Indian Hill Board of Education raised taxes without a vote, refused to refund money

Cincinnati, OH – After a five-plus year legal battle concluded with an Ohio Court denying all of its objections, the Indian Hill Exempted Village School District Board of Education finally conceded that it must return the $5.5 million that it illegally assessed taxpayers after raising taxes without a public vote in 2010.

The 1851 Center for Constitutional Law’s victory on behalf of a certified class of all school district property taxpayers comes nearly one year after the 1851 Center prevailed in striking down the tax increase before the Ohio Supreme Court. After the Court’s unanimous December 2014 decision, the school district still refused to return the funds, requiring the Center to file a class action lawsuit in January of 2015.

In affirming that Ohio taxpayers maintain a constitutional right to recover unlawfully-imposed taxes, Judge Martin of the Hamilton County Court of Common Pleas denied the Board’s Motion for Summary Judgment, rejecting the Board’s position that it was not required to return any of the funds, or that in the alternative, it was required to return $2 million at most.

Indian Hill School District property taxpayers can expect a refund check by March 1, 2016. Amounts are expected to be approximately $1,000 for the average taxpayer, and much greater for many others.

“The outcome of this case reflects the principles that property taxes cannot be increased without a vote by citizens, unlawfully-collected taxes must be returned to those taxpayers from whom they were taken, and government must pay interest to taxpayers when it has kept their funds for many years, as here,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law.

“These results should dissuade other school districts from attempting to unlawfully raise taxes. Nevertheless, Ohioans should have a hard look at their school board members, who, absent scrutiny, could quite literally be getting away with theft, as would have otherwise happened here.”

Due to the class-action status of the case, the Court of Common Pleas will hold several hearings over the coming months to finalize the case, including addressing the administrative complexities of issuing pro rata refunds not just to current homeowners in the district, but to those that owned homes during the period of illegal taxation.

Rather than settling the matter in January, the Board diverted nearly $200,000 from funds earmarked for the education of school district children to pay attorneys fees of $400 per hour. Unable to find Cincinnati law firms willing to defend its practices, the Board opted to hire a firm consisting of Washington D.C. lobbyists and Cleveland lawyers.

The Board and its lawyers argued that it was entitled to keep the taxpayers’ money because each and every taxpayer did not file an individual protest letter with each and every property tax payment, and further argued that perhaps it could have legally raised taxes, albeit to a lesser extent, in the absence of the unlawful tax increase that it chose.

The 1851 Center countered by explaining that state and federal Due Process Clauses have been held to require the return of unlawfully-charged taxes. The Court took little time in flatly rejecting the firm’s arguments and siding with the 1851 Center.

“Judge Martin should be commended for scrutinizing and seeing through the Board’s outlandish arguments rather than just reflexively siding with government – – the Court deserves credit for doing justice for Ohio taxpayers,” added Thompson.

Read more about the underlying Ohio Supreme Court Case HERE

Read the 1851 Center’s Class-Action Filings HERE

Court’s ruling places important limits on “quick-take” eminent domain power

Columbus, OH – An Ohio Court ruled that the City of Perrysburg’s attempt to immediately seize the land of eleven local homeowners exceeds its power, given the Ohio Constitution’s protection of private property rights.

The 1851 Center’s victory curtails the abuse of a practice known as “quick-take,” where governments claim to immediately own private property upon the filing of a Complaint, before any hearing or trial. While the Ohio Constitution sanctions this immense power for “making or repairing of roads,” local governments have increasingly sought to use quick-take for many other purposes.

In striking down the City’s attempt to use quick-take here, Judge Woessner of the Wood County Probate Court concurred that the practice cannot be expanded beyond roads, holding as follows:

  • “[T]he proposed appropriations are for . . . ‘other municipal purposes,’ as well as references to ‘installing pedestrian walkways and sidewalks’ as well as ‘for providing for public utilities.’ This Court finds that if the legislature intended for ‘quick-take’ procedures to extend to other areas, those other areas would have accordingly been referenced somewhere . . . They are not.”
  • “The Court further finds that expanding ‘quick take’ immediate possession of private property . . . beyond the clearly stated purpose of ‘making or repairing roads’ is not appropriate as a matter of law in appropriation/eminent domain cases. . .”

