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School Funding Formula Ruled Unconstitutional in Kansas

The Kansas Supreme Court ruled Monday that the state's new school finance system is unconstitutional, striking a definitive blow to the Legislature's latest effort.

By Hunter Woodall, Katy Bergen and Dion Lefler

The Kansas Supreme Court ruled Monday that the state's new school finance system is unconstitutional, striking a definitive blow to the Legislature's latest effort.

The decision found the state failed to meet the Kansas Constitution's requirements to adequately fund education, but it did not specify a dollar amount to reach constitutional muster.

The ruling also ordered a fairer distribution of state funding to ensure that students in poor districts have the same educational opportunities as their peers in wealthier communities.

With Monday's decision, the latest stage of the Gannon v. Kansas school finance case, the justices sent the issue back to lawmakers as they head into an election-year legislative session in January.

The majority of justices supported giving the Legislature time during next year's session to try to come up with a school-finance law that meets court requirements.

The court is ordering that a new funding law be crafted by April 30 so there's time for the justices to review it before schools' money runs out.

"...While we stay the issuance of today's mandate through June 30, 2018, after that date we will not allow ourselves to be placed in the position of being complicit actors in the continuing deprivation of a constitutionally adequate and equitable education owed to hundreds of thousands of Kansas school children," the decision reads.

"I think the court's drawn a line in the sand and they've issued the warning of, 'Don't test us on this one this time around,' " said Olathe Superintendent John Allison, a longtime Wichita superintendent who started in Olathe this school year.

Three of the seven justices -- Lee Johnson, Eric Rosen and Dan Biles -- wrote or joined in dissents saying they wanted the Legislature to have to move faster.

"I would direct the State to tell us no later than the end of this year precisely how the legislature intends to fix its years-long breach of the Kansas Constitution," Johnson wrote.

Lawmakers seemed in agreement that the ruling means more funding will be needed. But how much was unclear -- as is the source of any potential increase.

"The next challenge is if more funding is required -- if -- how do we pass a tax bill to provide more funding? I don't have the answer to that," said Rep. Steven Johnson, an Assaria Republican who chairs the House Tax Committee.

Lawmakers labored for weeks this spring to come up with the votes for a tax increase that could overcome Brownback's veto. Johnson doesn't think enough votes could be found to override another veto.

The formula the Legislature passed this spring included bipartisan work, and House Minority Leader Jim Ward, a Wichita Democrat, said he hoped that would continue.

"It really will come down to resources," Ward said. "When you're dealing with adequacy, that's usually resources."

Four school districts, including Kansas City, Kan., sued the state in 2010 for more education funding, contending that the state was failing to meet a constitutional requirement for suitable funding.

The court has divided the complex case into two parts: adequacy -- the overall amount of education funding -- and equity, whether the Legislature has fairly divided money between property-wealthy and property-poor districts.

The court ruled the Legislature had failed on both counts.

On adequacy, the court said the state hasn't proved it's providing enough money to fulfill the so-called Rose standards, a set of guidelines stemming from a 1989 Kentucky case that establish what schools must provide to meet students' minimum educational needs.

The court also held that the Legislature failed to show equity in funding because it allowed expanded use of so-called local option budgets, which allow residents of wealthier school districts to tax themselves to provide educational extras.

"That system, through its structure and implementation, is not providing school districts with 'reasonably equal access to substantially similar educational opportunity through similar tax effort,' " the ruling said.

LOBs are popular in Johnson County and some other wealthy suburbs -- and are generally considered to be crucial to winning enough lawmakers' votes to pass a school-finance plan in the Legislature.

The underlying issue is that in wealthy areas, minor increases in property tax rates can generate large amounts of money because of high property valuations. It's nearly impossible for property-poor districts to raise a significant amount of money that way.

The state has provided some funding to poor districts in an effort to offset that advantage, but the court ruled it's not enough.

