Rural School Districts and the Fight for Funding Adequacy: The Legal Challenge of

CASFG v. State of Georgia

Author(s): Luke M. Cornelius and Charlotte Bunn Robinson
Source: Journal of Education Finance , SUMMER 2006, Vol. 32, No. 1 (SUMMER 2006), pp.
71-88
Published by: University of Illinois Press

Stable URL: https://www.jstor.org/stable/40704282

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Rural School Districts and the Fight for Funding
Adequacy: The Legal Challenge of CASFG v. State of
Georgia

Luke M. Cornelius and Charlotte Bunn Robinson

On June 23, 2005, oral arguments were heard in the Fulton County Superior Court
in the first round of Georgia's current school finance litigation, CASFG v. State of
Georgia.1 The hearing was on the state's motion to dismiss the action by a coali-
tion of rural school districts, parents, and students. Four months later Senior
Judge Elizabeth Long issued her preliminary ruling, allowing the Consortium for
Adequate School Funding (CASFG) to proceed with its claims on the constitu-
tional adequacy of Georgia's Quality Basic Education (QBE) finance plan while
dismissing the consortium's complaint regarding equity.2 Both parties await fur-
ther procedural appeals before the Georgia Supreme Court, and this article
reviews the claims regarding the current state of funding in Georgia's schools and
recent related developments.
In many ways the current litigation in Georgia mirrors that of a decade ago
in the neighboring state of Tennessee. In Tennessee Small School Systems v.
McWherter, a coalition of low-property wealth rural systems successfully sued the
state, alleging that the reliance of the funding system on local wealth deprived stu-
dents of both equal protection and an adequate education as required by the state
constitution.3 Although the Georgia plaintiffs appear to have much in common

Luke M. Cornelius is an assistant professor in the Department of Educational Leadership and Profes-
sional Studies at the University of West Georgia. Charlotte Bunn Robinson is an education program man-
ager in the Georgia Department of Education.
The views expressed in this article are entirely those of the authors and do not represent the views of
the Georgia Department of Education or any other Georgia state agency.
Postscript: On January 5, 2006, the Georgia Supreme Court rejected the defendants' appeal of the trial
court ruling. This action clears the way for a trial in Fulton County Superior Court on the merits of
CASFG's complaint.

1. M. McDonald, "Rural Schools Sue for Bigger Share," Atlanta Journal-Constitution, June 24, 2005, lD.
2. CASFG v. State, Civil Action No. 204CV91004 (Fulton Super. Ct. October 24, 2005).
3. Tennessee Small School Systems v. McWherter, 851 S.W.2d 13 (Tenn. 1993).

JOURNAL OF EDUCATION FINANCE | 32*.l SUMMER 2OO6 7I-88 Jl

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72 JOURNAL OF EDUCATION FINANCE

with the rural litigants in McWherter, there are notable dif

significant of these differences may be found in the det
and Georgia's history of education finance litigation.

MCDANIEL V. THOMAS AND THE ADEQUATE PROGRAM FOR

EDUCATION IN GEORGIA

Whereas some states, including Texas, California, a

extensive traditions of school finance litigation,
may be summed up in a single precedent: McDani
typical second-wave litigation relying on the Geo
tection clause to seek greater equity in school funding
time was known as the Adequate Program for Edu
system funded 13 separate categorical needs. Becau
local effort to qualify for funding, it was characteriz
However, participation in APEG required not only
tion of specific program expenditures. Equalized st
when school districts could establish actual expen
categories; they could not qualify for funding base
Although APEG was characterized as a foundation
local funding for all districts that made the requ
Supreme Court concluded that by the late 1970s A
flat grant because the state was providing 90% of
problem cited by the McDaniel plaintiffs was not in t
ability of local school districts to supplement the A
gram to equalize these supplemental appropriation
able to raise substantially more money than their typ
terparts. By 1977-78 this situation had resulted in sub
The trial court rejected the plaintiffs' claims re
APEG program. The Georgia Supreme Court up
appeal by noting both the substantial outlays of th
program and the absence of any evidence that any
deprived of basic educational opportunities.9 Ther

4. McDaniel v. Thomas, 248 Ga. 632, 285 S.E.2d 156 (Ga. 1981).
5. Georgia Constitution of 1976, art. VIII, §8, fi.
6. McDaniel, 634-636.
7. Ibid., 636.
8. Ibid., 637.
9. Ibid., 644.

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 Rural School Districts and Funding Adequacy 73

