Ruling is in

Supreme Court rejects challenge to school funding formula

Ralph Carr Judicial Center

The Colorado Supreme Court in a 4-3 decision issued Monday rejected a constitutional challenge to part of the state’s school funding formula.

At issue in the case of Dwyer v. State of Colorado was the negative factor, a calculation the legislature has used to reduce school funding to balance the state budget.

“At the end of the day, the State has not reduced statewide base per pupil funding below its constitutional minimum. That fact torpedoes Plaintiffs’ lawsuit,” the opinion said. (See full opinion at bottom of article.)

The decision was not unexpected, but it deals a hard blow to advocates of increased school funding by closing the last big court option available to them.

“This disappointing decision has slammed the courthouse doors on the children of Colorado, cementing in place our uncompetitive levels of education investment,” said Kathleen Gebhardt, a lead lawyer for the plaintiffs.

“We just have to keep trying” to strengthen school funding, she added. “The new normal, it’s just not acceptable. … The next step has to be the voters,” perhaps with a ballot proposal to tweak constitutional requirements for school funding.

The suit was filed just over a year ago by a group of parents and school districts organized by Children’s Voices, the Boulder nonprofit law firm that also put together the Lobato v. State of Colorado lawsuit. That case challenged the state funding system on broader grounds and was rejected by the high court in 2013.

The target in the Dwyer case was much narrower — the negative factor and the proper interpretation of Amendment 23, the constitutional provision that requires K-12 funding to increase annually by population growth and the rate of inflation.

The plaintiffs asked that the negative factor section be stricken from the state’s school funding law and that the legislature be barred from reinstating the factor in another form. The suit didn’t ask that lost funding be restored.

The case boiled down to a fundamental disagreement between the plaintiffs and the state on two key issues — the definitions of base school funding and per-student funding.

“Plaintiffs’ challenge to the negative factor presents a surprisingly straightforward question of constitutional interpretation. Quite simply, this case is about one thing: the meaning of the term ‘base,'” the ruling said.

The court’s majority came down on the state’s side.

“By its plain language, Amendment 23 only requires increases to statewide base per pupil funding, not to total per pupil funding,” the majority wrote. “The Supreme Court therefore holds that the negative factor does not violate Amendment 23.”

The ruling said that principles of ballot measure interpretation “compel the conclusion that Amendment 23 only requires increases to statewide base per pupil funding, not total per pupil funding. We know that this is what Amendment 23 means, because this is exactly what Amendment 23 says.”

The ruling also said those legal principles required that “We presume that the negative factor is constitutional, and we will only void it if we deem it to be unconstitutional beyond a reasonable doubt.”

The negative factor has been an issue of increasing concern — and even bitterness — among school board members, administrators and teachers since the legislature first used it in 2010, when state revenues still were reeling from the recession.

State and local funding for basic school operations totals about $6.23 billion this school year, an average of $7,295 per pupil. Without the negative factor, total funding would be $885 million higher. (See this spreadsheet of how negative factor affects individual districts.)

Legislators from both parties have been sympathetic about the negative factor’s impact on schools, if not to the argument that it was unconstitutional. They have concerns about reducing the legislature’s budgeting flexibility and about impacts on other state programs.

But for the last two legislative sessions, lawmakers have worked to reduce the negative factor, which had produced a funding shortfall as high as $1 billion in past years.

Budget experts fear it will be increasingly difficult to shrink the negative factor more in the future. Despite rising state revenues, constitutional requirements for annual state spending caps and taxpayer refunds make it unlikely significantly larger amounts of money will be available for K-12 in 2016-17 and beyond. (See the 2016-17 projection from the Colorado School Finance Project and these models of future negative factor impacts.)

How Amendment 23 works

Passed by voters in 2000, Amendment 23’s backers intended for it to provide a predictable and growing source of funding for schools. The amendment’s goal was to restore per-pupil funding to 1988 levels over time.

State funding for schools comes in two major chunks. The larger amount, base funding, provides an identical per-student amount to every district. The second chunk, called factor funding, gives districts varying additional per-student amounts based on individual district characteristics such as numbers of at-risk students, low enrollment and cost of living for staff.  Local property and vehicle tax revenues also contribute to what’s called total program funding for schools.

A third, smaller pot of state support known as categorical funding provides money to districts for programs such as special education, gifted and talented and transportation. That money is not distributed by the same formula that governs total program funding.

A key fact is that up until the 2010-11 school year, the legislature applied the inflation-and-enrollment increase to both base and factor funding.

Behind the negative factor

In 2010, the legislature created the negative factor (originally called the stabilization factor) to control school spending as lawmakers continued to struggle with the overall state budget. It applied to the 2010-11 K-12 budget and has been in effect ever since.

