing $26 million in federal revenue earmarked for specific purposes, school districts in North Dakota incurred approximately $417 million in operating expenses during the 1990-1991 school year. Of that $417 million, state sources of revenue were $220 million (52.8%), school district sources of revenue were $182 million (43.6%), county sources of revenue were $8.6 million (2.1%), and unre-stricted federal sources of revenue were $6 million (1.5%).2
The two primary sources of funding for education are a local ad valorem property tax and state foundation aid. During the 1990-1991 school year, local property taxes gener-ated about 82% of the $182 million in local revenue and state foundation aid constituted about 76% of the $220 million in state reve-nue.
The local property tax is levied on each school district‘s taxable property value as assessed and equalized by each county. See
During the 1991-1992 school year, the val-ue of assessed property per pupil ranged from $77,745 per pupil in the Spiritwood school district to $145 per pupil in the Bel-court school district, and the mill levies ranged from 261.07 in the Bell elementary school district to zero in the Belcourt high school district, the Twin Buttes elementary district, and the Earl, Horsecreek, and Springbrook rural districts. Five nonoperat-ing districts also had a mill levy of zero. During that year, the statewide average tax-able property value was $7,870 per pupil and the mean average mill levy for all school districts was 186.89. All of the plaintiff school districts had lower assessed property
The other major source of state funds for education, foundation aid, is distributed by the State to school districts through the stat-utory formula outlined in
Under
The State reimburses school districts for transportation costs under a statutory formu-la which is based on the size of buses, the miles transported, and the number of pupils.
Special education is funded by distribu-tions from the state and federal government and, upon a majority vote, school districts may also impose a tax levy for special edu-cation.
Other sources of state revenue for edu-cation are a coal conversion tax on plants that convert coal into electricity [
As a result of disparities in the assessed value of property, mill levies, and the number of students in each district, there are dispari-ties between school districts in the amount of money available for per pupil expenditures. During the 1990-1991 school year, the dis-parities in expenditures ranged from $11,743.28 per pupil in the Twin Buttes elemen-tary school district to $2,085.97 per pupil in the Salund rural school district. In the 209 high school districts, the disparities ranged from $8,554.94 per pupil in the Fort Totten district to $2,306.26 per pupil in the United district. The mean expenditure in the high school districts was $3,692.58 per pupil. In the 48 elementary school districts, the dis-parities ranged from $11,743.28 per pupil in the Twin Buttes district to $2,173.12 per pupil in the Mapleton district. The mean expenditure in the elementary districts was $4,360.49 per pupil. In the 12 rural districts, the disparities ranged from $8,486.60 per pu-pil in the Earl district to $2,085.97 per pupil in the Salund district. The mean expendi-ture in the rural districts was $4,434.41 per pupil. The mean average expenditure for all school districts in the 1990-1991 school year was $3,425.12 per pupil.
During the 1990-1991 school year, all of the plaintiff school districts had per pupil expenditures below the state average. Their per pupil expenditures were $2,948.83 in Bis-marck; $2,806.18 in Devils Lake; $2,869.22 in Dickinson; $2,709.46 in Grafton; $3,178.34 in Grand Forks; $2,547.44 in Mandan; $2,317.82 in Surrey; $2,614.36 in Valley City; and $2,576.20 in West Fargo.
B.
Within that statutory framework for dis-tributing funding for education and the state-wide disparities in expenditures per pupil, mill levies, and assessed values per pupil, we now consider the parties’ constitutional argu-ments.
The plaintiffs argue that the impact of the statutory method for distributing funding for public education, as a whole, does not provide a “uniform system of free public schools throughout the state” under the education provisions of our state constitution,
The defendants respond that a “uniform system of free public schools” is satisfied by the Legislature‘s creation of school districts and by the implementation of a uniform sys-tem of schools in those districts, which, they contend, is achieved through curriculum re-quirements and accreditation standards. The defendants assert that the education provisions do not mandate any particular type, or level, of funding for public education. They argue that, in the absence of evidence that the statutory method for distributing funding for public education deprives any children either of access to an education, or of an adequate education, the funding meth-od satisfies the education provisions.
However, the parties agree mere uniformi-ty alone does not fully define the Legisla-ture‘s constitutional obligation under the edu-cation provisions. The defendants admit a uniformly inadequate system would not satis-fy the education provisions and argue that
C.
In San Antonio Independent School Dis-trict v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973), the United States Su-preme Court considered a federal equal pro-tection challenge to disparities resulting from the method for distributing funding for edu-cation in Texas. The Supreme Court con-cluded that, under the federal equal protec-tion clause, strict scrutiny was not applicable to the Texas financing scheme, because edu-cation was not a fundamental right guaran-teed by the United States Constitution, and because wealth was not a suspect classifica-tion. The Court thus analyzed the Texas financing scheme under the rational basis standard and held that it was rationally relat-ed to a legitimate state purpose of local control.
Although Rodriguez governs equal protection analysis of school financing under the federal constitution, we have often recog-nized that our state constitution may afford broader rights than those granted under the equivalent provision of the federal constitut-ion.6 Matter of Adoption of K.A.S., 499 N.W.2d 558 (N.D. 1993); Kavadas v. Lorenzen, 448 N.W.2d 219 (N.D. 1989); Johnson v. Hassett, 217 N.W.2d 771 (N.D. 1974).
Long viewed as our state constitu-tional guarantee of equal protection,
“Section 21. No special privileges or immunities shall ever be granted which may not be altered, revoked or repealed by the legislative assembly; nor shall any citi-zen or class of citizens be granted privi-leges or immunities which upon the same terms shall not be granted to all citizens.
“Section 22. All laws of a general na-ture shall have a uniform operation.”
In Gange v. Clerk of Burleigh County District Court, 429 N.W.2d 429, 433 (N.D. 1988), we outlined the standards of judi-cial scrutiny for equal protection claims un-der our state constitution:
“When a statute is challenged on equal protection grounds, we first locate the ap-propriate standard of review. We apply strict scrutiny to an inherently suspect classification or infringement of a funda-mental right and strike down the chal-lenged statutory classification ‘unless it is shown that the statute promotes a compel-ling governmental interest and that the distinctions drawn by the law are neces-sary to further its purpose.’ State ex rel. Olson v. Maxwell, 259 N.W.2d 621, 627 (N.D. 1977). When an ‘important substan-tive right’ is involved, we apply an interme-diate standard of review which requires a ‘“close correspondence between statutory classification and legislative goals.“’ Hanson v. Williams County, 389 N.W.2d 319, 323, 325 (N.D. 1986) [quoting Arneson v. Olson, 270 N.W.2d 125, 133 (N.D. 1978)]. When no suspect class, fundamental right, or important substantive right is involved, we apply a rational basis standard and sustain the legislative classification unless it is patently arbitrary and bears no ration-al relationship to a legitimate governmen-tal purpose. See State v. Knoefler, 279 N.W.2d 658, 662 (N.D. 1979).”
The parties agree that the right to education is a fundamental right under the North Dakota Constitution. See, e.g., Lapp v. Reeder Public School District, 491 N.W.2d 65 (N.D. 1992); State v. Rivinius, 328 N.W.2d 220 (N.D. 1982), cert. denied, 460 U.S. 1070, 103 S.Ct. 1525, 75 L.Ed.2d 948 (1983); State v. Shaver, 294 N.W.2d 883 (N.D. 1980); In Interest of G.H., 218 N.W.2d 441 (N.D. 1974). Compare Rodriguez, supra [education is not a fundamental right under federal constitu-tion].