Court adopted the approach of many states, such as Arizona, that educational
adequacy is largely a matter of meeting a legislatively determined minimum stan-
dard.10 On the question of equity, the Georgia Supreme Court in McDaniel
reversed the trial court and held that the state had a rational interest in preserv-
ing local control, thus allowing some districts to provide additional educational
opportunities beyond the minimum guaranteed by APEC11 In so doing, the
Georgia Supreme Court endorsed the reasoning of the U.S. Supreme Court in San
Antonio School District v. Rodriguez that Georgia's school funding system was not
an appropriate subject for the type of strict scrutiny analysis that might require
the imposition of greater equity in funding beyond APEG.12 Instead the court
determined that local control by school boards, as also constitutionally required,
was rationally met by permitting individual districts to control their supplemen-
tal funding beyond the APEG minimums.
McDaniel left an essential legacy with which to frame the current constitutional
challenge. McDaniel effectively bars the application of equal protection strategies
to future school funding cases, essentially mooting all equity challenges as long
as each child is receiving the legislatively defined minimum educational program.
This controlling aspect of McDaniel was acknowledged in the trial court's recent
rejection of all equal protection claims in the current CASFG litigation.13 How-
ever, while closing the door to future equity claims, McDaniel implicitly opened
the door to future claims on the basis of adequacy. In dismissing the McDaniel
adequacy claim the court noted that its ruling was not that the plaintiffs had failed
to state a cognizable constitutional claim but rather that they had simply failed
to present any evidence that APEG had failed to provide any students with an ade-
quate education. Finally, although McDaniel upheld APEG as meeting the rule of
law, the state supreme court did not give the plan a ringing endorsement. "Our
holding that the current system of financing public education in Georgia is not
unconstitutional should not be construed as an endorsement by this court of the
status quo."14 The court then affirmed that the system did indeed produce seri-
ous disparities in educational opportunities and encouraged the General Assem-
bly to address this concern. Although this final material was essentially dicta, it
cannot be deemed to be a mere coincidence that only four years after the ruling
in McDaniel APEG was replaced with the QBE program at bar in the present
CASFG litigation.

10. For example, see Shofstall v. Hollins, 110 Ariz. 88, 515 P.2<d 590 (Ariz. 1973).
11. McDaniel, 648.
12. Ibid., 647, citing San Antonio v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973).
13. CASFG v. State, 10-12.
14. McDaniel 648.

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74 JOURNAL OF EDUCATION FINANCE

Georgia's qbe program

In 1985 the Georgia General Assembly replaced APEG with a new funding
gram, QBE.15 Perhaps acknowledging the disparities noted by the Ge
Supreme Court in McDaniel and the growing importance of local supplem
funding of public education, QBE was designed to equalize basic program
ing and provide some equalization of supplemental funding as well. QBE a
replaced the categorical funding system of APEG with a foundation formul
addressed specific classifications of public school students and their educat
programs based on grade levels and abilities.16 QBE is a two-part funding
gram, with a foundation plan similar to APEG to fund a minimum basic le
education and a guaranteed tax base equalization formula that is applied to
trict supplementary appropriations. In both formulas the local base for th
gram is an ad valorem tax generally levied on 40% of the assessed value of
taxable wealth.17

The core of QBE is a foundation formula designed to deliver a guaranteed

imum program of education to every student in the state. Each year the Ge
Assembly designates a set minimum amount of funding per full-time equi
(FTE), which in fiscal year 2005-06 was set at $2,36i.5i.18 FTEs are then calc
for each of 19 funded program categories by counting program segments based
an idealized six-period school day. Six segments of enrollment in any progr
the equivalent of one FTE in that program. Programs are also assigned weights t
attempt to approximate both specific program costs and desired teacher-
ratios for each program. These range from a 1.000 weight and a 1:23 teacher
ratio for basic high school to 5.7294 and 1:3 for certain classifications of di
students.19 The FTE count for each program is then multiplied by the base
gram cost and by the program weight to reach a weighted program cost for
program at each school in a district. These amounts are then totaled for a
and district base program cost. This final calculation determines the min
funding to be made available to each school and district. To achieve this am
each school district is required to provide a local fair share by imposing a
valorem tax of five mills on the 40% assessment of local property for schoo

15. O.C.G.A. 20-2-131 et seq.

16. R. Rubenstein and D. Sjoquist, Financing Georgias Schools: A Primer, FRC Report No. 87 (At
Fiscal Research Program, Young School of Policy Studies, Georgia State University, 2003).
17. In Georgia ad valorem taxes for different local activities, including schools, cities, counties, and
cial tax districts, are assessed to different portions of the assessment. Additionally, although 40%
dard for schools, it is not universal, and local exceptions ranging from 47% to 100% do exist. The f
for millage adjusts to apply limits as if these local systems were applying their millage to the 40%
ment.

18. C. Sielke, Georgia School Finance 2004 (unpublished paper, 2004 State of the States and Provi
AERA Special Interest Group on Fiscal Issues).
19. 0.C.G.A. 20-2-161.

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 Rural School Districts and Funding Adequacy 75

poses, with the state making up the difference. This foundation formula may be
most simply stated as

State base QBE aid - Total weighted base program cost -

(5 mills x 40% of local assessed property value).

