Request By:
Mr. Frank R. Hatfield
Superintendent
Bullitt County Schools
P.O. Box 99
Shepherdsville, Kentucky 40165
Opinion
Opinion By: David L. Armstrong, Attorney General
In your letter to the Office of the Attorney General, you have asked for a formal opinion relative to the legal propriety of expending school funds in the support of certain anticipated litigation. The discussed litigation would place before an appropriate court the question of the Commonwealth's obligation, under the United States and Kentucky Constitutions, to ensure a greater equality for educational opportunity for Kentucky's school children through an equitable distribution of the financial resources available to the public common school districts. The questions you have presented with regard to such anticipated litigation were stated by you as follows:
"1. If one or more school districts initiate a suit to enforce state equalization of school funding within the Commonwealth, may interested school districts contribute reasonable amounts of money from school funds to meet the costs of the suit, including reasonable attorney's fees?
"2. If a suit as described herein were to be initiated by school children and their parents, without any school district joining as plaintiff, would this affect a school district's authority to help meet the costs of the litigation from school funds?"
Our response to your first question is in the affirmative with only a qualified response as stated below believed appropriate to your second question.
We must at first note and make clear that this opinion in no respect will address the merits of the anticipated litigation, nor should this opinion be construed as constituting an imprimatur or an endorsement of such litigation. The reason for this caveat is a reflection of the regulations governing this office, 40 KAR 1:020, relative to the statutory function and responsibility of opinion writing. Thus, it is not that an opinion is lacking concerning the subject of the proposed litigation, but only that allegiance will be maintained to the regulation proscribing this office from rendering an opinion to questions involving matters being litigated or to questions submitted in the comtemplation of litigation.
Your questions, in essence, ask this office to determine whether a local public common school district may expend school tax monies to finance litigation expecting to place in issue the legality of the disparities in the financial resources available to the public common school districts. We believe there is bountiful statutory and case authority to be harvested and applied to your question and the attendant circumstances.
In support of our previously indicated affirmative response to your first question, we set out the pertinent statutory provisions. First, KRS 160.160 mandates that the management and control of a school district is vested with the local board of education. Further, this school law provision states:
"Each board of education shall be a body politic and corporate with perpetual succession. It may sue and be sued; make contracts; expend funds necessary for liability insurance premiums and for the defense of any civil action brought against defense of any civil action brought against an individual board member in his official or individual capacity, or both, on account of an act made in the scope and course of his performance of legal duties as a board member; purchase, receive, hold and sell property; issue its bonds to build and construct improvements; and do all things necessary to accomplish the purposes for which it is created."
Secondly, KRS 160.290(1) provides that each board of education, among other powers and responsibilities, is required to "have control and management of all school funds" and "may use such funds . . . to promote public education in such ways as it deems necessary and proper."
As can be seen from the above two provisions, there is not in them a specific statutory pronouncement upon what a local board of education may expend school funds. However, a general rule is that school funds may be expended for those purposes authorized either expressly or by necessary implication by the statutes. See
Shanklin v. Boyd, 146 Ky. 460, 142 S.W.2d 1041 (1912) and also Peterson, Rossmiller and Volz, The Law and Public School Operation (2nd ed. 1978) at page 174. The issue then, at least in part, becomes whether the expenditure of school funds in the support of litigation relative to school finance is impliedly an authorized "purpose".
In
Howell v. Haney, Ky., 330 S.W.2d 941, 943 (1960) the former Court of Appeals succinctly recognized that, in view of KRS 160.160, it was evident that the General Assembly had created boards of education as bodies corporate, with "power to sue and be sued in their corporate name." Earlier, just as the then
Court of Appeals in Lewis v. Morgan, Ky., 252 S.W.2d 691 (1952), had determined that a local board of education has the implied power to employ and pay an accountant to make a general audit of the school records, the
Court of Appeals in Hogan v. Glasscock, Ky., 324 S.W.2d 815 (1959), decided that despite the absence of specific statutory authority, a local school board could employ an attorney to represent it to protect the board's corporate action and decisions. In the Lewis case and Hogan case, the Court of Appeals referenced both KRS 160.290 and KRS 160.160 and especially that part of the latter section conferring upon the boards of education the general power to "do all things necessary to accomplish the purposes for which it is created."
The common reference in the authorities cited above is that of a proper school "purpose". Even if this "purpose" issue were not governed by the educational sections of our Kentucky Constitution, as we feel certain that it is, we suggest that the same result would be required. For example, in 68 Am.Jur.2d § 95 at page 440, it is generally stated that:
"School funds are held to be trust funds for educational purposes which the courts will not permit to be diverted to other even though closely kindred uses, no matter how meritorious the project may appear to be in its practical, ethical or sentimental aspects."
Likewise, the former Court of Appeals stated in
Board of Education of Madison County v. Wagers, Ky., 239 S.W.2d 48, 49 (1951), that "the history of our decisions indicates this Court has jealously guarded school funds from diversion, even for laudable purposes. (Citations omitted)."