“The Court’s ruling is a victory for private property rights across Ohio,” explained Maurice Thompson, Executive Director of the 1851 Center. “Governments have increasingly been using quick-take for anything and everything, rather than just for roads, intimidating Ohioans and stripping them of their right to mount any legal objection in court. This ruling helps ensure that meritorious arguments against eminent domain will now be heard – – and that in turn means that many more eminent domain abuses will be stopped.”

The City had sought to immediately seize property for sidewalks, a bike path, and what it cryptically referred to as “other municipal purposes.” Ohio cities may still acquire property for such purposes; however the Court’s ruling clarifies that they must attempt to negotiate and agree with homeowners, rather than exercising force as a first option.

Read the Homeowners’ Motion for Judgment on the Pleadings HERE

Read the Court’s Order HERE

Fourth Amendment secures property rights of landlords from unlawful searches and occupational licensing regulations in Ohio and nationwide

Columbus, OH – The Southern District of Ohio ruled that the City of Portsmouth’s occupational licensing requirements imposed upon landlords – – rental property inspections and licensing fees – – violates the Fourth Amendment to the United State Constitution.

The 1851 Center for Constitutional Law’s victory on behalf of Portsmouth rental property owners Ron Baker, Nancy Ross, Thomas Howard, and Darren Oliver means that indiscriminate and warrantless government inspections of rental properties are unconstitutional nationwide, and that unlawfully-extracted “rental inspection fees” must be returned to the rental property owners who paid them.

These property owners had long rented their property in Portsmouth without license or inspections, and their properties had never been the subject of complaint by tenants, neighbors, or others. However, the City threatened to criminally prosecute and even imprison these landlords if they continued to rent their homes without first submitting to an unconstitutional warrantless search of the entire interior and exterior of these homes.

Judge Susan Dlott, of the Western Division of the Southern District of Ohio, held as follows:

  • “[T]he Court finds that the Portsmouth [Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections. It is undisputed that the [Rental Dwelling Code] affords no warrant procedure or other mechanism for precompliance review . . . the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.”
  • “The inspections are also significantly intrusive. As the Supreme Court has noted, the ‘physical entry of the home is the chief evil against which the wording of the Fourth Amendment is directed.’”
  • “The search inspection sheet details eighty items to be inspected throughout the entirety of the rental property. The Court thus concludes that the intrusion is significant.”
  • “Taking into account the above factors—the significant expectation of privacy, the substantial intrusion into the home, and the inefficacy of the warrantless inspections on the proffered special need—the Court finds the warrantless inspections are unreasonable.”
  • “Having determined that the Code is not saved by special needs or the closely regulated industry exceptions, the Court concludes that the Code’s failure to include a warrant provision violates the Fourth Amendment.”

Both the United States and Ohio Supreme Court have invalidated warrantless inspections of rental property, and repeatedly held that warrantless administrative inspections of business property are generally invalid, absent exigent circumstances.

Nevertheless, Ohio cities had vigorously sought to collect licensing fees from area landlords, and the warrantless searches served as the lynchpin to each of these goals. Ordinances such as Portsmouth’s Rental Dwelling Code established an absolute prohibition on renting out property within a community – – even though the landlord may have long done so and even though his or her property may be in pristine condition – – without a government-approved license that cannot be acquired without first paying a $100 annual fee per rental home and submitting to an open-ended warrantless search of every area of the property, inside and out.

“The Federal Court’s ruling victory for all property owners and tenants. Local government agents do not have unlimited authority to force entry into Ohioans’ homes or businesses. To the contrary ‘houses’ are one of the types of property specifically mentioned by the Fourth Amendment; and Ohioans have a moral and constitutional right to exclude others, even government agents, from their property. Entry requires either a warrant or an emergency, and neither is present with respect to these suspicion-less rental inspections,” said Maurice Thompson, Executive Director of the 1851 Center.

