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.

Eyes on

Happening at a campus near you: Here’s what the security review of every public school in Tennessee looks like

PHOTO: Marta W. Aldrich
Sumner County Schools safety coordinator Katie Brown and Gallatin police Lt. Billy Vahldiek examine the window pane in a school hallway to make sure the glass is shatter-resistant. The review team is one of more than a hundred across the state who are conducting security assessments this summer of every Tennessee public school.

Balancing a clipboard in one hand and a coffee tumbler in the other, Katie Brown bends down to inspect a window pane in the hallway of a 10-year-old Tennessee school building.

The glass is shatter-resistant. Check.

Down the hall, Lt. Billy Vahldiek opens an outside exit door and then watches as it latches and locks properly. Check.

Earlier that morning, both Brown and Vahldiek circled the elementary school’s outside perimeter to make sure lighting is adequate, signage is clear, and landscaping doesn’t create blind spots where an intruder could hide.

The pair — one a school safety coordinator, the other a police officer — are teaming up on this day in Sumner County, north of Nashville, to walk through several schools and review security protocols with their principals as part of a statewide review.

“A lot of these schools were built post-Columbine, and some of them are post-Sandy Hook, but none of them are post-Parkland,” said Vahldiek, a Gallatin police officer, chronologically listing three of the nation’s most horrific school shootings.

Aging school facilities and heightened safety concerns are the prime drivers behind Tennessee’s sweeping summertime inspection of all 1,800 of its public school campuses. Gov. Bill Haslam ordered the unprecedented assessment in March following an intruder’s fatal shooting rampage at Marjory Stoneman Douglas High School in Parkland, Florida.

The state’s goal is to identify vulnerabilities that could put Tennessee students and staff at similar risk — and to inform districts how they should use $35 million in safety grants in the months ahead.

Tennessee is among states that responded to Parkland by stepping up their upcoming budgets for thwarting potential attackers. This spring, Haslam and the Legislature doubled to $10 million the amount of recurring annual safety grants — and also provided a one-time investment of $25 million. A share of the money will become available to all 147 districts beginning in July based on Tennessee’s school funding formula — but only after the school systems provide the state with safety inventories of all of their schools.

"It’s a massive undertaking. It’s the first time we’ve ever looked at every school in Tennessee like this."Mike Hermann, Tennessee Department of Education

“It’s a massive undertaking. It’s the first time we’ve ever looked at every school in Tennessee like this,” said Mike Hermann, who is helping to coordinate the review in behalf of the state Education Department.

“Our work is definitely cut out for us this summer,” added Commissioner David Purkey, whose Safety and Homeland Security department is spearheading the initiative. “But there’s a sense of urgency. We want to get it all done by the start of the school year, at least that’s our goal.”

As of this week, about a third of the inspection reports had been submitted — on pace with the state’s timetable. In mid-July, Tennessee will begin accepting applications for the extra spending money.

Most of the one-time grants are expected to further harden school campuses with improvements like upgraded security cameras, fixing or replacing broken locks or outdated doors, and beefing up front entrances. The smaller annual funding could be tapped to hire law enforcement officers to police some campuses, though the money is a drop in the bucket toward providing coverage for every school. There’s also opportunity to invest in mental health services if that’s identified as a local priority.


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The money will only go so far. Still, officials believe the safety review lays the groundwork for next steps.

“It’s an excellent opportunity for schools to make an honest appraisal of where they are with security,” Hermann said. “And we’re going to have a much clearer picture of where we are statewide so that future action by the next governor and General Assembly can be based on a higher level of information.”

The reviews are conducted by local teams who participated in regional trainings provided by the state Safety and Homeland Security Department. Comprised of school personnel and local law enforcement, each two-person team follows an 89-point checklist of risks and precautions based on national standards developed by the U.S. Department of Homeland Security.

PHOTO: Marta W. Aldrich
On-site security reviews are being conducted in schools statewide this summer under an order from Gov. Bill Haslam.

Depending on the building’s age and size, each review usually take two to three hours as inspection teams meet with the principal and inspect the physical facility. Can a school control access to the building? Do all staff wear photo identification badges on campus? Do teachers keep their classroom doors locked?

“The days of propping open doors on a pretty day are gone,” said Brown as she and Vahldiek went through the checklist during one inspection.

The teams also document the availability of personnel for security and for student support services such as school psychologists, as well as relationships with local law enforcement and healthcare providers. Finally, they submit their reports to the state and include copies of each school’s emergency plans and its drill logs from the previous year.