The consideration, in light of Kentucky's Constitution, of the "purposes" for which school funds may be expended is as recent as the Supreme Court of Kentucky's decision in
Fannin v. Williams, Ky., 655 S.W.2d 480 (1983). In Fannin, Justice Liebson writing for the majority of the Court, noted:
"The federal constitution is silent on the subject of education, leaving this most important function to the several states. Our state constitution provides for and regulates this function primarily under the title, 'Education,' Sections 183-189 inclusive. These sections start with the requirement that the General Assembly 'provide for an efficient system of common schools throughout the state.' They end with the requirement that 'no portion of any fund or tax now existing, or that may hereafter be raised or levied for educational purposes, shall be appropriated to, or used by, or in aid of, any church, sectarian, or denominational school.'" 655 S.W.2d at 482.
In reaching the conclusion in Fannin that tax money could not be expended to furnish text books to children attending nonpublic schools, the Supreme Court reaffirmed the position that to constitute a proper expenditure of school monies the purpose for which the expenditure was to be made had to be educational. 655 S.W.2d at 484.
Many cases have preceded Fannin v. Williams providing ample opportunity for our appellate courts to determine what was or was not an expenditure of school money for an educational purpose. We, by way of formal opinions, have also had many occasions to reflect on the issue. Looking first at some of the cases, the
Court in Board of Education of Spencer County v. Spencer County, Ky., 230 S.W.2d 81 (1950), concluded that Kentucky Constitution § 180 providing that no tax levied and collected for one purpose is ever to be expended for another purpose and with § 184 providing that school fund taxes levied for the purpose of the common school education shall not be appropriated for any other purpose than for the common schools, read together, prevented a board of education from paying an assessment for a flood wall notwithstanding the fact that the board of education and school children would benefit from the construction of the flood wall. The former Court of Appeals stated that:
"The test is, what constitutes an educational purpose within the meaning of Section 184 of the Constitution, rather than whether an activity might be beneficial to education." 230 S.W.2d at 83.
Also found not to constitute educational purposes was the cost for the construction of a street in
City of Louisville v. Leatherman, 99 Ky. 213, 35 S.W. 625 (1896) and the cost of helping to maintain a public library in
Board of Education of City of Covington v. Board of Trustees of Public Library of City of Covington, 113 Ky. 234, 68 S.W. 10 (1902).
The Kentucky Appellate Court has determined that it was an educational purpose and therefore proper for a local board of education to expend school funds for construction and operation of a recreational center jointly with a fiscal court in
Dodge v. Jefferson County Board of Education, 298 Ky. 1, 181 S.W.2d 406 (1944), for membership in the
Kentucky School Board Association in Schuerman v. State Board of Education, 284 Ky. 556, 145 S.W.2d 42 (1940), and for a school nurse in
Board of Education of Bowling Green v. Simmons, 245 Ky. 493, 53 S.W.2d 940 (1932).
The consideration of the "educational purpose for the legal expenditure of school funds" question has resulted in opinions from this office concluding that paying for expenses incurred by teachers and administrators in attending professional activities and functions, OAG 83-228, the legality of the superintendent's contract, OAG 77-608, lobbying for legislation, OAG 74-212, sewer connection tap-in fee, OAG 68-283, preventative medical services for students, OAG 65-293, operating a school cafeteria, 1957 OAG 40,719, and Kentucky Education Association dues for teachers, 1955 OAG 37,443, were permissible expenditures of school funds. Determined to be improper were expenditures for public street crossing guards, OAG 79-107, legal fees and costs incurred in a removal action of a board member for usurpation of office, OAG 78-648, election contests to determine whether a board member is entitled to hold the office, OAG 77-580, promoting political candidates, OAG 74-118, repairing of public street, OAG 72-514, operating costs of county health department, OAG 68-143, defraying cost of public library furnishing books to school children, OAG 61-879, and fire station expenses, OAG 60-612.
In view of the above authority and precedents, it is believed inescapable in response to your first question, that a local board of education may expend school funds to support litigation efforts relating to the equity of the distribution of financial resources available to a school district. The former Court of Appeals stated in
Reeves v. Jefferson County, Ky., 245 S.W.2d 606, 608 (1952), wherein the amount of certain taxes for the benefit of the schools was an issue, that KRS 160.160 and 160.290 place upon local boards of education rather than the taxpayers, the initial responsibility of maintaining legal actions on behalf of school districts. By such an expenditure, whether for costs of the suit or attorney fees, the school district must be viewed as expending money for the protection of as well as the fostering of the public interest committed to it - the quantity and quality of educational opportunities available to school children. Such an expenditure we believe meets the required constitutional educational purpose test. Of course, a school district must live within its annual income, so any expenditure, as discussed herein, would have to be made in accordance with appropriate budget considerations.
We decline to offer a specific response to your second question. Without knowing the role a school district would attempt to play in litigation initiated by someone else, whether by school children and their parents or otherwise, we do not believe an adequate consideration can be made against the educational purpose test. Certainly we do take the position that a school district may not legally donate school funds. See OAG 61-879. However, this is not to say a school district would be unable to expend funds in support of a position in litigation as amicus curiae, for example, where the litigation or the defense thereof related to an educational purpose matter.
We trust this opinion will be of help to you and others in considering the legal propriety of the expenditure of school funds.