Court filings: Court of Appeals, brief for appellee Little Rock School District (LRSD)

This transcript was created using Optical Character Recognition (OCR) and may contain some errors. FRIDAY , ELDREDGE&: CLARK H(IUCH(L H FRIDAY ( 1117 - tlI WllLIAW H tUTTON . r A JAM(I W WOO"[ IYIIIIOH M (ll(MAN. JIii . ,. A JO( 0 IILL. ,. A . A PARTNERSHIP OF INOIV IOUAL5 ANO PROFESSIONAL ASSOC ' A TIONS ATTORNEYS AT LAW JOHN C . (CHOlt , ,. A J 4M(I A IUTT,.Y , ,. A . FIIUQ(IIIIIClt . Ullll(IIIY , f' A . H f L.41UL" ,. A All DAVIS, JIii . f' A (8 C CLAfllt. Jl4 , f' A MAI,. LEOOETT. ,. A H Q[W(Y WATIION , f' A . it4Ul I . l(NHAM Ill. f' A l Al'lftY W 8Ul41C8 , r A. 4 WYCS:L!FF Hl81T J l4 .. ,. A J AM(! 0 WAl40 H411111!1, r A J l"tHlL l r MALCOM , I" A J ,t,M(!I M SIMrSOH,,. A . J A.M(!I M S AXTON , r A .J 5H(,.H(l4 O jlfUSS(lL Ill. f' A OQ H,t,LO M IACON , f' A . WILL IAM THOMAS 8AXTUt . r A . WAlf11 4 ,.AUl.8ON II, ,. A . IAIIIIIIY (. COf'llH, t' .A .IIICHAltO 0 . TA.YL014 . ,. A .J OIH'H I HUlll9T , JII . f' A . HIZA8(TH lll081N WUIIJ,.AY . ,. A . CHltllTO,.IHIIII H(ll.11 . ,. A L AUlllA H(NIH(Y SMITH , ,. A . lt08(11T S SHAF(ft , f A . WIL LI AM ltol 0141FFIH Ill. ,. , A . M ICH AEL 5 . M0014( . f' A . DIAM( S WACS:(Y . f A WAL TEii M (l(l Ill . 1' A l(VIN A CR ASI . ,. A WI LLIAM A . WAOO(LL. JIit f' A , Mr. Michael E. United States Gans Court U.S. Court & Custom 1114 Market Street St. Louis, MO 63101 2000 FIRST COMMERCIAL 8UILO INO 400 WEST CAPITOL AVENUE LITTLE ROCK , ARKA ... SAS n:o 1- l4tl TELEPHONE 50t - J7e-:o, I FAX ~O. 501 -l7 S- 214 7 September 8, 1997 of Appeals House 9 COTT .J l ,t,HC,t,I T ., & M -l A Y L( ,:0 11tt[Y 4 ~ O l(ltf I l(A.CW .1 111 J l( ( llltQWN ., 4 .J AW(I C 14C(II .J Iit & M,t,IUIY 4 U OHT 4 ICOf T H ru c,c . ,- 4 .JOH N CL A'l""OH Jl4HOOL,."'f OU Y ,t,l fO H W40( . , 4 it'I IC[ .:. 0Aflt0H(II ., 4. fO H I A ,- .10 H8 . !' .A Q ,t,V IO O Wll!IOH ,- 4 .J(FF .. (Y M WOO .. . ,. 4 A""O"(W " TU llfloj[Jt , ., .A Q ,t,VIO W U IIA.F . ,. A C All l A G i,.Al,..HOU" JOH M C ;:(HOLE Y J " A. Lll90 N !l lLI.VCS JO NA.MN C '10OSE VL7 II ,:HIIISTO r't-tEllt L AW SO -" Gll(OO IIY O "AYLOII TO NY L. WILC O X F" AH C. HICS:WAM l (TTY; O(MOIIY IAIIIAll4 .J .IIAHO J A.W(I WI !Ml TH CUFFOIIJO W r'L U WC[-OAHIEl l "l(lltllt lHG ~;: .. 4 LLISO H J :o,nfWH~ TOCO 4 a 1111 [LLE H W ,J W(HS HELEfrH "II ~AYOEII J ASCH I . "t(HOIIE-, 9UIAH )rif CHll.O ~9 o, c:uH W I LLIAM J 5W ITH 8 S ClAAl Wllll4W L. ... EAIIY , A WIL LI AM L. 4T TO M . II 4 {50 I 370 5C~ Re: Court of Appeals No. 97-1794, 97-1855 , 97-2394 and 97-2406 (Consolidated) Dear Mr. Gans: Brief CJH/k Enc. cc: I have enclosed for filing the Little Rock in the above-referenced matter. School \..,. Christopher Heller All Counsel Dist:::-ic-:'s I I I I I I I I I I I I I I I I I I I IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT ARKANSAS DEPARTMENT OF EDUCATION APPELLANT v. LITTLE ROCK SCHOOL DISTRICT, et al .ALMA SCHOOL DISTRICT, et al v. LITTLE ROCK SCHOOL DISTRICT, et al Nos. 97-1794EALR, 97-1855EALR, 97-2394EALR and 97-2406EALR (Consolidated) Appeals from the United States District Court For the Eastern District of Arkansas Western Division APPELLEES APPELLANTS APPELLEES Honorable Susan Webber Wright, District Judge BRIEF FOR APPELLEE LITTLE ROCK SCHOOL DISTRICT Christopher Heller John c. Fendley, Jr. FRIDAY, ELDREDGE, CLARK 400 w. Capitol Ave. Suite 2000 Little Rock, AR 72201 I I I I I I I I I I I I I I I I I I I TABLE OF AUTHORITIES STATEMENT OF THE CASE. SUMMARY OF ARGUMENT. ARGUMENT TllLZ o:, COll'l'D'l'S I. Th Diatriot Court Did ot Rely Upon Diaputed xaterial :raota ii . . l . . " 6 II. Th Diatriot Court correctly :rollowed Recent Precedent III. Other Iaauea ltaiaed By AD And Intervenor Do ot warrant aeveraal CONCLUSION i 20 I I I I I I I I I I I I I I I I I I I '!'ULS 01' &U'l'BOIU'!'XU DuPree v. Allla School Dist. No. 30 279 Ark. S.W. 2d 90 (1983) .... Jenkins v. Missouri 1997 U.S. App. LEXIS 21468 (8th Cir. 1997) . . . . . . . . . 18 . 1 LRSD v. PCSSD, 83 F.3d 1013 (8th Cir. 1996 ...... 