The plaintiffs thus assert that strict scrutiny applies to the statutory method for distributing funding for the fundamental right to education. See Horton v. Meskill, 172 Conn. 615, 376 A.2d 359 (1977); Pauley v. Kelly, 162 W.Va. 672, 255 S.E.2d 859 (1979); Serrano v. Priest, 18 Cal.3d 728, 135 Cal.Rptr. 345, 557 P.2d 929 (1976), cert. de-nied, 432 U.S. 907, 97 S.Ct. 2951, 53 L.Ed.2d 1079 (1977); Washakie Co. School Dist. No. One v. Herschler, 606 P.2d 310 (Wyo.), cert. denied, 449 U.S. 824, 101 S.Ct. 86, 66 L.Ed.2d 28 (1980).
In Matter of Adoption of K.A.S., supra, we considered a state equal protection challenge to a statutory scheme which authorized court-appointed counsel for indigent parents facing termination of parental rights in a proceeding under the Uniform Juvenile Court Act and the Uniform Parentage Act, but not for indigent parents facing termi-nation of parental rights in an adoption pro-ceeding.
The equal protection challenge in this case involves financing of the fundamental right to education. The parties agree that the statu-tory method of distributing funding for that fundamental right results in disparities in expenditures per pupil. Those relative fund-ing disparities may well impair the funda-mental right to education. However, we agree with the rationale of those courts that, while recognizing the importance of edu-cation, have concluded that legislative deter-minations about the financing mix for edu-cation involve difficult questions of local and statewide taxation, fiscal planning, and edu-
However, unlike those jurisdictions which have concluded that strict scrutiny is not applicable to state equal protection chal-lenges to financing education and have thus analyzed the issue under the rational basis standard, our equal protection cases also require consideration of the intermediate level of heightened scrutiny for important substantive rights. E.g., Hanson v. Williams County, 389 N.W.2d 319 (N.D. 1986). Compare Rodriguez; Lujan; McDaniel; Hornbeck; Nyquist; Walter. See also Skeen et al. v. State of Minnesota et al., 505 N.W.2d 299 (Minn. 1993) [although strict scrutiny applies in determining wheth-er the Legislature has met a student‘s funda-mental right to a general and uniform system of public schools, rational basis applies to determining whether financing of the system is thorough and efficient].
In Kavadas v. Lorenzen, 448 N.W.2d 219, 222-223 (N.D. 1989), we explained our rationale for choosing between the intermedi-ate level of scrutiny and the rational basis standard of review:
”Hanson follows our equal protection cases in which we have generally applied the intermediate level of scrutiny to classi-fications which have completely prevented a class of injured persons from maintaining an action to recover for their injuries. Bellemare v. Gateway Builders, Inc., [420 N.W.2d 733 (N.D. 1988)] supra [intermedi-ate level of scrutiny applicable to statute that prevented a class of plaintiffs from suing for damages for any deficiency in the design, planning, supervision or observa-tion of construction, or construction of an improvement to real property]; Patch v. Sebelius, 320 N.W.2d 511 (N.D. 1982) [in-termediate level of scrutiny applicable to statute that prevented a class of plaintiffs from suing the state or a state agency]; Benson v. North Dakota Workmen‘s Com-pensation Bureau, 283 N.W.2d 96 (N.D. 1979) [intermediate level of scrutiny appli-cable to statute that excluded a class of employees from workmen‘s compensation]; Herman v. Magnuson, 277 N.W.2d 445 (N.D. 1979) [intermediate level of scrutiny applicable to statute that prevented a class of plaintiffs from suing a municipality for defective streets or bridges]; Johnson v. Hassett, 217 N.W.2d 771 (N.D. 1974) [inter-mediate level of scrutiny applicable to au-tomobile guest statute that prohibited a class of plaintiffs from suing for ordinary negligence of host].
“In contrast, we have generally applied the rational basis test to statutory classifi-cations which involve economic or social matters and do not deprive a class of plain-tiffs from access to the courts. Mauch v. Manufacturers Sales & Service, Inc., 345 N.W.2d 338 (N.D. 1984) [rational basis test applicable to comparative negligence provi-
sions of Section 9-10-07, N.D.C.C. ]; Law v. Maercklein, 292 N.W.2d 86 (N.D. 1980) [rational basis test applicable to statute allowing only residents to participate in the Unsatisfied Judgment Fund]; Thar-aldson v. Unsatisfied Judgment Fund, 225 N.W.2d 39 (N.D. 1974) [rational basis test applicable to statute limiting recovery from Unsatisfied Judgment Fund to $5,000 in cases in which the tortfeasor can not be ascertained, while permitting a $10,000 re-covery from the Fund in other cases].”
We have also applied the intermediate lev-el of heightened scrutiny to a classification involving homestead rights, which, like edu-cation, have state constitutional underpin-nings [Mund v. Rambough, 432 N.W.2d 50 (N.D. 1988)] and to a classification involving a defendant‘s wealth and the vital interests in presenting a defense to a criminal prosecu-tion for issuing checks without sufficient funds. State v. Fischer, 349 N.W.2d 16 (N.D. 1984); State v. Carpenter, 301 N.W.2d 106 (N.D. 1980).
The defendants argue that the fund-ing of education should not be analyzed un-der heightened scrutiny, because the plain-tiffs’ claims are based on relative disparities in the amount of funding for education and not on the absolute deprivation of the funda-mental right to education. See, e.g., Rodri-guez, supra; Skeen, supra. They argue that differences in the relative level of expendi-tures per pupil do not translate into inferior educational opportunities and do not affect educational outcomes. Relying on Kadrmas v. Dickinson Public Schools, 402 N.W.2d 897 (N.D. 1987), aff‘d, 487 U.S. 450, 108 S.Ct. 2481, 101 L.Ed.2d 399 (1988), the defendants argue that education funding involves “classic” so-cial and economic legislation, which is scruti-nized under the rational basis standard rath-er than under heightened scrutiny.
In Kadrmas, this court considered edu-cation and equal protection provision chal-lenges to
In analyzing the state and federal equal protection challenge to
The dissent determined that the statute involved access to the fundamental right of education, which was an “important substan-tive right,” warranting the intermediate stan-dard of scrutiny under our state equal pro-tection provisions. Id. at 904-905 (Levine, Justice, concurring and dissenting). The dis-sent concluded there was no close correspon-dence between the statutory classification and the legislative goal of conserving and allocating financial resources.
We do not believe Kadrmas is determina-tive of the level of scrutiny applicable to the effect of the entire statutory method for dis-tributing funding for public education. Kadrmas involved transportation charges, a service which this court held was not an essential element of a “uniform system of free public schools.” Here, the equal protec-tion challenge involves the effect of the entire statutory method for distributing funding for the “uniform system of free public schools” which obviously entails funding for some “es-
Funding of education involves more than social and economic matters like a day of rest, recreation and Sunday closing of busi-nesses [Best Products Co., Inc. v. Spaeth, 461 N.W.2d 91 (N.D. 1990)], or the allocation of damages in tort reform cases. E.g., Kavadas v. Lorenzen, supra. Although the distribu-tion of funding for public education involves money and economic consequences, the focus must be on the rights affected and the indi-vidual interests involved. See Vantage, Inc. v. Carrier Corp., 467 N.W.2d 446, 448 (N.D. 1991); Hanson v. Williams County, supra, 389 N.W.2d at 325. Here, those rights and interests support use of the intermediate lev-el of scrutiny.
