What's the way forward?

Education leaders put on brave face in wake of Supreme Court ruling

Colorado education leaders say they will continue fighting for stronger education funding at the Capitol and perhaps at the ballot box following a Supreme Court ruling upholding the state’s current finance system.

But supporters of more funding face steep hurdles in their quest, based on the state budget situation and past history.

The Colorado Supreme Court on Monday rejected a constitutional challenge to the so-called negative factor, a formula the legislature uses to reduce annual school funding.

The decision in the Dwyer v. State lawsuit pretty much dashes the last hope for a sweeping fix to the tight funding situation that has vexed district leaders since 2010, when the negative factor was first used.

In that same time period, the Supreme Court has rejected two school funding lawsuits and voters defeated a proposed $1 billion tax increase to help support schools.

“K-12 is in for a bumpy ride,” said Tracie Rainey, executive director of the Colorado School Finance Project, a research organization.

Jane Urschel, deputy executive director of the Colorado Association of School Boards, had a slightly different take. Quoting the just-departed Yogi Berra, she said, “When you come to a fork in the road, take it. That’s where we are,” she added, saying education now faces “a short-term route and a long-term path” on funding.

The heart of the issue

School funding is driven by two things — Amendment 23 and a 1994 school finance law. The constitutional amendment, approved by voters in 2000, requires school funding to increase by enrollment growth and inflation every year.

Negative factor history
  • Fiscal year 15-16: $855.1M
  • FY14-15: $880M
  • FY13-14: $1.004B
  • FY12-13: $1.001B
  • FY11-12: $774M
  • FY10-11: $381M
  • FY09-10: $130M

The finance law divvies money up in two ways: Base funding, through which districts receive an equal amount per student, and factor funding, which gives districts varying amounts based on unique characteristics like size, number of at-risk students and staff cost of living.

Before the negative factor was created, the Amendment 23 formula was applied to both base and factor funding. The legal rationale behind the negative factor allows the formula to be applied only to the base, essentially allowing the legislature to reduce factor funding. Some argue the negative factor also has the effect of cutting the base.

It’s estimated use of the negative factor has cut school funding by about $5 billion since 2009-10. Support for basic school operating costs is about $6.2 billion this school year.

“The negative factor has had a devastating impact on school districts across Colorado,” said Lesley Dahlkemper, a member of the Jefferson County school board.

Does education face a “new normal?”

District leaders have been resisting the negative factor for five years, but some observers have concluded that tight funding is “the new normal” for schools. Opinions still differ in the wake of the court ruling.

“I don’t know how it’s not,” said Reilly Pharo Carter, executive director of Climb Higher Colorado, a group that advocates for high academic standards.

Others hope the situation will be temporary.

Milestones
  • 2000 – Amendment 23 passed
  • 2010 – A23’s 1 percent annual “bonus” expires; negative factor imposed
  • 2013 – Supreme Court rejects Lobato funding lawsuit; voters defeat $1 billion tax increase to help fund schools
  • 2014 – Despite intense lobbying, legislators make only modest trim in negative factor
  • 2015 – High court rejects Dwyer lawsuit

“We can’t allow it to be the new normal,” said Lisa Weil, executive director of Great Education Colorado, a funding advocacy group.

“We should not let anyone, legislators or the general public, think that because it’s the new normal it’s OK,” said Democratic state Sen. Andy Kerr of Lakewood, a Jeffco teacher and member of the Senate Education Committee. “We shouldn’t let anyone forget what the old normal was.”

Legislative prospects are dim

With the state courthouse door closed for now, education leaders are turning toward Urschel’s short-term route: the 2016 legislative session.

Advocates made a hard push to trim the negative factor in 2014 and tried again during the 2015 session. But lawmakers were able to make only small reductions.

“If we are serious about providing a high quality education to the students of Colorado, the legislature and the governor need to make increased school funding a high priority,” said Kerrie Dallman, president of the Colorado Education Association, the state’s largest teachers union.