5,9,10,16 LRSD v. PCSSD, 778 F.2d 404 (8th Cir. 1985) 18 ii I I BTA'l'DDl'I' OP ~ CASB I Th s1tt1g1nt AsJr1uaent I I I I I I I I I I I I I I I I The Little Rock School District (LRSD), the Pulaski County Special School District (PCSSD) and the North Little Rock School District (NLRSD), collectively the "Districts," brought this case to enforce the Pulaski County School Desegregation Case settlement Agreement. For the second time, this Court has been asked to interpret those parts of the Settlement Agreement which protect the Districts from the loss of State funding for programs which were funded at the tiae of the settlement and from retaliatory action by the State because of the settlement. Two separate and distinct coponents of the Settlement Agreement are at issue in this appeal. First, because of the relatively small amount of the financial settlement in this case, 1 the State of Arkansas agreed to continue to fund all of the programs for which the Districts received state funding at the time of the settlement: 1The Settlement Agreement requires the State of Arkansas to pay to LRSD, PCSSD and NLRSD a total of nearly one hundred thirty million dollars, including a twenty aillion dollar loan to LRSD. ADE Appx. Vol. 1, pp. 110-124. By comparison, the State of Missouri has paid the Kansas City School District approximately two hundred fifty million dollars for restoration of the district's physical facilities and approximately nine hundred fifty aillion dollars for educational and other prograJ1s. Jenkins y, Missouri. 1997 u.s. App. LEXIS 21468 at *22- *23 (8th Cir. 1997). This Court recently approved an agreement by which Missouri will be released from any further obligation upon the payment to the Kansas City School District of an additional three hundred twenty aillion dollars over three years . .lg. at *l. The Kansas City School District has fewer students than the Districts in this case. 1 I I I I I I I I I I I I I I I I I I I II.E continuation of Existing Funding In addition to any paYJlent described elsewhere in this agreeaent, the State will continue to pay the following costs: (6) The State' share of any and all programs for which the Districts now receive State funding. ADE Appx. Vol.l, pp. 92-93. It is undisputed that the Districts are now required to fund certain programs, including teacher retirement and health insurance, which were funded by the State of Arkansas at the time of the settlement agreement. ADE Appx. Vol. 3, p.385. The second provision of the Settleaent Agreement at issue in this case prohibits the state from retaliating against the Districts because of the aettleaent: II.L Prohibition of Punitive Action The State shall take no action (including the enactment of legislation) for the purpose of retaliating against the Districts (including retaliatory failure to increase State aid and retaliatory reduction in State aid) because of this Litigation or this settlement. ADE Appx. Vol. 1, p. 98. 2 2This section of the Settlement Agreement also prohibits legislation which has a substantial adverse impact on the ability of the Districts to desegregate, but creates an exception for fair and rational adjustaents to the funding formula which have general applicability even if those adjustaents reduce the proportion of state aid to any of the Districts. The Districts have not claied that the State's new funding formula has had a substantial adverse impact on their ability to desegregate. 2 I I I I I I I I I I I I I I I I I I 1 Th J'Undinq roraul Before 1995, the State bore the entire burden of funding the teacher retirement and health insurance programs for all Arkansas school districts. Direct state funding of teacher retirement and health insurance was discontinued by Act 1194 of 1995. ADE Appx. Vol. 3, pp. 357-58. Act 1194 also changed the State's aethod of appropriating funds for teacher retirement, health insurance and other programs fro a line it81l appropriation to a general appropriation. ADE Appx. Vol. 3, pp. 352-53. School districts are now required to pay the total cost of these programs. undisputed ract1 The material facts of this case are not in dispute. Teacher retirement and health insurance were programs fully funded by the State of Arkansas at the time of the Settlement Agreement. ADE Appx. Vol. 3, p. 385. The Settlement Agreement requires the State to continue to pay its share of any and all programs for which the Districts received State funding at the tiae of the Settlement Agreeaent. ADE Appx. Vol. 1, pp. 92-93. One hundred thirty aillion dollars was appropriated for teacher retirement for the 1995-96 school year (ADE Appx. p. 387- 88; Amicus Appx. pp. 143-45) and before the new funding scheme was adopted, the Arkansas Department of Education requested $134,500.00 to fund teacher retirement for the 1996-97 school year (ADE Appx. Vol. 3, pp. 387-88). Nearly forty-three million dollars was budgeted for "public school employee insurance" for the 1995-96 school year. ADE Appx. Vol 3, p. 352. 