This money is then allocated on a program basis for local districts to fund each
of the 19 enumerated programs. Under the QBE Act, the majority of the money
is designated for direct instruction, principally teacher salaries, with smaller
shares allocated to indirect programs (e.g., counselors, administration), facility
maintenance and operations, staff development, and media. It should be noted
that since 2002 the amounts designated for some activities, including media mate-
rials and facility maintenance and operations, have actually declined in an effort
to increase funding for instruction while avoiding larger increases in the overall
base cost.20 There is also a separate formula to allocate additional money for
teacher salaries based on the training and experience levels of staff.
Although the QBE foundation formula is clearly equitable in terms of per-FTE
funding, which is identical statewide, it still invites some criticism. The program
weights generally are applied to specific grade-level groups or special programs,
such as English as a second language and vocational lab, without regard for what
the actual local program costs may be. Obviously in a program such as vocational
training these local differences could vary greatly by vocation. Another example
is special education. Special education programs are divided into five different
weighted programs. However, these weights are assigned largely on the basis of a
student's placement for a segment, such as resource or inclusion, with little regard
for the actual disability or cost of specific services. Additionally, the emphasis on
aligning program weights with ideal class sizes creates a classic economy of scale
in which larger and more diverse districts can more easily maximize the formula's
recommended class sizes, which smaller districts, such as those represented by
CASFG, may not be able to duplicate. This problem is most obvious in programs
such as gifted and special education, where in some smaller rural schools it may
be possible to identify only a few students eligible for a specific program within
appropriate age and grade levels.
Additionally, the QBE foundation formula, like all weight-based schemes linked
to actual enrollments, is open to criticism for overidentification. Clearly the empha-
sis on higher funding weights for special programs creates an incentive, especially
at higher grade levels, to identify as many student segments as possible in programs
other than the standard regular education program. Furthermore, the emphasis on
ideal staff-student ratios fails to reflect school realities. The need to divert staff to

lower-funded or unfunded areas such as physical education and special education

20. Sielke, Georgia School Finance, 3.

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y6 JOURNAL OF EDUCATION FINANCE

render the ideal class sizes irrelevant, although mandates on maximum class
the core curriculum are enforced. Likewise, a strict mathematical applicatio
counselor, social worker, and school psychologist to pupil ratios could
the sharing of a single staff member by three or more schools, especial
enrollment districts.

Despite these flaws, the QBE foundation formula, as APEG did before
vides an equitable distribution of basic educational funding in which low
districts receive proportionately more state aid per weighted FTE than d
wealth districts. Therefore, the real advantage of QBE over APEG is in
of supplemental appropriations. Desiring to retain the local control d
important in McDaniel, the legislature designed QBE to allow local distr
all additional taxation beyond the 5 mills required for the operation of
dation plan, to a maximum of 20 mills.21 This discretionary millage of
mills is left to the local school board's discretion and is not restricted t
programs or cost categories. Therefore, these funds may be used to inc
salaries, provide additional opportunities, or make up for inadequacies
foundation funding. Unlike APEG, QBE provides equalization for thes
mental funds through a guaranteed tax base (GTB) formula designed
mize differences in local property wealth.22 Unlike the classic GTB formula
seeks to provide district power equalization to the wealthiest district,
plan equalizes this amount to only the wealth of the district representing t
percentile of local property wealth per FTE.
Under this part of QBE, a school district is rewarded for its additiona
effort by equalization funds so that, essentially, it has the same fiscal c
the school district at the 75th percentile, provided the receiving distric
this level in wealth per FTE. The formula for this phase of QBE is simp

State aid per weighted FTE = (Wealth/FTE of 75th percentile district x L

supplemental millage rate) - (Wealth/FTE local district x Local millage

Note that under Georgia's QBE Act there is no recapture provision.

above the 75th percentile in local property wealth receive no additional
However, these districts are allowed to retain all supplemental revenue
means that potentially a quarter of Georgia's school districts have the
raise more revenue than is possible for the remainder, even with the G
ization. Similarly, these districts can also use additional property wealth
overall millage while matching the per- FTE spending levels of poorer d

21. Three metro Atlanta districts, including City of Atlanta Public Schools, have been allow
this 20-mill cap temporarily because of excessive outstanding bonded debt.
22. Rubenstein and Sjoquist, Financing, 18. Originally QBE equalized only the first 3.25 m
plemental tax, but these were equalized to the 90th percentile of local property wealth.

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 Rural School Districts and Funding Adequacy 77

The QBE formula, though far from providing perfect equity, solves many of the
problems cited by the court in McDaniel. The basic program not only is fully
funded on the basis of complete equity per FTE but represents in its funding
weights a better attempt to fund specific educational programs in line with actual
costs and class sizes. The GTB portion of the formula equalizes district revenue
capacity while retaining local autonomy over actual supplemental tax rates and
spending decisions. Therefore, the question of the adequacy of the QBE formula
is less a question of the theoretical soundness of the formula than of its applica-
tion. As has already been noted, the foundation formula creates an inherent econ-
omy of scale that benefits larger districts. Additionally, as CASFG has cited in its
complaint and press materials, the funding of the base QBE amount has not
increased substantially in recent years.23 Another problem, which can be demon-
strated by the restricted group of school plaintiff districts named by CASFG, is that
much of the discrepancy in funding between school districts can be attributed to
the GTB aspect of the formula. Not only does this part of the formula allow some
high-wealth school districts certain advantages, but it also rewards only the school
districts willing to make the local tax effort necessary to maximize their GTB earn-
ings. It is therefore possible for children in some low- wealth school districts to be
denied certain educational opportunities if their community as a whole decides to
place a higher value on lower property taxes than educational adequacy.