But none of the more than a dozen education leaders interviewed by Chalkbeat Colorado are optimistic.

“I hold absolutely no hope that our funding problems might be solved by the governor or the legislature,” said George Welsh, superintendent of the Canon City schools and a long-time advocate for smaller districts.

“It is not realistic to think that the governor and legislature will be able to ‘buy down the negative factor’ in the next few years,” said Chris Watney, president of the Colorado Children’s Campaign.

The key problem is that refunds required by the Taxpayer’s Bill of Rights, a slowing of state revenue growth, automatic increases in base school funding and required support of transportation will leave lawmakers with little extra cash for the 2016-17 budget.

“There aren’t extra dollars, there is no unused pot of money and the legislature does not have the power to create more dollars by printing them, deficit spending or by raising taxes. Thus, lobbying ‘pressure’ won’t succeed here because it can’t,” said Republican Sen. Chris Holbert of Parker, a member of Senate Education.

“I think we’re going to be lucky to keep the negative factor where it is,” said Kathleen Gebhardt, a lead attorney for the plaintiffs in the Dwyer lawsuit.

Some people are looking to changes in the hospital provider fee for short-term relief. That fee is assessed on hospitals to attract higher federal Medicaid funding, with the money paid back out in Medicaid reimbursements. Even though it’s not a tax and can’t be spent for non-Medicaid purposes, the $800 million a year generated by the fee counts against the state’s TABOR revenue cap and helps trigger tax refunds.

Gov. John Hickenlooper wants lawmakers to reclassify the fee so it doesn’t count as state revenue. Doing so would free up money for state spending.

Many education leaders support the governor.

“It’s a short-term strategy that would give us some breathing room,” said Boulder Valley Superintendent Bruce Messinger, who has been a leading voice on school funding.

Hickenlooper was unsuccessful in selling the idea to the 2015 legislature and likely will face a challenge in 2016, particularly with majority Republicans in the Senate, who don’t want to roll back TABOR refunds.

Going to the ballot

The long-term path for education leaders is developing some sort of education-funding ballot proposal for voters.

“I think it’s very likely we’ll have to go to the ballot,” Weil said.

But no one is predicting yet what a ballot proposal would look like. Options include raising the state revenue ceiling, a dedicated tax increase for K-12 or tinkering with Amendment 23.

Constitutional thicket
A variety of constitutional and legal provisions affect the state budget, including:
  • Balanced budget – The state constitution requires this
  • Taxes – TABOR says tax rates can only be raised by voters
  • Revenue cap – The amount of money the state can spend in a year is limited by TABOR
  • Refunds – If revenue exceeds the cap, the excess must be refunded to taxpayers, or lawmakers can propose a ballot measure allowing the excess to be spent
  • Other spending – State Medicaid spending is driven partly by federal requirements, and state law requires transfers to transportation and construction under some circumstances

Kerr and others note a ballot proposal could be a tough sell.

“There are people who have been talking about it all along, but I don’t see any appetite for going back to the ballot at this point,” he said, alluding to voter rejection of a proposed tax increase for K-12 education in 2013.

Any ballot proposal also would reopen discussions within the education community about changing school finance formulas. Both education reform advocates and poorer districts argue the formulas are outdated and inequitable.

“Equity, accountability and innovation … should be top of mind as we look for answers,” Watney said.

Broader constitutional fixes are being discussed in other quarters.

A group of civic and business leaders named Building a Better Colorado is holding public meetings around the state and studying a possible list of constitutional changes, not just to the state budget.

If that group moves ahead with a proposal, it will have to consider education, Gebhardt believes.

“If you don’t have K-12 support it’s going to be very difficult,” she said, because any campaign will need the “boots on the ground” provided by teacher and parent groups.

One last lifeline

There is one other court case still pending that could affect education funding.

