By: Brittany Flaherty Theis
Recently, the Illinois Supreme Court upheld the dismissal of a lawsuit that claimed the Illinois education funding system set forth in the School Code violates the equal protection clause of the Illinois Constitution. The plaintiffs alleged the state’s education funding system had the effect of requiring taxpayers in school districts with low property values to pay property taxes to fund public schools at a higher rate than similarly situated taxpayers in school districts with high property values. Plaintiffs further alleged that despite paying a higher property tax rate, students in those “property-poor districts” received a lower operating expenditure per pupil. Defendants, including the State Board of Education, its Superintendent, and the Governor, filed a motion to dismiss the case for lack of standing and subject matter jurisdiction. The lawsuit was dismissed because plaintiffs’ alleged injury (paying higher property taxes than residents of “property-rich” school districts) is not a direct result of the enforcement of the education funding statute or the defendants’ actions in enacting the statute. Although the court ultimately held plaintiffs failed to state an injury caused by the statute and lacked standing, it explained Illinois’ education funding system and the interaction between the statute and local property taxation.
The funding provisions of the School Code are designed to provide at least a certain level of funding per student through a combination of state and local funds. The School Code establishes a formula for determining the level of contribution from the state. The formula considers both the “Average Daily Attendance” and “Available Local Resources” of the school district. The School Code does not require school districts to exert a minimum tax rate in order to qualify for assistance.
The Illinois Supreme Court explained that the “education funding statute is simply that: a funding statute. It is not a taxing statute.” The statute creates a system for local school districts to receive financial aid from the state. Although the statute assumes a certain local property tax rate in calculating the “Available Local Resources,” the school districts are not required to impose that tax rate in order to receive the statutorily determined amount of general state aid. The discretion to determine the actual rate of local property taxes remains with the school districts. For that reason, in part, the Supreme Court ruled plaintiffs did not have standing to bring a claim against the defendants and the dismissal of the complaint was proper.
For information regarding the education funding statute or General State Aid and how it impacts your school district, please feel free to contact Whitt Law Attorney Stuart Whitt.
Carr v. Koch, 2012 IL 113414 (Ill. 2012).
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