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Opinion 97029

DATE: May 21, 1997

SUBJECT: Extent of Legislature's Power, Under Article VII, Section 1 of the Nebraska Constitution, to Provide for Free Instruction in the Common Schools

REQUESTED BY: Senator Floyd P. Vrtiska

Nebraska State Legislature

WRITTEN BY: Don Stenberg, Attorney General

Lauren L. Hill, Assistant Attorney General




You have requested an opinion from this office regarding

the extent to which the Legislature is limited in exercising its

duties under Article VII, Section 1 of the Nebraska Constitution.

Specifically, the question you have posed is whether "Article VII

or any other section of the Nebraska Constitution limit[s] the

Legislature's power to establish the duties and obligations of

local school boards or to restrict their authority to set budgets

or levy taxes to provide the financial support for those budgets."

As we have not been advised of any legislation prompting your

inquiry, our response is necessarily broad and is not directed to

specific legislation. See Op. Att'y Gen. No. 96-003 (January 11,

1996); Op. Att'y Gen. No. 95-004 (January 18, 1995); and Op. Att'y

Gen. No. 82-214 (March 15, 1982).




Pursuant to the Nebraska Constitution, the "Legislature

shall provide for the free instruction in the common schools of

this state of all persons between the ages of five and twenty-one

years." Neb. Const. art. VII, § 1. Our analysis of this provision

is governed by several canons of constitutional construction which

have been adopted by the Nebraska Supreme Court. First, we are

bound by the cardinal rule that the state Constitution must be

applied and enforced as it is written. State ex rel. Spire v.

Conway, 238 Neb. 766, 472 N.W.2d 403 (1991). Next, the provisions

of the Constitution must be read as a whole. Jaksha v. State, 222

Neb. 690, 385 N.W.2d 922 (1986). Finally, because the Nebraska

Constitution "is not a grant but, rather, a restriction on

legislative power, . . . the Legislature is free to act on any

subject not inhibited by the Constitution." State ex rel. Stenberg

v. Douglas Racing Corp., 246 Neb. 901, 905, 524 N.W.2d 61, 64

(1994); State ex rel. Creighton University v. Smith, 217 Neb. 682,

353 N.W.2d 267 (1984); Cf. Lenstrom v. Thone, 209 Neb. 783, 311

N.W.2d 884 (1981). In so acting, however, the court has

established that "[t]he people of the state, by adopting a

constitution, have put it beyond the power of the [L]egislature to

pass laws in violation thereof." State ex rel. Randall v. Hall,

125 Neb. 236, 243, 249 N.W. 756, 759 (1933); see also State ex rel.

Stenberg v. Murphy, 247 Neb. 358, 527 N.W.2d 185 (1995).




Discussion




In accordance with these guidelines, we now address your

inquiry. The supreme court has specifically determined that the

Article VII, § 1 provision is not self-executing given that

subsequent legislation was clearly necessary to carry the provision

into effect. State ex rel. Shineman v. Bd. of Education, 152 Neb.

644, 42 N.W.2d 168 (1950). Therefore, the court has concluded that

"the method and means to be adopted in order to furnish free

instruction to the children of this state have been left by

[Article VII, § 1] to the Legislature." Id. at 648, 42 N.W.2d at

170; Affholder v. State, 51 Neb. 91, 70 N.W. 544 (1897). The

Legislature has elected to execute Article VII, § 1 by creating a

statewide system of school districts which are governed at the

local level.




With regard to the powers and duties of local school

districts, the supreme court has consistently held that "[a] school

district in this state is a creature of statute and possesses no

other powers than those granted by the Legislature." School Dist.

of Seward Educ. Ass'n v. School Dist. of Seward, 188 Neb. 773, 779,

199 N.W.2d 752, 757 (1972) (quoting State ex rel. School Dist. v.

Bd. of Equalization, 166 Neb. 785, 90 N.W.2d 421 (1958); see also

School Dist. of Waterloo v. Hutchinson, 224 Neb. 665, 508 N.W.2d

832 (1993); Banks v. Bd. of Educ. of Chase County, 202 Neb. 717,

277 N.W.2d 76 (1979). Therefore, it is clear that "[t]he

Legislature has plenary power and control over school districts,

including provision for the appointment or election of governing

bodies thereof. Consequently, [the Unicameral] may provide

limitations on any authority to be exercised by a school board."

School Dist. of Seward Educ. Ass'n, 188 Neb. at 779, 199 N.W.2d at

757; Farrell v. School Dist. No. 54, 164 Neb. 852, 84 N.W.2d 126

(1957).




"[T]he term `free instruction' in right to education

cases [is] pertinent to the issue of constitutionality of school

financing, including collection of fees, tuition, and taxes."