3 I I I I I I I I I I I I I I I I I I I The state adopted a new funding formula, Act 917 of 1995, to take effect at the beginning of the 1996-97 school year. ADE Appx. Vol. 3, pp. 321-50. A related law, Act 1194 of 1995, requires that school districts fund their own teacher retirement and health insurance programs beginning with the 1996-97 school year. ADE Brief, p. 7; ADE Appx. Vol. 3, pp. 357-58. The new funding laws contain no specific appropriation for teacher retirement or health insurance. Most State funding under the new State funding system is distributed on a per ADM basis as equalized by the relative wealth of the funded district. ADE Appx. Vol. 3, p. 376. Distributing State funds on an equalized basis aeans pursuant to a method that takes into account a district's local revenue and which gives aore State funds to poorer districts than richer districts. ADE Brief, p. 6. other xatt1r1 In its statement of the case, PCSSD has addressed and clarified several other matters contained in the ADE and Intervenor briefs. LRSD adopts PCSSD's position with respect to those matters. 8omRY OJ' UCl1JIID'l' The undisputed facts in the record are sufficient to uphold the district court's grant of swaary judgment. The district court's finding that funds which in past years were appropriated specifically for teacher retirement and health insurance are now included within a larger general appropriation is a logical 4 I I I I I I I I I I I I I I I I I I I conclusion based on the undisputed evidence and not an imperaiasible resolution of a disputed fact. ADE's contention that there exists a dispute as to whether its new funding formula distributes funds on a~ per-student basis as opposed to an equalized per-student basis is also incorrect. Both district court opinions at issue here clearly show the district court's understanding that funds are distributed on a equalized per-student basis as the State contends. This case is governed by this Court's decision with respect to the workers' compensation program. LR.SD y, PCSSD, 83 F.3d 1013 (8th Cir. 1996). The actions of the State at issue here are very similar to the actions the State took to discontinue the State funded workers' copensation program and then to distribute workers' compensation funding on a per-student basis. The State's effort to redistribute teacher retirement and health insurance program funds on an equalized per student basis, rather than a basis which bears any rational relationship to the nwnber of employees in a school district or to the cost of those programs, should be rejected. The distribution of funds on an equalized per-student basis results in LRSD receiving State funding for a much smaller percentage of its teacher retirement and health insurance costs than the percentage received by other districts outside Pulaski County. Thia result is precisely what the anti-retaliation clause of the Settlement Agreeaent was eant to prevent. ,Ig. at 1018. 5 I I I I I I I I I I I I I I I I I I I UGUJODl'l' I. Th Di t.riot Court Di4 IIOt ly Upon Di pute4 Material J'aot The Arkansas Department of Education contends that the district court ignored or resolved two factual issues which "were central and essential to the Districts' claims." ADE Brief, p. 14. ADE described the "two key disputed factual issues" as follows: First, that there is "an identifiable amount of dollars distributed as Equalization Funding that are 'ear-marked' to satisfy school districts' teacher retirement and health insurance matching"; and second, that "these identifiable and ear-marked 'retirement' and 'health insurance' funds are now being distributed on a pure per-student3 basis" as opposed to an equalized per-student basis. ADE Brief, p. 16. There is, in fact, no issue at all with regard to the second "factual dispute" described by ADE. Both district court opinions below clearly adopted ADE's position. In its order granting summary judgment on the teacher retirement issue, the district court found that the State's new funding scheme "distributes funds on a per-ADM basis equalized by the wealth of the district." ADE Add. p. 9 (emphasis supplied). In its opinion granting SWllllary judgment on the health insurance issue, the district court held "that because the new funding scheme does not consider the number of eligible employees but instead is based 3ADE uses the terms "per-ADM basis" (ADE Brief, p. 16) and "per-student basis" (ADE Brief, p. 14). The terms are roughly equivalent. ADM means average daily membership. 