CASFG V. STATE OF GEORGIA

CASFG represents a diverse class of plaintiffs, including

lic school students and their parents. Overall, CASFG's m
of Georgia's 180 public school districts. The overall cha
bership school districts is that they are predominantly
tricts and located outside the metropolitan Atlanta area.2
in addition to CASFG, are five rural county school distri
ners of the state, specifically Ben Hill, Brantley, Elbert,
representative students and parents from each of these
plaint in CASFG v. State of Georgia proposed two theori
and equal protection.25 The latter argument, because it
McDaniel, was worded in such a way that it is essentially
quacy issue. In essence, the argument is that equal prote

23. CASFG Press Release, "Consortium Files Lawsuit for Adequate Sch
2004; on file at casfe.org).
24. The CASFG membership includes three small, rural independent cit
25. CASFG v. State, Plaintiffs' Complaint, 56-58.

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78 JOURNAL OF EDUCATION FINANCE

children in some school districts do not receive an adequate education

plaintiffs define under their adequacy claim.
The named defendants are an unusual choice given the nature of the
versy. Although the State of Georgia is named as the lead defendant, which
prove adequate, the remaining defendants were the elected state super
of schools and the appointed members of the state board of education.
unusual here is that neither the state superintendent nor the board has any
control or statutory input over QBE and the other funding programs i
The plaintiff's legal theory appears to be that the board and the super
are responsible for carrying out the educational programs and that the
a statutory responsibility to prepare an estimate for the governor and
Assembly of the cost of funding education.26 In its motion to dismiss,
dants made specific note that QBE, its funding mechanisms, and its spe
cations are enacted by the General Assembly and signed into law by the gov
without any direct role played by either the state superintendent or
board.27 This unorthodox decision to sue the state superintendent and b
reflect the political realties of the plaintiff districts. Both the governor an
islature, seemingly the more appropriate named defendants, reflect the rec
to Republican control in Georgia, a shift based primarily on rural constitue
In claiming that the current funding program under QBE is inadeq
plaintiffs raise a number of specific challenges. The first is an argumen
QBE program does not realistically address the actual costs of providin
education and that it significantly underfunds those costs.29 The plain
that the current formula does not provide enough funding in the basic
to purchase a single high school text per year in its categorical allocation. T
tiffs go on to argue that this minimum funding scheme fails to allocat
paraprofessional aides, counselors, and school psychologists on a basis th
sents actual needs. This is especially evident in school districts with lar
populations that are underfunded as a result of reliance on simple allocation
on a base FTE count. The plaintiffs detail a large number of areas in wh
ing is inadequate for mandated programs or forces school districts to trans
from other important programs to meet state mandates. Examples in
failure of QBE, in calculating instructional costs, to factor in Federal I
Contributions Act deductions and to not account for the high school
allocations, which assume teaching a full six-period schedule even tho

26. Ibid., 7-10.

27. CASFG v. State, Brief in Support of Defendant's Motion to Dismiss Plaintiffs' Complain
28. The state superintendent is also a Republican but comes from a suburban county outs
29. (JAötU v. otate, Haintirts Complaint, 17-26.

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 Rural School Districts and Funding Adequacy 79

regulations require high schools to allocate one period for each teacher for plan-
ning activities.30 The plaintiffs then argue that the low tax base of the plaintiff
school districts places them at a disadvantage for raising the revenue needed to
fund programs and that they lack the sales base to take advantage of the
Education-Special Purpose Local Option Sales Tax for capital needs. Finally, the
plaintiffs conclude by noting that their studies, as well as numerous state panels and
commissions over the previous decade, have concluded that the QBE formula, even
if reasonable in its distribution formula, lacks adequate funding. CASFG estimates
that, based on the state's own formula and increases in costs and enrollments,
in fiscal year 2002 the QBE formula was underfunded by $1.2 billion. In summary,
CASFG argues that the QBE formula does not accurately or realistically fund
needed and required programs in school districts, especially the plaintiff districts,
and that the formula itself, even with its flaws, is severely underfunded.31
The plaintiffs then turn to specific evidence of educational inadequacy in the
plaintiff districts and statewide. These arguments are subdivided into two sepa-
rate sections, one dealing with the inadequacy of personnel and instructional
resources and the second dealing with educational achievement and outcomes.
As in the recent Campaign for Fiscal Equity (CFE) litigation, the plaintiffs seek
to define adequacy in terms of both inputs and outcomes.32 They note that state
expenditures per FTE in the plaintiff districts are lower than the state average and
the rates in wealthy districts.33 There is then a lengthy discussion of specific
deficits in the affected school districts, such as the lack of classroom supplies, qual-
ified teachers in critical areas, textbooks, social workers, and teachers' manuals.34
Most of these complaints are presented as general deficits and are neither partic-
ularized to a specific district nor enumerated. Presumably the plaintiffs intend to
substantiate these deficits through testimony in a trial proceeding. Even the short-
ages that are specified appear to be anecdotal and lacking in context with regard
to the state as a whole. For example, the plaintiffs note that Murray County has
one Spanish language translator for five elementary schools and one middle
school.35 But they do not discuss the circumstances in the other plaintiff districts
or in the state as a whole, instead allowing the limited number of bilingual staff
in that district to speak for itself.

30. Ibid., 20-21.

31. Ibid., 26-32. Plaintiffs include a long section on the history of efforts to assess and reform QBE ini-
tiated by several governors and the General Assembly, all of which conclude that the base formula has
never been fully funded to achieve its goals.
32. Campaign for Fiscal Equity, Inc. v. State, 100 N.Y.2d 893 (N.Y. 2003).
33. Ibid., 33.
34. Ibid., 32-45.
35. Ibid., 42-43.