Kolesnick v. Omaha Public School Dist., 251 Neb. 575, 581, ____

N.W.2d ____ (1997). The parameters within which the Legislature

may act under Article VII, § 1 have been delimited in several

supreme court decisions.




In Peterson v. Hancock, 155 Neb. 801, 54 N.W.2d 85

(1952), the court invalidated a legislative enactment which had

sought to establish statutory incentives for consolidation or

reorganization of local districts. The statutes at issue imposed

a "blanket mill tax levy" on all taxable property located in

elementary school districts, which levy was in addition to the

regular school levy. Id. at 804-805, 54 N.W.2d at 88. Although

most of the revenue raised by the blanket mill tax levy came from

elementary school districts enrolling fewer than five students,

only those districts which enrolled at least five students received

revenues from the tax. Id. at 805-806, 54 N.W.2d at 89. In its

review of that statutory finance formula, the Peterson court

acknowledged the Unicameral's broad authority under Article VII,

§ 1, but also determined that when enacting legislation under that

provision, "the Legislature is of course restrained by other

related limitations of the Constitution." Id. at 810, 54 N.W.2d at

91. After analyzing the finance formula, the court concluded that

application of the formula under review (1) produced a commutation

of taxation in some school districts, in violation of Article VIII,

§ 4 of the Nebraska Constitution; and (2) was not levied uniformly,

and, thus, violated Article VIII, § 1 of the Constitution. Id. at

812, 814, 54 N.W.2d at 92-93.




In Gould v. Orr, 244 Neb. 163, 506 N.W.2d 349 (1993), a

family whose children attended the Raymond Central School District,

attempted to challenge the state school finance formula which

existed prior to the 1990 enactment of LB 1059 on the basis that

the formula denied them equal protection of the law, equal

educational opportunities, and the right to uniform and

proportionate taxation. Id. at 164, 506 N.W.2d at 350. While the

dispute was ultimately resolved on procedural grounds, the court

determined that an unequal method of financing a school district's

instruction budget is not a per se violation of Article VII, § 1.

Id. at 169, 506 N.W.2d at 353.




More recently, in Swanson v. State, 249 Neb. 466, 544

N.W.2d 333 (1996), the court assessed a challenge to the "common

levy" financing mechanism which resulted from the 1993 enactment of

LB 839. At issue were the plaintiff's claims that (1) the common

levy constituted a commutation of property tax, in violation of

Neb. Const. art. VIII, § 4; (2) that the levy was nonuniform and,

thus, in violation of Neb. Const. art. VIII, § 1; (3) that the levy

created a state property tax, in violation of Article VIII, § 1A;

and (4) that the common levy constituted "special legislation," in

violation of Article III, § 18. Id. at 468, 544 N.W.2d at 336.




In reviewing the plaintiff's Article VIII, § 4 challenge,

the court reaffirmed the principle that an impermissible

commutation of taxes occurs "when tax funds raised in one [school]

district are diverted entirely to the benefit of another [school]

district." Id. at 471, 544 N.W.2d at 337 (citing State ex rel.

School Dist. v. Ellis, 160 Neb. 400, 70 N.W.2d 320 (1955); State ex

rel. Groves v. School Dist., 101 Neb. 263, 162 N.W. 640 (1917)).

The court, however, did not find the "common levy" financing method

to be violative of the Article VIII, § 4 proscription against

commutation of taxes. 249 Neb. at 472-474, 544 N.W.2d at 338-339.

Specifically, the court determined that "[a] tax levy does not

equal a commutation merely because the taxing district is broadened

to reflect the actual benefits to the public. So long as all

taxpayers receive the benefit of the taxes they remit, the taxing

district passes constitutional muster without offending the

prohibition against commutation." Id. at 474, 544 N.W.2d at 339.




The court also rejected the plaintiff's uniformity clause

challenge as being without merit given that, by its very

definition, the common levy taxed all Class I school districts at

the same rate. Id. at 475, 544 N.W.2d at 339. With regard to the

plaintiff's third claim, the court reiterated that "[t]he State

cannot . . . avoid or circumvent [the Article VIII, § 1A

prohibition against creation of a state property tax] by converting

the traditional state functions into local functions supported by

property taxes." Id. at 476, 544 N.W.2d at 340. Given that

nothing in the common levy tax formula granted state control over

individual school district budget decisions, the court rejected

Swanson's state property tax challenge. The court further rejected

the plaintiff's Article III, § 18 challenge and, ultimately, upheld

the "common levy" financing formula. Id. at 480, 544 N.W.2d at

342.




Based upon the supreme court's interpretation of Article

VII, § 1 in these cases, it is clear that the Legislature has full

plenary authority over local school districts. In enacting

legislation pursuant to Article VII, § 1, the Unicameral must

comply with other limits imposed upon it by the Nebraska

Constitution.




Sincerely,




DON STENBERG

Attorney General






Lauren L. Hill

Assistant Attorney General