The education provisions of our state con-stitution have “at least equal standing” with the guarantees of freedom of religion and freedom of speech and press, and the State has a compelling interest in establishing min-imum standards of education to ensure that our children receive an adequate education. State v. Rivinius, supra, 328 N.W.2d at 228. Funding of education promotes “[a] high de-gree of intelligence, patriotism, integrity and morality on the part of every voter in a government by the people ... to insure the continuance of that government and the pros-perity and happiness of the people” [
Although the statutory method for distrib-uting funding for education may not totally deprive any student of access to the funda-mental right to education, we believe the method of distributing funding for that fun-damental right involves important substan-tive matters similar to those rights involved in cases in which we have applied the inter-mediate level of scrutiny. Accordingly, we analyze these equal protection claims under the intermediate level of scrutiny, and we require the distribution of funding for edu-cation to bear a close correspondence to leg-islative goals. E.g., Hanson v. Williams County, supra.
The Legislature has identified an edu-cational funding goal to “support elementary and secondary education in this state from state funds based on the educational cost per pupil.”
The State is responsible for imple-menting our public school system, and the Legislature is authorized to provide for the maintenance of that system through a state or legislative levy of taxes, or through a mandatory local tax levy. Dornacker v. Olson, 248 N.W.2d 844 (N.D. 1976). All taxes for education purposes, including local prop-erty taxes, are State taxes. Id.; State ex rel. Haig v. Hauge, 37 N.D. 583, 164 N.W. 289 (1917).
In this case, the overall effect of the Legislature‘s statutory method for funding education authorizes the distribution of fund-ing primarily on the basis of property wealth in the different school districts throughout the state. That distribution is not necessari-ly related to any aspect of educational needs, or educational cost per pupil, and, as a whole, fails to bear a close correspondence either to the constitutional mandate to provide an equal educational opportunity, or to the legis-lative goal of “support[ing] elementary and secondary education in this state from state funds based on the educational cost per pu-pil.”
The lack of a close correspondence to those goals centers on the 22 mill deduct in
The equalizing effect of the deduct has deteriorated over the last twenty years. In 1973, the deduct was 20 mills and was sup-plemented by a 21 mill equalizing county levy for education. That levy was collected on all real property in the county and was distrib-uted to school districts in the county based on the district‘s number of students. How-ever, this equalizing county levy was re-pealed in 1981. 1981 N.D. Sess. Laws, ch. 198. In 1973, the 20 mill deduct and the 21 mill county levy equalized about two-thirds of the statewide average school levy of 65 mills. In the 1991-1992 school year, our state founda-tion aid payments were equalized only to the extent of the 22 mill deduct, while the state-wide average mill levy for education exceed-ed 186 mills. Compare Skeen, supra [Minne-sota education funding system did not violate education and equal protection provisions where approximately 93% of revenues gener-ated by funding system were equalized by state law and approximately seven percent were unequalized and subject to local con-trol].
In the 1973-1974 school year, foundation aid and tuition apportionment represented about 69% of the statewide average expendi-ture per pupil. In the 1981-1982 school year, foundation aid and tuition apportion-ment represented about 64% of the statewide average expenditure per pupil. By the 1990-1991 school year, foundation aid and tuition apportionment represented only about 46% of the statewide average expenditure per pu-pil. The net result of the low deduct is that its capacity for equalization has been dramat-ically reduced over the last 20 years to the point where the majority of revenues are no longer equalized by state aid.
The deduct also fails to treat the coal conversion and severance taxes, the oil and gas production and extraction taxes, and the telephone tax, all of which are “in lieu” of property tax revenues, as if they were part of the local tax base for equalization purposes. That failure results in further disparate treatment and impact on the state‘s overall method of distributing funding for education.
The statutory method of distributing fund-ing for education also allows some school districts to receive state reimbursement for transportation costs which exceed their actu-al costs while other districts receive less than half of their actual costs. That disbursement is totally unrelated to educational costs per pupil and does not bear a close correspon-dence to the constitutionally mandated goal of an equal educational opportunity, nor to the Legislature‘s goal to “support elementary and secondary education in this state from state funds based on the educational cost per pupil.”
We are not persuaded that local control of education justifies the disparities in per pupil expenditures exhibited in this case.8 An ele-ment of local control is clearly a useful and desirable aspect of any education system. However, local control in North Dakota is undercut and limited by the Legislature‘s enactment of requirements for statewide uni-
Rather than selectively reweigh the evi-dence, we accept the trial court‘s determina-tions that the lack of substantially uniform funding has created seriously adverse edu-cational consequences. In other words, rela-tive differences in funding significantly inter-fere with some children‘s right to an edu-cation. We summarize the findings about those adverse educational consequences.
Property wealthy districts have lower pupil to teacher ratios in all sizes of districts. (Trial Court Findings of Fact 216, 217). Those districts have substantially higher rev-enues per pupil and provide their children with substantially more favorable teacher ra-tios. Teacher-pupil ratios range from 58.5 teachers per 1,000 pupils in grades one through six in the lowest revenue group, compared to 90.9 teachers per 1,000 for those grades in the highest revenue group of dis-tricts. There is a clear correlation between revenues and the ratio of teachers to pupils. (Finding 218).
To illustrate, the Fargo school district has greater access to taxable wealth than does neighboring West Fargo, both urban dis-tricts. Fargo annually spends over $1,000 per pupil more than West Fargo for an aver-age of over $25,000 more per class room of twenty-five students. (Finding 236). The Crosby district is able annually to spend over $1,300 more per pupil than the Surrey dis-trict with a comparable number of pupils, an average of over $32,500 more per classroom. The Billings County district has an edu-cational purchasing power that is annually $5,000 per pupil more than the Bell School District with a comparable number of pupils, an exorbitant average of over $125,000 more per classroom. (Finding 236). These dis-parities in dollars cause disparate educational opportunities.
The trial court found that property poor districts have a larger number of pupils per classroom than wealthy districts. Larger classes complicate instruction and interfere with educational goals by emphasizing effi-ciency over effectiveness. (Finding 266). Maximum class sizes allowed under the state accreditation standards are often exceeded at all levels in elementary, junior high, and senior high schools in poor districts. (Find-ings 266-282). Class size adversely affects student‘s educational opportunities. (Find-ing 273).
Funding disparities cause other deficien-cies: reduced curriculums; unavailability of textbooks; use of outdated textbooks; short-ages and lack of equipment, supplies, and materials; spartan physical education pro-grams; science laboratories without equip-ment; and lack of libraries. (Findings 283-342).
Many elementary schools do not have a library. (Finding 293). In one poor district, teachers supplement their outdated text-books by purchasing scholastic magazines at their own personal expense. (Finding 306). Lack of a library is an inequity of major proportions, depriving students of the essen-tial skills of research, self direction, and inde-pendent learning. (Finding 317).
