Original jurisdiction in case of Thomas P. O'Donnell, Jr. and Eileen O'Donnell, his wife; Philip Shalanca and Ann Marie Shalanca, his wife; Kenneth Moules and Geraldine Moules, his wife; and Wilkes-Barre Area School District v. Robert E. Casey, State Treasurer, and Caryl M. Kline, Secretary of Education.
Robert T. Panowicz, with him Anthony B. Panaway, for petitioners.
Paul Schilling, Deputy Attorney General, with him Susan J. Forney, Deputy Attorney General, Norman J. Watkins, Deputy Attorney General, and Edward G. Biester, Jr., Attorney General, for respondents.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Craig and MacPhail. Judges Blatt and DiSalle did not participate. Opinion by President Judge Bowman.
[ 45 Pa. Commw. Page 396]
Invoking our original jurisdiction (42 Pa. C.S. § 761) the Wilkes-Barre Area School District (District) joined by parents and taxpayers residing in that District with children attending District schools, by petition for review in the nature of a complaint in equity seek to enjoin the State Treasurer and the Secretary of Education from disbursing funds to any school district within the Commonwealth under provisions of The Public School Code of 1949*fn1 (School Code) establishing a formula for computation of the state subsidy.
Petitioners premise their request for an injunction upon the alleged unconstitutionality of the 1977 amendments to the School Code which redefine that formula by introducing a market value/income aid ratio. This formula, set forth in sections 2501 and 2502 of the School Code, 24 P.S. §§ 25-2501, 25-2502, includes three major elements: student enrollment; district spending per student; and the district's relative wealth. The District asserts that the formula used by the Commonwealth to measure district wealth and determine the amount of the subsidy payable to a district through the Secretary of Education and State Treasurer bears no rational relationship to a district's ability to raise revenue to meet its needs, and that distribution of Commonwealth funds in accordance with this formula is arbitrary, unreasonable and capricious, thereby violating due process protections guaranteed under the Pennsylvania Constitution, Art. I, § 1, and the Fourteenth Amendment of the United States Constitution.
[ 45 Pa. Commw. Page 397]
Respondents have filed preliminary objections to the petition alleging: (1.) that the petition fails to state a cause of action; (2.) that petitioners have failed to join the remaining five hundred and four (504) school districts as indispensable parties; (3.) the District's lack of standing to raise a due process challenge; and (4.) the failure to conform to the class action requirements of Pa. R.C.P. Nos. 1701-16.
In passing upon respondents' demurrer we accept as true all well-pleaded factual averments in the petition for review. Department of Environmental Resources v. The Hartford Accident and Indemnity Co., 40 Pa. Commonwealth Ct. 133, 396 A.2d 885 (1979). Though replete with legal conclusions and argument, the only "facts" pleaded are statistics for the years 1970-1976 which disclose, (1.) that of all local school taxes collected in the Commonwealth, district levies on income represented a maximum of nine and two-tenths (9.2%) per cent of the total revenue collected each year, and (2.) that Wilkes-Barre Area School District during the period 1972-73 and 1976-77 has been able to raise only seven (7.0%) per cent of the revenue necessary to carry out its duty to support, maintain and operate its schools from taxes on income and only ten (10.0%) per cent of the total needed from all taxable sources other than property taxes, including taxes on income. To better understand the significance the District places on these figures it is necessary to discuss briefly the operation of Pennsylvania's school subsidy formula.
In order to finance its system of educational services, the legislature has vested in each school district "all the necessary authority and power annually to levy and collect, in the manner herein provided, the necessary taxes required, in addition to the annual State appropriation. . . ." Section 507 of the School Code, 24 P.S. § 5-507.
[ 45 Pa. Commw. Page 398]
We have had occasion recently to examine in detail the manner by which student enrollment, cost and district wealth are computed ...