well known and need no comment here. What is important to note is that the objection to classification by wealth is in this case aggravated by the fact that the variations in wealth are State created. This is not the simple instance in which a poor man is injured by his lack of funds. Here the poverty is that of a governmental unit that the State itself has defined and commissioned. The heaviest burdens of this system surely fall de facto upon those poor families residing in poor districts who cannot escape to private schools, but this effect only magnifies the odiousness of the explicit discrimination by the law itself against all children living in relatively poor districts.

This does not suggest that by itself discrimination by wealth is necessarily decisive. No court has so held. However, when the wealth classification affects the distribution of public education, the constitutional significance is cumulative.12

It cannot be argued that a quality education endows its recipient with a distinct economic advantage over his less educated brethren. By these standards the inexorable effect of educational financing system such as here maintained puts the State in the position of making the rich richer and the poor poorer. If added to this problem is the problem that the parents of children who live in poor districts have also a lower income than the parents in wealthier districts, then the disparity may be even more severe than that alleged by plaintiffs.

III

A State, of course, could have a powerful and legitimate interest in maintaining the strength of local government by preserving local choice in school spending. If that interest were "compelling"-and sufficiently so and if because of some extremely important State need, it were necessary that only wealthy children be given quality education and that poor children be denied such, then the present financing structure might be justified. (See Shapiro v. Thompson, 394 U.S. 618 (1969).) Whether this interest of the State is constitutionally compelling, however, need not be decided for two reasons. By its own acts, the State has indicated that it is not primarily interested in local choice in school matters. In fact, rather than reposing in each school district the economic power to fix its own level of per-pupil expenditure, the State has so arranged the structure as to guarantee that some districts will spend low (with high taxes) while others will spend high (with low taxes). To promote such an erratic dispersal of privilege and burden on a theory of local control of spending would be quite impossible.13

The second reason for ignoring the question of whether the State's interest is compelling is that, under the constitutional standard here adopted, if the State chooses to emphasize local control, it remains free

"As with the conjunction of poverty and the voting interest in Harper v. Virginia Board of Elections, 383 U.S. 663 (1966), or poverty and the interest in access to appellate review as in Griffin v. Illinois, 351 U.S. 12 (1956). "The Serrano opinion states the idea:

"We need not decide whether such decentralized financial decision-making is a compelling state interest, since under the present financing system, such fiscal freewill is a cruel illusion for the poor school district . Far from being necessary to promote local fiscal choice, the present financing system actually deprives the less wealthy districts of that option . . ." 5 Cal. 3d at 611.

to do so to whatever degree it wishes. In fact, it is the singular virtue of the Serrano principle that the State remains free to pursue all imaginable interests except that of distributing education according to wealth. The State makes the argument that what plaintiffs seek here is uniformity of expenditure for each pupil in Minnesota. Neither this case nor Serrano requires absolute uniformity of school expenditures. On the contrary, the fiscal neutrality principle not only removes discrimination by wealth but also allows free play to local effort and choice and openly permits the State to adopt one of many optional school funding systems which do not violate the equal protection clause.14

IV

The State argues that the issues here posed have been foreclosed by McInnis v. Shapiro, 293 F. Supp. 327 (N.D. Ill. 1968), aff'd sub nom McInnis v. Oglivie, 394 U.S. 322 (1969), and Burress v. Wilkerson, 310 F. Supp. 572 (W.D.Va. 1969) aff'd nom. 397 U.S. 74 (1970). It is true that the present complaint-like the two decisions noted-contained references to a duty of the State to respond to individual “needs” of pupils. It appears that plaintiffs herein have now abandoned this aspect of their claim. In any event such a claim is in fact foreclosed by McInnis and Burress, supra. These two decisions, however, do not speak to the issue here considered-whether there is a right to mere fiscal neutrality. As the Serrano decision makes clear, the Supreme Court left that issue open. See Askew v. Hargrave. 401 U.S. 476 (1971). The reasoning of the California court on this point is completely persuasive and this court adopts it as its own. Serrano v. Priest, supra, at

615-618.

V

Therefore, this court concludes that the allegations of the plaintiff childrens' complaint state a cause of action and that a system of public school financing which makes spending per pupil a function of the school district's wealth violates the equal protection guarantee of the 14th amendment to the Constitution of the United States. In accordance with the foregoing memorandum,

It is ordered that the motions of defendants to dismiss the action are denied.

The court will retain jurisdiction of the case but will defer further action until after the current Minnesota legislative session.

OCTOBER 12, 1971.

MILES W. LORD,
U.S. District Judge.

14 This Court in no way suggests to the Minnesota Legislature that it adopt any one particular financing system. Rather, this memorandum only recognizes a constitutional standard through which the Legislature may direct and measure its efforts. For an explication of some of the numerous school financing systems available which meet the equal protection standard, see Guthrie, Kleindorfer, Levin and Stout, Schools and Inequality (1971); Coons, Clune, and Sugarman Private Wealth and Public Education (1970), and "Education Opportunity: A Workable Constitutional Test for State Financial Structures," 57 Cal. L. Rev. 305 (1969).

