How “Per-Pupil Expenditures” Actually Means Student Population

Zuni Public School Dist. No. 89 v. Department of Education

Federal law requires a State’s Secretary of Education to calculate the disparity of expenditures per-pupil when determining whether the State’s public school funding program “equalizes expenditures” (for purposes of certain federal grants). However, when doing so, the Secretary is directed to “disregard” school districts “with per-pupil expenditures above the 95^th percentile or below the 5^th percentile of such expenditures,” and shall also take into account special additional costs, such as those borne by geographically isolated districts. Where the greatest measured district per pupil expenditures exceed the least measured district per-pupil expenditures by more than 25%, that state is not eligible for federal grants. The question here is whether the Secretary may identify these disregarded districts by looking to the number of the district’s pupils as well as the expenditure per pupil.

If Congress’ language is ambiguous then there is a gap for the agency to fill and the Secretary’s interpretation must be upheld under Chevron. “The matter here is the kind of highly technical, specialized interstitial matter that Congress often does not decide itself, but delegates to specialized agencies.” Also, the original method was left entirely to the Secretary, and never seems to have been challenged. The Court also finds the Secretary’s method objectively reasonable while it questions the reasonableness of the method based on number of districts alone since the secretary’s method actually excludes outliers while excluding based on the number of districts could exclude a larger or smaller portion of the population depending on the geographic characteristics of the school district lines.

And, finally, the text of the statute: How does “per-pupil expenditures” translate into student population? “A customs statute that imposes a tariff on ‘clothing’ does not impose a tariff on automobiles, no matter how strong the policy arguments for treating the two kinds of goods alike.” N-percentile is defined as a “the value Xn/100 such that n per cent of the population is less than or equal to Xn/100.” Congress did not delineate the relevant population to be divided for the purposes of evaluating “per-pupil expenditures.” Since the population is not defined the Secretary could define it – here he did so on the basis of students, not districts – and any reasonable definition passes Chevron. Where Congress wanted to be more specific, it has been, and the population should be defined based on Congressional intent (apparently, intent to allow ambiguity that can be filled in by the Secretary).

Justice Stevens, concurring, cites then Chief Justice Rehnquist for the proposition that “in rare cases the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters, and those intentions must be controlling.” “Justice Scalia’s argument today,” he continues, “rests on the incorrect premise that every policy-driven interpretation implements a judge’s personal view of sound policy, rather than a faithful attempt to carry out the will of the legislature.” He further cites Chevron for the proposition that “if a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.” This case is one “in which the legislative history is pellucidly clear and the statutory text is difficult to fathom” (the paucity of comments is a sign of faith in the statute’s sponsors who introduced it on behalf of the administration who implemented this method both before and after the statute was passed, and as for what is left of the law – “any competent counsel challenging the validity of a presumptively valid federal regulation would examine the legislative history of its authorizing before filing suit”)

Justices Kennedy and Alito, concurring, argue that “only if Congress has not directly addressed the precise question at issue should a court consider whether the agency’s answer is based on a permissible construction of the statute.” The plain language is ambiguous, so Chevron deference applies.

Justice Scalia (joined by the Chief Justice, Justice Thomas, and Justice Souter) goes back to his Church of the Holy Trinity lecture: in that case the court said that sometimes “a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers,” a proposition with which Justice Scalia humbly differs. Justice Scalia observes the “suspicious order of proceeding” that the majority takes by discussing what the statute does not say before commenting on what it does. Percentile, as used in the statute, refers to a division of some population, and concerns the percentile of “per-pupil expenditures or revenues.” The population at issue here is clear – the local education agency – and it does not suggest that the state may use each student’s individual per-pupil revenue. The only population mentioned in the statute is that of the LEA: “local education agencies with per-pupil expenditures or revenues …”

As for Justice Stevens’ concurrence, “once one departs from [the actual meaning of the text] … fidelity to the intent of Congress is a chancy thing. The only thing we know for certain both Houses of Congress … agreed upon is the text. Legislative history can never produce a ‘pellucidly clear’ picture.” “What judges believe Congress ‘meand’ (apart from the text) has a disturbing but entirely unsurprising tendency to be whatever judges think Congress must have meant, ie., should have meant.” Finally, Justice Scalia argues that the cases that Justice Stevens cites for the proposition that congressional intent is prior to statutory interpretation do not support that proposition at all.

By using this convoluted interpretation the Secretary managed to exclude approximately 26% of New Mexico’s LEAs. “To be governed by legislated text rather than legislators’ intentions is what it means to be ‘a Government of laws, not of men.’”