For many districts, the ruling was a win, but their celebration had a cautionary tone.

"We're pleased and hopeful, but we've been here before," Kansas City, Kan., Superintendent Cynthia Lane said. "We're a little bit cautious because we've experienced these things several times over the last decade. We're hopeful that this time we can come to resolution."

Still, she called the day an "important milestone."

"Without this today we wouldn't move forward," Lane said. "I don't want to downplay that it was significant. We want to see resolution so we can focus fully on advancing education for kids."

In Kansas City, Kan., school leaders have had to cut $55 million in the past eight years, Lane said, dramatically affecting the district's ability to retain teachers, expand early education resources and support a high school career and college readiness program. The district only recouped roughly $10 million through this year's resolution.

"Just think about all the resources and support that we have not been able to provide to our kids," Lane said.

Olathe Superintendent Allison said he recalled the 2009 recession, when some of the first cuts to public education were made. Leaders told school districts that "we'll make this right once the economy improved," said Allison, who was superintendent of Wichita when it filed suit in 2010.

He said he saw Tuesday's ruling as acknowledgment from the Supreme Court that Kansas has not delivered on that promise.

"I think the sad part in all of this is that we have had almost a generation of Kansas students enter school and be close to graduation under ongoing financial and legal issues," Allison said.

The Shawnee Mission district's interim superintendent, Kenny Southwick, said in a statement that the district was still reviewing the decision.

Lawmakers struggled to approve a new school finance formula during the 2017 session in light of a March ruling from the state's high court that Kansas had failed to ensure adequate funding for public schools.

The court's March ruling also found Kansas had failed to provide roughly one-quarter of its public school students with basic math and reading skills.

Both the Senate and the House passed the formula late in the session, but it came over vocal objections from leading Democrats about the level of funding. Democratic attempts to pump more money into the formula failed.

The new formula adds a net of roughly $488 million over two years, funds all-day kindergarten and adds early childhood funding.

Sen. Dinah Sykes, a Lenexa Republican who voted for the formula, said she wasn't surprised by the court's decision.

"I think there were a lot of us who voted for this, especially moderates, who thought, 'This isn't gonna to do it, but we're going to try to bring those more conservative people on board and get the vote,' " Sykes said.

The legal team for the school districts suing the state contended in an earlier court filing that the "the lowest estimate of what it costs to constitutionally fund an education to Kansas K-12 public school students is ... $893 million over the next two years."

But the state's legal team argued that the formula met the court's standard.

A spokeswoman for Kansas Attorney General Derek Schmidt said Monday evening that his office was still reviewing the ruling. Gov. Sam Brownback said, "We are looking at the decision and will have further comment upon full review."

The GOP Senate leadership issued a statement Monday criticizing the court's decision.

Senate President Susan Wagle of Wichita, Vice President Jeff Longbine of Emporia and Majority Leader Jim Denning of Overland Park said the "ruling shows clear disrespect for the legislative process and puts the rest of state government and programs in jeopardy."

"As promised, Senate Republicans remain committed to providing every Kansas student with an exceptional education, however, raising taxes to fund this unrealistic demand is not going to happen," the statement said.

Sen. Julia Lynn, an Olathe Republican, said legislators worked hard on the formula. She was critical of the tone of Monday's ruling, saying she was "not looking forward to the tax increase debate."

"I think it was unnecessary ... for them to have that kind of tone or ... to show such disappointment in our product as if we aren't capable of producing a product that would meet their expectations," Lynn said.

She said she's come to the conclusion there will "never, ever be enough money" to satisfy the court.

"And unless somebody else has a better idea, we're going to be doing this for the rest of our legislative lives. The Legislature will be fighting this," she said.

The Wichita Eagle's Jonathan Shorman and Suzanne Perez Tobias contributed to this report.

(c)2017 The Kansas City Star (Kansas City, Mo.)

Caroline Cournoyer is GOVERNING's senior web editor.
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