In February 2012, we issued a Law Alert regarding the Illinois Supreme Court's decision to hear an appeal in a lawsuit challenging the constitutionality of the state's education funding system. On November 29, 2012, the Illinois Supreme Court issued its decision in Carr v. Koch. The Court essentially decided that the plaintiffs could not challenge the funding system in the judicial system, but instead must seek a change through the Illinois legislative process.
To review, the lawsuit was filed in March 2010 by two property owners who sought a judgment declaring that the Illinois education funding system, as established by the School Code, violates the equal protection clause of the Illinois Constitution. According to the plaintiffs, the state's education funding system requires taxpayers in school districts with low property values to pay property taxes to fund local public schools at a higher rate than similarly situated taxpayers in school districts with high property values. The plaintiffs argued that these unequal tax burdens are unconstitutional because they are not rationally related to any legitimate legislative purpose. Both the Circuit Court of Sangamon County and the Fourth District Appellate Court dismissed the lawsuit.
The Illinois Supreme Court agreed with the lower courts' determination that the tax rates were imposed by the local school districts and were not mandated by the state funding scheme. The court emphasized that the education funding statute, "is simply that: a funding statute. It is not a taxing statute." The Court stated that school districts receive the statutorily determined amount of general state aid regardless of the local property tax rate they impose, and each district has complete discretion to determine, implement, and enforce its local property tax rates. Additionally, the Court concluded that the funding statute does not dictate local property tax rates, and therefore the injuries alleged by the plaintiffs (being forced to pay higher property taxes than similarly situated taxpayers in property-rich districts) were not caused by the statutory funding scheme. Consequently, the Court decided that the lower courts properly dismissed the lawsuit.
If you have any questions regarding this case, please contact any Robbins Schwartz attorney.
David G. Weldon of the firm's Chicago office prepared this Law Alert.