Unfortunately, summertime does not lend itself to seeing a school on a typical school day. For now, the buildings are mostly empty of students and staff as classrooms are painted, floors are waxed, and maintenance performed. But Brown views school break as a good time to look at the nitty-gritty details and to have thoughtful, unrushed conversations with school leaders that should trickle down to faculty and staff.

“We absolutely are taking this seriously,” said Brown, who is coordinating 46 reviews for Sumner County Schools.

“Most things on the checklist are not requirements or codes; they’re recommendations and best practices,” she said. “But this raises our awareness. It reinforces the good things we’re already doing. And it will inform how we use the safety grants.”

Editor’s note: This story does not name the school being inspected as a condition of Chalkbeat’s reporter shadowing the review team.

School Finance

Indianapolis Public Schools sold a temple and bottle plant recently, but the sale of Broad Ripple is more controversial

PHOTO: Dylan Peers McCoy
Phillips Temple

When retired teacher Clara E. Holladay passed away in 1946, she left the school district where she taught a generous and unusual gift: Two duplex houses on the northside of Indianapolis.

Holladay’s will stipulated that the income should “assist good and worthy students, who would not, without assistance, be able to secure a high school or college education,” according to the Indianapolis Star.

Indianapolis Public Schools held on to the houses at 54th Street and North College Avenue for the next seven decades. Last year, the district sold them for $423,000. (The proceeds of the sale were invested, and the interest will continue to fund scholarships.) Between September 2015 and the end of 2018, district officials expect to have sold 10 properties and raised nearly $21 million, according to information provided by the administration.

Many sales, like Holladay’s duplexes, occur without much attention. But the district’s plan to sell the building that contained Broad Ripple High School, after closing the school this year, has drawn significant attention. And it has ignited a simmering controversy over whether the district should be forced to sell the property to a charter school, as state law currently requires, or be allowed to sell it to a developer.

But while Broad Ripple has historical and personal significance, it is one of at least four former school buildings the district has sought to sell in recent years. Over the last 50 years, enrollment in the district fell from nearly 109,000 students to 31,000. In an effort to raise money for the cash-strapped district and reduce its stockpile of underused buildings, Superintendent Lewis Ferebee’s administration has made a flurry of sales.

The money that the district raises by selling property is a short-term salve for its budget woes. But it has helped pay the bills at a time when Indianapolis Public Schools is consistently running a deficit. Next year the administration projects a deficit of about $45 million, and officials plan to ask voters to increase school funding in November.

Indianapolis Public Schools set off a real estate frenzy when it sold a former Coca-Cola bottling plant on Mass Ave. that will soon become a high-end development. The district has owned the striking art deco property since the late 1960s, using it to house a bus depot and other central services. More recently, it purchased a historic church — the Phillips Temple — in 2011, and the administration planned to demolish it to make room for a parking lot, according to the Indianapolis Star. Instead, it sold the historic property to a developer in 2015.

Here is a list of the properties the district has sold since 2015, according to the district

Property: Minnie Hartmann School 78

Buyer: John H. Boner Center

Closing Date: 9/7/2015

Sale Proceeds: $400,000

Property: Phillips Temple

Buyer: Van Rooy Properties

Closing Date: 9/17/2015

Sale Proceeds: $122,500

Property: CIRT

Buyer: Milhaus

Closing Date: 11/24/2015

Sale Proceeds: $1,100,000

Property: Florence Fay School 21

Buyer: TWG (Whitsett Group)

Closing Date: 2/26/2016

Sale Proceeds: $500,000

Property: Otis E. Brown School 20

Buyer: Tessera (Yeshua Society)

Closing Date: 7/20/2016

Sale Proceeds: $255,000

Property: College Avenue Doubles

Buyer: L. Stoeffer and Associates, Inc.

Closing Date: 12/21/2016

Sale Proceeds: $423,000

Property: SCIPS – Service Center IPS

Buyer: Bottleworks District, LLC

Closing Date: 9/1/2017

Sale Proceeds: $12,000,000

Property: Mallory/Ford

Buyer: Ford TWG, LLC

Closing Date: 11/3/2017

Sale Proceeds: $1,650,000

Property: Meridian Transition

Buyer: Families First

Closing Date: In Negotiations / July 2018

Sale Proceeds: $1,575,000

Property: FMD/Polk

Buyer: TWG Development, LLC

Closing Date: Pending Sale / December 2018

Sale Proceeds: $2,750,000