“Government inspections of one’s home frequently results in arbitrary orders to make thousands of dollars worth of untenable improvements to even the most well-maintained properties. These enactments were nothing more than a set of back-door tactics to collect revenue on the backs of Ohio property owners, while attempting to chase ‘the wrong type of owners’ out of town.”

Read the Federal Court’s Order HERE

October 4, 2015: Columbus Dispatch: Rental inspections ruled unconstitutional

October 2, 2015: WDTN-TV 2: Federal judge rules Ohio city’s warrantless rental property inspections are unconstitutional

October 1, 2015: Portsmouth Daily Times: The original Portsmouth licensing fee declared unconstitutional

Taxpayers cheated by Indian Hill School District’s “Inside Millage Move”, by raising taxes without public vote

Cincinnati – Indian Hill School District’s property tax increase without voter permission violated state law, according to unanimous ruling from the Supreme Court of Ohio.

This decision rebuffs Ohio school districts’ efforts to take advantage of a legal loophole created in 1998, which appeared to allow such tax increases in limited circumstances, though not to collect tax revenue that the districts do not need or use, as they run considerable budget surpluses and stockpile cash reserves.

The 1851 Center for Constitutional Law asserted, on behalf of the taxpayers and homeowners of the Indian Hill School District, that the District violated state law in 2009 when it raised property taxes by 1.25 mills ($400 per year, on average, for Indian Hill households), without voter permission, while already, without the tax increase, running multi-million dollar budget surpluses and maintaining a free and clear cash reserve of over $25 million.

The case centered around Ohio Revised Code Section 5705.341, which provides “no tax rate shall be levied above that necessary to produce the revenue needed by the taxing district or political subdivision for the ensuing fiscal year,” and “Nothing . . . shall permit . . . the levying of any rate of taxation . . . unless such rate of taxation for the ensuing fiscal year is clearly required by a budget of the taxing district.”

The case also drew upon Section 2, Article XII of the Ohio Constitution, which forbids property taxation “in excess of one per cent of its true value in money for all state and local purposes,” except by approval of the voters.

Indian Hill raised taxes despite carrying an unencumbered surplus of over $25 million in its bank account at the time.

The Court’s decision, authored by Justice O’Neill, explains “far from defraying current operating expenses, the increased revenue from the outside mills padded the district’s surplus. To permit a tax increase that performs no function other than to increase the amount of budget surplus would deprive the ‘clearly required’ standard of all meaning.”

“The Court’s decision means that already-wealthy Ohio school districts cannot continue to use public budgeting gimmicks to raise property taxes without a vote. This decision protects taxpayers here and also in many other districts,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law.

“While running exorbitant budget surpluses and maintaining a thick bank account may echo fiscal responsibility to some, this means the school district is taking from taxpayers money that it does not need – – over-taxing them rather than allowing them to keep and use their own money for their families’ betterment.”

The 1851 Center will now litigate to recoup for the taxpayers the roughly six million dollars that Indian Hill School District wrongfully charged them between 2010 and 2014.

The Court’s Decision can be found HERE.

The Court’s Decision can be found HERE.

Oral Arguments from the case can be viewed HERE.

March 12, 2015: Cincinnati.com: Indian Hill Board stonewalls refund of inside millage tax

December 14, 2014: Sandusky Register: Court: Some schools’ inside millage moves could be illegal

December 4, 2014: Cincinnati.com: Court ruling could reduce property taxes in Indian Hill

Northeast Ohio Sewer District tax on “impervious surfaces” is without legislative authorization, and is a property tax without the required voter approval

stormwaterColumbus, OH – The 1851 Center for Constitutional Law submitted to the Ohio Supreme Court its Merit Brief asserting that the Northeast Ohio Regional Sewer District, a Cleveland-Akron area administrative agency, lacks authority to regulate property in response to rainwater, which is not sewage, and even if it has such authority, may not impose a stormwater-related tax without a vote.

