In the case of Toledo City School Dist. Bd. of Edn. v. State Bd. of Edn., 146 Ohio St.3d 356, 2016-Ohio-2806, the Ohio Supreme Court held that “the General Assembly has constitutional authority to adjust local school funding retrospectively.”
The dispute began when the Ohio Department of Education (“ODE”) “noticed that the number of community-school students reported in some districts’ October counts was greater than the number reported in the [Community School Average Daily Membership (“CSADM”)]. Believing the CSADMs to be more accurate, [ODE] recalculated those school districts’ school-foundation funding for that fiscal year.” Toledo at ¶ 7. The recalculation resulted in ODE reducing funding for fiscal years 2005, 2006, and 2007 “by the following amounts: Toledo, $3,576,948; Dayton, $2,548,120; and Cleveland, $1,857,311.” Toledo at ¶ 8.
The “Cincinnati School District [had previously] sued the department over its fiscal-year-2005 adjustment of Cincinnati’s school-foundation funding.” Toledo at ¶ 9. “During the pendency of the Cincinnati litigation, the General Assembly amended R.C. 3317.03 to authorize [ODE] to adjust the formula ADM if an error was discovered” and “immunized the department from liability for any legal claim for reimbursement brought by a school district for the reduction of school-foundation funding.” Toledo at ¶ 11. “[T]he boards [nonetheless] filed complaints seeking an order that the department had to pay their respective funds for fiscal years 2005 through 2007 using only the formula ADMs from the October counts and not from the CSADMs.” Toledo at ¶ 12. The boards also asserted that the General Assembly’s actions in retroactively authorizing ODE’s actions violated the Ohio Constitution’s prohibition against retroactive laws – i.e., laws made to affect acts or facts occurring before they come into force.
The Ohio Supreme Court held “that the Retroactivity Clause, Article II, Section 28 of the Ohio Constitution, does not protect political subdivisions, like school districts, that are created by the state to carry out its governmental functions. Therefore, the legislature was able to authorize the department to adjust local school funding calculations and to retroactively immunize the department from liability for any legal claim of reimbursement by a school district for a reduction of school-foundation funding, without violating the Retroactivity Clause.” Toledo at ¶ 46.
To read this case, please click here.
Authors: Matthew John Markling and Patrick Vrobel
Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always changing Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.