Mark Tallman Blog Gannon School Finance Case

Thursday, May 24, 2018

Key Issues for the Kansas Supreme Court in the Gannon school finance case

Based on briefs filed by both parties and oral arguments Tuesday, the Kansas Supreme Court's decision in the last school finance case will focus on these questions.

1.       How much is enough? The state says actions by the Legislature over the past two sessions will provide $1 billion more in school funding over a six-year period. The plaintiffs want $500 million added to what the Legislature did immediately (for next school year) and up to $2 billion more phased in and adjusted for inflation.

2.       Meaning of the latest cost study. The state says the $2 billion cost of meeting state standards developed by Dr. Lori Taylor and others is based on "moon shot" aspirational goals that should not be required constitutional adequacy. It argues the Legislature used another approach to adequacy, based on previous rulings of constitutional compliance in 2009. The plaintiffs say the new study's goals are based on what Kansas students need to be successful, as defined by the State Board of Education, and the new study confirms what previous state-commissioned studies, a peer review this Spring, and an alternative study commissioned by the plaintiffs found about the cost of meeting state standards. Several justices questioned why the Legislature has repeatedly paid for cost studies it then doesn't want to follow.

3.       What is required to meet the “Rose” standards? The Supreme Court has set the standard for adequacy as enabling "all" students to meet or exceed seven standards of educational competence, from basic skills to preparation for college and career, called the Rose standards after a Kentucky school finance case. A major reason courts found the current finance system unconstitutional is that about 25 percent of students score below "grade level" on Kansas state tests and nearly 15 percent do not graduate on time. The state says approved funding should[LF1]  allow 85 percent of students to reach grade level. Plaintiffs say the target should be at least 90 percent of students on grade level and 60 percent of students "college ready" on state tests. Justices asked how high the constitutionally acceptable bar had to be – can schools be expected to reach 100 percent? Put another way, can more money solve all educational issues?

4.       Does money matter? No debate here: both sides agree additional funding will improve education. The state says its billion-dollar increase will significantly improve student success and should satisfy the constitutional requirement. The plaintiffs say it won't go far enough.

5.       The role of the court. Several justices expressed concern that any decision based on substantially new facts – such as the new cost study – would go beyond their scope as an appeals court. They raised the possibility of sending the case back to the three-judge panel to consider new evidence. Neither side expressed much support for a step that would add months or years to the process.

6.       The role of the State Board of Education in funding. Article 6, section 1 of the Kansas Constitution gives the Legislature the duty to “establish a system of public schools” for educational improvement; and in later sections delegates to the State Board authority for “general supervision” of public schools; to local school boards the duty to “maintain, develop and operate” schools and to the Legislature the duty to “make suitable provision for finance.” The state says this means the Legislature has the primary role, and the State Board is to supervise the system the Legislature “establishes.” The plaintiffs argue the State Board has independent authority to set educational standards for schools and students which the Legislature then must support with adequate funding. When asked if that means the State Board could lower standards (and therefore costs), plaintiffs replied that the Supreme Court should then intervene to the enforce the provision that the public education system must provide educational “improvement.”

7.       Retaining jurisdiction. The school finance bill passed in the 2018 session includes phasing in more than $400 million spread over the next four years. The plaintiffs want more money now AND a phase-in of additional funds. However, the state wants the court to dismiss the case, which means if the Legislature failed to follow through, a new lawsuit would have to be filed. The plaintiffs want the court to retain jurisdiction until any final resolution is fully implemented, which could be more than five years. The Supreme Court allowed a three-year phase-in as part of the Montoy case in the late 2000’s. It dismissed the case before the Legislature fully funded the law, and funding was reduced when state revenues fell during the Great Recession and following state income tax cuts.

8.       What happens to the Local Option Budget? The state claims the new requirement of a 15 percent LOB should count in its favor because it will increase the mandatory commitment of funding for each district. (For example, it would keep local school districts from using additional state aid to offset their LOB and reduce local property taxes.) Plaintiffs argue that a mandatory LOB should be 100 percent equalized by the state, rather than equalized to the 81.2 percentile under current law. The court has approved the 81.2 percent rate for the currently optional LOB. Plaintiffs also want the court to remove any voter protest or election requirements for the LOB and strike a provision that requires districts to use LOB funding for at-risk and bilingual education programs in proportion to amount of at-risk and bilingual weighting they receive.

9.       When will the court decide? That’s up the court. It previously promised a decision by June 30. If the Legislature’s action is found to be insufficient, the state has asked that the system be allowed to operate (schools remain open) during the upcoming school year (while about $200 million will be added) and the Legislature given next session to continue to work toward compliance. Plaintiffs say unless the Legislature approves additional funding for the upcoming school year, more funding committed for the future and changes to the LOB, the court should shut down the school finance system until it does – but want exceptions to allow maintenance of school district buildings and property while schools are closed.

KASB analysis of court hearing on school finance

KASB analysis of court hearing on school finance

The state on Tuesday urged the Kansas Supreme Court to keep schools open, accept the new finance law and dismiss the Gannon lawsuit that has gone back and forth between the court and Legislature for eight years. 

Plaintiff school districts, however, argued the new law falls far short of what Kansas students need to succeed, urged an additional $500 million and upwards of $2 billion afterwards, plus inflation, and pleaded with the court to maintain jurisdiction in the case because of past behavior by the state in cutting school funding after the previous Montoy decision. 

The long-awaited showdown before the state Supreme Court was scheduled to take two hours, but ran closer to three hours. Chief Justice Lawton Nuss said the court would take the matter under advisement. The court has previously stated it would issue a decision by June 30. 

A ruling against the state could trigger a special legislative session this summer as political campaigns heat up before the Aug. 7 primaries. 

Here is what KASB experts Donna Whiteman, assistant executive director of legal services, and Mark Tallman, associate executive director of advocacy and communications, noticed during the arguments (here is a link to the full KASB Live webinar on the court proceeding): 

— The court is trying to determine if the new law is calculated to have all students meet or exceed the Rose standards and whether students have reasonable access to educational opportunity from similar tax support. What level of student achievement is acceptable?   

— The state argued Kansas is adding $1 billion more for education, getting to Montoy levels of funding adjusted for inflation, but that is going to take five years. “That may be the single biggest problem that they (the state) have to overcome,” Tallman said. 

— Justices expressed frustration over how long the school system has been underfunded. The case was originally filed in 2010 after the state during the Great Recession cut school funding below levels accepted by the court as part of the Montoy lawsuit. 

— The state abandoned the school finance cost study commissioned by legislative leaders, which called for upwards of $2 billion in additional funding. “The state threw their expert witness under the bus,” said Whiteman. Whiteman noted without a cost study to rely on, three justices questioned whether they have enough information before them and talked about possibly remanding the case back to the lower court for more fact-finding. 

— After years of denying that “money matters” in K-12 funding, the state on Tuesday essentially conceded that it does. 

— When asked to dismiss the Gannon case, several justices noted that the court dismissed the Montoy lawsuit and then several years later, the state cut school funding.