All of the complaining districts have cur-tailed or virtually eliminated staff develop-ment due to lack of funds, although the trial court found as a fact that “a teacher who takes a course in more effective teaching and applies that information is likely to be a better teacher.” (Finding 344). Although special education programs are mandated by state and federal law, and although the num-ber of special education students has been increasing, statewide reimbursement for these programs has decreased from 35% in 1985-1986 to 26% in 1989-1990, intensifying problems for poor districts. (Findings 345-360). Some districts receive reimbursement of significantly more money than they actual-ly spend for transportation of students, up to 150% of their actual expenses, while other districts receive only 40-45% reimbursement. (Findings 370-378). These uneven variations in funding add to the lack of uniformity in educational opportunities.
Accreditation is one measure of compliance with minimum standards within each school. (Finding 413). Because of funding short-ages, some districts are not accredited by the North Central Association. Other poor dis-tricts are deficient and facing disaccredita-tion because of recommendations that are beyond their financial resources. (Findings 409-429). However, accreditation assures only uniformity in some basic elements, and wealthier districts easily meet those stan-dards. (Finding 426). Significantly, districts that had all levels of schools accredited by the North Central Association had signifi-cantly higher average test scores at all grade levels. (Finding 428).
In sum, the trial court found that the differentials in current revenues per pupil that exist among North Dakota school dis-tricts create a lack of uniformity in education. (Finding 431). The quality of education strongly correlates with the revenue per pu-pil that a district has available to purchase educational services, materials, and equip-ment. (Finding 432). Money makes a dif-ference.
High-spending schools have educational advantages over low-spending schools: bet-ter qualified and trained teachers as well as in-service training of staff, better equipment, and adequate facilities that are not over-crowded. (Finding 434). The higher reve-nues in wealthy districts translate into more staff, better teacher-pupil ratios and pro-grams, and adequate supplies. (Finding 434). Greater funding means that schools do more things educationally, and do them bet-ter. (Finding 434).
The distinct advantages to students in wealthy districts, compared to poor districts, permit some children to compete more favor-ably for access to post-secondary training and for jobs, and create life-long advantages for some students in wealthy districts, and life-long deficits for others in poor districts. (Finding 447). The existing school finance system in North Dakota has systematically created and continues significantly unequal educational access and opportunities, stem-ming from lower per pupil expenditures due to property wealth variations. These serious educational disadvantages for some children are only explained by the lack of uniformity in resources. (Finding 450).
The present educational funding system seriously discriminates against some students and significantly interferes with their right to equality of educational opportunities. Be-cause educational opportunities are not sub-stantially uniform, the existing system of ed-ucational funding needs fixing.
We conclude that the effect of the Legisla-ture‘s statutory method for distributing fund-ing for primary and secondary education in North Dakota, as a whole, does not bear a close correspondence to the goals of provid-ing an equal educational opportunity, and of supporting elementary and secondary edu-cation from state funds based on the edu-cational cost per pupil. We do not hold that any one of the various statutes for distribut-
We affirm the district court judgment inso-far as the court concluded that the overall impact of the entire statutory method for distributing funding for education in North Dakota is unconstitutional.
III
Although we sustain the district court‘s determination that the statutory method for distributing funding for edu-cation, as a whole, is unconstitutional, we also conclude that the district court erred in man-dating specific actions to be taken by the Governor, the Superintendent of Public In-struction, and the Legislative Assembly and its leaders, and in retaining jurisdiction to monitor and enforce compliance with its deci-sion. In view of the separate powers en-trusted to the three coordinate branches of government, it is not the usual function of the judiciary to supervise the legislative pro-cess in that manner. State v. Sathre, 110 N.W.2d 228 (N.D. 1961). The procedure for a declaratory judgment provides an adequate alternative to the court‘s retention of juris-diction.
Accordingly, we affirm the district court judgment in part and we reverse in part.
MESCHKE and LEVINE, JJ., concur.
SANDSTROM, Justice, dissenting.
We are asked to decide if North Dakota‘s educational finance system meets the state constitution‘s requirements that the Legisla-tive Assembly “provide for a uniform system of free public schools,” and that “[a]ll laws of a general nature shall have a uniform opera-tion.”
Because the majority opinion‘s analysis is seriously flawed, ignoring the clear meaning of the constitutional language, and the opin-ions of this Court, I dissent.
The district court declared virtually every education finance statute unconstitutional. The majority purports to affirm the district court; yet it declares no statute unconstitu-tional, but says the “effect” of the education finance system is an unconstitutional result.
There is a fundamental right to education. The plaintiffs, however, have failed to estab-lish any student is being denied that right. They concede all plaintiff districts meet or exceed the educational requirements of the state. The students in North Dakota in gen-eral, and in the plaintiff districts, are receiv-ing a good education.
School districts, as political subdivisions of the state, cannot sue the state for “uniform funding.” Through lawsuit, taxpayers are not entitled to the same tax burden as differ-ent taxpayers. Students deprived of an edu-cation can sue to obtain one, but none assert an education is being denied.
Regardless of the flawed logic of the ma-jority, there is no constitutional right to equal education financing.
To claim the constitutional requirements of a uniform system of education requires sub-
In citing this Court‘s decisions holding the right to an education cannot be denied to handicapped children, the majority ignores the rationale of the cases and overstates their holdings as a “constitutionally mandat-ed goal of equal educational opportunity.”
The right to an education cannot be de-nied, but it is absurd to suggest “equal edu-cational opportunity” requires the same edu-cational experience, the same textbooks, the same teachers, the same class options, or the same dollar spending. Students are entitled to the opportunity to receive an education under a uniform system of structure and standards.
The majority seeks to manufacture a new constitutional right where none exists and none was intended. Absent the violation of a legitimate constitutional right, we are not to supplant our judgment for the legislature‘s.
I
The majority wrongly states it is unneces-sary to resolve the issue of the nine plaintiff school districts’ standing to challenge the constitutionality of North Dakota‘s school fi-nancing statutes. The districts lack stand-ing. Their lack of standing is not only im-portant, but the majority must ignore their lack of standing in order to find unconstitu-tionality.
School districts are political subdivisions of the state created by statute. See
“A political subdivision, as an agency of the state in the exercise of governmental powers, generally has no privileges or im-munities under the Federal Constitution which it may invoke in opposition to the will of the State.
“In this instance the County, rather than a private person, is the party asserting a violation of its constitutional rights. Stuts-man County may not successfully assert a violation of those constitutional rights be-cause it is not a person or private party within the context of those provisions. If Stutsman County has a serious complaint about the burdens placed upon it by this designation under the legislative enact-ment of
chapter 55-10 for preservation of historic sites, the County must take it to the Legislature which controls the Coun-ty‘s fate in matters such as this.”
County of Stutsman at 330 (citations omit-ted, footnote omitted).
This Court has previously held school dis-tricts have no enforceable rights against the state regarding education funding. In Dick-inson Public School Dist. v. Sanstead, 425 N.W.2d 906 (N.D. 1988), this Court held local school districts have no contract rights against the state to foundation aid payments. In Sanstead, this Court said, “state aid to local school districts is a mere gratuity.” Sanstead at 910. See also Zenith School District No. 32 v. Peterson, 81 N.W.2d 764, 768 (N.D. 1957).