The Sewer District seeks to levy a tax on “impervious surfaces” on hundreds of thousands of Northeast Ohio residential and business property owners. These surfaces include roofs, patios, driveways, and parking lots, and are taxes levied based upon the square footage of each. The District maintains that this is a means of addressing rain-related erosion, run-off, and flooding.

Although such districts’ authorities often claim that settlement agreements with the federal EPA mandate such programs, such settlements mandate no particular course of action and do not permit agencies to transgress the Ohio Constitution.

Joining the 1851 Center on the Brief is the Ohio Real Estate Investors Association. Objecting to the taxes and regulations are several Cleveland-area municipalities, as well as numerous property-owner and business organizations, including the Ohio Council of Retail Merchants, Greater Cleveland Association of Building Owners and Managers, and the Cleveland Automobile Dealers Association.

The 1851 Center’s amicus brief argues that a sewer district, as an administrative agency of defined and limited powers, has no authority to impose taxes and regulations related to rainwater falling from the sky, i.e. something other than sewage. The brief further maintains that even if the agency had power to address rainwater, it may not tax property owners because the Ohio Constitution prohibits the raising of property taxes without voter approval through a tax levy election.

The 1851 Center’s brief asserts the following:

 

  • Pursuant to the Ohio Constitution, the General Assembly can only confer administrative power on an agency, and such agencies may not make policy.

 

  • The Northeast Ohio Regional Sewer District seeks to manage stormwater – – rain, essentially. The legislature, however, fully aware that it rains and snows in Cleveland, gave the Sewer District no such authority.

 

  • The Sewer District maintains no power to levy a tax without voter approval.

 

  • Although labeled a “fee,” the stormwater fee meets the legal standards of a tax because it is levied without regard to use, on certain property owners who gain no particular benefit from paying it, to advance goals that benefit the general public.

 

“Agencies like this are entirely unaccountable to the public, and this case stands for the principles that such agencies cannot take control of every facet of our lives, down to rainwater and the size of our patios, while taxing development in a manner that punishes and discourages it, with no regard to economic factors or public approval,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law.

“The Sewer District’s tax on impervious surfaces, including nearly every patio, rooftop, and driveway in Northeast Ohio, bares a far closer resemblance to sewage than does rainwater, and the District must consider less invasive methods to dealing with rain, which we have managed to deal with without taxation for all of human civilization.”

Oral arguments will likely take place in the fall.

Read the Amicus Brief here.

Act regulates business in response to constitutionally-protected advertising, and prohibits legitimate purchases of gold and silver

Columbus, OH – A federal court late yesterday ruled that Ohio’s regulatory scheme governing those purchasing gold, silver, and other precious metals – the Precious Metals Dealers Act- violates the First Amendment.

The ruling, made by Judge Watson of the Columbus division of the Southern District of Ohio, paves the way for Ohio businesses, most prominently coin dealers, to resume purchases of items containing gold and silver content, and in particular, to resume advertising their interest in purchasing inventory consisting of precious metals, free from concern over confiscatory prosecution, fines and regulations.

The 1851 Center for Constitutional Law took up the coin dealers’ case and challenged the state law after the Ohio Department of Commerce threatened to shut down Liberty Coins, of Delaware, Ohio, if it refused to pay considerable fines and obtain a government license to advertise its business.

The lawsuit had sought recognition that the First Amendment applies to and protects “commercial speech,” such as coin dealers’ advertising, and that the Act’s prohibition of advertising by coin dealers was not a means of reducing gold and silver-related theft.

The lawsuit had also made claims asserting that requirements that business owners demonstrate that they have “good character,” “sufficient reputation,” “sufficient financial responsibility,” and “sufficient experience” prior to being permitted to run their businesses were unconstitutionally vague; and that the Act’s authorization of warrantless searches of business owners’ property and records at any time without notice violated their Fourth Amendment rights.

In his 28 page decision, Judge Watson, explaining that “the Act only prohibits the unlicensed buying of precious metals when commercial speech is involved,” emphasized that “a broad injunction completely prohibiting enforcement of the licensing provision is warranted.”

