Zuni Public Sch. Dist. No. 89 v. Dep’t of Educ., No. 05-1508 (U.S. S. Ct. April 17, 2007)
In a 5-4 decision, the U.S. Supreme Court has rejected a claim by two New Mexico school districts that a federal regulation interpreting a funding formula under the federal Impact Aid Act unfairly deprives them of resources. The act provides funding for school districts whose ability to finance local schools is adversely affected by a federal presence, such as where there is much federal property exempt from property taxes or many federal employees with school-aged children. The statute generally forbids states from offsetting this federal aid by reducing their own support for schools, but an exception allows a state to factor in federal aid if the state’s funding formula “equalizes” expenditures among school districts. The statute’s formula for “equalization” calls for no more than a 25% disparity between the per-pupil expenditures of the districts with the highest and lowest such expenditures. But the statute instructs the U.S. Department of Education (ED), in making this determination, to “disregard [school districts] with per-pupil expenditures ... above the 95th percentile or below the 5th percentile of such expenditures.” Longstanding ED regulations call for disregarding not the top and bottom 5% of school districts per se but, rather, those districts whose students account for the 5% of the state’s student population that lies at the high and low ends of the spending distribution. Under this formula, New Mexico was certified as “equalized,” allowing it to offset the federal aid the two school districts receive.
The Court upheld the regulation as a reasonable method of carrying out the Congressional statutory purpose of excluding statistical outliers. Justice Breyer delivered the Court’s opinion, in which Justices Stevens, Kennedy, Ginsburg, and Alito joined. The Court noted that the statute permits ED to identify the districts that should be “disregard[ed]” by looking to the number of the district’s pupils as well as to the size of the district’s expenditures per pupil. ED’s method is the kind of highly technical matter that Congress does not decide itself but delegates to specialized agencies. In addition, the statute’s history strongly supports ED because the present statutory language originated in draft legislation sent by the secretary of education himself, which Congress adopted without comment. At the time no member of Congress, ED official, school district, or state expressed the view that this statutory language required ED to change its regulatory system of calculation, a system ED and school districts had followed for nearly 20 years. As a result, the Court concluded, the regulation falls within the scope of the statute’s plain language. Both students and school districts are of concern to the statute, and, thus, the “disregard” instruction can include within its scope the distribution of a ranked population consisting of pupils (or of school districts weighted by pupils), not just a ranked distribution of unweighted school districts alone. The Court was reassured that no statistician had indicated that the language cannot be interpreted this way.
Justice Scalia filed a scathing dissenting opinion, in which Chief Justice Roberts and Justice Thomas joined, arguing that “today’s decision is nothing other than the elevation of judge-supposed legislative intent over clear statutory text” and warning against “judicial libido” tempting judges in the “School of Textual Subversion.” Justice Souter filed a dissent in which he joined Justice Scalia’s dissent and found “the statutory language unambiguous and inapt to authorize [ED’s] methodology.” Justice Stevens filed a concurring opinion responding to Justice Scalia and suggesting that this case does not present the kind of question that seems likely to engender strong judicial predispositions. Justice Kennedy filed a concurring opinion, in which Justice Alito joined, agreeing with the outcome but arguing that it would have been more faithful to the Court’s ruling in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), if the Court had first established that ED’s interpretation is entitled to deference only because the statute is ambiguous before embarking on a discussion of policy concerns.
Zuni Public Sch. Dist. No. 89 v. Dep’t of Educ., No. 05-1508 (U.S. S. Ct. April 17, 2007)
[Full opinion]
[Editor’s Note: For background on the case, including a link to the transcript of the oral arguments, see below.]
[NSBA School Law pages on Zuni Public Sch. Dist. No. 89 v. Dep’t of Educ.]