The district court erred when it ignored established North Dakota law and instead applied Minnesota law to find the school districts have standing to assert constitution-al claims on their own behalf. See Metro. Sports Fac. v. County of Hennepin, 451 N.W.2d 319 (Minn. 1990). Since the majori-ty‘s finding of unconstitutionality is not based on specific claims of any but the school dis-trict plaintiffs, the ignoring of established North Dakota law is crucial to its holding.
II
The first step in analyzing the constitution-ality of North Dakota‘s school finance system is determining what the education clause of our North Dakota Constitution requires.
A
The majority reviews the language of
“Section 1. A high degree of intelli-gence, patriotism, integrity and morality on the part of every voter in a government by the people being necessary in order to insure the continuance of that government and the prosperity and happiness of the people, the legislative assembly shall make provision for the establishment and main-tenance of a system of public schools which shall be open to all children of the state of North Dakota and free from sectarian con-trol. This legislative requirement shall be irrevocable without the consent of the United States and the people of North Dakota.
“Section 2. The legislative assembly shall provide for a uniform system of free public schools throughout the state, begin-ning with the primary and extending through all grades up to and including schools of higher education, except that the legislative assembly may authorize tuition, fees and service charges to assist in the financing of public schools of higher edu-cation.
“Section 3. In all schools instruction shall be given as far as practicable in those branches of knowledge that tend to im-press upon the mind the vital importance of truthfulness, temperance, purity, public spirit, and respect for honest labor of ev-ery kind.
“Section 4. The legislative assembly shall take such other steps as may be necessary to prevent illiteracy, secure a reasonable degree of uniformity in course of study, and to promote industrial, scienti-fic, and agricultural improvements.”
The district court concluded the uniformity provision in
In construing constitutional provisions:
“[W]e must undertake to ascribe to the words used that meaning which the people understood them to have when the consti-tutional provision was adopted. State ex rel. Sanstead v. Freed, 251 N.W.2d 898 (N.D. 1977). In so doing, it is appropriate to consider contemporaneous and long-standing practical interpretations of the provision by the Legislature where there has been acquiescence by the people in such interpretations.”
Kadrmas v. Dickinson Public Schools, 402 N.W.2d 897, 899 (N.D. 1987).
The record of the North Dakota Constitu-tional Convention debates reflects the dele-gates’ intent in requiring “a uniform system of free public schools.”
“Sec. 2. The Legislature shall provide at their first session after the adoption of this Constitution for a uniform system of free public schools throughout the State, beginning with the primary and extending through all grades up to and including the normal and collegiate course.”
Official Report of the Proceedings and De-bates of the First Constitutional Convention of North Dakota, p. 152 (1889).
“And each county of the State shall be divided into a convenient number of inde-pendent school districts. But no school district shall be formed containing less than twenty-five inhabitants.”
In opposition to the proposed amendment, Delegate William J. Clapp explained:
“This matter of the school district system came before the committee and it was their idea, and the idea of the Convention that while the school district system might be the best, at some other time there might be some better method, and we thought the better plan would be to adopt a uniform system and if so the Legislature will make it uniform. I hope it will stand as it is here.”
Debates of the Convention, p. 603. The amendment failed.
Clapp‘s comments clarify the framers’ in-tent. The education committee believed the legislature should create a system of local school districts to provide education for North Dakota‘s citizens. The committee, however, used the word uniform in section 2 to give the legislature flexibility in determin-ing the best organizational system in the future. The framers did not intend to re-quire the legislature to create an education system with uniform per pupil funding fi-nanced by the state.
The early contemporaneous legislative con-struction of the education provisions also supports the proposition that the state is not required to provide uniformity in per pupil funding. In 1890, the First North Dakota Legislative Assembly enacted chapter 62, en-titled: “AN ACT to Provide for a Uniform System of Free Public Schools Throughout the State and to Prescribe Penalties for Vio-lation of the Provisions Thereof.” Chapter 62 established school districts and governed the schools in those districts. N.D. Sess. Laws, ch. 62 (1890); see also Cardiff v. Bis-marck Public School Dist., 263 N.W.2d 105, 107-8 (N.D. 1978).
Under chapter 62, the state‘s school sys-tem was financed almost exclusively by local taxes. “[T]he First Legislative Assembly did provide for a uniform system of free public schools through a system of school districts, financed by a local ad valorem property tax levy of not exceeding 30 mills. (Sections 101 and 102, Chapter 62, Laws of 1890).” Dornacker v. Olson, 248 N.W.2d 844, 848 (N.D. 1976). The first legislature gave local school boards power to levy a property tax of not more than 30 mills in any one year. S.L. 1890, ch. 62, § 101. Chapter 62 also re-quired each county assess a levy of one dollar on each elector in the county and a further tax of two mills for all taxable property in the county for the support of the common schools. S.L. 1890, ch. 62, § 102.
The First Legislative Assembly did not see the funding for North Dakota‘s schools as the responsibility of the state, but rather as a local function. The only state money for education provided by the first legislature came from fines and penalties for violation of state law, school land leases, and interest and income from the state permanent school trust fund. S.L. 1890, ch. 62, § 90. Use of these funds for education was mandated by
In its original form, prior to its amend-ment in 1970 and 1982,
“All proceeds of the public lands that have heretofore been, or may hereafter be, granted by the United States for the sup-port of the common schools in this state; all such per centum as may be granted by the United States on the sale of public lands; the proceeds of property that shall fall to the state by escheat; the proceeds of all gifts and donations to the state for common schools, or not otherwise appro-priated by the terms of the gift, and all other property otherwise acquired for com-mon schools, shall be and remain a perpet-ual fund for the maintenance of the com-mon schools of the state. It shall be
deemed a trust fund, the principal of which shall forever remain inviolate and may be increased but never diminished. The state shall make good all losses thereof.”
Prior to its amendment in 1982,
“The interest and income of this fund to-gether with the net proceeds of all fines for violation of state laws and all other sums which may be added thereto by law, shall be faithfully used and applied each year for the benefit of the common schools of the state, and shall be for this purpose appor-tioned among and between all the several common school corporations of the state in proportion to the number of children in each of school age, as may be fixed by law, and no part of the fund shall ever be diverted, even temporarily, from this pur-pose or used for any other purpose what-ever than the maintenance of common schools for the equal benefit of all the people of the state; provided however, that if any portion of the interest or income aforesaid be not expended during any year, said portion shall be added to and become a part of the school fund.” [Em-phasis added.]
Although the drafters of North Dakota‘s Constitution were aware of the divergent value of property throughout the state and, therefore, the differing ability of local com-munities to raise money for schools, the drafters determined the proceeds from North Dakota‘s trust fund should be distrib-uted on a per student basis, rather than on an equal educational opportunity basis. See Debates of the Convention, pp. 161-63, and 288-89.
Similarly, the early education legislation did not include statewide “equalization” among school districts. As discussed above, the 1890 statutes provided the state‘s schools would be funded primarily through school district property taxes, county property tax-es, and county poll taxes. S.L. 1890, ch. 62, §§ 101 and 102. The school district property taxes were retained within the school district. S.L. 1890, ch. 62, § 101. The county taxes were paid into the state tuition fund. S.L. 1890, ch. 62, § 102. The state tuition fund was apportioned among the counties strictly by the number of school age children resid-ing in each county. S.L. 1890, ch. 62, § 90. Each county then distributed the state tu-ition fund moneys to school districts on the same basis (the number of school age chil-dren in the district). S.L. 1890, ch. 62, § 95. This funding method included no equalization based on the property wealth of a particular school district.