A 2011 federal court lawsuit filed by some legislators, other elected officials and private citizens argues that TABOR violates federal constitutional guarantees that states have “representative” forms of government – including legislatures with the power to tax.

The case hasn’t been tried while procedural issues are being considered by the federal courts.

Learn more about school finance in Chalkbeat’s archives

Church and state

The backdoor voucher? How a Detroit school created to lift up a ‘Christ-centered culture’ found a way to get public dollars

PHOTO: Allie Gross
At the Cornerstone charter recruitment gathering, families scooped up documents from a table brandishing the phrase “Faith. Family. Culture.” — the private school’s trademark.

When prospective families arrived at Cornerstone Schools’ flagship campus on Nevada Street last month, they were greeted by a staff primed to woo and sell.

Folding chairs had been placed in the tidy front entrance of the northeast Detroit school, and one by one, administrators stood up to speak about the rich culture and strong curriculum that parents and children had come to know and love since the religious school opened in 1991.

“You know, when you come in the fall, we’re going to have a team of parents waiting for you to teach you how to do things because there’s a way to do things. Just like when you go to a church or join a new group,” said Candace Brockman, the primary school principal and soon to be K-8 leader, to the crowd of potential families.

In March, Cornerstone announced that starting next year, its flagship private Christian school would stop providing primary and middle school classes. Instead, a charter, employing the same staff and using the same curriculum, would take over. Families from the religious school would help new families get to know the new school, Brockman explained. The words “Centers of Hope” glimmered in gold typeface above her as she spoke.

“They are going to make sure you understand the history and how they do things and that’s how we’re going to do it here,” she said. “You are going to have to get with our program.”

The history of Cornerstone is clear: The network of schools was started in 1991 by local attorney Clark Durant in response to a speech given by the city’s then-archbishop Adam Maida to the Detroit Economic Club. But how the families Brockman was addressing would get with the program — at least as it exists today — is less straightforward. Although the schools’ genesis was Christ-driven, nearly three decades after its creation, four of Cornerstone’s five schools are charters, which by law cannot teach religion.

And starting next year, the program is even more ambiguous. The last standing private, pre-K through 12th-grade Christian school, the one Brockman was presenting at, will be undergoing its own conversion.

Pinpointing where the religious school ended and the charter school began was difficult. Parents sitting in the room may have wondered: Am I at a meeting with Cornerstone Nevada, the flagship, independent, religious school? Or am I listening to a talk about Cornerstone Jefferson-Douglass Academy, the soon-to-open public charter school? The two entities couldn’t help but brush against each other.

Following Brockman’s presentation, parents were invited to come forward and pick up enrollment information for the public charter school. Making their way to the front of the room, families scooped up documents from a table brandishing the private school’s slogan, “Faith. Family. Culture.” Children grabbed bookmarks that showcased the Cornerstone schools’ principles — love, joy, peace, forbearance, kindness, goodness, faithfulness, gentleness, and self-control. Although posters and murals dotting the hallways made clear that these values came from Galatians 5:22, Fruit of the Spirit — the Apostle Paul’s nine traits of a Christian — the information was noticeably absent from the giveaways.

PHOTO: Allie Gross
A hallway at the Cornerstone flagship campus showcasing the network’s guiding principles.

Cornerstone’s switch from private to charter raises thorny issues about the separation of church and state — and whether Michigan’s notoriously freewheeling charter sector is set up to safeguard it. It also highlights questions about privatization — whether the Cornerstone network is using its charter schools, and the public dollars they’ll bring in, to prop up their struggling religious school.

The network, and its portfolio of independent and publicly funded schools, offers an example of “the extreme difficulties private religious schools are going to confront if they are trying to become charter schools, and want in some way to maintain what they believe are their core values,” said Kary Moss of the American Civil Liberties Union, which lobbies to protect the First Amendment. “This is obviously a big problem in a state like Michigan where there is such a pro-charter movement and little regulation.”

