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Law School Case Brief

Zuni Pub. Sch. Dist. No. 89 v. Dep't of Educ. - 550 U.S. 81, 127 S. Ct. 1534 (2007)

Rule:

The regulations promulgated under the Impact Aid Act, 20 U.S.C.S. § 7701 et seq., set forth the equalization calculation method as follows: determinations of disparity in current expenditures per-pupil are made by -- (i) ranking all of the State's school districts on the basis of current expenditures per pupil in the relevant statutorily determined year; (ii) identifying those school districts that fall at the 95th and 5th percentiles of the total number of pupils in attendance at all the State's school districts taken together; and (iii) subtracting the lower current expenditure per pupil figure from the higher for those school districts identified that fall at the 95th and 5th percentiles, and dividing the difference by the lower figure. 34 C.F.R. pt. 222, subpt. K, app. P1 (2006). 

Facts:

The Federal Impact Aid Program provides financial assistance to local school districts whose ability to finance public school education is adversely affected by a federal presence. The statute prohibits a State from offsetting this federal aid by reducing state aid to a local district. To avoid unreasonably interfering with a state program that seeks to equalize per-pupil expenditures, the statute contains an exception permitting a State to reduce its own local funding on account of the federal aid where the Secretary of Education finds that the state program "equalizes expenditures" among local school districts. 20 U.S.C. § 7709 (b)(1). The Secretary is required to use a formula that compares the local school district with the greatest per-pupil expenditures in a State to the school district with the smallest per-pupil expenditures. If the former does not exceed the latter by more than 25 percent, the state program qualifies as one that "equalizes expenditures." In making this determination, the Secretary must, inter alia, "disregard [school districts] with per-pupil expenditures . . . above the 95th percentile or below the 5th percentile of such expenditures in the State." § 7709(b)(2)(B)(i). Regulations first promulgated 30 years ago provide that the Secretary will first create a list of school districts ranked in order of per-pupil expenditure; then identify the relevant percentile cutoff point on that list based on a specific (95th or 5th) percentile of student population--essentially identifying those districts whose students account for the 5 percent of the State's total student population that lies at both the high and low ends of the spending distribution; and finally compare the highest spending and lowest spending of the remaining school districts to see whether they satisfy the statute's requirement that the disparity between them not exceed 25 percent.

Using this formula, Department of Education officials ranked New Mexico's 89 local school districts in order of per-pupil spending for fiscal year 1998, excluding 17 schools at the top because they contained (cumulatively) less than 5 percent of the student population and an additional 6 districts at the bottom. The remaining 66 districts accounted for approximately 90 percent of the State's student population. Because the disparity between the highest and lowest of the remaining districts was less than 25 percent, the State's program "equalize[d] expenditures," and the State could offset federal impact aid by reducing its aid to individual districts. Seeking further review, petitioner school districts (Zuni) claimed that the calculations were correct under the regulations, but that the regulations were inconsistent with the authorizing statute because the Department must calculate the 95th and 5th percentile cutoffs based solely on the number of school districts without considering the number of pupils in those districts. A Department Administrative Law Judge and the Secretary both rejected this challenge, and the en banc Tenth Circuit affirmed.

Issue:

Did the "above the 95th percentile of per pupil expenditures" permit calculation of percentiles by (1) ranking local districts, (2) noting the student population of each, and (3) determining the cutoff point on the basis of districts containing 95 percent (or 5 percent) of the State's students?

Answer:

Yes

Conclusion:

The United States Supreme Court noted that the definitions of percentile indicated that to identify the relevant percentile cutoffs, a distribution of values had to be constructed. The instruction to identify the 95th and 5th "percentile of such expenditures" made clear that the relevant characteristic for ranking purposes was per-pupil expenditure during a particular year. Context supported the finding that the instruction to identify districts with "per-pupil expenditures" above the 95th percentile "of such expenditures" was ambiguous, because both students and school districts were of concern. Thus, the disregard instruction could include within its scope the distribution of a ranked population that consisted of pupils (or districts weighted by pupils) and not just a ranked distribution of unweighted districts alone.

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