The order, an across-the-board rebuke to Ohio’s regulations and the cavalier enforcement tactics the Ohio Department of Commerce has against Ohio’s small businesses over the past year, concluded as follows:

  • The Department of Commerce failed to show “how holding one’s self out as willing to purchase precious metals contributed to the evils the State seeks to prevent. Moreover, Defendants have not shown how requiring a license only for purchasers of precious metals who engage in commercial speech directly and materially advance those interests.”
  • “[The state] has not shown that forcing those who engage in commercial speech to obtain a license is reasonable,” and “the restriction on commercial speech is more extensive than necessary.”
  • The Department of Commerce “incorrectly” asserts “that the law prevents fraud, money laundering, theft and terrorism by requiring those who wish to engage in the business of buying from the public gold, silver, and other precious metals to be licensed.”
  • “The breadth and number of exemptions undercuts the Defendants’ argument that the licensing scheme is narrowly tailored to protect against theft, fraud, or terrorism.”

The Court added that the Department of Commerce’s aggressive reading of the regulations was “nonsensical,” and that Ohio coin dealers and others “are unable to actually purchase precious metals without facing prosecution due to Defendants’ incorrect interpretation of the Act.”

“We are just trying to make it safe for small businesses to operate in Ohio – – a mission that we wish our state government would share, rather than thwart,” said Maurice Thompson, Executive Director of the 1851 Center. “This Act and those enforcing it treat small businesses who make gold and silver available as public utilities at best, and criminals at worst, irrespective of whether they have done harm.”

Heightened enforcement of the PMDA by the Department of Commerce, under the control of the Kasich Administration, comes in response to accelerated lobbying and financial contributions to candidates by the pawn brokers industry, which is exempt from the regulations, and a direct competitor of those who are subject to the Act. The enforcement, which would have put many coin dealers out of business, also comes at a time of rising precious metals prices, where an increasing number of Ohioans seek to use gold and silver to protect their savings against potential inflation caused by federal government increases in the money supply.

Thompson added “the state misguidedly seeks to advance its mission of ‘preventing theft and resale of precious metals’ through gag orders, warrantless searches, and criminalization of innocent small businesses. Fortunately, the First Amendment allows us to protect Ohioans’ rights to engage in truthful promotion of their businesses.”

Read the Court’s Order Granting Liberty Coins’ Motion for Preliminary Injunction HERE.


December 7, 2012: Bloomberg Businessweek: Ohio gold, silver dealers’ law blocked by judge

December 7, 2012: Ohio Watchdog: OH: Judge blocks catch-22 in state law that threatened entire industry

December 6, 2012: WYTV 33 News: Ohio gold, silver dealers’ law blocked by judge

Cleveland, OH – A federal court enjoined the City of Shaker Heights from further harassment of Shaker Heights residents city officials silenced through threat of a frivolous trademark lawsuit. The threat had come in retaliation for the citizens’ opposition to the City of Shaker Heights’ attempt to increase income taxes on residents through an August 7 vote.

The Northern District of Ohio Judge Christopher Boyko ordered that the City “shall take no action which interferes in any way with Plaintiffs’ use of the Shaker Heights Taxpayers Union Logo. . .

This Order comes in response to legal action filed on behalf of the Shaker Heights Taxpayers Union (“SHTU”). This legal action included a demand for an immediate injunction prohibiting city officials from engaging in any further threats, intimidation, or retaliation in response to the taxpayers’ legitimate exercise of their constitutional rights

Shaker Heights resident Mark Zetzer formed the SHTU to advocate against the City’s placement of a personal income tax increase on the August 7 ballot, arguing that Shaker Heights taxes were already the highest in the state. In addition Mr. Zetzer designed for the group a logo that parodies the City of Shaker Heights logo by replacing the City logo’s leaves with dollar signs, to represent City officials’ use of taxation as a first-resort (see the logo below).

