CHICAGO -- A recent Ohio Common Pleas Court decision that declared Ohio's school funding system unconstitutional has placed a cloud over an upcoming $68.64 million revenue bond sale for school improvements, according to state officials.

David Spialter, business counsel for the Ohio attorney general's office, said that the Ohio Classroom Facilities Act, which allows the state to issue bonds to help distressed school districts fund capital improvements, was among the provisions ruled unconstitutional by the Perry County Common Pleas Court earlier this month.

In its decision, the court ruled that the state's school funding system is unconstitutional because it does not "produce a thorough and efficient system of education for all students."

The state's bond counsel and underwriter's counsel for the bond issue are trying to determine what impact the decision may have on the $68.64 million of bonds the state plans to sell Spialter said. The bond issue, authorized by state lawmakers last year, would be secured by a portion of state lottery proceeds.

"[The court's decision] places a cloud on the bond deal, so bond counsel without clarification from the court could not give a clean bond opinion," Spialter said.

Gregory Stype, an attorney at Squire, Sanders & Dempsey, who is involved with the state's efforts to determine the impact of the ruling on the bond issue, declined to comment.

The passage in the decision that created the uncertainty states that the Classroom Facilities Act contributed to the unconstitutionality of the school funding system "not because of the funds provided by the act," but because "the legislature failed to provide sufficient funds to serve the facilities needs of Ohio's public schools."

Joel Taylor, an attorney representing Ohio in the lawsuit, said that the state will appeal the ruling to the Fifth District Court of Appeals in Canton by Aug. 15.

If the suit is ultimately successful, Ohio could end up paying more than $1.2 billion annually to equalize funding among the state's 612 school districts, according to William Phillis, executive director of the Ohio Coalition for Equity and Adequacy. The coalition, which comprises 500 school districts, backed the lawsuit that was filed by five school districts in January 1992.

In its decision, the court instructed state superintendent Ted Sanders and the state board of education to prepare a report for the legislature outlining proposals to eliminate funding disparities among school districts.

While state legislative leaders have supported the state's decision to appeal the Court decision, the state board of education has voted to recommend that the state not contest the ruling.

Rebecca Chapman, a spokeswoman for the state board, acknowledged that the board vote will not hinder the state's decision to appeal the ruling.

Even so, the superintendent and the board are in the process of creating two panels to draft, and recommend to the legislature, changes in the state's school funding system, Chapman said. The proposed changes, which are expected to be completed by January, will be included in the board's legislative and budget recommendations for the next two years, she said.

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