6 I I I I I I I I I I I I I I I I I I I upon ADM, equalized by the wealth of the district, requiring the settling Districts to pay health insurance matching from equalization or local funds is not a "fair and rational" adjustment to the funding formula." ADE Add. p. 17 (emphasis supplied). ADE's contention that there exists in this case some dispute about whether the new funding formula distributes funds on a "pure per-student basis, as opposed to an equalized per student basis," is simply wrong. If there ever was a dispute, it has been resolved in ADE'& favor. The State's contention that there is a material dispute about whether the new funding formula distributes certain funds that are "ear-marked" for teacher retirement and health insurance is also insubstantial. Teacher retireaent and health insurance were programs fully funded by the State at the tiae of the Settlement Agreement. ADE Appx. Vol. 3, p. 385. There were specific appropriations for teacher retirement and health insurance for the 1995-96 school year. ADE Appx. p. 387-88; Amicus Appx. pp. 143-45. Act 1194 of 1995 discontinued itemized State funding for teacher retireaent and health insurance beginning with the 1996-97 chool year. Finally, overall State funding for Arkanaaa public schools is greater for the 1996-97 school year than it was for the 1995-96 school year by an amount which exceeds the total 1995-96 State payments for teacher retirement and health insurance. ADE Appx. Vol. 3, pp. 352-53. These established facts are sufficient to support the district court's finding that "it is only logical to conclude that sums 7 I I I I I I I I I I I I I I I I I I I that were previously either paid directly by the State or appropriated as line iteaa for distribution to the Districts must be components of a fund that is forecast to be over $200,000,000.00 more than it was at the tiae of the Lake View decision.' ADE Add. p. 7. The state is contending that if the Districts cannot find a line item appropriation for teacher retirement and health insurance, then those programs, which have been funded by the state for decades, are not funded under the new school formula. The district court reached the only logical conclusion. Funding for teacher retirement and health insurance is contained in a large, unitemized appropriation under the new funding formula, and those funds are distributed on an equalized per-student basis rather than a basis which bears soae relation to the number of employees or actual costs. 4Even the intervenor& seem to see the logic of the district court's conclusion. In describing the change from the old program funding systell to the new student funding system, they say: The money is there but the requirement to pend a specific amount on employee health insurance, for example, is gone. Intervenor&' Brief, p. 20 (emphasis supplied). The Intervenor& go on to say that our argwaent that the Settlement Agreement has been violated with respect to teacher retirement and health insurance funding ignores the fact that the funds are still provided Intervenors' Brief, p. 21. 8 I I II. Th Pitrict &r BntitlO To emunnn Judgment A A Matter I I I I I I I I I I I I I I I I I Of Lay Thia case is governed by the terms of the settlement Agreement. In deciding the eaning of the terms in the Settlement Agreement, and their application to the facts in this case, the district court carefully followed the oat recent precedent established by this Court. As a result, the district court reached the correct conclusion under the law of this case. The precedent followed by the district court was established in LRSD y, Pesso, 83 F.3d 1013 (8th Cir. 1996). In that case, this court determined that State funding of workers' compensation was a "program" for purposes of the Settlement Agreement and held that funding the Districts to a lesser degree than other districts in the state violates the Settlement Agreement . .lg. at 1017. Although the State added a slightly different twist in its effort to redistribute funding for the teacher retir .. ent and health insurance prograJU1, the facts are close enough to the workers' compensation case to warrant the same result. In the workers' compensation case, the districts argued that payment of workers' compensation costs was a "program" for which they received "State funding" at the time of the Settlement Agreement. LRSD y, Pesso. 83 F.3d at 1013, 1017 (8th cir. 1996). This Court agreed, but defined the "program" as "equal state funding of workers' compensation for all school diatricts."5 .lg. 5NLR.so will argue that programs such as teacher retirement and health insurance which were funded by the State at the time of the settlement cannot be discontinued even by a change in State funding 9 I I I I I I I I I I I I I I I I I I I at 1018. This court concluded that "the State can change its funding scheme for workers' compensation, so long as the change is, in the words of the Settlement Agreement, "fair and rational" and of "general applicability." l.s1- The State argues that the teacher retirement and health insurance programs have been eliminated