Point counter-point

Lawyers offer clashing views on Colorado school funding shortfall

The two sides in a key school funding case offered sharply different interpretations in oral arguments before the Colorado Supreme Court on Wednesday.

The lawyers’ cases were interrupted repeatedly by the justices trying to tease out the meaning of the lawyers’ arguments.

The arguments were a key step in a lawsuit named Dwyer v. State, which challenges the constitutionality of the formula that the legislature has used since 2010 to reduce annual K-12 support and balance the state budget.

Lawyer Sean Connelly, representing the plaintiffs, argued that the formula (known as the negative factor), was devised with “the sole intent of circumventing the plain language and intent of Amendment 23,” the constitutional amendment that governs school funding.

But Senior Assistant Attorney General Jonathan Fero, representing the state, argued that Amendment 23 has clear language requiring annual growth only in “base” school funding, not all K-12 support. The language “provides the only answer the court needs because its meaning is plain,” Fero said.

The two sides have different interpretations of such key terms as “base funding” and “per-student funding,” a gap alluded to by Justice Nathan Coats.

“Reading the two sets of briefs, it’s like two ships passing in the night,” Coats remarked.

The case has crucial implications for Colorado’s school funding system and the overall state budget.

A ruling in favor of the plaintiffs could mean hundreds of millions in additional school support in future years but a possible severe squeeze on other state programs, including higher education. High court rejection of the suit likely would set a “new normal” for K-12 funding and be a bitter disappointment for school districts.

At issue is the meaning of Amendment 23, the 2000 constitutional provision that requires annual K-12 spending increases based on inflation and enrollment growth.

In 2010, the legislature created the negative factor formula to control school spending as lawmakers struggled to balance the overall state budget. The legal reasoning behind the negative factor is that A23 applies only to base per-student funding, not to additional state funds districts receive to compensate for staff cost of living, size, number of at-risk students, and other factors.

Prior to the budget crisis brought on by the 2008 recession, the legislature calculated K-12 increases based on both base and factor funding.

Fero argued that Amendment 23’s definition of the base is clear, and “there can be no question what this language refers to.”

The plaintiffs argue that use of the negative factor is “a charade.” Connolly said, “We should win because the state’s premise is wrong.”

Timothy Macdonald, the second plaintiffs’ lawyer who spoke, said use of the negative factor “renders Amendment 23 a hoax.”

Connelly and Madonald argued that the actual effect of using the negative factor has been to cut base funding, not factor funding.

Fero stuck to his position, saying, “I think they are trying to overcomplicate the case.”

Coats summed up the back and forth by saying, “It’s a question of what the base consists of.”

Use of the negative factor has created an annual funding shortfalls of about $1 billion. Despite improving state revenues and district pressure on lawmakers, the legislature has been able to make only modest reductions in the negative factor. It’s pegged at $855 million for the 2015-2016 school year. School funding will be $6.24 billion next year, compared to $5.93 billion in the school year that ends June 30.

Background of the case

The suit was filed in June 2014 by a group of parents, school districts and education organizations. The lead plaintiffs are Lindi and Paul Dwyer, who have four daughters in the Kit Carson district, and the case takes their name. A Denver judge rejected the state’s motion to dismiss the suit last December, sending the case to the state’s Supreme Court.

In addition to Connelly and Macdonald, the plaintiffs are being represented by Boulder public interest lawyer Kathleen Gebhardt.

The Dwyer case has attracted several friend-of-the-briefs in both sides. Briefs supporting the plaintiffs have been 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.

There’s no set deadline for the seven-member high court to issue a ruling.

Dwyer is the second major school-funding case to reach the high court in two years.

In late May 2013 the court rejected plaintiffs’ claims in the long-running Lobato v. State suit, which was a much broader challenge to the state’s school funding system. (See Chalkbeat’s Lobato archive here.)

The court issued its Lobato ruling less than three months after hearing oral arguments.

Local funding

Aurora board to consider placing school tax hike on November ballot

A kindergarten teacher at Kenton Elementary in Aurora, Colorado helps a student practice saying and writing numbers on a Thursday afternoon in February 2017. (Photo by Yesenia Robles, Chalkbeat)

Seeking to boost student health and safety and raise teacher pay, Aurora school officials will consider asking voters to approve a $35 million tax plan in November.

