Minnesota’s Miracle Case: Van Dusartz v. Hatfield
Glen Dawursk, Jr.
“The stability of a republican form of government depending mainly upon
the intelligence of the people, it is the duty of the legislature to establish
a general and uniform system of public schools. The legislature shall make such
provisions by taxation or otherwise as will secure a thorough and efficient
system of public schools throughout the state.” (State of Minnesota Constitution, Article 13,
Sec. 1) The concept of establishing a secure
financial base for supporting education has been an issue for years in the
state of Minnesota
and eventually led to the landmark case Van Dusartz versus
Hatfield in 1971.
This case helped change the concept of equality in financing education
in the US.
This report will explain the
circumstances that led to this historic case, the similarity to a California
case, the court’s ruling, and the impact it had on education finance in Minnesota.
Before 1956, Minnesota’s primary funding for the state’s public education
system was through local property taxes.
These taxes were inequitable as some homeowners paid a higher amount of
actual taxes due to the value of their property and their districts reaped the
benefits of plenty of income. Meanwhile,
poorer areas of the state (such as depressed rural and inner-city areas) could
not collect the similar amounts of tax revenue due to their communities’
decreased property values. To combat this inequality, the Minnesota legislature in 1957 created Foundation Aid whereby
the state took on the major cost of educating elementary and secondary
students. This shifted the “majority of
school funding from local taxes to the state.” (Thorson, 2006, p.28)
Foundation Aid’s intent was to alleviate the
significant tax inequity of local governments by subsidizing all elementary and
secondary public schools through state taxes.
The formula used covered the greater share of the cost of the per-pupil
requirements. The percentage of state
participation was as much as 84% at the time. (Thorson, 2006) Unfortunately the formula was never modified
and the program lacked an inflation index. Predominately due to rising costs,
the percentage of state participation lowered to just 43% by 1970. (Melcher, 2004) This
meant that districts again had to tap local property taxes to cover the
majority difference. Again, this meant a
significant difference in revenues between the richer suburban communities and
the depressed property values of the farm and urban areas. For example, “Anoka was forced to levy a tax of $581 on a $20,000 home
to spend $536 per pupil, while Golden Valley had to levy only $369 on a similar home to spend $837
per pupil.” (Melcher, 2004, p. 4)
While the state did toy with concepts,
modifications and new ideas for funding education, the process continued to be
bogged down by the bureaucratic polices of state government and the desire of
politicians not to raise state income taxes in order to subsidize the dramatic
increase in local property taxes. (Melcher
2004; Thorson, 2002, 2000; Knowles,
2005) Their hesitation came to
an abrupt stop when a group of parents and students from White Bear Lake sued the State of Minnesota. This lawsuit along with a similar law suit in
California became the foundation for a legal change in how
states fund education.
In late 1970, a
group of parents and students representing the White Bear Lake schools sued the State of Minnesota over the inequitable
system and distribution of funds for education.
Their suit, Van Dusartz v.
Hatfield, 334 F. Supp. 870, contended that “the system denied their
children substantially equal educational opportunity and required them to pay
higher tax rates than those in wealthy districts to receive the same or lesser
expenditure level.” (Melcher, 2004, p. 4) They stated that the current state
system of relying upon local property values violated the equal protection
clause of the 14th amendment to the US Constitution (“nor shall any
state...deny to any person within its jurisdiction the equal protection of the
laws”). The suit sought “fiscal neutrality.”
neutrality is “that the quality of a child’s education, measured by the amount
expended for that education, cannot be permitted to vary according to the
property wealth of his or her parents and their neighbors.” (Strom, 2006, p. 2)
Basically, it stated that it was illegal to require taxpayers in a poor
district to pay more than taxpayers in a rich district and that fiscal
neutrality was a right under the 14th amendment. Therefore, the State of Minnesota was violating each
citizen’s rights by allowing the enforcement of inequitable property taxes for
the purpose of subsidizing public education.
While this case was in process, a similar case
was being decided in California. Parallel to Minnesota, communities were being
forced to pay different rates of property tax due to the inequality of property
values. For example, “a tax rate in 1976
of $1.00 per $100 in a poor community like Baldwin Hill would generate $170 per
child. In Beverly Hills, this same rate would
generate $1,340 per child.” (Schrag, 1999) The concept of fiscal
neutrality became an issue as it came to the California Supreme Court in the
case Serrano versus Priest. The case argued two specific points:
“education in the public schools is a fundamental interest or right” and “the
wealth of a school district -- meaning its real-property tax base -- is a
suspect classification.” (Coon, 1999) The case started as a class action
suit in Los Angeles County Superior
Court. Public-interest attorneys
represented all California public-school pupils and
argued about “the fundamentality of public education, the struggle of haves vs.
have-nots and the battle against discrimination.” (Coon, 1999) The court ruled
that based upon the 14th amendment, “that the school funding system violated
the Equal Protection Clause of the United States Constitution and of the
California Constitution, that education is a fundamental interest, and that
wealth is a suspect class.” (Hirji, 1999, p. 583) These August 1971 rulings
lead the way for a similar supposition in Minnesota’s Van Dusartz v. Hatfield case.
On October 12, 1971, Federal
District Judge Miles Lord finalized the Circuit 8 law suit by concluding that “the Minnesota school finance system made spending per pupil a
function of school district wealth and violated the equal protection clause of
the 14th amendment to the US Constitution.” (Melcher, 2004, p.4) He stated that "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.” He further stated that “the level of spending for a child’s
education may not be a function of wealth other than the wealth of the state as
a whole.” (Van Dusartz v. Hatfield)
The case brought an immediate reaction from the Minnesota legislature.
Through a special session on October 30, 1971, the state leaders passed the Omnibus Tax Bill often
referred to as the ‘Minnesota Miracle.’ “This bill shifted the main source of
education funding in the state from local taxes to statewide income and sales
taxes.” (Thorson, 2006, p. 28) The states’ 43% investment in school districts
now was mandated at 93%. (Melcher, 2005, p. 5) Because of this dramatic change,
the White Bear Lake parents and students dismissed their complaint.
While Minnesota was not finished with litigation (Skeen v State of Minnesota, 12/91), the Van Dusartz versus Hatfield case marked
a historical marker in school financing in the United States. Through this
case, the rights of an individual student were increased and the obligations of
the state toward that student were also clarified. It is an example of how our
complicated system of justice works in the US, of how our desire to maintain equality continues,
and how our interest in educating our future generations perseveres.
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Dusartz v. Hatfield. 334 F. Supp.
870 (U.S. Dist. Minn., 1971)