for every district in the State and, because the "change affects all districts to the same degree, it does not run afoul of the Settlement Agreement." lg. However, aa with the worker' compensation case, there is more to the story. To eaae the transition fro a State funded to a district funded workers' compensation program, the State disbursed "seed oney" which paid about one-half of the workers' compensation expense statewide but only about one-third of the expense for the settling Districts. The disparity arose because the State used enrollment rather than number of employees to determine how much money each district would receive. l.sl- This Court held that the distribution of workers' compensation "seed money" violated the settlement: Thia result is precisely what the antiretaliation clause was meant to prevent. It funds the Pulaski County districts to a lesser degree than other districts in the state. It is of no oent that the State reached this result in a aathematically consistent anner. The District Court correctly held that the State must disburse seed money to the Pulaski County districts in the same percentage as it does statewide. which is determined to be fair, rational, and generally applicable. LRSD agrees with that argument. 10 I I I I I I I I I I I I I I I I I I I In thia case, the legialature ha said that beginning with the 1996-97 school year funding for teacher retirement and health insurance is a district, rather than a State, responsibility. The state has also moved from a line item appropriation which shows specific funding for health insurance and teacher retirement to a general appropriation of funds to be distributed, for the most part, on an equalized per-student basis. ADE Appx. Vol. 3, pp. 317-366. Statewide, the amount of money which flows through the public school fund is greater for the 1996-97 school year than it was for the 1995-96 school year. ADE Appx. Vol. 3, pp. 352-53. ADE argues that because none of the aoney in the expanded public school fund is "ear-aarked" for teacher retirement or health insurance, this case does not fit within this Court's ruling which required fair distribution of workers' compensation seed money. ADE Brief, p. 19-22. All the State has really done is to strip away the labels from the teacher retirement and health insurance programs. The funding for those prograas has been shifted from a line item appropriation to a general appropriation. Funds for teacher retirement and health insurance are now combined with other funds to be distributed on an equalized per-student basis as "equalization funding." ADE Appx. Vol. 3, p. 352. The State is playing a shell gaae, contending that if the Districts cannot find the pea, it does not exist. The district court was not fooled. It was clear to the district court that "what used to be funded as a line item was 11 I I I I I I I I I I I I I I I I I I I folded into the 1996-97 appropriation for State equalization funding.w ADE Ad. pp. 8-9. Simple logic dictates wthat sums that were previously either paid directly by the State or appropriated as line iteas for distribution to the districts ust be component of [the new equalization) fund .... w ADE Ad., p.7. This Court should affira the di trict court. If the State can avoid responsibility for continued funding of the teacher retirement and health insurance programs simply by moving the funds into a general appropriation to be distributed on an equalized per-student basis, the Settlement Agreement requirement of continued funding and this Court's decision concerning workers' compensation seed aoney will have been rendered meaningless. This is not a case where the State has treated all Arkansas school districts the same with respect to teacher retirement and health insurance funding. The State has changed the way it distributes funding for those prograas in a way that favors districts outside Pulaski County. Instead of simply paying the actual costs of those programs statewide, the State has elected to distribute on an equalized per-student basis the funds which would have gone to pay for the teacher retirement and health insurance programs. The impact of the State's distribution of teacher retirement funds according to the number of students rather than the number 12 I I I I I I I I I I I I I I I I I I I of teachers in LR.SD can be easily shown.' The State budgeted $130,000,000.00 to pay teacher retirement statewide for the 1995- 96 fiscal year. ADE Appx. Vol., 3, p. 352. The average daily membership for the State for the 1995-96 school year was 443,516 students. A per student distribution of those retirement funds would yield $293.11 per