Even though federal courts have repeatedly confirmed that the First Amendment trumps trademark law in the field of political speech, just as Mr. Zetzer’s message was beginning to gain traction, the City of Shaker Heights sent Mr. Zetzer a “Demand to Cease and Desist,” threatening that “[f]ailure to stop [use of the SHTU logo] will result in the City taking legal action to protect its trademark, including a request for an award of damages.”

In response, SHTU had been forced to stop using the logo in its campaign.

“This case featured an appalling attempt by city officials to silence anyone who stands in the way of their access to more of Shaker Heights residents’ earnings,” said Maurice Thompson, Executive Director of the 1851 Center. “The Court’s Order preserves the rights of Ohioans to effectively criticize their local governments, particularly as they push for more taxes, and further acknowledges that political speech parodying one’s government cannot be abridged.”

Added Thompson, “Conducting frivolous legal activity on city time is not just unethical – – it’s also a waste of public funds. If the City simply abstained from paying government employees to engage in activities such as instituting official-appearing legal threats to silence opposing viewpoints in the heat of an election, there would likely be no need to impose additional taxes on Shaker Heights residents.”

July 27, 2012: Cleveland.com: Judge says Shaker Heights can’t stop anti-tax group’s use of logo

 

The 1851 Center’s Complaint can be viewed here.

The Motion for a Preliminary Injunction is available here.

The legislature has passed a state budget that includes the repeal of Ohio’s Estate Tax.  Special thanks to the team at http://www.endohioestatetax.com/ for their leadership in accomplishing a feat that no liberty group before them had accomplished:  the elimination of a statewide tax.  In drafting the initiative and representing the effort, the 1851 Center was simply the professional scaffolding around this inspiring all-volunteer effort. Read more

Cincinnati Public Schools has a policy of prohibiting the use of vacant public school buildings by charter schools and private schools.

Historical Overview

Theodore Roosevelt School, in Cincinnati, had purchased an unused school building located in the Fairmount neighborhood, where all CPS schools are in academic emergency status and 80 percent of families are minorities and live in poverty. The school opened in August, 2010, serving 210 students and employing 45 staff members.

CPS sued Dr. Conners, the operator of Theodore Roosevelt, attempting to enforce a deed restriction and shut down the school. The 1851 Center asserted such a restriction is void by Ohio’s public policy in favor of school choice and cheats taxpayers of sales revenue from the buildings.

Both the Hamilton County Court of Common Pleas and Appellate Court ruled in favor of Dr. Conners, affirming the following: CPS’s deed restriction is void due to Ohio’s public policy in favor of transferring taxpayer-owned school buildings to community schools; statewide public policy favors effectuating parental choice and educational opportunity through community schools; and Theodore Roosevelt is entitled to retain possession of the school and continue its operation.

“Our expectation is that the Supreme Court will decide to uphold a landmark ruling in favor of school choice in Ohio, and against adversarial school districts who attempt to block alternative schools’ right to exist,” said 1851 Center Executive Director Maurice Thompson. “Deed restrictions like the one struck down in this case were devised simply to stop new charter schools from opening in Cincinnati, so that CPS could retain students and protect its state funds. In its brief, CPS compares itself to a ‘gas station’ or ‘hotel’ that has a right to use hardball tactics against its competition. It seems to have forgotten that it’s a public school that exists to educate children, rather than to amass revenue.”

Partners in Action

Joining the 1851 Center in defending school choice, as amicus parties, are the Ohio Alliance for Public Charter Schools, the Black Alliance for Educational Opportunities, School Choice Ohio, the Ohio Coalition for Quality Education, and the National Alliance for Public Charter Schools. Joining Cincinnati Public Schools is the controversial government-funded lobbying organization The Ohio School Boards Association.

Timeline

February 7, 2011: Ohio Supreme Court hears Oral Arguments in Conners

The Ohio Supreme Court heard oral arguments in Cincinnati Public Schools v. Conners at 9:30a.m. on February 7, 2011. 

September 24, 2011: Ohio Supreme Court Will Review CPS v. Conners

The Ohio Supreme Court has granted certorari and will review this case. This will likely be the final resolution of the case.

