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In School Funding Court Battles, There's Been a Winning Shift

The legal strategy to get states to provide adequate education funding has changed -- and it's working in schools' favor.

This fall, schools and other education advocates won a victory in Pennsylvania when the state Supreme Court reinstated a lawsuit claiming that the state's school funding formula doesn't meet schools' basic needs.

The case, William Penn School District v. Pennsylvania Department of Education, is just one of many in recent years that highlight a fundamental shift in legal strategy for education funding lawsuits.

Instead of arguing that funding levels are too low, plaintiffs have started focusing on state-mandated standards for public schools, such as test scores and college-readiness. In other words, they argue, implementing these new requirements while receiving the same or less per-pupil funding from the state amounts to an unfunded mandate violating the state's constitutional promise to fund education.

"They'll mandate until the cows come home," says David Sciarra, executive director of the Education Law Center. "But what they don't do in so many places, is really sit down and think about if this is the performance we want, what are the resources that need to be in schools to give them a chance to achieve those standards, what's the cost and how do we build our financing formula around that?"

The approach is working.

In a series of rulings, the Kansas Supreme Court has said the state's education funding formula isn't enough to help schools fulfill state standards and that it allows for severe inequities between rich and poor districts. The Washington state Supreme Court ruled in 2012 that the state's funding formula was inadequate because it was only providing a portion of what it actually costs to run a school. And the Connecticut Supreme Court is expected to issue a ruling next year on a similar funding inadequacy suit in that state.

Lawsuits have intensified as education funding has struggled to recover from the Great Recession. In many cases, states were woefully unprepared for the kind of revenue drops they experienced in 2008 and 2009, so they disproportionately relied on spending cuts to balance budgets. In that slash-and-burn environment, education funding lost its untouchable status it had enjoyed in many states.

According to a Center on Budget and Policy Priorities analysis, nearly half of all states last year still provided less in per-pupil funding than they did before the 2008-2009 school year. Taking inflation into account, eight of the 23 states were more than 10 percent behind. That's largely because revenues have been slower to recover than in prior economic boom periods. In the meantime, fixed costs like Medicaid and pensions have put increased pressure on budgets.

So even when schools win in court, that doesn't solve the underlying problem: Many states don't have enough money for education and don't know where to get it.

Washington state, for example, is facing a fall 2018 deadline to fully fund basic education. In 2015, the state Supreme Court sanctioned the state for failing to make progress and fined it $100,000 per day to be put into an education fund. Since then, Washington has funneled $1.5 billion more general and special fund money into education -- a 19 percent increase -- and this year, lawmakers approved a phased-in property tax hike to pump in billions more over four years.

Still, the high court last month found the state will be about $1 billion short of its goal by next year's deadline.

Kansas has also responded by raising taxes in what was a massive, bipartisan effort this year. The state has increased special fund and general fund spending on education by 28 percent to $4.1 billion since 2015. But thanks to tax cuts in 2002, Kansas is still just providing 90 cents today for every dollar it spent per pupil a decade ago. Recently, the state Supreme Court found the funding is still falling short and ordered the legislature to fix it in next year's session.

Liz Farmer, a former Governing staff writer covering fiscal policy, helps lead the Pew Charitable Trusts’ state fiscal health project’s Fiscal 50 online resource.
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