student. Distribution of that amount based on LRSD's average daily aeabership of 22,385 students would result in a state teacher retireaent payaent of $6,561,267.00. This is only about two-thirds of the aaount actually paid by the State to LR.SD for the 1995-96 school year when the calculation was done on a per-teacher rather than per-student basis. The State appropriation of $130,000,000.00 for the 1995-96 school year should have been sufficient to fund the entire cost of the teacher retirement program statewide. Before the establishment of the new funding program, ADE sought an appropriation of $134,500,000.00 to fund the statewide teacher retirement program for the 1996-97 school year. ADE Appx., Vol. 3, pp. 387-88. That amount also should have been sufficient to fund the entire cost of the statewide teacher retirement program. The result of the state aoving teacher retirement funds into a general appropriation and distributing those funds on an 'we understand that ADE uses an equalized per-student distribution rather than a pure per-student distribution. Largely because its aillage rate is the fifth highest in the state (ADE Appx., Vol. 4, p. 583), LR.SD is a relatively rich school district for the purposes of the new funding formula. Accordingly, LR.SD would actually receive less funding on an equalized per-student basis than is shown in this example. 13 I I I I I I I I I I I I I I I I I I I equalized per-student basis is that LRSD will receive two-thirds or less of its teacher retirement costs while the average funding level statewide exceeds one hundred percent of teacher retirement costs. The results are the same for employee health insurance. The estimated statewide health insurance contribution for the 1996-97 school year is $42,815,000.00. ADE Appx. Vol. 2, p. 245 and Vol. 3, p. 352. This money is distributed through the new funding formula on an equalized per-student basis which bears no rational relationship to a particular district's costs for employee health insurance. As a result, the State paid 109.95 percent of the cost of employee health insurance statewide excluding Pulaski County. ADE Appx. Vol. 2, p. 245. The average funding in the Pulaski county school districts is 71.39 percent. LRSD receives only 53.41 percent of its cost of employee health insurance payments. The district court correctly held "that because the new funding scheme does not consider the number of eligible employees but instead is based upon ADM, equalized by the wealth of the district, requiring the settling districts to pay health insurance matching from equalization or local funds is not a 'fair and rational' adjustment to the funding formula." ADE Ad., p. 17. III. other 11,v IAi IY N>I xntervenor1 Do 1ot warrant lYral ADE and the Intervenor& have raised several other issues, none of which warrants reversal of the district court opinions. Both appellants contend that the new funding formula is 14 I I I I I I I I I I I I I I I I I I I beneficial to the Pulaski County School districts since they received aor State funding this year than they did last year. The Intervenor& completely misstate the District' claim: The Districts allege that the total funding is less under the new funding formula than under the prior funding foraula. Intervenor Brief, p. 8. In fact, the Districts argued that they receive less than they would haye received had the same amount of money been distributed for the 1996-97 school year under the old Act 34 formula instead of the new Act 917 formula. Intervenor Appx., p. 68. The Intervenor& seem to think that the district court resolved a conflict between the Districts' position that they would have received a greater amount of funding for the 1996-97 school year had the available funds been distributed under the old Act 34 formula and ADE' position that the Districts received more State aid this year than last year. Intervenor Brief, pp. 8- 9. There is no conflict. The district court accepted PCSSD's position "that its total State funding in 1996-97 will be less under the new foraula than it would haye been under the old." ADE Ad., p. 12. ADE's exhibit which purports to show that the Pulaski County districts will receive more State funding for the 1996-97 school year than they did for the 1995-96 school year (Intervenor Appx., p. 170) is not in conflict with PCSSD's position that it would have received aore money for 1996-97 under Act 34 than it does under the new funding scheme. 