March 11, 2011: Court of Appeals: CPS Deed Restrictions Against Charter and Private Schools Illegal 

Cincinnati Public Schools’ (CPS) policy of prohibiting the sale of unused available public school buildings to charter schools and private schools is unlawful and must end, today ruled the Court of Appeals for the First District Court of Appeals, Hamilton County.  This decision further rebuffs CPS efforts to shut down Theodore Roosevelt Community School and others, and is a victory for charter and private school operators throughout the state.

CPS appealed after a victory by the 1851 Center for Constitutional Law on behalf of Theodore Roosevelt Community School, a Cincinnati charter school CPS had sued to shut down.  The Court of Appeals decision, authored by Judge Sundermann, states: “We conclude that the trial court properly determined that the facilitation of community schools having access to classroom space was clear Ohio public policy. And the deed restriction that sought to prevent the use of the property for educational purposes was void as against this clear policy.”

The Court further stated:  “[w]e are not persuaded by CPS’s argument that the property was not ‘suitable’ for classroom use.  This argument is belied by the deed restriction itself, which allows the possibility that the restriction would not apply should CPS itself decide to use the property for school purposes in the future.”

This additional ruling exposing CPS to the loss of millions of dollars in funding from the Ohio School Facilities Commission (OSFC), which requires that school districts follow all state rules related to charter schools, including heeding charter schools’ right of first refusal to purchase all property “suitable for use as classroom space,” in order to be eligible for OSFC funding.  The fate of this funding is still in dispute, in a second case brought by the 1851 Center and the Ohio Coalition for Quality Education, pending before Judge Ruehlman in Hamilton County.

The court’s ruling affirms:

  • CPS’s deed restriction is void due to Ohio’s public policy in favor of transferring taxpayer-owned school buildings to community schools;
  • CPS’s deed restriction is void because it is in derogation of a statewide public policy in favor of effectuating parental choice and educational opportunity through community schools;
  • Although the deed restriction is void, Theodore Roosevelt is entitled to retain possession of the school, and continue its operation; and
  • CPS school buildings with such prohibitive deed restrictions are suitable for use as classroom space.

October 14, 2010: Cincinnati Public Schools Continues Charter School Vendetta in Appellate Court 

On October 14, the 1851 Center filed its brief in response to Cincinnati Public Schools’ appeal of a trial court ruling invalidating its efforts to eliminate school choice options in Cincinnati’s poorest communities.

In May, Ohio’s school choice movement won a significant victory when Hamilton County Common Pleas Court Judge Robert P. Ruehlman ruled that Cincinnati Public Schools (CPS) violated state law through its policy of prohibiting the sale of unused available public school buildings to charter and private schools.

The Theodore Roosevelt School opened in August 2010. However, CPS has appealed the case, now before the First Appellate District in Hamilton County. The school building was previously unused, and is located in the Fairmount neighborhood, where all CPS schools are in academic emergency, and 80 percent of families are of minority status and live in poverty.

CPS is attempting to enforce a deed restriction prohibiting the use of school buildings previously owned by CPS for use by a charter or private school. The school district likens itself to a private hotel or gas station that can prohibit “competitors” from acquiring its old buildings. However, those buildings are taxpayer-owned, and being sold at a considerable loss due to the deed restriction.

The 1851 Center countered that such a restriction is void by Ohio’s public policy in favor of school choice, and cheats taxpayers of sales revenue from the buildings. The trial court agreed with the 1851 Center.

“CPS is not a private business or individual: it is a taxpayer supported entity that should not target the state’s program of education, i.e. community schools, as ‘competing,’” the 1851 Center wrote in its filing with the appeals court.

The 1851 Center is joined by the Ohio Alliance for Public Charter Schools (OAPCS), which has filed an amicus brief in the action.

“Securing adequate and affordable facilities remains one of the greatest challenges to Ohio’s charter schools,” OAPCS wrote in its amicus brief. “The Cincinnati Public School District’s attempt here to prevent a public school from operating where a different public school once existed unlawfully exacerbates these facilities challenges and, at the same time, needlessly prevents students from getting a public education at the school of their choice.

