Order Code RS22622
March 13, 2007
School Finance Litigation
Jody Feder
Legislative Attorney
American Law Division
Summary
Over the past several decades, a series of lawsuits have challenged funding
disparities that exist among school districts within the states. Spurred by concerns that
such disparities discriminated against students in poor school districts or resulted in an
inadequate education, school finance plaintiffs began filing lawsuits in federal and state
courts based on theories involving educational equity or adequacy. This report provides
an analysis of litigation regarding school financing, including an overview of the legal
issues involved in such litigation and a description of the leading school finance cases
at both the federal and state level.
In the 1970s, a series of lawsuits began challenging the funding disparities among
school districts within the states.1 Schools in the U.S., which typically receive some
federal and state financial assistance, generally derive a substantial percentage of their
funding from local property taxes, which, at least in the early days of education finance
litigation, generated significantly different levels of funding depending on how much the
property in a given district was worth. Spurred by concerns that such disparities
discriminated against students in poor school districts or resulted in an inadequate
education, school finance plaintiffs began filing lawsuits in federal and state courts based
on theories involving educational equity or adequacy.2
1 For general information on school finance litigation, see the National Conference of State
Legislatures’ National Center on Education Finance [http://www.ncsl.org/programs/educ
/NCSLEducationFinance.htm]; the National Access Network [http://www.schoolfunding
.info/index.php3]; the Education Commission of the States [http://www.ecs.org/ecsmain.asp
?page=/html/issuesK12.asp]; and the Department of Education’s National Center for Education
Statistics [http://nces.ed.gov/edfin/]. See also, EQUITY AND ADEQUACY IN EDUCATION FINANCE:
ISSUES AND PERSPECTIVES (Helen F. Ladd et al. eds. 1999); Michael A. Rebell, Education
Adequacy, Democracy and the Courts (April 25, 2001), [http://www.schoolfunding.info/resource
_center/research/EDUADEQ.PDF].
2 A handful of lawsuits have claimed that state education finance systems violate Title VI of the
Civil Rights Act, which prohibits discrimination on the basis of race, color, or national origin in
programs receiving federal financial assistance. See, e.g., Robinson v. Kansas, 295 F.3d 1183
(10th Cir. 2002); Powell v. Ridge, 189 F.3d 387 (3rd Cir. 1999).

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In the most prominent federal case on school financing, San Antonio Independent
School District v. Rodriguez,3 the Supreme Court rejected a legal challenge to Texas’s
system of public financing for its elementary and secondary schools, holding that the state
finance system did not violate equal protection or interfere with a fundamental right.
Ultimately, the Rodriguez case, which clarified that school funding disparities were not
a federal issue, foreclosed school finance claims based on the U.S. Constitution and
prompted plaintiffs to file lawsuits based on state constitutional claims, thereby
transforming education finance litigation into an issue of state law. This memorandum
discusses the Rodriguez case and the resulting flurry of state education finance litigation,
including the dominant legal theories of equity and adequacy and the leading cases in each
of these areas.
Federal Court and the Rodriguez Case
In Rodriguez, the original plaintiffs in the case challenged the Texas state system of
public financing for elementary and secondary schools, which they claimed to be a
violation of the Equal Protection Clause of the Fourteenth Amendment4 because funding
under the system, which was based on local property taxes, discriminated against students
in less affluent school districts and interfered with the students’ fundamental right to
education. The Supreme Court rejected both of these arguments, holding that the state
finance system did not violate equal protection or interfere with a fundamental right.5
Under the Supreme Court’s equal protection jurisprudence, “the general rule is that
legislation is presumed to be valid and will be sustained if the classification drawn by the
statute is rationally related to a legitimate state interest,”6 although laws that are based on
suspect classifications such as race or gender or that interfere with a fundamental right
typically receive heightened scrutiny and require a stronger, if not compelling, state
interest to justify the classification or infringement. The Rodriguez Court, however,
concluded that the Texas financing system did not discriminate against any definable
category of poor people or result in the absolute deprivation of education and therefore
held that there was no impermissible classification based on wealth and no discrimination
against a suspect class.7 Likewise, the Court found that the Constitution did not explicitly
or implicitly guarantee a right to education and that there was no evidence that the Texas
financing system resulted in an education so inadequate that it interfered with the ability
to exercise other fundamental constitutional rights.8
3 411 U.S. 1 (1973).
4 Section 1 of the Fourteenth Amendment states in relevant part: “No State shall make or enforce
any law which shall abridge the privileges or immunities of citizens of the United States; nor
shall any State deprive any person of life, liberty, or property without due process of law; nor
deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const. amend.
XIV, § 1.
5 San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 18 (1973).
6 City of Cleburne v. Cleburne Living Center, 473 U.S. 432, 440 (1985).
7 Rodriguez, 411 U.S. at 25, 28.
8 Id. at 35-37.