The school board will hear its staff’s proposal for the proposed ballot measure Tuesday. The board may discuss the merits of the plan but likely would not decide whether to place it on the ballot until at least the following week.

Aurora voters in 2016 approved a bond request which allowed the district to take on $300 million in debt for facilities, including the replacement building for Mrachek Middle School, and building a new campus for a charter school from the DSST network.

But this year’s proposed tax request is for a mill levy override, which is ongoing local money that is collected from property taxes and has less limitations for its use.

Aurora officials are proposing to use the money, estimated to be $35 million in 2019, to expand staff and training for students’ mental health services, expanding after-school programs for elementary students, adding seat belts to school buses, and boosting pay “to recruit and retain high quality teachers.”

The estimated cost for homeowners would be $98.64 per year, or $8.22 per month, for each $100,000 of home value.

Based on previous discussions, current board members appear likely to support the recommendation.

During budget talks earlier this year, several board members said they were interested in prioritizing funding for increased mental health services. The district did allocate some money from the 2018-19 budget to expand services, described as the “most urgent,” and mostly for students with special needs, but officials had said that new dollars could be needed to do more.

The teacher pay component was written into the contract approved earlier this year between the district and the teachers union. If Aurora voters approved the tax measure, then the union and school district would reopen negotiations to redesign the way teachers are paid.

In crafting the recommendation, school district staff will explain findings from focus groups and polling. Based on polls conducted of 500 likely voters by Frederick Polls, 61 percent said in July they would favor a school tax hike.

The district’s presentation for the board will also note that outreach and polling indicate community support for teacher pay raises, student services and other items that a tax hike would fund.



School Finance

Key lawmakers urge IPS to lease Broad Ripple high school to charter school

PHOTO: Scott Elliott

Several Indiana lawmakers, including two influential state representatives, are calling on Indianapolis Public Schools leaders to sell the Broad Ripple High School campus to Purdue Polytechnic High School.

In a letter to Superintendent Lewis Ferebee and the Indianapolis Public Schools Board sent Tuesday, nine lawmakers urged the district to quickly accept a verbal offer from Purdue Polytechnic to lease the building for up to $8 million.

The letter is the latest volley in a sustained campaign from Broad Ripple residents and local leaders to pressure the district to lease or sell the desirable building to a charter school. The district is instead considering steps that could eventually allow them sell the large property on the open market.

But lawmakers said the offer from Purdue Polytechnic is more lucrative and indicated they wouldn’t support allowing the district to sell the property to other buyers.

The letter from lawmakers described selling the property to Purdue Polytechnic as a “unique opportunity to capitalize on an immediate revenue opportunity while adhering to the letter and spirit of state law.”

It’s an important development because it was signed by House Speaker Brian Bosma and chairman of the House Education Committee Bob Behning, two elected officials whose support would be essential to changing a law that requires the district to first offer the building to charter schools for $1. Both are Republicans from Indianapolis.

Last year, the district lobbied for the law to be modified, and Behning initially included language in a bill to do so. When charter schools, including Purdue Polytechnic, expressed interest in the building, he withdrew the proposal.

The district announced last month that it planned to use the Broad Ripple building for operations over the next year, which will allow it to avoid placing the building on the unused property registry that would eventually make it available to charter operators.

The plan to continue using the building inspired pointed criticism from lawmakers, who described the move in the letter as an excuse not to lease the property to a charter school. Lawmakers hinted that the plan will not help win support for changing the law.

“It certainly would not be a good faith start to any effort to persuade the General Assembly to reconsider the charter facility law,” the letter said.

The legislature goes back in session in January.

The Indianapolis Public Schools Board said in the statement that they appreciate the interest from lawmakers in the future of the building.

“We believe our constituents would not want us to circumvent a public process and bypass due diligence,” the statement continued. “We will continue to move with urgency recognizing our commitment to maximize resources for student needs and minimize burdens on taxpayers.”

Indianapolis Public Schools is currently gathering community perspectives on reusing the property and analyzing the market. The district is also planning an open process for soliciting proposals and bids for the property. The district’s proposal would stretch the sale process over about 15 months, culminating in a decision in September 2019. Purdue Polytechnic plans to open a second campus in fall 2019, and leaders are looking to nail down a location.