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80 JOURNAL OF EDUCATION FINANCE

"The plaintiffs' argument with regard to instructional materials, tex

technology, and even school buses, is that QBE is both underfunde
formula fails to make adequate allowance for these expenditures. The r
plaintiff school districts must overly supplement these expenditu
funds or do without, for example by using out-of-date texts, forc
pay for classroom materials, and even maintaining school buses b
mended time limits found in state regulations."36 However, no arg
sented that the plaintiff school districts are unique in these
presumably textbook allowances and costs are the same statewid
only that the failure of the basic QBE program to fund these nee
constitutional definition of adequacy.
With regard to the faculty and other personnel issues, the plaint
make two arguments.37 First, they argue that the minimal fundin
QBE makes it difficult for poorer, more remote school districts to att
quality staff needed to maintain the required programs of instruction
that this shortage is especially acute in critical areas for at-risk st
bilingual education, special education, vocational training, and co
social work professions. As with materials, the CASFG plaintiffs argue
funding of the formula, unrealistic funding amounts, and budget
years all aggravate the staffing problems in the plaintiff school distr
tion, the plaintiffs argue that given the high dropout rates and other
cators in their districts, even if adequate personnel as indicated u
present, they would still be insufficient to provide an adequate ed
dents in these districts. This second argument stresses not only th
ent is inadequately funded but also that it would still fail to prov
education to high-need students even if fully funded.
Although the plaintiffs' approach to the arguments regarding the in
educational inputs is decidedly anecdotal and general in nature, t
regarding the adequacy of outcomes in much more specific. The pla
four main outcomes to assess the adequacy of the education curren
vided under QBE: the Georgia Criterion-Referenced Competency T
the Georgia High School Graduation Test (GHSGT), the SAT, and
dropout rates.39 Here the plaintiffs seek to demonstrate that students
tiff districts have significantly lower achievement than the state aver
ple, CRCT scores in the plaintiff districts tend to be below the state a

36. Ibid., 38, referring to Ga. Comp. R. & Regs. R. 160-5-3-11.

37. Ibid., 17-22.
38. Given in reading, math, and language arts in grades 1-8 and in science and social
3-8.
39. CASFG v. State, Plaintiffs' Complaint, 45-54-

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 Rural School Districts and Funding Adequacy 81

subjects, and this achievement gap widens as students advance in grade level.40
Likewise, measures such as first-time passing rates on the GHSGT show lower
achievement in the plaintiff districts, as do SAT scores.41 Similarly, students and
graduates in the plaintiff districts were shown to have fewer opportunities for
advanced placement courses, and those who did go on to postsecondary studies
needed more remedial learning support than the average Georgia student.
Perhaps CASFG's strongest outcome-based argument concerns high school
completion and dropout rates.42 Plaintiffs point out that Georgia has the highest
dropout rate in the nation, with only 63% statewide graduating, and far fewer in
the plaintiff districts. Also, as noted by the plaintiffs, scores such as the SAT and
GHSGT represent only the achievement of pupils attempting to finish high
school, and the dropout rate is indicative of an overall failure of education. The
plaintiffs' complaint includes many references to noncompletion and dropout
rates as evidence of the inadequacy of QBE, the need for better funding of alter-
native programs, and the need for more and better-trained student support staff.
Also, high school completion offers the plaintiffs perhaps the strongest evidence
for their argument under McDaniel that the defendants have failed to provide for
"an adequate education that is beyond a Minimum' education."43 The McDaniel
decision includes the phrase "in the absence of evidence to show that existing state
funding for public education deprives students in any particular school district
of basic educational opportunities." Plaintiffs have cited this language as creating
an implied right to educational adequacy where such deprivation can be sub-
stantiated. Although the court could not adjudicate adequacy based on the evi-
dence presented in McDaniel it did not preclude such evidence from being
presented at another time.44 Under the plaintiffs' reasoning this passage estab-
lishes the justiciability of their claims. Unlike in McDaniel the CASFG plaintiffs
present evidence, especially the failure of students to complete high school, to
prove the state's failure to provide an adequate education "designed to produce
individuals who can function in society," as required in McDaniel45 Therefore,
noncompletion, far more than the SAT, CRCT, or even GHSGT, is seen as a pow-
erful indicator of a failure to meet the minimum definitions of adequacy laid
down two decades ago in McDaniel46

40. Ibid., 47-48.

41. Ibid., 49-52.
42. Ibid., 48-49.
43. McDantely 644.
44. Ibid.
45. Ibid.
46. Graduation rates in the plaintirr counties range rrom a high or 59% to a low or 45% in Murray
County. At trial, counsel for the defendants averred that a dropout rate of more than 50%, as in Murray
County, could be deemed adequate if the legislature so determined.

