State of Iowa Facing Class Action Education Lawsuit

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DAVENPORT, Iowa -- A class action lawsuit against the state of Iowa is seeking equity in school funding. The suit claims the state's current system is unfair and unconstitutional. In the early 1970's, the state created an education funding formula that was a combination of property taxes and state aid; before that, almost all school district funding came from local property tax dollars. That formula is still in existence today.

"It’s kind of like a layered cake," said Margaret Buckton, with Iowa School Finance Information Services. '"The first layer is a uniform property tax levy, the state fills in up to 87.5% of the cost per student and then the property tax payers pay the last 12.5% and that`s the way it works for 163 school districts. For the other 170, they get a little bit more property tax, as little as a dollar, as much as $175 per student," said Buckton.

As well intended as it may have been, some say the way the system is set up results in an unfair playing field, with different amounts of money being spent on students, depending on which district they go to school in. Such is the case in Davenport. "They`ve got 15,000 kids there at the minimum, as many of these urban education network districts are, for them, they would get the full $175 (per student) more if we made a correction in the law, so they don`t pay any property taxes, they can`t access that, that`s what the superintendent is actually talking about doing, is using their cash reserve, their local property tax to make up that difference, and for them, that`s almost $2.8 million additional revenue that`s not being provided," said Buckton.

Inequities like that are what caused Catherine Cartee, a Davenport attorney, to file a class action lawsuit on behalf of all students in Iowa that have not received the same amount of money. "It`s inherently unfair, discriminatory in nature. I think there`s all kinds of problems with it," said Cartee. Cartee believes the funding formula, which allows some districts to collect up to $175 dollars more per student than Davenport, is a violation of students' civil rights. "It could be that Hispanics and English as a second language and special ed students aren`t receiving as much money in some districts as they are other districts because they`re not," said Cartee. "Special ed students in Davenport most certainly aren`t receiving as much money as they are in the outlying districts here, but also in districts across the state," she said.

And even if districts have cash reserves, they're only allowed to spend that money under certain narrow circumstances. "Many school districts have cash reserves that are fairly significant right now, so in the case of davenport, they`re looking at $22-24 million cash in the bank, that they`ve collected over the years, but they don`t have permission to spend it from the state since the formula limits their spending, it effectively serves as a cap," said Buckton.

Efforts have been made to create a more equal system. "Every school district that`s below the maximum amount will increase over a time until we completely close that gap. That was a proposal that was brought to the legislature last year, it didn`t get much traction, but again it`s gonna be brought forth again this year and I think that there`s a likelihood that it will get some traction this year," said Shawn Snyder, with Iowa Association of School Boards.