This Court previously has interpreted the education provisions of the Constitution. Those cases concluded the Constitution only requires the legislature to establish a state-wide system of schools. Our past opinions make clear the legislature is not required to provide any particular level or type of state funding for education.
In Todd v. Board of Education, 54 N.D. 235, 241, 209 N.W. 369, 371 (1926), this Court held
“[R]equires the establishment and mainte-nance by the state of a uniform system of free public schools, but this requirement is satisfied by provision for the creation of school districts and for a uniform system of schools in those districts.”
In Zenith School District, 81 N.W.2d at 768, the Court concluded “[s]tate aid to school districts, however, is not reimburse-ment for or payment for anything. It is a grant in aid and in so far as the local districts are concerned it is in the nature of a gratui-ty.”
In Dickinson Public School Dist. v. San-stead, 425 N.W.2d at 909, the Court ex-plained:
“[T]he Legislature could have required, as it did in the distant past, that all funding for public schools be borne by the local district, inasmuch as the State‘s constitu-tional directive to provide a uniform sys-tem of public schools is satisfied by provi-sion for the creation of school districts and for a uniform system of schools in those districts.”
Other state courts which have interpreted similar constitutional provisions have held “uniform” merely applies to the general sys-tem of education, and not to equality in fund-ing. See Skeen v. State, 505 N.W.2d 299, 310 (Minn. 1993) (constitutional requirement met
B
Although
Although
“A high degree of intelligence, patriotism, integrity and morality on the part of every voter in a government by the people being necessary in order to insure the continu-ance of that government and the prosperi-ty and happiness of the people, the legisla-tive assembly shall [establish] a system of public schools....”
“In all schools instruction shall be given as far as practicable in those branches of knowledge that tend to impress upon the mind the vital importance of truthfulness, temperance, purity, public spirit, and re-spect for honest labor of every kind.”
“The legislative assembly shall take such other steps as may be necessary to prevent illiteracy, secure a reasonable degree of uniformity in course of study, and to pro-mote industrial, scientific, and agricultural improvements.”
The state is meeting its responsibility to provide a basic education. The legislature has created a uniform system to deliver edu-cational services through the use of local school districts supervised by local school boards.
(1) Employ certified teachers (
(2) Offer courses satisfying at least mini-mum high school curriculum require-
(3) Teach high school courses for at least a set minimum amount of time for a high school student to receive a unit of cred-it for the course (
(4) Hold school for at least a minimum number of days each year (
(5) Meet health and safety requirements (
The teacher certification and qualifications statutes require all teachers be certified based on standards established by the state superintendent of public instruction. Teach-ers can teach only in their major or minor field of preparation.
The courses included in the minimum high school curriculum requirements are four units each of English and science, three units each of math and social studies, one unit each of health and physical education, music, and six units of electives from at least two course areas identified in the statute.
Under the statutory curriculum, students in elementary schools must be taught spell-ing, reading, writing, arithmetic, language, English grammar, geography, United States history, civil government, nature study, and elements of agriculture. Physiology and hy-giene also must be taught.
A school‘s foundation aid payments can be reduced for failure to comply with the curric-ulum requirements. See
Additionally, the legislature has authorized the state superintendent of public instruction to establish standards for accreditation of public and private schools.
The accreditation standards are grouped into eight categories: school improvement, administration, instructional personnel, in-structional program, student evaluation, pu-pil personnel services, library media services, and school policies. Many accreditation standards impose more stringent require-ments than are mandated by statute. See Accreditation Standards, Criteria and Pro-cedures for the classification of Elementary, Middle Level/Junior High, and Secondary Schools, prepared by the North Dakota De-partment of Public Instruction, August, 1991.
The content of some accreditation stan-dards differ for different schools based on varying enrollments. The different stan-dards for large and small enrollment schools are based on practical considerations. The size of a district makes a difference in the educational programs the district can offer. Larger schools are expected to meet higher standards in regard to breadth and depth of course offerings. For the most part, the plaintiffs’ schools are the larger schools in the state.
Public schools may receive one of four accreditation classifications: (1) accredited with commendation (given to a school that has met the accreditation standards and gone through a school improvement process), (2) accredited (given to a school that has met the accreditation standards but has not gone through a school improvement process), (3) accredited with warning (given to a school that has failed to meet a “required” accredi-tation standard or a sufficient percentage of the “optional” standards), and (4) not accred-ited (given to a school that was accredited with warning and failed to correct the prob-lem that caused the warning).
A school accredited with warning suffers no financial penalty during the year it re-ceives the warning, but the school must re-move the warning by the next date of accred-itation or it will be reclassified as not accred-ited.
All public secondary schools in North Da-kota currently are accredited. All but one of
C
Since the legislature has created a system of education uniform both in organizational structure and in curriculum requirements, the Court‘s review of
All of the schools in the plaintiff school districts meet the statutory curriculum re-quirements, and all of the schools are accred-ited. The plaintiffs do not challenge the adequacy of North Dakota‘s accreditation system, rather the plaintiffs’ action is based on claims of relative harm—harm caused by differences in per pupil funding among dis-tricts.
The district judge assumed relative fund-ing differences, and the different choices school districts are forced to make because of funding differences, amounted to a constitu-tional violation. The district court, however, mistakenly assumed school districts have a right to equal funding. The district court failed to analyze whether the relative differ-ences in funding amounted to denial of some children‘s right to an education. The district court found inadequacies based on outside reading in newspapers and magazines, and on the defendants’ anecdotal evidence. The majority makes this same mistake.
Rather than examine all the factors which measure quality in education, the district court focused only on funding. To meet its responsibilities under
Student output is the appropriate measure of education quality. To assess education quality in the state, the department of public instruction coordinates the administration of the Comprehensive Test of Basic Skills (CTBS), the Test of Cognitive Skills (TCS), and the National Assessment of Educational Progress (NAEP). The CTBS and TCS tests, which are administered and scored to-gether, have been administered in all public schools and almost all private schools in North Dakota in grades 3, 6, 8, and 11 since 1990.
The CTBS test measures achievement in basic skills. The TCS test is a “school abili-ty” test. It does not measure achievement; it measures how well students should be expected to perform in school.
The test results for North Dakota students show students are learning commensurate with their ability. In 1991, North Dakota students on an average scored higher than the national average on all CTBS subtests at all grade levels. North Dakota students also achieved the top scores in the United States on the 1990 NAEP eighth grade mathematics assessment. Contrary to the plaintiffs’ anec-dotal evidence, differences in district funding do not have an effect on student learning as measured by standardized tests.
Misconstruing the constitutional require-ments, the district court fundamentally erred in focusing on the relative funding differ-ences among school districts, and in discount-
The education clause does not require uni-formity in education funding, only that the state ensure a basic level of education. The plaintiffs have not demonstrated the state‘s system fails to provide a basic education. The requirements of the education clause are being met, and the system is valid under
III
The majority‘s equal protection analysis is also faulty. The majority correctly points out that under
Equal protection analysis begins with a review of the right allegedly infringed. This case involves three groups of plaintiffs: the nine school districts, taxpayers in each of the nine plaintiff school districts, and parents suing on behalf of their children who are students in the nine plaintiff school districts.
