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.


More than 1,000 Memphis school employees will get raise to $15 per hour

PHOTO: Katie Kull

About 1,200 Memphis school employees will see their wages increase to $15 per hour under a budget plan announced Tuesday evening.

The raises would would cost about $2.4 million, according to Lin Johnson, the district’s chief of finance.

The plan for Shelby County Schools, the city’s fifth largest employer, comes as the city prepares to mark the 50th anniversary of the assassination of Martin Luther King Jr., who had come to Memphis in 1968 to promote living wages.

Superintendent Dorsey Hopson read from King’s speech to sanitation workers 50 years and two days ago as they were on strike for fair wages:

“Do you know that most of the poor people in our country are working every day? They are making wages so low that they cannot begin to function in the mainstream of the economic life or our nation. They are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation … And it is criminal to have people working on a full time basis and a full time job getting part time income.”

Hopson also cited a “striking” report that showed an increase in the percent of impoverished children in Shelby County. That report from the University of Memphis was commissioned by the National Civil Rights Museum to analyze poverty trends since King’s death.

“We think it’s very important because so many of our employees are actually parents of students in our district,” Hopson said.

The superintendent of Tennessee’s largest district frequently cites what he calls “suffocating poverty” for many of the students in Memphis public schools as a barrier to academic success.

Most of the employees currently making below $15 per hour are warehouse workers, teaching assistants, office assistants, and cafeteria workers, said Johnson.

The threshold of $15 per hour is what many advocates have pushed to increase the federal minimum wage. The living wage in Memphis, or amount that would enable families of one adult and one child to support themselves, is $21.90, according to a “living wage calculator” produced by a Massachusetts Institute of Technology professor.

Board members applauded the move Tuesday but urged Hopson to make sure those the district contracts out services to also pay their workers that same minimum wage.

“This is a bold step for us to move forward as a district,” said board chairwoman Shante Avant.

after parkland

Tennessee governor proposes $30 million for student safety plan

Gov. Bill Haslam is proposing spending an extra $30 million to improve student safety in Tennessee, both in schools and on school buses.

Gov. Bill Haslam on Tuesday proposed spending an extra $30 million to improve student safety in Tennessee, joining the growing list of governors pushing similar actions after last month’s shooting rampage at a Florida high school.

But unlike other states focusing exclusively on safety inside of schools, Haslam wants some money to keep students safe on school buses too — a nod to several fatal accidents in recent years, including a 2016 crash that killed six elementary school students in Chattanooga.

“Our children deserve to learn in a safe and secure environment,” Haslam said in presenting his safety proposal in an amendment to his proposed budget.

The Republican governor only had about $84 million in mostly one-time funding to work with for extra needs this spring, and school safety received top priority. Haslam proposed $27 million for safety in schools and $3 million to help districts purchase new buses equipped with seat belts.

But exactly how the school safety money will be spent depends on recommendations from Haslam’s task force on the issue, which is expected to wind up its work on Thursday after three weeks of meetings. Possibilities include more law enforcement officers and mental health services in schools, as well as extra technology to secure school campuses better.

“We don’t have an exact description of how those dollars are going to be used. We just know it’s going to be a priority,” Haslam told reporters.

The governor acknowledged that $30 million is a modest investment given the scope of the need, and said he is open to a special legislative session on school safety. “I think it’s a critical enough issue,” he said, adding that he did not expect that to happen. (State lawmakers cannot begin campaigning for re-election this fall until completing their legislative work.)

Education spending already is increased in Haslam’s $37.5 billion spending plan unveiled in January, allocating an extra $212 million for K-12 schools and including $55 million for teacher pay raises. But Haslam promised to revisit the numbers — and specifically the issue of school safety — after a shooter killed 14 students and three faculty members on Feb. 14 in Parkland, Florida, triggering protests from students across America and calls for heightened security and stricter gun laws.

Haslam had been expected to roll out a school safety plan this spring, but his inclusion of bus safety was a surprise to many. Following fatal crashes in Hamilton and Knox counties in recent years, proposals to retrofit school buses with seat belts have repeatedly collapsed in the legislature under the weight the financial cost.

The new $3 million investment would help districts begin buying new buses with seat belts but would not address existing fleets.

“Is it the final solution on school bus seat belts? No, but it does [make a start],” Haslam said.

The governor presented his school spending plan on the same day that the House Civil Justice Committee advanced a controversial bill that would give districts the option of arming some trained teachers with handguns. The bill, which Haslam opposes, has amassed at least 45 co-sponsors in the House and now goes to the House Education Administration and Planning Committee.

“I just don’t think most teachers want to be armed,” Haslam told reporters, “and I don’t think most school boards are going to authorize them to be armed, and I don’t think most people are going to want to go through the training.”

Editor’s note: This story has been updated.