The Zuni Public School District #89 (Zuni) and the Gallup-McKinley Public Schools (Gallup) sued to contest a U.S. Department of Education decision concerning funding, particularly Impact Aid, which accounts for the presence of military bases or Indian Reservations within a school district. By law, school districts cannot be penalized with regard to local and state funding sources if they accept federal funding; however, if a state has a program that equalizes expenditures among local educational agencies, then federal funding may be factored into state educational expenditures. Expenditures and funding are factored on a per student basis with a general disparity test, and if the highest spending is no more than 25% more than the lowest per student spending, then the local education funding is deemed equal.
The Assistant Secretary of the U.S. Department of Education deemed the state of New Mexico to have an equalized funding program in place for the 1999-2000 school year. Zuni and Gallup contested this decision. In 1994, Congress placed a new equalization formula in place, under which New Mexico would not qualify as equalized. The Assistant Secretary reinstated his preferred formula in 1996, which factored in both district size and number of pupils. The U.S. Supreme Court upheld the U.S. Department of Education's opinion and decision in this matter, finding the Assistant Secretary's formula to be acceptable. Traditionally, Congress leaves specifics of this sort to the individual agency, and the statute's history supported the Assistant Secretary. Furthermore, the Secretary's formula falls within the scope of the statute's language.
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