A
As explained above, the nine plaintiff school districts have no standing to challenge the constitutionality of the state‘s education funding system.
B
The taxpayer plaintiffs’ argue they are dis-criminated against under the current funding formula. They claim their equal protection rights are violated because they are paying property taxes higher than taxpayers in oth-er school districts, and their school district should be receiving more money from the state. The district court found:
“Plaintiff taxpayers are denied equal protection in that they must pay propor-tionately higher taxes on their real estate for the maintenance of education which does not result in equal education opportu-nity for the students in their districts.”
In San Antonio Independent School Dis-trict v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973), reh‘g denied, 411 U.S. 959, 93 S.Ct. 1919, 36 L.Ed.2d 418 (1973), the United States Supreme Court reviewed claims Tex-as’ school financing system was unconstitu-tional. The Court noted wealth discrimina-tion claims in challenges to state public school financing laws are unlike any of the forms of wealth discrimination previously re-viewed by the United States Supreme Court:
“Rather than focusing on the unique fea-tures of the alleged discrimination, the courts in these cases have virtually as-sumed their findings of a suspect classifica-tion through a simplistic process of analy-sis: since, under the traditional systems of financing public schools, some poorer peo-ple receive less expensive educations than other more affluent people, these systems discriminate on the basis of wealth. This approach largely ignores the hard thresh-old questions, including whether it makes a difference for purposes of consideration under the Constitution that the class of disadvantaged ‘poor’ cannot be identified or defined in customary equal protection terms, and whether the relative—rather than absolute—nature of the asserted de-privation is of significant consequence.”
Rodriguez, 411 U.S. at 19, 36 L.Ed.2d at 34. The Court concluded no suspect classification based on wealth was involved:
“However described, it is clear that ap-pellees’ suit asks this Court to extend its most exacting scrutiny to review a system that allegedly discriminates against a large, diverse, and amorphous class, uni-fied only by the common factor of resi-dence in districts that happen to have less taxable wealth than other districts. The system of alleged discrimination and the class it defines have none of the traditional indicia of suspectness: the class is not saddled with such disability, or subjected
to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majori-tarian political process.”
Rodriguez, 411 U.S. at 28, 36 L.Ed.2d at 40 (footnote omitted). See also Lujan v. Colorado State Bd. of Educ., 649 P.2d at 1021; Skeen, 505 N.W.2d at 314. The taxpayer plaintiffs are not a suspect class.
The taxpayers in districts with relatively low taxable value per pupil are not, on aver-age, poor. Kathryn L. Strombeck, a re-search analyst with the Tax Commissioner‘s Office, compared the average adjusted gross incomes for taxpayers in the plaintiff dis-tricts, with statewide average adjusted gross incomes. Strombeck concluded no signifi-cant relationship existed between average adjusted gross income and taxable valuation per pupil. School districts with high average adjusted gross incomes do not consistently have high levels of taxable valuation per pu-pil, nor do they consistently have low levels of taxable valuation per pupil.
The taxpayers in districts with relatively low taxable value per pupil do not necessarily pay higher property taxes than taxpayers in school districts with relatively high taxable value per pupil. The plaintiffs’ expert, Dr. John Augenblick, established statistically there is little or no relationship between a districts’ property wealth and its mill levy. The taxpayer plaintiffs’ only complaint is that because the state has failed to fully equalize its funding to school districts, the school boards in some of the districts, with the consent of the people, have chosen to raise the school districts’ mill levy, forcing some of the taxpayer plaintiffs to pay more property taxes than some taxpayers in other districts. This complaint does not state a valid consti-tutional claim. The equal protection clause does not guarantee taxpayers rates identical to all other taxpayers in the state. Signal Oil and Gas Company v. Williams County, 206 N.W.2d 75 (N.D. 1973). The legislature has wide discretion to fix the basis of taxa-tion. Signal Oil and Gas Company at 82. A tax will be upheld:
“[I]f any state of facts reasonably can be conceived that would sustain it. Further-more, a court need not know the special reasons, motives, or policies of a State legislature in adopting a particular classi-fication, so long as the policy is one within the power of the legislature to pursue, and so long as the classification bears a reason-able relation to those reasons, motives, or policies.”
Signal Oil and Gas Company at 83 (citations omitted); see also Caldis v. Board of Cty. Com‘rs, Grand Forks Cty., 279 N.W.2d 665, 672 (N.D. 1979); So. Valley Grain Dealers v. Bd. of Cty. Com‘rs, 257 N.W.2d 425, 436 (N.D. 1977).
Because the legislature‘s funding scheme for public education promotes both local con-trol and local involvement, it bears a rational relationship to a legitimate legislative pur-pose. The district court erred in concluding the taxpayer plaintiffs’ constitutional rights are violated by the current public school financing system.
C
In North Dakota, education is a fundamen-tal right under the North Dakota Constitu-tion. In In Interest of G.H., 218 N.W.2d 441 (N.D. 1974), this Court resolved whether G.H., a child with severe physical handicaps, was entitled to have the state pay her tuition at the Crippled Children‘s School. This Court held:
“We are satisfied that all children in North Dakota have the right, under the State Constitution, to a public school edu-cation....
“Handicapped children are certainly en-titled to no less than unhandicapped chil-dren under the explicit provisions of the Constitution.”
In Interest of G.H. at 446. After reviewing the United States Supreme Court‘s Rodri-guez opinion, this Court concluded, even if education was not a fundamental right under the North Dakota Constitution, G.H. would be entitled to a state funded public education under the equal protection clauses of the United States and North Dakota Constitu-tions. This Court concluded classifications
“When North Dakota undertakes to supply an education to all, and to require all to attend school, that right must be made available to all, including the handicapped, on equal terms.”
In Interest of G.H. at 447.
In Lapp v. Reeder Public School Dist. No. 3, 491 N.W.2d 65 (N.D. 1992), this Court reit-erated its holding in In Interest of G.H., explaining:
“Under our state constitution, all chil-dren in North Dakota have the right to a public school education.
N.D. Const. Art. VIII, § 1 . Our state constitution also guarantees ‘equal educational opportunity’ to a handicapped child. In Interest of G.H., 218 N.W.2d 441, 447 (N.D. 1974). The school board of a public school has a duty [t]o establish for all children of legal school age residing within the district, a system of free public schools which shall furnish school privileges equally and equi-tably.’Section 15-29-08(1), N.D.C.C. ; see alsoN.D. Const. Art. VIII, § 2 .”
Lapp at 67 (citations omitted).
In Interest of G.H. and Lapp are very different from this case. In In Interest of G.H., the issue was which public entity, if any, would be responsible to pay for G.H.‘s education. Similarly, in Lapp, the issue was the handicapped child‘s residence so as to determine the financially responsible district. Both In Interest of G.H. and Lapp involved a total deprivation of the child‘s right to an education and an inherently suspect classi-fication. This case involves neither a complete denial of education opportunity, or an inher-ently suspect classification.
