## Facts

- Public school children and their parents filed a statewide class action challenging California’s public school finance system, seeking declaratory and injunctive relief.
- The challenged system relied largely on (1) local school district taxes on real property and (2) state aid from the State School Fund.
- Plaintiffs alleged wide interdistrict disparities in assessed property valuation per pupil, producing substantial differences in per-pupil revenue among districts.
- Plaintiffs alleged wealthier districts could raise more school revenue at lower tax rates, while poorer districts paid higher tax rates but still had less revenue and inferior educational opportunities.
- The trial court sustained general demurrers without leave to amend and dismissed the action.
- The California Supreme Court reviewed whether the complaint stated viable constitutional claims, accepting the pleaded allegations as true at the demurrer stage.

## Issues

1. Whether a school finance system substantially dependent on local property taxes, causing wide revenue disparities tied to district wealth, violates equal protection under the Fourteenth Amendment and the California Constitution.
2. Whether education in California public schools is a fundamental interest and whether wealth-based disparities constitute a suspect classification requiring strict scrutiny.
3. Whether the California Constitution’s “free common schools” provision requires equalized spending or revenue among school districts.

## Decision

- The court reversed the judgment of dismissal and remanded for further proceedings.
- The court held the complaint stated causes of action under federal and state equal protection provisions, based on allegations that educational opportunity was made a function of local wealth.
- The court recognized education as a fundamental interest for equal protection analysis in this context and treated the alleged wealth-based discrimination as triggering strict scrutiny at the pleading stage.
- The court rejected the separate claim under the “common schools” clause, holding that provision does not mandate equal expenditures among districts and allows some local variation.

## Legal Principles

- When a financing scheme plausibly conditions access to meaningful educational opportunity on wealth, equal protection scrutiny may be heightened.
- In this setting, education may be treated as a fundamental interest and wealth-based discrimination as suspect, requiring the state to show a compelling purpose and necessary means.
- At the pleading stage, a complaint sufficiently alleging wealth-linked, substantial interdistrict disparities in educational opportunity states an equal protection claim and should not be dismissed on demurrer.
- The California Constitution’s “common schools” requirement obligates the Legislature to maintain a system of common schools but does not, by itself, require equalized spending across districts.

## Conclusion

The California Supreme Court held that allegations of major school funding disparities tied to local property wealth stated viable equal protection claims under both federal and state constitutions, warranting strict scrutiny and reversal of the demurrer dismissal, while also holding the “common schools” clause did not independently require equalized district spending.


Serrano v. Priest, 5 Cal. 3d 584 (Cal. 1971)