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Supreme Court Upholds Constitutionality of State Law Authorizing Charter Schools

2004-1668. State ex rel. Ohio Congress of Parents and Teachers v. State Bd. of Edn., 2006-Ohio-5512.
Franklin App. No. 03AP-508, 2004-Ohio-4421. Judgment affirmed in part and reversed in part.
Moyer, C.J., Lundberg Stratton, O'Connor and Lanzinger, JJ., concur.
Resnick and Pfeifer, JJ., dissent.
O'Donnell, J., dissents and would dismiss the appeal as having been improvidently accepted.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2006/2006-Ohio-5512.pdf

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(Oct. 25, 2006) The Supreme Court of Ohio held today that Chapter 3314 of the Ohio Revised Code, the state law authorizing establishment and operation of community or “charter” schools, is constitutional both on its face and as applied.

In a 4-3 decision authored by Justice Judith Ann Lanzinger, the Court reversed in part and affirmed in part an earlier ruling by the 10th District Court of Appeals and reinstated a trial court order dismissing all constitutional challenges to the program that had been raised by charter school opponents. Today's Supreme Court ruling left in place a second set of legal challenges to the charter school program based on non-constitutional issues that have yet to be addressed by the Franklin County Court of Common Pleas.

A group of advocates for Ohio's traditional public school systems, including organizations representing parents, teachers, school administrators, school board members and taxpayers, filed suit in 2001 challenging the community school legislation enacted by the General Assembly. Defendants are the State Board of Education, Ohio Department of Education and other government offices and officials. The Franklin County Common Pleas Court granted motions to intervene in the case on the side of the defendants by a group representing a number of Ohio community school operators and students, and by White Hat Management LLC, a company that manages 28 community schools located in various Ohio cities.

In the amended complaint, the plaintiffs asserted 10 different statutory and constitutional arguments to support a declaratory judgment from the trial court that Chapter 3314 of the Revised Code is void and unenforceable. They also requested injunctions stopping further allocations of tax dollars to community schools and reallocating current state tax revenues to the traditional public school districts that have lost funding to community schools.

In 2002, the parties and the trial court agreed to divide the litigation into separate phases. As the first phase, the judge directed the parties to submit written briefs arguing only the constitutional issues raised by the plaintiffs. In May 2003, the trial court issued a judgment dismissing counts four, five, six and seven of the plaintiffs' complaint, which included all of their constitutional claims. The plaintiffs appealed, and in August 2004 the 10th District Court of Appeals affirmed the trial court's dismissal of one constitutional claim, but reinstated for further proceedings three of the constitutional arguments advanced by the community school opponents. Both sides appealed the portions of the 10th District's decision unfavorable to them to the Supreme Court.

Writing for the majority in today's decision, Justice Lanzinger rejected all constitutional arguments advanced by the charter school opponents. Justice Lanzinger's opinion was joined by Chief Justice Thomas J. Moyer and Justices Evelyn Lundberg Stratton and Maureen O'Connor.

To the argument that charters violate the Thorough and Efficient clause because they are not part of the common school system, she wrote, “In enacting community school legislation, the General Assembly added to the traditional school system by providing for statewide schools that have more flexibility in their operation. Community schools were designed to give parents a choice and give educators ‘the opportunity to establish limited experimental educational programs in a deregulated setting.'”

She noted that community school students must pass the same graduation test that students in traditional public schools must pass, and that community schools must administer proficiency and achievement tests and meet the same health and safety standards as traditional schools and explained: “The expressed legislative intent is to provide a chance of educational success for students who may be better served in their educational needs in alternative settings. Requiring community schools to be operated just like traditional public schools would extinguish the experimental spirit behind R.C. Chapter 3314. While the wide discretion granted to the General Assembly is not without limits … we hold that the General Assembly has not transgressed the limits of its legislative power so as to render R.C. Chapter 3314 unconstitutional under the Thorough and Efficient Clause.”

Justice Lanzinger also rejected the appellants' related claim under the Through and Efficient Clause that community schools have diverted money from local school districts and made them more reliant on local property taxes. “(W)hen a student leaves a district for a community school, the state reduces the state funding that the district receives for the student. Nothing in the Constitution, however, prohibits the General Assembly from reducing funding because a school district's enrollment decreases,” wrote Justice Lanzinger. “If a child moves out of the district altogether, the state is permitted to reduce its funding to that child's district because state money follows the child. For example, if a child leaves a school district to attend private school, or to be schooled at home, the state is required to reduce its funding to that district. The same thing occurs when a child opts to attend a community school. Whenever a student leaves, for any reason, the school district's funding is decreased and the district continues to receive state funding based on the students actually attending. Traditional schools still receive the full amount of state funds for the actual number of students enrolled.”