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82 JOURNAL OF EDUCATION FINANCE

STATE RESPONSE AND PRELIMINARY RULING

The state of Georgia's initial response to the CASFG

missal of the claims on a variety of legal and constitu
answer the substance of the complaint. The state chall
standing, sovereign immunity, separation of powers,
on which relief can be granted.47 In the recent ruling on
miss, the court dismissed the defendants' arguments r
ereign immunity with little discussion. Given the broad s
it would have been difficult to have excluded all of th
was well established, even school districts, as arms of the
prohibited from seeking enforcement of constitutio
tives.48 Likewise, the defense of sovereign immunity
obvious financial implications of this litigation, the
declaratory and injunctive relief only, rather than a
Although the state has appealed this ruling, these dete
to be altered by the Georgia Supreme Court.
The two issues of greater significance to the defense
ration of powers and failure to state a claim. The trial
with the state's claim that separation of powers should
interfering with what are essentially legislative issues,
public money and the determination of standards of
Relying on McDaniel, which indicated that the initial
was essentially a legislative matter, the state argued t
beyond the purview of the courts. "The question of h
best be funded is nonjusticiable and is more suitably h
of government."50 Noting that the plaintiffs' claims ar
the interpretation of which is the province of the judicia
assertion. However, it should be expected that the de
argue this aspect of McDaniel not only to appeal the se
sion but also to attack the justiciability of the adequacy
With regard to the defense arguments regarding C
claim, the trial court issued a split ruling. It agreed w
McDaniel effectively barred any equity challenges to th
protection clause.51 Given that the QBE formula, whateve

47- CASFG v. State, 2-4.

48. Stewart v. Davison, 218 Ga. 760 (Ga. 1963).
49. CASFG v. State, Brief in Support of Defendant s Motion to Dism
50. McDaniel, 285.
51. CASFG v. State, 10-12.

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 Rural School Districts and Funding Adequacy 83

equitable than the previously upheld APEG system, this outcome is hardly sur-
prising. The real question in CASFG v. State is how accountable the state is under
the current education clause, which states, "The provision of an adequate public
education for the citizens shall be a primary obligation of the State of Georgia."52
The plaintiffs argued that this provision, almost identical to that in the 1976 con-
stitution in force during McDaniel, creates an obligation that can be enforced
through litigation. The defendants, also relying on McDaniel, argue that this pro-
vision is nonjusticiable and is also contradicted by constitutional provisions that
place the primary responsibility for operating and funding public schools on the
local districts.53 Essentially the state makes three main arguments regarding the
adequacy complaint. First, as already noted, they argue that under McDaniel
defining a constitutionally adequate education is a legislative rather than judicial
prerogative. Second, they argue that the Georgia Constitution vests both author-
ity and responsibility for educational funding in local school boards, not the state,
as argued by CASFG, and that under this analysis QBE cannot be deemed inad-
equate because it is a voluntary state allocation, not one that is constitutionally
mandated. Finally, whatever burden the education clause imposes on the state
was satisfied when the state enacted these constitutional provisions to empower
local boards and grant them ad valorem tax authority.54
The trial court has rejected the defendants' arguments with regard to justicia-
bility and has instead accepted the contention that McDaniel provides a clear
mandate for the judicial review of claims supported by evidence that children are
denied an adequate education. Although this ruling is currently under appeal, as
it stands the trial court appears willing to allow the plaintiffs to proceed with their
constitutional adequacy claim alone for a trial on the merits of the complaint.
Somewhat curiously, given the extent of the state's arguments, the court did not
address at all the question of the inclusion of the named defendants.

ANALYSIS

Barring a complete dismissal of the remaining adequacy

reversal regarding standing or separation of powers, it appe
plaintiffs will get their day in court. Several strong argumen
this litigation. Perhaps foremost of these, provided the
agrees with the trial court, is the education clause itself. Ge

52. Georgia Constitution, art. VIII, §1, f 1.

53. Georgia Constitution, art. Vili, $5, 5 1, empowers county boards ot e
tain public schools; art. VIII, §5, ?2, vests management and control of sc
§6, 5i> provides for local taxation to support these schools.
54. CASFG v. State, Brief in Support of Defendant s Motion to Dismiss

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 84 JOURNAL OF EDUCATION FINANCE

in Thro's Category IV, which "are those states that exhibit clauses that prov
education as a fundamental right."55 If the Georgia educational progr
regard to either the plaintiff districts or overall, is found to be inadequate u
clause, this will affirm the clear contention of the plaintiffs that the state h
obligation to ensure the adequacy of each child's education. This conclus
powerfully contradict the state's arguments that this responsibility has
stitutionally transferred to local boards. Such a ruling would also defeat
claims that the plaintiff school districts are partially to blame for any inad
because they have failed to avail themselves of the full discretionary m
mitted under QBE. Such a holding would then leave the state open to th
tiary discussion as to the adequacy of education in the plaintiff counties.
Evidence gathered from the Georgia Department of Education's own
many of which are relied on by CASFG, appears to strongly support t
tiff's arguments. Although the numerous allegations regarding teacher
staff, programs, materials, and facilities have yet to be substantiated, Depa
of Education data tend to support at least some of the plaintiffs' asserti
is a disparity between starting salaries in rural and urban systems, alt
higher cost of living in areas such as Atlanta may negate these extra i
Many small systems can pay only the state base, with a starting salary
(State of Georgia 2003-04 Base Salary Schedule),56 whereas systems in t
Atlanta area can offer starting salaries such as $34,730 in Gwinnett Cou
$32,248 in Fayette County.58 Likewise, there is little debate that Georgia ha
in recent years in last place with regard to outcome statistics such as dropo
and SAT scores. Furthermore, the state and its leaders have actually
highlight these deficiencies, especially with measures such as the SAT that,
be easily argued, are not reliable determinants of educational adequacy.
it would take little to dispute that the SAT, a test taken voluntarily and
college-bound high school students, with widely varying participatio
between Georgia and neighboring states, is a poor indicator of overall e
quality, these arguments are subverted by statements by the governor
leaders referring to the SAT as the "gold standard for measuring edu
achievement."59 Indeed, the current governor has made raising SAT scores