U.S. DISTRICT COURT, DISTRICT OF MINNESOTA

THIRD DIVISION

No. 3-71 CIV. 243

Donald VAN DUSARTZ and Audrey Van Dusartz, individually and on behalf of all others similarly situated; et al., plaintiffs

versus

Rolland F. Hatfield, Auditor of the State of Minnesota, et al., Defendants

DISMISSAL

TO: John Mason, Solicitor General, and Douglas Skor, Special Assistant Attorney General, State Capitol, Saint Paul, Minnesota, attorneys for defendants.

WHEREAS:

On October 12, 1971, the court entered a memorandum and order in the above-entitled case denying defendants' motion to dismiss. In the order, the court indicated that jurisdiction would be retained pending the special session of the Minnesota Legislature which at the time was considering proposals for financing of public elementary and secondary education.

On October 30, 1971, chapter 31 of the Minnesota Extra Session Laws was approved. Said statute sets forth new formulae for providing State aid to elementary and secondary education.

Upon consideration of chapter 31, plaintiffs' attorneys have concluded that said statute may well not meet the strict constitutional standard set forth in the court's October 12 memorandum. However, it appears that the scheme set forth in the recent legislation is considerably closer to meeting the constitutional standard of fiscal neutrality than the previous statute which the court analyzed in its October 12 memorandum.

Further, plaintiffs' counsel are seeking an analysis of the effects of the current legislation on easing the disparities between rich and poor school districts. This analysis will not be available for several months, and the effects of the second-year financing scheme will not be known. precisely for some time after that.

By its recent enactment, the legislature indicated that it was moving toward full acceptance of the principle expressed by the Court in its October 12 memorandum and by the California Supreme Court in Serrano v. Priest. The degree of acceptance of this principle in the short amount of time between the filing of these memorandums and the enactment of the legislation makes it appear to these plaintiff's to be particularly prudent to hold further constitutional challenges in abeyance until the Legislature has had a full session in which to consider completely the constitutional principles established by the court in the above-entitled case.

Therefore, please take notice that the above-entitled action is hereby dismissed without prejudice pursuant to rule 41.

ORDER FOR DISMISSAL

The Court being informed that defendants have no objection to the dismissal of the above-entitled case,

It is Ordered that the case be dismissed without prejudice and without costs to either party.

NOVEMBER 29, 1971.

MILES W. LORD,
U.S. District Judge.

RODRIGUEZ v. SAN ANTONIO

Civ. Action 68–175SA (W.D. Tex. 1971)

PER CURIAM

Pursuant to rule 23, Federal Rules of Civil Procedure, plaintiffs ring this action on behalf of Mexican-American schoolchildren and eir parents who live in the Edgewood Independent School District, nd on behalf of all other children throughout Texas who live in hool districts with low property valuations. Jurisdiction of this mater is proper under 28 U.S.C. §§ 1331, 1343. This Court finds merit. 1 plaintiffs' claim that the current method of State financing for ublic elementary and secondary education deprives their class of qual protection of the laws under the 14th amendment to the U.S. Constitution.1

Edgewood and six other school districts lie wholly or partly within he city of San Antonio, Tex. Five additional districts are located within rural Bexar County. All of these districts and their counterparts throughout the State are dependent upon Federal, State, and local sources of financing. Since the Federal Government contributes only about 10 percent of the overall public school expenditures, most revenue is derived from rural sources and from two State programs: the available school fund and the minimum foundation program. In accordance with the Texas constitution, the $296 million in the available school fund for the 1970-71 school year was allocated on a per capita basis determined by the average daily attendance within a district for the prior school year.

Costing in excess of $1 billion for the 1970-71 school year, the minimum foundation program provides grants for the costs of salaries, school maintenance, and transportation. Eighty percent of the cost of this program is financed from general State revenue with the remainder apportioned to the school districts in "the local fund assignment." Tex. Educ. Code Ann. arts. 16.71-16.73 (1969). Although generally measuring the variations in taxpaying ability, the economic index employed by the State to determine each district's share of "the local fund assignment" (Tex. Educ. Code Ann. arts. 16.74–16.78) has come under increasing criticism.2

F. Supp.

1 See Serrano v. Priest, 5 Cal. 3d 584, P. 2d (1971); and Van Dusartz v. Hatfield, (D. Minn. 1971). Serrano convincingly analyzes discussions regarding the suspect nature of classifications based on wealth, and Van Dusartz points out that in this type case "the variations in wealth are state created. This is not the simple instance in which the poor man is injured by his lack of funds. Here the poverty is that of a government unit that the state itself has defined and commissioned."

See "The Challenge and the Chance," Rpt. of the Governor's Comm. on Public School Educ. 58-68 (1968). The accuracy of the Economic Index is the subject of separate litigation in Fort Worth Ind. School Dist. v. J. W. Edgar, (N.D. Tex., Fort Worth Div.).