Teaching in a room with 37 kids makes for tight cornering in crowded spaces and a lot of calls for students to stop and pay attention.

So when Mary Ditter, a sixth-grade teacher in the Osseo School District, hears about smaller class sizes in St. Louis Park, it's easy to see her district as a loser among "haves and have-nots."

Aggravating matters is this tax fact: An owner of a $150,000 home in the Osseo district will pay more in school taxes next year than the owner of a similarly valued St. Louis Park home, yet Osseo schools will receive nearly $600 per student less in local revenues.

Such disparities are not new, and the fact that they persist is provoking discontent among "have-not" districts. Ten years after the Minnesota Supreme Court rejected one lawsuit over school funding, there is talk of trying again.

Mary Ditter talks to her Elm Creek sixth-graders.

Joey Mcleister

Star Tribune

Schools for Equity in Education, a group representing many of the districts that challenged disparities in state funding, has begun a study to determine whether new litigation is needed.

A major factor in any decision, officials say, will be how Gov. Tim Pawlenty and the Legislature resolve the current state budget crisis.

The issue takes on added importance because the locally approved tax levy, once viewed as a means to fund programs beyond the basics, now is seen as essential to everyday school operations.

An equal shake

In 1988, 48 school districts, most of them in outlying suburbs and adjacent rural areas, sued the state, claiming that wealthy districts had an unfair advantage over poorer districts in educating students.

Three years later, after a 67-day trial believed at the time to be the longest state civil trial in Minnesota history, Wright County District Judge Gary Meyer agreed, declaring the state's finance system unconstitutional because of inequities caused in large part by locally approved tax levies.

But the ruling was overturned in 1993 by the state Supreme Court, which said that while disparities existed, they were not as severe as in other states. Minnesota was meeting all of its districts' basic needs, the court said, and an effort to ease gaps already was underway at the Legislature, which put a ceiling on how much districts could raise. The work has continued in recent years with the state covering some of the districts' locally-approved revenues. The less affluent a district, the greater the state's contribution.

Even with those efforts, Brad Lundell, executive director of the Schools for Equity in Education, said that a wide gulf remains between districts such as Osseo and Anoka-Hennepin and western suburban districts.

Differences in property wealth have created inequities for taxpayers, too, they say.

For example, the owners of $150,000 homes in the Anoka-Hennepin and St. Louis Park districts will pay almost the same in school taxes during the 2003-04 school year, yet the St. Louis Park district will get twice as much money per pupil -- $1,425 vs. $687.

That's because the western suburbs have greater commercial-industrial wealth, easing the burden on homeowners.

Scott Croonquist , executive director of the Association of Metropolitan School Districts, which represents St. Louis Park and about two dozen other higher-property-wealth districts, agrees that a homeowner's tax burden should be the same or similar.

However, that doesn't mean total funding should be the same, he said. Teacher pay is higher in the western suburbs because the market demands it. Districts there "stepped to the plate" to aid west-metro area desegregation efforts.

Besides, Croonquist said, some people seem to forget "that they actually lost that lawsuit 10 years ago."

And many of the schools he represents are in a tough spot because they have hit the state-imposed cap on how much they can raise locally.

His group wants the Legislature to let districts raise money to cover increases for inflation at the local level if the state is unable to provide them. The increases would not require voter approval.

Such a move would return stability to the school funding system, Croonquist said last week. But, he added, the idea is "not being received with open arms at this point."

Greg Vandal, superintendent of the Sauk Rapids-Rice School District, who will be leading the Schools for Equity in Education study, said that while no decision has been made to pursue litigation, he believes two avenues could be explored.

One would be a claim based on taxpayer equity. The other would involve defining what the state requires of its schools and then determining whether funding is adequate. Vandal said legal challenges based on the "adequacy" argument have prevailed in other states.

Van Mueller, a professor emeritus of education administration at the University of Minnesota who has studied differences between lower and higher property-wealth districts, said moves by states to set standards and ratchet up testing could strengthen a legal challenge.

States would be forced to defend inequities in school performance, he said.

Tight quarters

In Osseo, Superintendent Chris Richardson said the state went backwards in the cause of equity two years ago by allowing west-suburban districts already exceeding levy limits to raise even more money.

His district finally won voter approval last fall of a levy putting it at the $837-per-student limit, but the additional revenue only ensures that current programs will remain as they are for another year. No cuts are to be reversed.

At Elm Creek Elementary School in Maple Grove, Ditter said teaching 37 kids is "frustrating" and "overwhelming."

The classroom is so crowded, she said, that her students aren't able to form a circle for the morning meeting, when kids greet one another.

But tax realities will surface even in today's social studies lessons. After her students read aloud about a Chinese ruler who won favor with peasants by cutting taxes, the teacher asked her students:

"Do people today like the idea of lowering taxes?"

"Yes," they replied.

"It's kind of a popular concept," Ditter said.

-- Staff writer James Walsh contributed to this report.

-- Anthony Lonetree is at alonetree@startribune.com .