July 06, 2010: Cincinnati Public Schools Blocked from Discriminating Against Charter and Private Schools

On July 6, Judge Ruehlman denied CPS’s desperate last-ditch effort to derail Theodore Roosevelt School’s opening by denying CPS’ Motion to Stay. This clears the way for the school to open in August; area families have already enrolled over 200 children. The school will employ approximately 40 people.

A Public Records Request by the 1851 Center reveals that CPS has already paid its hand-picked law firm over $32,000 in Cincinnati taxpayers’ money for the case, at an average rate of approximately $200 per hour, and at times as much as $256 per hour.

This is quite a sum, considering that Dr. Conners only paid $30,000 for the school building and the 1851 Center offered CPS an opportunity to settle beforehand. In addition, the amount also does not include the fees yet to be paid for the pending appeal.

May 28, 2010: Common Pleas Court says Cincinnati Public Schools Violated State Law 

Cincinnati Public Schools’ (CPS) policy of prohibiting the sale of unused available public school buildings to charter schools and private schools violates state law, yesterday ruled Hamilton County Common Pleas Court Judge Robert P. Ruehlman. The judge issued the ruling immediately from the bench.

In his ruling, Judge Ruehlman called CPS’s deed restrictions anti-competitive and acknowledged that CPS was merely attempting to suppress competition from charter and other alternative schools, and thwart school choice for the parents and children of Cincinnati.

The ruling halts CPS’s restrictive practice and opens the district to the loss of hundreds of millions of dollars in funding from the Ohio School Facilities Commission (OSFC). Last week, OSFC member State Rep. Kris Jordan moved to stop state facilities funding to CPS because of its purported violations. Jordan, prompted by the 1851 Center’s legal action against CPS, informed the commission the school district forfeited its statutory right to project funding because of repeated violations of state charter schools provisions. The court’s ruling bolsters Jordan’s assertion.

The court’s ruling affirms:

  • A contract term that violates public policy is void;
  • A contract term that hinders the purpose of a statute is void;
  • CPS’s deed restriction is void due to Ohio’s public policy in favor of transferring taxpayer-owned school buildings to community schools;
  • CPS’s deed restriction is void because it is in derogation of a statewide public policy in favor of effectuating parental choice and educational opportunity through community schools; and
  • Although the deed restriction is void, the conveyance must remain valid.

 

June 1, 2010: Cincinnati Enquirer: Judge Sets Charter School Precedent

March 11, 2011: Appellate Court’s ruling

October 14, 2010: OAPCS’s amicus brief

October 14, 2010: Appellate merit brief

March, 2010: Motion for judgment

March, 2010: Response to original complaint

Ohio Townships do not have the power to levy taxes.  That’s why they call them “fees.” This case argues that “fees” on new homeowners and developers are really taxes and are unconstitutional.

Timeline

February 14, 2011 – 1851 Center Files Amicus Brief at Ohio Supreme Court

On February 14, 2011, the 1851 Center for Constitutional Law filed an amicus brief with the Ohio Supreme Court, on its own behalf and on behalf of the Tax Foundation. The brief argues that Ohio townships, which do not have the power to levy taxes, cannot levy back-door taxes on new homeowners and developers merely by labeling those taxes as “impact fees.”

December 15, 2010 – The Ohio Supreme Court Accepts the Case on Appeal

February 1, 2010 –  1851 Center Files Amicus Brief at Appellate Court

The 1851 Center filed an amicus brief with the Twelfth District Court Appeals, arguing that Ohio townships, which do not have the power to levy taxes, cannot levy back-door taxes on new homeowners and developers merely by labeling those taxes as “impact fees.”

Media

March 3, 2011 – Listen to Maurice Thompson on the Tax Policy Podcast here.

Documents

February 14, 2011: 1851 Center’s Amicus Brief (Ohio Supreme Court)

February 1, 2010: 1851 Center’s Amicus Brief (Appellate Court)