Cite as 351 Ark. 31 (2002)
In the face of this testimony, the State makes the implausible argument that more money spent on education does not correlate to better student performance. This position is contrary to Judge Imber's finding in her 1994 order and to the Tennessee Supreme Court: "[T]here is a 'direct correlation between dollars expended and the quality of education a student receives.'" McWherter, 851 S.W.2d at 141. The State's argument is farfetched in this court's opinion. We are convinced that motivated teachers, sufficient equipment to supplement instruction, and learning in facilities that are not crumbling or overcrowded, all combine to enhance educational performance. Certainly, Dr. Simon's testimony confirms that. All of that takes money.
The State's retort on the variations in revenue among school districts is that Amendment 74 specifically contemplates variations and authorizes them. It is true that Amendment 74 states: "The primary reason for allowing such variations is to allow school districts, to the extent permissible, to raise additional funds to enhance the educational system within the school district." However, Amendment 74 does not authorize a system of school funding that fails to close the gap between wealthy school districts with premier educational programs and poor school districts on the lower end of the economic spectrum, which are mired in poverty and unable to provide a system of education much above the most elementary kind.
[16] The initial inquiry in our equality analysis is whether school districts are impermissibly classified on the basis of wealth so that discrimination exists. We hold that a classification between poor and rich school districts does exist and that the State, with its school-funding formula, has fostered this discrimination based on wealth. Having identified the classification created by the schoolfunding formula, the next issue is what level of judicial scrutiny will be employed in this case. Two levels are offered by the parties. The heightened level is strict scrutiny under which the State would have to show, first, that it has a compelling interest to support disparate treatment in funding between school districts and, secondly, that the school-funding system is narrowly tailored to serve that interest. See, e.g., Shaw v. Hunt, 517 U.S. 899 (1996); Pridgeon v. State, 266 Ark. 651, 587 S.W.2d 225 (1979) ("Only
