In 1976 the California Supreme Court found that the existing system of financing schools was unconstitutional because it violated the Equal Protection Clause of the State Constitution. The court ruled that property tax rates and per pupil expenditures should be equalized and that, by 1980, the difference in base revenue limits per pupil should be less than $100 (called the "Serrano band"). A built-in inflation factor brought the allowable difference to about $300 per student (based on average daily attendance, or ADA) by 2000. The vast majority of the state's students—nearly 99%—were attending districts with base revenue limits within that band. The court did not recommend a penalty for districts already above the band.
The court excluded special purpose or categorical funds from the calculation of equitable funding.
October 1980 Plaintiffs filed a “bill of particulars” stating that equalization had not been accomplished and the deadline for the $100 band had not been met. They asked that some expenditures in addition to revenue limits be equalized.
December 1982 Superior Court in Los Angeles heard the Serrano v. Priest, Gonzalez v. Riles, Placentia USD v. Riles, and Lucia Mar USD v. Graves cases, all of which dealt with similar issues.
April 1983 Superior Court trial judge found that the current school finance system is constitutional and that sufficient parity exists within the $100 band adjusted for inflation.
June 1985 Plaintiffs filed an appeal in the Second District Court of Appeals.
May 1986 Court of Appeals upheld the 1983 Superior Court decision.
September 1986 California Supreme Court voted to hear the appeal of the Superior Court decision.
March 1987 Defendants filed for dismissal of Supreme Court review.
April 1989 Plaintiffs withdrew. Case was declared closed.
A 1998 change in the ADA calculation raised renewed concerns about equity in revenue limit amounts. In 2001-02 the Legislature approved a multiyear plan to equalize all revenue limits according to the type of district (elementary, high school, unified). It has not been funded since then. The plan calls for 90% of the statewide enrollment to eventually have base revenue limits of the same amount; only 10% of the students could be in districts with higher base revenue limits. According to the California Department of Education, 776 school districts with more than 5 million students were eligible for additional funds under this plan in 2000-01. The mechanism is different from the "Serrano band," but the result is similar.
Although the Serrano case is long-settled, educational equity is still an issue that is now joined by questions about the adequacy of support for public schools. In May 2000 a suit—Williams v. California—charged that California is not providing all students with the same educational quality, particularly in textbooks, qualified teachers and appropriate classrooms.
The case was settled in August 2004. The settlement requires districts to provide sufficient numbers of instructional materials, provide qualified teachers, and keep facilities in good repair. It also created a monitoring and compliance system overseen by county offices of education.
The settlement disappointed supporters who believed Williams was an adequacy lawsuit. The plaintiffs said Williams was never about adequacy and that the floor established by the settlement improved conditions for California students.