U.S. law bars public schools from teaching religion. Voucher programs, which exist in 14 states and Washington, D.C., have blurred the boundaries by allowing parents to use public education funds to pay tuition at religious schools. But Michigan does not offer vouchers. Voters rejected the practice in 1970 and again in 2000 when now-Secretary of Education Betsy DeVos helped to underwrite the ballot proposal and poured upwards of $12 million into the campaign.

As a result, there are no options for religious schools in the state to get public funds for instruction. It also means that religious schools that struggle financially have little choice but to close.

But the state’s chaotic school choice landscape offers a not-so-obvious loophole: Schools can shop for an authorizer to reopen as a charter school, allowing them to receive public funds in exchange for accountability tied to student learning. The downside: They must drop their religious affiliation and practices, and open up to all students.

That could be a tall order for Cornerstone, a 26-year old school network steeped in religious rhetoric and created for the express purpose of “lifting up a Christ-centered culture.” Brockman, like much of the current staff, says on the school’s website that she “considers it a blessing to be able to educate children in a learning environment that places Jesus Christ first.”

The network has transitioned from private to charter before — in 2009 they converted two of their religious schools into charters, and they’ve since opened two more. And their authorizer, Grand Valley State University, has found no problems with the Cornerstone charters overstepping church-state lines. Yet conversations with the school’s founder, Durant, highlight the needle-thin line they straddle.

“We are a little not-for-profit trying to do the great prophet’s work if you will. God’s work. To help these children have fulfilling lives,” Durant said in an interview with Catholic News Network last summer. He later defined a fulfilling life as “following the things Jesus would teach and to love God and to love others.”

The comments give insight into the intricacies and strength of Cornerstone’s religious roots. But they also just toe the line, never fully compromising the school’s secular status.

A big part of this is due to the outward-facing work of the network to still draw distinctions between its private and religious schools. Like the other charters, Cornerstone Jefferson-Douglass Academy will move from the purview of the Cornerstone Schools Association, the organization running the private school endeavors, to the Cornerstone Education Group, a management company that leads the network’s charters.

For example, the four charter schools adopted a brand-new curriculum, and while the schools continued to use the private schools’ principles — love, joy, peace, forbearance, kindness, goodness, faithfulness, gentleness, and self-control — charter leaders do not place them in the context of the Bible or make them as much of a focus in the school day.

“What you have to do with your charter school is you say ‘OK, what are the attributes then of the character that make it possible for a person to at least begin to appreciate?’” Durant said in an interview with Chalkbeat. “So what is it? It’s love, peace, patience, kindness, gentleness, long-suffering, all these things which, in a fulfilling life, if you had those virtues, you’d be an amazing human being.”

Durant, who received a contribution and public endorsement from DeVos when he ran for the U.S. Senate as a Republican in 2012, said he wants “every company, every organization” to hire his graduates, knowing that “they would infect the culture in a good way in those places.”

Still, the four charter schools, which fell in the 9th, 14th, 19th and 20th percentile according to the latest state rankings, have not hit the same threshold of success that the Cornerstone private school boasts. The low achievement, which Durant calls unacceptable, spurred a recent restructuring of the charters’ management company. A new CEO and chief academic officer were hired. The network has also been re-visioning what a Cornerstone charter school will look like, with Jefferson-Douglass Academy as a forthcoming case study.

A hallway at the Cornerstone flagship campus.

 

Unlike the other Cornerstone charter schools, Jefferson-Douglass Academy will keep the same curriculum the private school is currently using. Additionally, a Christ-centered class will be offered after school by a third party. Finally, the time slot that previously was saved for chapel and a “Life and Teachings of Jesus” course will stay on the schedule but be replaced with intensive character development.

The school is also in the process of re-thinking how they can make sure influential texts, such as the Bible, are still, legally, underscoring lessons.

