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.

New Partner

Boys & Girls Clubs coming to two Memphis schools after all

PHOTO: Marta W. Aldrich
Principal Tisha Durrah stands at the entrance of Craigmont High, a Memphis school that soon will host one of the city's first school-based, after-school clubs operated by the Boys & Girls Club of Greater Memphis.

Principal Tisha Durrah says her faculty can keep students focused and safe during school hours at Craigmont High School. It’s the time after the final bell rings that she’s concerned about.

“They’re just walking the neighborhood basically,” Durrah says of daily after-school loitering around the Raleigh campus, prompting her to send three robocalls to parents last year. “It puts our students at risk when they don’t have something to do after school.”

Those options will expand this fall.

Craigmont is one of two Memphis schools that will welcome after-school programs run by the Boys & Girls Club of Greater Memphis following this week’s change of heart by Shelby County’s Board of Commissioners.

Commissioners voted 9-4 to foot the bill for operational costs to open clubs at Craigmont and Dunbar Elementary. The decision was a reversal from last week when the board voted down Shelby County Schools’ request for an extra $1.6 million to open three school-based clubs, including one at Riverview School. Wednesday’s approval was for a one-time grant of $905,000.

Commissioners have agreed all along that putting after-school clubs in Memphis schools is a good idea — to provide more enriching activities for neighborhood children in need. But some argued last week that the district should tap existing money in its savings account instead of asking the county for extra funding. Later, the district’s lawyers said the school system can only use that money legally to pay for direct educational services, not to help fund a nonprofit’s operations.

Heidi Shafer is one of two commissioners to reverse their votes in favor of the investment. She said she wanted to move ahead with a final county budget, but remains concerned about the clubs’ sustainability and the precedent being set.

PHOTO: Boys & Girls Club
The Boys & Girls Club provides after-school programs for children and teens.

“If we give (money) to something that’s para-education, we have less to give to education,” she said. “There’s only a limited amount of dollars to go around.”

The funding will help bring to Memphis the first-ever school-based Boys & Girls clubs opened through Shelby County Schools, the largest district in Tennessee, said Keith Blanchard, the organization’s Memphis CEO.

While the nonprofit has had a local presence since 1962 and is up to seven sites in Memphis, it’s had no local government funding heretofore, which is unusual across its network. Nationally, about 1,600 of the organization’s 4,300 clubs are based in schools.

Blanchard plans to get Dunbar’s club up and running by the beginning of October in the city’s Orange Mound community. Craigmont’s should open by November.

“We hope to maybe do another school soon. … A lot will depend on how this school year goes,” he said. “I certainly hope the county sees the value in this and continues to fund in a significant way.”

At Craigmont, the club will mean after-school tutoring and job training in computer science and interviewing skills. Durrah says the activities will provide extra resources as the district seeks to better equip students for life after high school.

“It looks toward the long term,” Durrah said of the program. “This really fits in with the district’s college- and career-ready goals.”

diplomas for all

Education commissioner floats idea of allowing a work readiness credential to confer benefits of a diploma

Parent rally outside the state education building for more diploma options. (Courtesy Betty Pilnik)

A high school diploma opens doors to matriculating in college, qualifying for certain jobs and entering the military.

But many students struggle with New York state’s arduous requirements, which generally include passing at least four Regents exams. During a discussion Tuesday about creating more diploma options, New York state’s education commissioner floated a radical solution: Allow students to use a work-readiness credential to obtain a “local diploma” instead.

“I think what we need to look at is the opportunity of saying can the CDOS [Career Development and Occupational Studies credential] be, can the completion of the CDOS sequence, be an appropriate end to receiving a local diploma?” Elia said during a Board of Regents conversation about graduation requirements.

The CDOS credential was originally crafted in 2013 as an alternative to a diploma for students with disabilities. They can show they are ready for employment by completing hundreds of hours of vocational coursework and job-shadowing or by passing a work-readiness exam. The rules were changed last year to also allow general education students to obtain the credential, which can substitute for a fifth Regents exam for students who pass four.

Allowing the credential itself to confer the benefits of a diploma would mark a seismic shift in what it means to graduate in New York state. Students would potentially avoid having to pass a series of Regents exams — which would mark a huge victory for advocates who argue those exams unfairly hold students back.

But it would also raise questions about whether standards are being watered down. Chalkbeat has reported that the work-readiness exams used to obtain a CDOS credential often test fairly basic life skills, such as how to overcome obstacles when throwing a company party. The state itself is currently reviewing these exams to see if they have “sufficient rigor.”

The state cautioned that there is no formal proposal on the table. Also, the commissioner’s statement Tuesday morning was vague. If state officials decide to move forward with the proposal, for instance, they would need to decide if it is for all students or only students with disabilities. Officials would also need to clarify whether the work-readiness exam itself was sufficient for a diploma, or whether extra coursework would be tacked on.

“The Board of Regents and the State Education Department have made it a priority to allow students to demonstrate their proficiency to graduate in many ways. This is not about changing our graduation standards. It’s about providing different avenues – equally rigorous – for kids to demonstrate they are ready to graduate with a meaningful diploma,” said education department spokeswoman Emily DeSantis. “Today, the Board of Regents and the Department started a discussion to examine all of New York’s diploma options and graduation requirements. This discussion will continue over the coming months. It is premature to speculate on any changes that could be made as a result of this process.”

Regardless of any changes, all students would likely be required to complete the same number of high school courses, which includes 22 credits of required work, state officials said.

Still, just having the head of the state’s education department float this concept suggests a dramatic policy reversal. Starting in 2005, the Regents began a process to make it more difficult to earn a diploma in an attempt to prepare more students for college and career. Local diplomas exist today but are only offered in limited cases, for students with disabilities who complete a set of requirements, including the math and English Regents, and for general education students who just miss passing two of their Regents exams.

Recently, state education officials have been looking for ways to help students just shy of the passing mark. In 2014, they created a “4+1” option, which allows students to substitute a final Regents exam for a pathway in areas like the arts or Career and Technical Education, and then last year added CDOS as a potential pathway.

In 2016, another rule change allowed students to appeal Regents exam grades with scores below passing and let students with disabilities graduate after passing two Regents exams and getting a superintendent’s review. Last year, the number of New York City students successfully appealing Regents exam scores in order to graduate tripled, likely contributing to a boost in the city’s graduation rate.

By placing a discussion about diploma options on Tuesday’s agenda, state officials suggested the Regents want to do even more. Allowing students to earn a local diploma without passing any Regents exams would be the biggest change to date.

Stephen Sigmund, executive director of High Achievement New York, did not comment specifically on this provision and said he generally supports recent changes to graduation requirements. But he said looking forward, it will be important to maintain high standards.

“Ensuring that there’s rigor and that graduates are ready for what comes next is very important,” Sigmund said.

Many education advocates are likely to be supportive by the change. A group of activists rallied at the State Education Department on Monday, carrying signs that said “diplomas for all.”

These and other advocates argue that students across the state — particularly those with disabilities or those who struggle with tests — have had their life options severely limited by the exams.

State Senator Todd Kaminsky, who has been active in fighting for more diploma options, said for him, finding solutions for these students outweighs critics’ concerns about rigor.

“I think this is a major victory for parents who had seen their potential for their children stifled,” Kaminsky said. “I am firmly of the belief that we need to err on the side of giving children options to graduate.”