Michigan schools may face penalties for suing state

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Public school districts would be penalized for using any state funding to sue Michigan under a 2018 education budget bill approved last month by the Republican-led Legislature but not yet signed by Gov. Rick Snyder.

The controversial penalty follows a series of lawsuits by the Detroit, Kalamazoo and Saginaw districts, each of which sued the state School Reform Office earlier this year in an attempt to stop potential school closures the state did not end up forcing.

The districts were “trying to get out from under accountability laws,” said Rep. Tim Kelly, R-Saginaw, who chairs the House Appropriations subcommittee on school funding and pushed for the budget language.

“I just felt that’s not right. They’re institutions of the state, and if the state says this is what you have to do, this is what you have to do.”

While Kelly said school districts could still use private donations or foundation money to sue the state, critics argue the budget language could have a chilling effect on public school officials and limit their ability to fight unjust laws imposed by Lansing.

“It’s basically saying school districts aren’t entitled to speak out against actions of the state that, in some cases, have proven to be unconstitutional or onerous to the school district,” said Peter Spadafore of the Michigan Association of School Administrators.

Detroit Public Schools Community District sued the state in March in an attempt to block forced closure of up to 24 poor-performing local schools. District officials argued they deserved a three-year reprieve after state legislation created the new district to free it from old debts.

The School Reform Office in January released rankings targeting as many as 38 Michigan schools for closure, an aggressive plan that Gov. Rick Snyder’s administration was already backing off of by early March. Instead, Detroit and other districts ended up signing “partnership agreements” with the state this spring in an attempt to turn around the schools without closing them.

State Superintendent of Public Instruction Brian Whiston offered districts the partnership agreement option on March 3, nine days after Kalamazoo and Saginaw public schools first sued the state over potential closures. The lawsuits remain active despite agreements to delay the shutdowns.

A Detroit schools spokeswoman declined to discuss the budget language, noting the governor has not yet signed it.

“We will await that process to determine our next steps as a district,” Chrystal Wilson said.

Kalamazoo Superintendent Michael Rice was more critical, calling the budget language “an overreach and dubiously legal.”

Kalamazoo Public Schools is also a named plaintiff in a high-profile case challenging the constitutionality of a $2.5 million appropriation to reimburse private schools for state mandates, but the district is not paying for attorneys in that case.

The budget language would prohibit school districts from using funds appropriated by the state “to pay an expense incurred relating to any legal action initiated by the district or intermediate district against the state.” Districts that do so would forfeit state funds by an amount equal to those expenses.

“I don’t think it’s right to take money out of the classroom for what might be seen as a frivolous lawsuit,” Kelly said. “What if all of a sudden they decide they don’t like a test and they want to sue, or they don’t want to take attendance? At what point does this just become ridiculous?”

State Rep. Jon Hoadley, a Kalamazoo Democrat who sits on the House Appropriations Committee, said the penalty provision was the primary reason he voted against the education budget.

“I’m not sure how this is even constitutional,” Hoadley said. “There are moments when school districts need to stand up for their kids, and the school budget penalizes districts who are standing up to protect the constitutional rights of their pupils. This is punitive in nature.”

From a legal perspective, public schools are part of state government, said attorney Richard McLellan, a longtime Lansing insider and GOP education expert. He noted the state Constitution requires the Legislature to maintain and support a system of free public elementary and secondary schools.

“Normally you don’t allow the Department of Environmental Quality to sue the Department of Corrections,” McLellan said. “The choice, for whatever policy reason, to say, ‘No, we don’t want school aid money sued to sue the Department of Education or governor or anyone else’ seems to be within the constitutional authority of the Legislature.”

House Republicans who added the budget language say it was inspired by recent lawsuits, but critics say its inclusion in the final budget plan is a hasty move that ignores a history of legitimate legal challenges.

Spadafore pointed to a major 1997 Michigan Supreme Court ruling in a lawsuit that included 83 plaintiff school districts and one intermediate school district. The complaint was originally filed 17 years earlier by Donald Durant, former school board president of Warren’s Fitzgerald School District.

The high court ruled the state violated the Headlee Amendment to the constitution by failing to appropriately fund required special education, special education transportation and school lunch programs.

As a result of the 4-3 decision, the state was ordered to send $212 million, including attorney fees, to the victorious plaintiff school districts. A financial settlement including all districts brought total state costs to $844 million.

More recently, a federal judge in 2016 suspended a Michigan law designed to tighten rules prohibiting local governments and schools from using taxpayer dollars to distribute information about ballot proposals.

“Now, basically the state’s budget says you can’t” file a similar lawsuit, Spadafore said. “There are other avenues a district could pursue, but I think it’s a slippery slope to include that in the budget.”

McLellan noted the budget provision does not appear to prevent districts from using local revenue sources, such as property tax millages, to fund a lawsuit. He suggested the local funds could be a “gimmick” to get around the penalty.

“It may create a little higher barrier to entry, just because you can’t use your state money to harass your state, but something important like Durant, they’d probably find a way to bring that suit,” he said.

Dennis Pollard, a Troy-based attorney who worked the Durant case and others challenging unfunded state mandates, said districts helped pay his fees but the lawsuits were filed on behalf of taxpayers.

“The constitutional right is that of a taxpayer, and that’s who’s bringing the suit,” Pollard said.

He suggested it could ultimately limit the ability of taxpayers to sue the state with district support.

Snyder has not said whether he supports the lawsuit penalty provision. A representative said Friday he will review the language along with the rest of the budget when it reaches his desk.

Hoadley urged a line item veto, noting Snyder rejected an unrelated license plate bill last week.

“We know his veto pen is working,” he said. “Hopefully it hasn’t run out of ink.”

An initial budget approved by the state Senate did not include the lawsuit penalty language, but the House moved to include it in the final version. House Speaker Tom Leonard, R-DeWitt, supports the provision, said spokesman Gideon D’Assandro.

The budget would raise state education funding to the highest point in Michigan history “to support our children and help them learn and grow,” DiAssandro said, “not to fund lobbying efforts from political activists and their attorneys.”