RALEIGH – For the better part of a decade, it seemed impossible to talk about education reform in North Carolina without someone bringing up the Leandro school-funding litigation. For most backers of the lawsuit, it was all about money. The public-school establishment tucked itself to bed each night as if it were Christmas Eve, with visions of court-ordered fiscal plums dancing in its head.
But the state’s judiciary had other ideas. Although the establishment, teacher unions, activists, and like-minded politicians and editorialists remain loath to admit this even today, years after the major court decisions were handed down, the Leandro plaintiffs lost the fundamental claim they sought to prove: that North Carolina’s system of funding public education was unconstitutional, requiring a remedy of higher state taxes to boost school spending.
The Supreme Court did issue two critically important decisions clarifying the right to educational opportunities enshrined in the state constitution, decisions that were then left to Wake Superior Court Judge Howdy Manning to enforce. These decisions, however, were important in a legal and policy sense, not a fiscal sense. There was to be no massive new infusion of state dollars into rural and urban school districts, financed by massive new taxes lawmakers could blame on the judiciary. Eschewing such policy activism, the Court simply affirmed that the constitution required that students be afforded an opportunity for a sound, basic education – and Manning affirmed, correctly, that with very few exceptions, additional dollars from state taxpayers were not required to satisfy that responsibility.
The Leandro saga is full of rich, ponderous mythology. It is not true, for example, that there are vast differences in spending per pupil among North Carolina school districts. That hasn’t been true since the 1930s. It is also false to suggest that North Carolina’s reliance on property taxes to fund the local component of public education is a cause of inequity. Indeed, because property-tax funding serves to adjust spending to housing costs, which correlate with the cost to build schools and hire personnel, it modestly reduces gaps in real resources per pupil that would otherwise exist.
Also, Leandro was hardly a case unique to the circumstances of North Carolina. It is important to understand that beginning in the 1970s, those who sought state tax hikes to jack up school spending fashioned a national strategy of litigation in state courts once it became clear that state legislatures were not going to throw open the revenue spigots on their own. These activists began Leandro-like lawsuits in dozens of states, achieving some kind of judicial “victory” in 27 of them, including North Carolina. In many cases, however, these “victories” bore far less fruit than the pro-tax activists had sought.
As the Tax Foundation demonstrates in a new study, these 27 states have since 1977 increased annual education spending by $34 billion in response to the lawsuits. That may sound like a huge number, but not in the context of a total national budget for public education in the many hundreds of billions of dollars. The lawsuit-motivated spending works out to about $976 per student, which is noticeable but represents less than 10 percent of the average public-school expenditure per pupil in 2003-04, $10,302 (which includes $8,899 for operations and $1,403 for capital).
Even the $976 figure vastly overstates the real effect of the state litigation, because school spending would have increased in these states even without court mandates, as the Tax Foundation discovered by examining the non-mandate states and prior spending trends in both groups. Its best estimate is that because of a supplanting effect by the court-ordered spending, operating expenditures in the 27 court-mandate states didn’t end up significantly higher than they would otherwise have been (indeed, you have to exclude the New Jersey case to get that result, otherwise the court-mandate states ended up with less money per pupil) and that capital funding is an average of only $164 per pupil higher because of the litigation.
North Carolina is at the very bottom of the national list when it comes to state appropriations enacted in direct response to a court decision – only $16 per pupil. That’s surprising only if you continue to be under the mistaken impression that those seeking remedies under Leandro – which came to include both poor, rural districts and large, urban ones – ended up “winning.” Not on their own terms. Lawyers and activists in most states filed their suits to achieve a big payday for the education establishment at the expense of taxpayers. In a few cases, most notably New York, Connecticut, and Massachusetts, they got it.
In North Carolina, they didn’t. That’s what really happened in the Leandro case, despite what you may have picked up from the subsequent political haggling and bloviation.
Hood is president of the John Locke Foundation.