“I think of the things that we’ve talked about a number of times and I am certainly interested in, and that is how can we be more intentional about what the kids get exposed to,” Durant said, adding that texts like Martin Luther King’s I Have a Dream speech and Abraham Lincoln’s second inaugural speech are chock-full of religious allusions that require an understanding of the Bible to fully comprehend.

“If you begin to understand what King said — the references he’s making, why he’s referencing the 40th chapter in Isaiah, why he’s doing these other things — and you have kids go and read that stuff,” Durant said.

And while officials have been clear they understand the law and their First Amendment obligations, at a recent information session for religiously oriented Cornerstone Nevada parents, school officials emphasized that Cornerstone’s core principles and “culture” would go nowhere when the school transitions to a charter.

“We want to have as many of our kids that we can seeding the kindergarten each year,” said Ernestine Sanders, the CEO of the Cornerstone Schools Association, the private school network, explaining how the school’s current pre-K would remain private and Christian.

Current parents who expressed concerns about having students without the same background enter their children’s classes were reassured.

“Is the goal to put all the Cornerstone kids in one (class) and then everybody else in another?” a parent asked.

Sanders nodded. “That’s our goal,” she said.

Critics of allowing religious organizations to receive charters to run publicly funded schools say Cornerstone’s hybrid model is troubling. They note that even if the charter schools stay in their lane and don’t teach religion, public dollars will still be benefiting the private, religious institution.

The Nevada campus, which the private Cornerstone Schools Association owns, will be leased to the Jefferson-Douglass charter school for 13.5 percent of its yearly per-pupil funding — or an estimated $500,000. While Durant says the lease funds will be kept at an arms length from any religious programming done by the private Cornerstone Schools Association, it has been noted that the network’s only remaining religious school, the Nevada campus high school, plans to expand in the coming years.

These fuzzy lines are troubling to some.

“In the religious voucher setting, if you’re going to give vouchers to non-public schools you can trace the money and know what you’re getting,” said Peter Hammer, the director of the Damon Keith Center for Civil Rights at Wayne State University’s law school. “Here it’s like one of those bad science fiction movies where they take over the body.”

The authorizer that green-lighted Cornerstone’s most recent switch, Grand Rapids-based Grand Valley State University, has experience authorizing schools run by religiously oriented operators. In 1990, one of their schools, Vanguard Charter School Academy, was the subject of an ACLU legal challenge. Filed on behalf of five families with children at the school, the lawsuit charged that the campus allowed prayer in school, taught creationism, and held a mandatory staff retreat with religious overtones.

The suit was ultimately dismissed, after the school made some changes as a result of the lawsuit. But not before attracting national attention to the charter school, which was run by National Heritage Academies, a for-profit charter network founded by Michigan billionaire and DeVos friend J.C. Huizenga.

Now, Grand Valley State University, which authorizes over 65 charter schools across Michigan, says it plans to keep a close eye on the church-state issue. The group even plans to hire an outside consultant to make sure the school’s space is “free of inappropriate religious symbols,” said Alyson Murphy, the organization’s director of governance and compliance, in an email.

“We review the curriculum (I recently reviewed the Jefferson-Douglass curriculum with a fine-toothed comb) to ensure it is consistent with public school laws and we also have a school consultant who attends every board meeting,” Murphy wrote in an email. “We are working closely with the board’s legal counsel to make sure that all religious items are appropriately covered up/removed before students are in the building for class.”

Candace Brockman, the primary school principal and soon to be K-8 leader, speaks to the crowd of potential families.

Grand Valley officials appear to have their work cut out for them, far beyond the church-state issues.

Sanders told parents at the transition meeting that the school would likely not be able to serve students with all kinds of disabilities — something private schools can do but public schools cannot.

“If we figure that we can’t meet (a student’s) needs then we’ll have to say that, because sometimes kids come with some incredible challenges, and parents, we know that another school would be able to do that,” Sanders said, noting that the school’s principal was still doing interviews to assess potential students. “You know, like autism is an area where we would say we can’t do that, but there are schools in a public school that have to meet that need, but it’s not something we can do. So the more we know, the more we can say ‘You can come here.’”