55. R. C. Wood and D. Thompson, Educational Finance Law: Constitutional Challenges to Sta
(Dayton, OH: Education Law Association, 1996): 96.
56. 2003-2004 State Base Salary Schedule, Georgia Department of Education, 2004 (
.k12.ga.us).
57. 2003-2004 Teacher Salary Schedule, Gwinnett County School System, 2004 (www.g
.ga.us).
58. 2003-2004 Teacher Salary Schedule, Fayette County School System, 2004 (www.fcboe.org).
59. J. Salzer, Opponents Fault Perdue for State s Low SAT Scores, Atlanta Journal-Constitution, Sep-
tember 10, 2005, lB.

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 Rural School Districts and Funding Adequacy 85

mary focus of educational policy in Georgia, thus lending support to a statistical

claim by CASFG that might otherwise be irrelevant. Nor can it be denied that
educational spending in recent years has been cut in numerous areas and that the
overall funding of QBE has risen at an incredibly slow pace.
By placing Georgia at the bottom of the nation in educational measures and
by placing the plaintiff school districts below the state level, the plaintiffs stand
to potentially demonstrate two levels of inadequacy. The present litigation may
show not only that students in the plaintiff districts are not receiving an adequate
education but also that the state educational system as a whole is inadequate,
something beyond recent decisions such as the CFEv. State decision in New York.
Additionally, these assertions of inadequacy are largely unrebutted because the
state's strategy has focused on procedural and legal defenses and has yet to pro-
vide any specific reply to the plaintiffs' substantive assertions.
However, these factors alone may be insufficient to establish the inadequacy of
the state QBE program overall or even in the plaintiff districts. In one of their
reply briefs the defendants point out that by turning the plaintiffs' own GHSGT
tables around, an argument can be made that passage rates in these counties are
more than adequate.60 For example, in three of the plaintiff counties, first-time
pass rates on the English section of the GHSGT were 92%, whereas in the lowest-
performing plaintiff system, Ben Hill, the pass rate was 85%.61 The plaintiffs' sta-
tistical claims of inadequacy may also prove to be less than conclusive. Although
the cited measures of educational achievement (the CRCT, GHSGT, and SAT) are
themselves criteria-referenced measures, the statistics used in the complaint are
normed to the state average. Unmentioned in the complaint is the simple math-
ematical rule that at any given time half of the state's students, schools, and dis-
tricts will perform below the statewide average on these measures.
Likewise, even the horrific dropout rates cited in the initial complaint may lack
both legal and statistical context. Under the definitions provided, these statistics
in Georgia are compiled as a comparison of pupils entering the 9th grade with
those who graduate four years later.62 However, these statistics leave out students
who complete high school in other locations or programs. Also, they fail to
account for the highly transitory nature of families in many Georgia districts,
especially those with a very high number of migratory foreign workers, which is
a particularly important factor in the high dropout rates of Hispanic students in
many school districts. Also, there remains the burden on the plaintiffs to estab-
lish the significance of the dropout rate to meeting the McDaniel standard of a

60. CASFG v. State, The State of Georgia Defendants' Reply to the Plaintiffs' Brief in Opposition to the
Dismissal of Their Complaint, 17-18.
61. Ibid.
62. CASFG v. State, Plaintiffs' Complaint, 48.

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86 JOURNAL OF EDUCATION FINANCE

minimally adequate education because that ruling did not enumer

completion as an explicit requirement for establishing an adequa
Beyond the evidentiary hurdles, the defendants have raised two pot
legal policy concerns. The first is the question of whether the cou
an adequate remedy if the QBE program is found to be inadequate
its motion to dismiss, the state provided a lengthy and pointed ap
"School Funding Decisions Elsewhere, Including the Most Remark
tures of the State of Alabama."63 This appendix is a thinly veiled a
suade the court of the difficulty, or impossibility, of courts adjudicat
school funding. Aside from the arguments of legislative and executive
and the separation of powers, this document also purports to show, de
ous plaintiff victories in other states, the practical difficulties of
implementing a satisfactory program to address inadequate educa
in these other states. In so doing the defendants challenge the just
plaintiffs' adequacy claims not merely on the basis of the court's auth
dicate these claims but also on the court's ability to do so.
And this argument, though perhaps less than ingratiating to the
without merit. Even if the Georgia Supreme Court upholds the au
state courts to evaluate the constitutional adequacy of QBE and t
funding programs, it remains to be seen whether Georgia courts h
cal ability or the constitutional authority to provide adequate rem
in Judge Long's ruling on the state's motion to dismiss, the cou
motion on the grounds of sovereign immunity largely because the
requested declaratory and injunctive relief. Unlike New York, Oh
states with successful adequacy litigation, there remains a signific
to whether a Georgia state court, in future proceedings to enforce
favor of CASFG, could actually order any relief to the plaintiffs that
the outlay or reallocation of state funds.
Furthermore, despite the successes of legal challenges to the ade
funding systems in the past decade and a half, it remains unclear
cient judicial relief can actually correct these deficiencies. Although it
sible in some jurisdictions to mandate expenditures to improve ce
needs such as texts, media, technology, buses, and facilities, othe
proven harder to address. For example, it remains to be seen in t
CFE ruling in New York whether there is any practical way to i
quality teachers and staff to work in the city schools. In Georgia,
tricts being in the greatest need of highly qualified staff according t