The legal reasoning behind the negative factor is that Amendment 23 applies only to base funding, not to factor funding. The original legal rationale for the negative factor is based on a 34-page 2003 memo issued by the Office of Legislative Legal Services.

With state revenues improving, reduction of the negative factor was the top priority for education interest groups during the 2014 legislative session. Their proposals ranged as high as $275 million. In the end, lawmakers agreed to a $110 million reduction.

The Hickenlooper administration and legislative budget experts resisted a larger buy down, arguing that a bigger amount would put too much pressure on the state budget in future years. That can happen because reducing the negative factor puts more money into K-12 base funding, which is subject to Amendment 23’s multiplier in the future.

Behind the Dwyer lawsuit

The suit was filed about a month after the 2014 legislative session, during which supporters of increased school funding were unable to persuade lawmakers to make a big cut in the negative factor.

Lawsuit backers met with key lawmakers near the end of the session, but legislators reportedly refused to be swayed by any possibility of a lawsuit.

But discussions about a challenge to the formula had been in the works long before that.

The lead plaintiffs were Lindi and Paul Dwyer, who have four daughters in the Kit Carson district.

Other plaintiffs  included the Colorado Springs 11, Boulder Valley, Mancos, Holyoke and Plateau Valley school districts, along with the East Central Board of Cooperative Educational Services. Other plaintiffs were the Colorado Rural Schools Caucus (now known as the Rural Alliance) and the Colorado PTA. Four sets of parents with children in the Kit Carson, Lewis-Palmer and Hanover districts also signed on to the suit.

The case also drew several friend of the court briefs supporting either the plaintiffs or the state.

Briefs supporting the plaintiffs were filed by the Colorado Association of School Boards and the Colorado Education Association, among others. A brief supporting the state’s position was filed by several business groups, including the Denver Metro Chamber of Commerce.

Monday’s ruling was written Chief Justice Nancy Rice and supported by justices Brian Boatright, Nathan Coats and Allison Eid. Justices Monica Marquez, William Hood and Richard Gabriel dissented.

maybe next year

Senate Republicans kill bill that would have taken broad look at public education in Colorado

Students at Vista PEAK Exploratory in Aurora work on a math assignment. (Photo by Nic Garcia)

A Republican-controlled state Senate committee spiked a bill Wednesday that was meant to spark a broad conversation about the future of Colorado’s public schools.

Some lawmakers hoped House Bill 1287 would help sell voters on raising taxes to better fund the state’s schools. But the Senate State, Military and Veterans Affairs committee voted 3-2 along party lines to kill the legislation, which would have created a series of committees to examine the state’s education laws and make recommendations for changing them.

Republicans objected to the bill because they didn’t want to create more bureaucracy, and they thought it was a ploy to raise taxes.

The bill’s demise was a defeat for a group of the state’s most authoritative lawmakers on education policy. It was one of the top legislative priorities for state Reps. Millie Hamner, a Dillon Democrat, and Bob Rankin, a Carbondale Republican. Both serve of the state’s budget committee and rallied lawmakers around the bill.

Rankin called the bill the most important of his legislative career.

“I’m bitterly disappointed, although it was expected,” he said. “I certainly don’t intend to give up. We’ve worked for over three years to move this idea forward. We thought we built a bipartisan coalition that was interested and wanted to help. We thought we were making really good progress.”

Hamner also expressed dismay over the bill’s death.

“To die quietly like that in Senate was really, really surprising and disappointing,” Hamner said. “Do we still have a need to establish a vision for the future of our kids? Yes. Apparently we’re going to have to do that without our Senate majority.”

Last-minute amendments brought by state Sen. Kevin Priola, a Henderson Republican, to address Senate GOP leadership’s concerns could not save the bill.

Supporters of the bill said the legislature needed to step in to help rethink Colorado’s education landscape holistically, not with piecemeal legislation. The state’s laws are outdated and clash with 21st century expectations, they said at Wednesday’s hearing.

“Our current collection of policies and laws have failed to keep pace with changes in expectations of our education system,” said Mark Sass, a Broomfield high school teacher and state director of a teacher fellowship program. “We need a deliberate and collaborative conversation in our state, as to our vision of education.”

State Sen. Owen Hill, a Republican from Colorado Springs, said he supported the goal of the bill. His name was listed as a sponsor when the bill was first introduced. But he said he eventually concluded the bill was the wrong approach.

“I’m not sure this is the solution to get us there,” he said. “It’s time for us to take a bottom up approach. I get nervous about standing up and staffing and financing another government program.”

After the committee hearing, Sass said Republican lawmakers failed to realize their unique role in Colorado shaping statewide education policy. The state’s constitution gives no authority to the governor, the education commissioner or the State Board of Education to create a strategic plan.