Authorizers are responsible for ensuring that charter schools comply with federal anti-discrimination laws.

It will have to keep a close eye on the school’s academic performance, as the other charter schools in the Cornerstone network have struggled. One campus, Lincoln-King Academy, landed on the state’s priority list in 2014, and only recently came off of it. Today, it’s the highest ranked Cornerstone charter school, falling in the 20th percentile, but only after Sanders was hired to help bring up achievement and strengthen culture.

Finally, Grand Valley State University will have to make sure that the new school remains solvent — which could be a challenge if it fails to thrive in Detroit’s crowded charter landscape or if current parents grow alienated and leave.

Nicole Perry said she isn’t thinking about pulling her 10-year-old son Ayinde out of the school that will soon be known as Jefferson-Douglass. But she said she was dismayed to learn about the conversion, even though it will eliminate her tuition bill.

Perry, who is the current PTO president for the primary school, said she chose the school in 2012 because of its rigorous academics, small classes, and “Christ-centered learning environment.”

“I feel like with us becoming a charter school it’s like, ‘Oh, they’re like the other schools. When I used to say Cornerstone, it meant something different,” said Perry, who said she cried at the first meeting when she learned Cornerstone wouldn’t be a private school anymore.

Still, she will be there next year — one of the parents Brockman spoke of who will guide and welcome newcomers.

“No one likes change if it’s not what you want, but the way I see it we either have to get on board or get off in my mind,” she said. “My son has been here for six years, I know the lay of the land, I like the school. Let me take this new person and grab them and show them, why not help the situation rather than hurt it.”

money matters

Why so negative? Colorado lawmakers seek to rebrand controversial tool that limits spending on schools

A student works at Tollgate Elementary School in Aurora. (Photo by Nic Garcia/Chalkbeat)

Colorado lawmakers are tired of hearing about the “negative factor.”

So they changed its name — at least in statute.

Going forward, the tool that budget writers will use to spend down the state’s financial obligation to public schools to balance the state budget officially will go by its original name: the “budget stabilization factor.”

The change was made when lawmakers passed the state’s annual school funding bill earlier this month.

The negative factor “has been used as a pejorative,” said state Sen. Kevin Priola, the Henderson Republican who put forth the idea of the name change. “The budget is never perfect. But these are the economic realities we have to deal with.”

Some education funding advocates are rolling their eyes. The term, they say, has become so well known and accepted that any attempt to change it will be difficult.

“You can change the name, but the debt’s the same,” said Lisa Weil, executive director of Great Education Colorado, a nonprofit that advocates for more school funding.

The negative factor — oh, sorry, we mean the budget stabilization factor — is just one part of a much larger and complex formula used to determine school funding.

The budget tool was first created in 2009 when state lawmakers were forced to slash the budget after the Great Recession.

School advocates knew they couldn’t escape the cuts the rest of the state was facing. So a team of lawmakers, lobbyists, superintendents and financial officers helped developed the tool.

Here’s how it works: After lawmakers determine how much funding schools should receive based on a formula developed in 1994, they compare that amount to available tax revenue. The difference is that year’s “stabilization factor.”

At the time the tool was created, the group wanted the cuts to be systematic — applied equally across all schools — and transparent. As part of the compromise, the state was required to track how much money it was withholding from schools.

In 2014, funding advocates sued the state, claiming the negative factor was unconstitutional. But the state Supreme Court disagreed.

Since then, Republican lawmakers have become more critical about the provision that requires them to track how much money the state isn’t giving schools. They argue that other state services such as roads, hospitals and parks all share a burden when it comes to balancing the budget.

Lawmakers have withheld about $5.8 billion from schools since the budget balancing tool was created. However, funding has slowly crept up each year, just not as fast as school leaders would hope.