63. CASFG v. State, Brief in Support of Defendant's Motion to Dismiss, A1-A14.

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 Rural School Districts and Funding Adequacy 87

issue seems even more difficult. At a time when all states and school districts are

contending with a shortage of highly qualified teachers and support personnel,

does there exist a solution, monetary or otherwise, that will allow these rural dis-
tricts to attract staff away from urban and suburban districts? Even if the State of
Georgia were to close the $4,000 gap in starting teacher pay between the plaintiff
districts and the wealthier Atlanta suburbs, or perhaps even offer a premium,
would this be sufficient? The argument can be made that many educators would
be unwilling to forgo the comforts of the metro Atlanta area or other cities and
suburbs to live and work in remote and high-need rural districts, regardless of
any financial inducements that might be offered.
The state has also implicitly raised a second structural argument. Although the
trial court refused to dismiss the instant case on the grounds that it was precluded
by the separation of powers, this remains a consideration in terms of the justi-
ciability of the complaint. As noted previously, it remains unclear whether Geor-
gia state courts, even if they can adjudicate the adequacy of the state's funding
program, can order any relief that requires the state to increase its educational
spending. Furthermore, although Georgia may have one of the strongest written
education clauses, establishing an adequate education as a right of its citizens and
a "primary obligation" of the state, it has equally strong constitutional language
that enshrines local control and governance of the educational process. Conse-
quently, if the problems identified in the CASFG districts, or elsewhere, were
found to be endemic to either those local school boards or their constituencies,
the only viable alternative for the state, short of amending the constitution, would
be to increase funding or programs in these districts in the hope of eventually
producing an adequate outcome.
Another possible effect of this constitutional conflict might even be to force a
fundamental rearrangement of the very constitutional provisions on which the
plaintiffs rely. In the extreme this might include rewording the basic education
clause on which this litigation relies. However, on a simpler level, such an amend-
ment might be necessary to resolve the conflict inherent in all adequacy liti-
gation, namely the logic that dictates holding the state government solely
responsible for educational adequacy while leaving the operation of public
schools largely in the hands of local boards. In Georgia this conflict would become
immediately apparent unless some changes in the education article were effected.
The political logic of holding states accountable for educational outcomes while
preserving local control appears to be untenable. Although plaintiffs may con-
tend, as they do in the instant case, that the inadequacies in the districts are purely
fiscal in nature and hence merely necessitate more state funding rather than over-
sight, this contention is at odds with the principle of holding state governments
responsible for the failures of their subsidiaries. Even without a verdict there are

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88 JOURNAL OF EDUCATION FINANCE

already signs of a possible constitutional shift. Earlier this year the

majority leader introduced a proposed constitutional amendment
constitutionally permitted local ad valorem taxes with a statewide 3
education, a move that would establish full state funding.64 Altho
posal might actually provide substantial increases in funding for
school districts, opponents statewide have already criticized the pr
death knell for local governance.65 Whether this amendment goes forw
the logical outcome of a plaintiff victory in this case probably would b
of constitutional reconciliation that would substantially weaken G
tion of local control.

If the court rules that the state is accountable for providing an adequate educa-
tion in all school districts, the state can certainly interpret this ruling as a mandate
for more oversight and state control at the local level. For the state, a court victory
could be hard to come by if they stay with the current Maginot Line mentality of
defensive tactics. With their day in court CASFG has the chance to present evidence
on the merits that effectively circumvents a defense that is based almost exclusively
on procedural arguments. So far, the defendants have shown no effort to rebut the
plaintiffs' specific evidentiary claims of inadequacy. The state also needs to address
any positive evidence showing gains in student achievement under the current
administration and also demonstrate evidence of additional state funding sup-
porting student achievement initiatives. A ruling in favor of the plaintiffs will mean
the state is accountable for the level of student achievement at the local level. This

will definitely redefine local control. Plaintiffs might celebrate a court victory but
will have to prepare for a new relationship with state-level leaders, who will have
more say over policies and priorities that have historically been local issues. Instead
of state-level policy recommendations, plaintiffs might have to learn to live with a
new era of increased regulations and policy mandates. For example, on the issue of
the SAT scores, the state could choose to mandate the use of the state-funded online
SAT prep courses for all high school students, and school districts would have no
choice but to make time in students' schedules for these activities. As the plaintiffs
continue to push their contentions, they may also need to prepare for the potential
paradigm shift in Georgia education policy that their victory might necessitate.

64. The actual proposal is for a legislatively determined sales tax of no more than 3% to fund education.
65. C. Reinolds, "Sales Tax for Schools Debated: Many Fear Loss of Local Control," Atlanta Journal-
Constitution, September 29, 2005, 4C.

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