A party attacking the constitutionality of a statute must show the statute affects the party‘s rights in an unconstitutional manner. Benson v. Schneider, 68 N.W.2d 665, 670 (N.D. 1955). When reviewing challenges to classifications which affect fundamental rights, or important substantive rights, “the challenged law must be shown to ‘significant-ly interfere’ with the right ... before a court need apply heightened scrutiny.” Gange v. Clerk of Burleigh Cty. D. Court, 429 N.W.2d 429, 433 (N.D. 1988); see also Wills v. State, 821 P.2d 866 (Colo. App. 1991) (When a statu-tory classification significantly interferes with the exercise of a fundamental right, the strict scrutiny test is used to evaluate its constitutionality.); Waller v. Edwards, 396 F.Supp. 808 (E.D. La. 1975) (If classification of voters into two groups significantly inter-feres with fundamental right, such classifica-tion must meet compelling state interest test to pass equal protection scrutiny.).
The plaintiffs have not proven a “signifi-cant interference” with their fundamental right to an education. The scope of the plaintiffs’ fundamental right to an education is defined by
In Kadrmas, several parents brought an action to enjoin the collection by a school district of a fee for school bus transportation. The parents asserted under
“In our view transportation is not a neces-sary element of the educational process, and it is not an integral part of the edu-cational system to which the constitution refers in requiring the Legislature to pro-vide ‘a uniform system of free public schools.’ Although transportation may be an important prerequisite to accepting the educational opportunities offered in the public school system it is not part of the system.”
This Court applied the rational basis test and upheld the statute:
“In our view the challenged statute in this case is purely economic legislation which neither involves a suspect classifica-tion nor a fundamental or important sub-stantive right which would require the strict scrutiny or intermediate standard of review.... We conclude that the rational basis test is the appropriate standard of review for the plaintiffs’ equal protection claims in this case. Accordingly, Section 15-34.2-06.1, N.D.C.C., must be upheld un-less it is patently arbitrary and fails to bear a rational relationship to any legiti-mate government purpose.”
Kadrmas at 902. This Court concluded the statute was rationally related to the legiti-mate governmental objective of allocating limited resources, and the statute did not discriminate on the basis of wealth so as to violate federal or state equal protection rights. Kadrmas at 903.
The current financing system satisfies the rational basis test. The system provides a basic education to all of the plaintiffs. The system also fosters local control and involve-ment in education, a legitimate legislative goal.
D
The plaintiffs make a valid public policy argument when criticizing the shortcomings of the 22 mill deduct1 in the state‘s founda-tion aid program. The deduct is not working as it did originally, and it is unfortunate the legislature has not done more to correct the problem. The job, however, is the legisla-ture‘s. Issues of funding necessarily involve the balancing of an infinite number of varia-bles, and involve making value judgments as to which variables deserve more attention. Value judgments associated with allocating scarce resources, in most situations, are properly made by the legislature, with the consent of the people. The judiciary‘s role is limited. The judiciary should not “constitu-tionalize” complex public policy issues unless fundamental or substantive rights are being abridged.
More involved than the truncated version stated by the majority, the stated intent of
The majority, citing to no specific legal principle, creates a new substantive right under the North Dakota Constitution: The right of school districts to receive less dispa-rate per pupil funding than they are current-ly receiving. The majority concludes strict scrutiny does not apply because “legislative determinations about the financing mix for education involve difficult questions of local and statewide taxation, fiscal planning, and
The majority, however, later concludes such determinations are suited for intermedi-ate substantive right scrutiny:
“Although the statutory method for dis-tributing funding for education may not totally deprive any student of access to the fundamental right to education, we believe the method of distributing funding for that fundamental right involves important sub-stantive matters similar to those rights involved in cases in which we have applied the intermediate level of scrutiny.”
The majority does not explain the legal source of the substantive right, or define what level of funding equality is mandated under its requirements. The majority‘s “we know it when we see it” approach tells the legislature to “try again,” without providing the legislature with a blueprint for construct-ing a new system.
Under the majority‘s holding, the legisla-ture could meet its constitutional obligation of providing “equal educational opportunity” by decreasing the amount of funding given to “property rich” school districts, without in-creasing the funding to the “property poor” school districts. The majority‘s opinion leads to this absurd result because of the majori-ty‘s failure to clearly define a child‘s funda-mental right to an education.
The majority‘s opinion is an example of why issues of funding are best left to the discretion of the legislature. Unless the leg-islature is denying a child his or her constitu-tional right to an education or acting in an arbitrary fashion, this Court has no business telling the legislature how to finance edu-cation. The majority‘s holding is not an ap-propriate exercise of judicial power, and is not a proper interpretation of the North Dakota Constitution.
I would uphold the constitutionality of North Dakota‘s school financing system.
VANDE WALLE, Chief Justice, dissent-ing in part.
I agree in part with Justice Sandstrom‘s analysis of the issues and application of the law. Although both the trial court‘s opinion and the majority opinion conclude that a per-pupil-payment equality is not necessary in order that the statutory scheme pass consti-tutional muster, the evidence upon which they rely and their analysis of why the pres-ent scheme is unconstitutional discuss the issues on essentially a per pupil basis. In the same manner, the trial court and the majority opinion acknowledge the legitimacy of the factor of economy of scale, i.e., that the costs for educating students do not rise pro-portionally to the increase in the number of students, but do not apply that factor to the comparison of “rich” and “poor” districts and give no more than lip service to the factor in their reliance on per pupil comparison and per pupil analysis to reach their result. Without more, I cannot conclude that the evidence supports more than a finding of inequity—an inequity which has not yet reached constitutional proportions. A com-parison of the very worst with the very best of 269 school districts cannot be the basis for finding unconstitutional disparity among all districts.
The challenge in this case closely resem-bles the challenge in Skeen v. State, 505 N.W.2d 299 (Minn. 1993), where a majority of the Minnesota Supreme Court concluded the Minnesota scheme for funding education complied with the requirement that the legis-lature establish a general and uniform sys-tem of public schools.1 There are, however, two dramatic factual differences between this case and Skeen. In Skeen, the per-pupil-payment from the State was $2,953 (in-creased to $3,050 for 1992 and subsequent
The second difference and, if the plaintiffs’ argument is not that the Legislature has failed to fund the schools, the more signifi-cant difference, is that in Minnesota the fully equalized State funding rate was near 93% while North Dakota was at 52.8%. Although it is tempting to use this disparity as a reason for rejecting the Minnesota analysis, I agree with Justice Sandstrom that the evi-dence does not indicate a present inability on the part of the plaintiffs to provide an ade-quate education.
Despite my agreement in part with Justice Sandstrom‘s opinion, I write separately to emphasize the most obvious teaching of Jus-tice Neumann‘s opinion, and that of the trial court, i.e., that the present system is fraught with funding inequities which I believe have not yet transgressed the rational-basis stan-dard of review but which appear to me to be on a collision course with even that deferen-tial standard.
As the opinion of Justice Sandstrom con-cludes, the education clause of our Constitu-tion “does not require uniformity in edu-cation funding, only that the state ensure a basic level of education” and, according to Todd v. Board of Education, 54 N.D. 235, 241, 209 N.W. 369, 371 (1926), “this require-ment is satisfied by provision for the creation of school districts and for a uniform system of schools in those districts.” Nevertheless, when the State requires a minimum curricu-lum as it seemingly must to achieve minimal “uniformity,” while at the same time it im-poses a maximum mill levy, [see
Regardless of the precise words used by the Legislature, the enactment of the State School Aid, “foundation program,” is a recog-nition that school districts are, under existing statutes, unable to raise the funds locally to provide an adequate education for the stu-dents in those districts. The “deduct” speci-fied by section