Long-Running South Carolina Funding Lawsuit Decided

Last Updated: November 24, 2014

This article appeared in the November 2014 Rural Policy Matters.

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After 21 years in the courts, South Carolina’s Abbeville school finance lawsuit has been decided. Earlier this month the State Supreme Court ruled in a 3–2 decision that the state is failing to provide the poorest districts with enough funding to meet the constitutional standard of a minimally adequate education. (See previous RPM coverage of Abbeville here and here.)

The ruling addresses several concerns of high-poverty rural districts, including long bus rides and substandard teacher certification. Specifically, in reference to one-way bus rides of two hours, the Court found that “inadequate transportation fails to convey children to school or home in a manner conducive to even minimal academic achievement.”

The Court also found that the state’s teacher certification process makes it possible for teachers who do not meet “minimal teaching-competency standards” and teachers who are not certified at all to teach core subjects. These teachers are more concentrated in low-wealth, high-poverty rural districts. 

The court ordered the legislature to fix the school finance system but did not specify the remedy.

"We are pleased the real work of creating a new and fair funding system can begin," says Amanda Adler, attorney at South Carolina Appleseed Legal Justice Center. Adler served as Director of the Rural School Finance Center at the Rural Trust. South Carolina Appleseed is a friend of the court for the Abbeville plaintiffs.

"An important task now is to determine the real cost of a constitutionally adequate education in the plaintiff districts," Adler says. "That will be an important starting point."

The two dissenting justices argued that school funding is a legislative matter and the court was overstepping its boundaries.

Complex history

The initial lawsuit was filed in 1993 by a group of rural, high-poverty districts that claimed the state’s 1977 funding formula was unconstitutional because the property tax base in rural districts prevented them from generating local revenues at the rates of wealthier, more urban districts.

Like many school finance lawsuits, Abbeville has had a complex history. The state argued for dismissal of the case, which was granted in 1996. But plaintiffs appealed and in 1999 the state Supreme Court found that the state was obligated to provide “the opportunity for each child to receive a minimally adequate” education, including adequate safe facilities and opportunities for children to acquire academic and vocational skills in reading and writing, math, science, and social studies.

The 1999 ruling reduced the number of districts in the case from 40 to eight and returned the case to the Circuit Court to hear arguments over what constitutes a minimally adequate education. Those arguments began in 2003. In 2005, the court found that the state was failing to fund pre-K through third grade at adequate levels. The state appealed the portion of the ruling related to early childhood funding and plaintiffs appealed the portion of the ruling related to teacher pay and facilities.

What’s next?

The South Carolina Supreme Court ruling ordered both the plaintiff districts and the legislature to propose remedies to the constitutional violation. 

Newly elected state superintendent Molly Spearman says she saw funding disparities due to local revenue capacity first hand when she worked in rural Saluda County. Spearman testified to that effect in the Abbeville case in the early 2000s. Governor Nikki Haley has also indicated that she understands funding challenges facing rural school districts.

One possible remedy that will likely be considered is a proposal to establish a statewide property tax for schools. A similar measure, called the S.C. Jobs, Education and Tax Act, was introduced in the legislature last year but died in committee. It would have created a statewide property tax with revenues distributed to all 82 school districts.

Such a measure would help ease one of the difficulties common to rural districts across the country and the one originally identified in Abbeville: the inability to generate significant revenues from local property taxes even when rural tax rates are relatively high.

Last year’s statewide property tax bill would have guaranteed that state funding to wealthier districts would not be cut under the measure for 25 years. It would also have granted tax relief for businesses in rural counties with tax rates higher than the proposed statewide rate and would have allowed local districts to raise property tax rates above the state rate to support local schools.

While a measure like the S.C. Jobs, Education and Tax Act would generate more equitable revenues for rural low-wealth districts, it would not directly address the additional needs of students living in poverty. Nor would it help the state’s poorest districts make up for years of severe underfunding.

The predictable but disastrous idea to consolidate school districts is also floating around. District consolidation is often proposed in response to rural low-wealth districts that win a school finance ruling. But there is almost no research evidence that district consolidation has saved money where it has been implemented. There is, however, extensive research demonstrating that district consolidation leads to the loss of local leadership, the closure of rural schools, greater economic decline in rural communities, much longer bus rides for rural students, reduced family involvement, and academic and extracurricular outcomes that are generally worse than before consolidation.

Adler says the state should not consider consolidation or any single piece of legislation as the answer. "I hope the state will take a deeper and broader view of what will make a difference," she said.

South Carolina’s rural low wealth school districts face some of the toughest challenges in the nation. The state has the opportunity to address some of these challenges if it implements a thoughtful, strategic funding system. To do so it must work respectfully and collaboratively with rural districts, especially the Abbeville plaintiffs, to build on their strengths, make the most of their rural characteristics, and provide their students with more than “minimally adequate” educational opportunity.

"This is an important decision in South Carolina," Adler says. "It is important to honor and remember the good work and energies of all the people who have worked in and with our state's rural school districts to make it happen, including those who did not live long enough to see this day." 

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Rural Policy Matters.