15 I I I I I I I I I I I I I I I I I I I ADE seems to admit that any increase received by the Pulaski county districts for the 1996-97 school year was proportionately smaller than increases received by other Arkansas school districts (ADE Brief, p. 25), but argues that the settling districts are "winners" under the new formula so their increased state aid "should preclude any finding or even any inference that the new funding scheme was enacted with intent to discriminate against them." ADE Brief, p. 24. First of all, the Settlement Agreement requirement of continued funding of existing programs does not require a finding of discriminatory intent in order to prove a violation, only a discriminatory impact. The workers' compensation issue was decided by this Court without any discussion of ADE'a intent. LRSD y, PCSSD, 83 F.3d 1013 (8th Cir. 1996). Second, a simple hypothetical shows the flaw in ADE's reasoning. Assume that a large amount of money was added to the public school fund and that ADE intentionally devised a formula to minimize the amount of aoney that would go to the Pulaski County achool districts. Ass\llle also that as a result education funding doubled statewide under a formula which increased funding for the Pulaski County school districts by only one percent. Would the Pulaski County school districts be precluded from claiming a violation of the Settlement Agreement simply because the small increase in their funding made them "winners"? The Intervenor& claim that the Pulaski County districts are seeking "to divert millions of dollars from students outside of 16 I I I I I I I I I I I I I I I I I I I Pulaski County for the use of the Pulaski County districts." Intervenor Brief, p. 10. That contention is completely unsupported and is absolutely untrue. The state's 1994-95 expenditure for public schools was only forty-eight percent of the total net State general revenues. ADE Appx. Vol. 3, p. 324. The state's practice has been to transfer funds from general revenues to the public school fund in order to pay the costs associated with the Settlement Agreement. ADE Appx. Vol. 3, pp. 359-60. The Pulaski County districts did not ask the district court to divert any money from districts outside Pulaski County. There is no reason that the funds necessary for the State to meet its settlement obligations should come from the public school fund rather than from general revenues. The Intervenors argue that the Districts do not care about "equal treatment" of students and are seeking to enforce the Settlement Agreement "simply because they believe they need more money." Intervenor Brief, p. 10. They are apparently forgetting that the Settlement Agreement provides a remedy for years of state imposed segregation. Had the state adopted a policy of equal treatment rather than segregation decades ago, we would not have this lawsuit today. The State cannot avoid its responsibilities under the Settl-ent Agreement simply by contending the Arkansas Constitution requires equal treatment. The response to that ar(JUllent is found in Judge Arnold's concurrence in a previous appeal in this case: The State argues that we cannot require it to spend more money in one school district than 17 I I I I I I I I I I I I I I I I I I I another, because to do so would conflict with a recent opinion of the Supreme Court of Arkansas requiring, under the State Constitution, ubstantially equal per-pupil funding throughout the state, DuPree Y, Alma School Dist. No, 30, 279 Ark. 340, 651 s.w. 2d 90 (1983), and with a statute iapl8lllenting thi opinion, Ark. Stat. Ann. SS 80-850.10 - 80-850.22. Thia argwaent is insubstantial. Under the Supremacy Clause, U.S. CONST. ART. VI. , cl. 2 , the Fourteenth Amendment overrides any inconsistent state statute or constitutional provision. LRSD y, PCSSD. 778 F.2d 404, 437 n. 1. (8th Cir. 1985) (Arnold, J. concurring). The Intervenor& point out, correctly, that funds paid to the Districts by reason of the Settlement Agreement are not included in determining the appropriateness of public school funding under state law. Intervenor' Brief, p. 16. Nothing in state or federal law requires that uch fund be included in any calculation to determine the equity of a state school funding scheme. Inexplicably, however, the Intervenor& go on to argue that "(t)he State funding syst8Jll will be put at risk when compliance with the federal range ratio requires additional funding to other districts as a result of any increase in funds to the Little Rock School District which will result from the district court's order." Intervenor Brief, p. 17. This argument is simply wrong and is in conflict with the position of the Intervenors, taken on the previous page of their brief, that funds paid by reason of the Settlement Agreement are not included in the calculation of the federal range ratio. 18 I I I I I I