KHI News Service

Kansas Supreme Court rules in school finance case

Case partially remanded; both sides find things to like in mixed decision

By Mike Shields | March 07, 2014

Kansas' top court today released its long-awaited decision in the school finance case and while the ruling settled little for now, both sides in the litigation said they found things to like about it.

Attorney General Derek Schmidt, whose office defended the state in Gannon v. State of Kansas, said he didn't believe the mixed decision would necessarily require the Legislature to spend more on K-12 schools, though that would be one option for making the state's school finance formula constitutional again.

"The decision specifically contemplates a range of responses from the Legislature," Schmidt said in an afternoon press conference joined by Gov. Sam Brownback and House and Senate Republican leaders, "ranging to full funding for the existing (school finance) formula, to partial funding, to doing a rewrite (of the formula), to doing nothing - the entire spectrum."

But representatives of the school districts that took to court claiming state aid dollars have been unequal and inadequate said they felt confident they would win the remainder of their points at retrial and that the Legislature would need to authorize an added $129 million in K-12 spending by July 1 to meet the standards spelled out in the unanimous decision.

"Our test for equity in K-12 public education finance is clarified and succinctly states as follows: School districts must have reasonably equal access to substantially similar educational opportunity through similar tax effort. Simply put, equity need not meet precise equality standards. As the Vermont Supreme Court has held, "money is clearly not the only variable affecting educational opportunity, but it is one that government can effectively equalize." - from the Gannon decision

"We are not concerned about this. All of our proof at trial was presented using the correct standard that the court now directs to be used," at retrial, said John Robb an attorney for the four public school districts that sued the state.

Audio clip

Governor and AG talk Gannon decision

'Unconstitutional disparities'

In the Kansas Supreme Court's decision delivered at 9:30 a.m., it concluded that the lower three-judge court that ruled against the state had partially erred in its findings and sent them back to the panel with specific instructions for further consideration.

But the higher court also stated that the lower court properly found that the state's funding mechanisms had created "unconstitutional, wealth-based disparities" among school districts.

The court likely avoided a harsh showdown with the Legislature, which had argued, in part, that the justices had no role in deciding school spending issues because that was a political matter to be left to elected officials.

Within hours of the decision's release, Republican leaders of the House and Senate were calling it "well thought out" and reasonable.

But they also said it was too soon to know how the Legislature would respond to it.

"We know what the parameters are now," said House Speaker Ray Merrick, a Stilwell Republican. "We can start working on the solutions and everything is wide open. We've been kind of hamstrung until we got this. Now we can start working on it."

The Legislature is about half way through its 90-day session and now must craft at least a partial response to the court's findings to have in place by July 1 or remain at odds with the judiciary.

Senate President Susan Wagle, a Wichita Republican, said she thought it was certain the Legislature would approve more money for schools, though how much remains uncertain.


Gannon Decision

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School Finance Decision Summary

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'Suitable provision'

The plaintiffs in the case were the school districts and 31 individuals. Each district lost funding beginning in fiscal year 2009, after the Legislature reduced spending on various categories of state aid, including base state aid per pupil, capital outlay, and supplemental general state aid.

The plaintiffs claimed that the continued reductions in K-12 spending violated Article 6 of the Kansas Constitution, which directs the Legislature to “make suitable provision for finance of the educational interests of the state.” The plaintiffs also claimed they were denied equal protection and due process.

The court ruled that the individuals did not have standing to sue, in keeping with the lower court's decision, but that the school districts did because they had "sufficiently alleged the funding reductions had undermined their ability to perform the districts’ constitutional duty to 'maintain, develop, and operate local public schools.'

For the courts to decide

That finding by the court is particularly significant given that the State had argued in its defense that it was solely the Legislature's role to define school funding because it was a political question beyond the court's reach.

The decision today clearly refuted that assertion first by noting that it was wholly for the court to decide whether an issue was within its purview.

It also stated: "Under the facts of this case, the school districts' claims...present a justiciable case or controversy because they are not political questions."

The lower court's ruling - had it been entirely upheld - would have required an additional $440 million in state spending on K-12 programs. Today's decision set a July 1 deadline for the state to add money to funds that underwrite school capital improvements and school operations or substantially change state law in ways that would otherwise make the system equitable.

According to state education officials, if the law isn't changed that would mean an extra $129 million in new spending; $25.2 million for capital outlay and about $104 million for school operations.

The Supreme Court justices found that the lower court's determination regarding the "inadequacy" of base state aid was improperly drawn and sent that portion back for reconsideration.

Robb, attorney for the plaintiff school districts, said he was confident they would be able to prevail on retrial.

Long simmering issue

The issue of K-12 funding has been before the courts off and on since at least 2003.

"We are not concerned about this. All of our proof at trial was presented using the correct standard that the court now directs to be used. In the trial court decision, the trial court just substituted a different standard that the Supreme Court found to be the wrong standard. The trial court will either have to re-look at adequacy using the correct standard based on the proof in the record or we will have to present more proof to the trial panel at a partial retrial of adequacy."

-John Robb, an attorney for the plaintiff school districts

In 2005, the Legislature was called into special session in response to a court ruling that school spending was inadequate and approved an additional $289 million for K-12 education. In 2006, the Legislature approved another $466 million over three years.

But in the wake of the 2008 recession the Legislature began reducing school aid and the state soon thereafter found itself back in court.

In 2012, the Legislature approved the largest tax cuts in state history while school spending continued to decline, a fact noted by the lower court in its decision that the state was obliged to spend more on K-12.

'Time to fix it'

Brownback said it was important to keep the tax cuts in place.

"These policies are helping and producing more revenues so we can address some of these equity issues down the road," he said. "We need to grow this state. We need to grow the revenues. We need to grow the number of people working."

But Democrats say the tax cuts have made it impossible to spend more on schools without draining state coffers, which are projected to be in deficit in the coming fiscal years because of the tax policy unless major cuts are made in state spending.

“The Kansas Supreme Court has affirmed that Gov. Brownback and the Kansas Legislature have created an unconstitutional school finance system and now it is time to fix it," said Senate Democratic Leader Anthony Hensley of Topeka. “I didn’t need to confer with the Attorney General to make that determination.”

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