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The Court’s holding that there was no discrimination against a suspect class and no
interference with a fundamental right was important because it determined the degree of
judicial scrutiny that the Texas financing system received. Had the Court found a
violation of equal protection or infringement of a fundamental right, then the Texas
school funding system would have been subject to strict scrutiny and the state would have
been required to offer a compelling state interest as justification for the system. In the
absence of such a finding, however, the Texas financing system was subject to rational
basis review. Under that standard, the Court upheld the state funding system as rationally
related to the legitimate state interest of maintaining local control over matters involving
education and taxation.9
State Courts
As noted above, the Rodriguez case foreclosed school finance claims based on the
federal constitution and prompted plaintiffs to file lawsuits based on state constitutional
claims instead, thereby transforming education finance litigation into an issue of state law.
This section discusses the two major legal theories involved in state education finance
litigation — equity and adequacy — as well as leading cases in these areas.
Equity Cases. Initially, litigants in school finance cases focused on the issue of
equity. Arguing that the funding disparities among school districts were inequitable, the
plaintiffs in these cases contended that such inequities were unconstitutional and should
be remedied by equalizing funding among all school districts. Although the U.S. Supreme
Court had rejected arguments based on the Equal Protection Clause of the U.S.
Constitution, advocates for school financing reform typically based their new legal claims
on equal protection provisions found within the constitutions of individual states. For
example, in Serrano v. Priest, which is the most prominent example of an equity-based
education finance claim, the Supreme Court of California held that the state finance
system for public schools violated the equal protection provisions in the California
constitution because “discrimination in educational opportunity on the basis of district
wealth involves a suspect classification, and ... education is a fundamental interest.”10
Although an equity-based litigation strategy was effective in some of the early cases:
[The] difficulties of actually achieving equal educational opportunity through the
fiscal neutrality principle, as well as political resistance to judicial attempts to enforce
court orders in the initial fiscal equity cases, seem to have dissuaded other state courts
from venturing down this path. Despite an initial flurry of pro-plaintiff decisions in
the mid-1970s, by the mid-1980’s, the pendulum had decisively swung the other way:
plaintiffs won only two decisions in the early ‘80s, and, as of 1988 ... 15 of the State
Supreme Courts had denied any relief to the plaintiffs ... compared to the seven states
in which plaintiffs had prevailed.11
In part, this shift may have occurred because state courts and legislatures experienced
implementation difficulties when attempting to equalize funding among school districts
9 Rodriguez, 411 U.S. at 50-56.
10 557 P.2d 929, 951 (Cal. 1976).
11 Rebell, supra note 1, at 24.

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and because court decisions that required equal resources did not necessarily ensure equal
or adequate educational opportunities.12 As a result of this diminished success with
equity-based claims, plaintiffs in school financing cases began bringing school finance
claims based on adequacy theories instead.
Adequacy Cases. Although state courts continued to analyze education finance
cases in terms of equal protection, the courts gradually began to examine other
considerations, notably arguments regarding educational adequacy. Specifically, rather
than rely on the argument that school funding disparities were a violation of equal
protection, some plaintiffs began arguing that inadequate funding levels resulted in a
violation of state constitutional provisions that guaranteed an adequate education. Most
of these claims were based on provisions found in virtually all state constitutions that
require states to establish a system of free public schools and provide students with a
“thorough,” “efficient,” or “adequate” education.13
For example, in the early case Robinson v. Cahill, the Supreme Court of New Jersey
interpreted a state constitutional provision that required the legislature to provide for “a
thorough and efficient system of free public schools,” and the court concluded that “we
do not doubt than an equal educational opportunity for children was precisely in mind”
and “the obligation is the State’s to rectify.”14 As a result, the court ruled that the New
Jersey school finance system was unconstitutional but left it to the legislature to devise
a solution that would compel localities to provide equal educational opportunities to their
students. In another significant adequacy case, Rose v. Council for Better Education, the
Supreme Court of Kentucky evaluated the claim that the state education financing scheme
was inadequate and therefore a violation of a state constitutional provision that requires
the legislature to “provide for an efficient system of common schools.”15 The court not
only found such a violation, but held that “Kentucky’s entire system of common schools
is unconstitutional”16 because the entire system is “underfunded and inadequate” and
“fraught with inequalities and inequities.”17 The court then held that every child “must be
provided with an equal opportunity to have an adequate education” and set forth
educational standards to define what constitutes an adequate education.18
Currently, state education finance litigation typically involves adequacy-based
claims. As one commentator notes, “Adequacy has become the predominant theme of the
recent wave of state court decisions because the adequacy approach resolves many of the
legal problems that had arisen in the early fiscal equity cases and because it provides the
12 Rebell, supra note 1, at 21-23.
13 Kindle Merrell, Education Commission of the States, Constitutional Language: State
Obligations for Public School Funding (August 2002), [http://www.ecs.org/clearinghouse
/38/62/3862.htm].
14 303 A. 2d 273, 294 (N.J. 1973).
15 790 S.W.2d 186 (Ky. 1989).
16 Id. at 215.
17 Id. at 197.
18 Id. at 211-12. For a discussion of how adequacy litigation is linked to the rise in the standards-
based educational reform movement, see generally Rebell, supra note 1.

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courts judicially manageable standards for implementing effective remedies.”19
Regardless of whether such lawsuits involve equity or adequacy theories, education
finance litigation has thus far been brought in 45 out of 50 states.20
19 Id. at 36.
20 Detailed tracking or analysis of state litigation is beyond the scope of this report. For more
information on such litigation, see the National Access Network’s website at [http://www
.schoolfunding.info/index.php3].

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