“We need someone to drive this conversation,” he said. “If the legislature won’t, who will?”

Priola said in an interview that he had hoped for more time to lobby Senate leadership and members of the committee. Instead, he said he’d try again next year.

“We live in a state with 178 school districts and thousands of schools,” he said. “There can’t be one way of doing things, but there also can’t be 1,000. There has to be some commonality on what we’re doing and what direction we’re heading.”

Rankin was less committed in trying again next year.

“I want to think about,” he said. “I don’t think this elected, term-limited legislature with the background they come from can develop the kind of leadership needed for this movement.”

The death of House Bill 1287 puts another bipartisan piece of legislation on shaky ground.

House Bill 1340, sponsored by state Reps. Alec Garnett, a Denver Democrat, and Paul Lundeen, a Monument Republican, would create a committee of lawmakers to study and make changes to the way Colorado funds its schools.

The state House of Representatives was expected to hold its final vote on that bill Wednesday morning. But Democratic leadership pushed the vote by a day.

Some Democrats in the House saw the two bills as a package, while Republicans in the Senate saw them as competing. With partisan rancor flaring in the waning days of the session, House Democrats could return the favor and kill the finance study bill.

Rankin, the House Republican, said he hoped his chamber’s leadership would let the finance study bill move forward. He introduced a similar bill two years ago but was unable to get the bill through the legislative process.

“I think it’s a good idea to take a hard look at school finance. Maybe we can get some dialogue going,” he said, adding that he believes lawmakers still need to think about a strategic plan for its schools.

Hamner, the House Democrat, said she also supported the finance study.

“I think their bill will be just fine,” she said. “Unless the Senate decides to kill it in State Affairs.”

Funding & Finance

$32 million is headed to Indiana schools to educate English-learners

PHOTO: Kelly Wilkinson / The Star
A first grader does his work while sitting on a bilingual rug at Enlace Academy, Tuesday, April 14, 2014. The charter school, with 55 percent English-language learners, uses a blended language learning approach.

Indiana schools serving students learning English are getting another budget boost this year.

The state budget, passed last week and awaiting the governor’s final approval, sets aside about $32 million for English-language learners, up from about $20 million in 2015. That will give schools $250 for each English-learner student in 2018 and $300 for each student in 2019 — up from $200 — along with even more funding for schools with higher concentrations. Charter schools will also be included for the first time.

The funding comes as districts across the state continue to see their number of English-learners grow. As Chalkbeat chronicled in our award-winning series, Lost in Translation, two-thirds of Indiana schools have seen an increase in the share of students learning English since 2006. And in Indianapolis, the number of English-learners attending Marion County public school districts has almost tripled since 2001.

For Indianapolis Public Schools, the impact will be significant. Superintendent Lewis Ferebee said the new formula for districts with higher concentrations of English-learners would bring in a little more than $5 million in new state money over the next two years.

Jessica Feeser, who oversees IPS’ programs for English-language learners, said the additional money might go toward adding teaching and staff positions at the newcomer program, a school that serves students who are new to the country and learning English.

“The best news about this is not just the money itself, but the message that it sends to our students and their families,” Feeser said. “That they are extremely important to our lawmakers and to the citizens of Indiana, and that we’re ready to invest in them.”

Under the new budget, all schools would get the $250 or $300 grant for each English-learner. But schools with higher concentrations of students learning a new language would get additional, much larger per-student grants.

For districts and charter schools with between 5 percent and 18 percent English-learners, the state would give an extra $975 in 2018 and $1,037 in 2019 for each student above the 5 percent threshold. For districts and charter schools with more than 18 percent English-learners, the state would dole out an extra $1,225 in 2018 and $1,287 in 2019 for each student above the 5 percent threshold.

This differs from the formula created in 2015, which only gave extra grant money to public school districts with English-learner populations above 25 percent. Charter schools were excluded. At the time, only two districts qualified — Goshen Community Schools and West Noble schools, both in Northeast Indiana.

Here’s how the English-learner population breaks down in Marion County districts:

  • Perry Township: 3,314 students, making up 20.5 percent of the district
  • Indianapolis Public Schools: 4,145 students, 14.4 percent of the district
  • Pike Township: 1,579 students, 13.9 percent of the district
  • Wayne Township: 2,029 students, 12.6 percent of the district
  • Washington Township: 1,431 students, 12.5 percent of the district
  • Lawrence Township: 1,792 students, 11.2 percent of the district
  • Speedway Schools: 191 students, 10.6 percent of the district
  • Warren Township: 853 students, 6.9 percent of the district
  • Decatur Township: 293 students, 4.5 percent of the district
  • Franklin Township: 271 students, 3 percent of the district
  • Beech Grove Schools: 70 students, 2.3 percent of the district