The majority opinion also denied contentions that tax-funded community schools deprive local residents of their constitutional right to control publicly-funded education through elected local school boards, and that the community school funding scheme diverts local school tax revenues away from local schools.

“This court has held that the General Assembly has the power to create and modify school districts. In State ex rel. Core v. Green (1953), the court stated, ‘ The General Assembly has the power to provide for the creation of school districts, for changes and modifications thereof, and for the methods by which changes and modifications may be accomplished.' In analyzing this specific issue in the case before us, the Court of Appeals for Franklin County opined that the plain language of Section 3, Article VI ‘does not give those [local] voters more power than the General Assembly to create policy and organize and administer a system of public education throughout the state.' We agree with this statement. … By choosing to create community schools as part of the state's program of education but independent of school districts, the General Assembly has not intruded on the powers of city school boards. … Section 3, Article VI of the Ohio Constitution does not prevent the General Assembly from creating additional schools that are located within city school districts but are not part of the district.”

With regard to the claimed unconstitutional diversion of local tax revenues, Justice Lanzinger wrote that community schools are funded by a complex formula from state funds alone. They are primarily funded by a per capita subsidy taken from the state's basic aid to the school districts that the students in community schools are entitled to attend. “Funds raised by local school districts, such as funds derived from local levies, are never sent from the local school district to the community schools, nor are any funds from the local school district to the state ever redirected to the community schools.”

The majority also held that, as non-profit organizations that are an integral part of the state's “system of common schools,” community schools are not covered by provisions of the Ohio Constitution that bar the state from lending its credit or assuming the debts of a non-public corporation or private entity.

Justice Paul E. Pfeifer concurred in part and dissented in part from the majority opinion. Justice Pfeifer said he agreed with the majority's holding that legislation allowing the establishment of charter schools is not unconstitutional on its face, but said he would find the state's community school program unconstitutional as currently established. “Irrespective of the noble intentions of charter school legislation, one undeniable effect is that public schools receive less state money than they would in the absence of charter schools,” wrote Justice Pfeifer. “The mathematically unavoidable result is that public schools received a greater percentage of their funding from local sources, which is unconstitutional pursuant to our DeRolph decisions.”

Justice Alice Robie Resnick entered a dissenting opinion in which she asserted that: “(T)he General Assembly does not have the authority under Section 2, Article VI (of the state constitution) to establish something other than a system of common schools.”

Quoting from a law journal history of Ohio's 1851 constitutional convention, at which the constitutional requirement of a “thorough and efficient system of common schools” was adopted, Justice Resnick wrote: “In choosing to mandate the creation of a system of common schools, the constitutional framers rejected the idea of simply subsidizing the existing diverse, parent-initiated and tuition-based schooling arrangements in favor of creating state organization and oversight. They viewed the diversity of the existing arrangements as an impediment to educational progress. The constitutional framers rejected the proliferation of diverse schools in favor of a single system. They also rejected the idea of competition among school districts and a variety of sectarian schools, viewing competition as inefficient, divisive and ineffective.” Justice Resnick explained further that “Section 2, Article VI was intended to bring order to the chaos of individualized approaches that resulted from the nascent mélange of loosely regulated and diverse schooling arrangements by mandating the creation and funding of a uniform and coherent body of governmentally controlled schools. R.C. 3314 contravenes that intent by reversing the process. It creates a jumble of ad hoc community schools that flourish on state funds otherwise inuring to the account of district schools.”

Justice Terrence O'Donnell wrote separately to state his belief that the Court should not have accepted jurisdiction to review the constitutional objections of the charter school opponents before lower courts had conducted a more thorough review of those claims. “Even a cursory reading of the majority and dissenting opinions reveals the complexity of the issues and the divergent positions taken by the members of the judiciary who have reviewed it at all levels,” wrote Justice O'Donnell. “I did not vote to accept this case because I believed the record needed development … I still believe that to be the correct course for this court to follow, i.e., to dismiss this appeal as improvidently accepted, to await further record development and to approach the entire case on a complete record.”

Donald J. Mooney Jr., 513.698.5070, Ohio Congress of Parents & Teachers.

Stephen P. Carney, 614.466.8980, for the State of Ohio Board of Education.