School Funding Cases in Kansas

in Kansas Litigation

Historical Background

The four cases consolidated into Brown v. Board of Education, the landmark U.S. Supreme Court desegregation decision in 1954, included Kansas’ original Brown v. Board of Education of Topeka suit.

In 1972, a trial Court found the Kansas public education funding system unconstitutional, in Caldwell v. State, Case No. 50616 (Johnson County District Court, slip. op. Aug. 30). In 1973, the legislature responded by passing the School District Equalization Act (SDEA), which established a foundation level of school funding per pupil and committed the state to fund the difference between local revenues and this target amount.

In 1990, plaintiffs challenged the constitutionality of the SDEA. A trial court “Opinion in Advance of Trial” held that “the duty owed by the Legislature to each child to furnish him or her with an educational opportunity is equal to that owed every other child.” Mock v. State, 91CV1009 (Shawnee County District Court, Oct. 14, 1991). The governor created a special task force to devise a new school finance system, and, in 1992, the state adopted the School District Finance and Quality Performance Act (SDFQPA). The Kansas Supreme Court upheld the new system in Unified School District No. 229 v. State, 885 P.2d 1170 (1994).

Montoy v. State

In 2001, a state court dismissed Montoy v. State, No. 99-C-1738 (Shawnee County, Nov. 21, 2001), which challenged the SDFQPA and the state “capital outlay” and special education “excess costs” funding statutes under the state constitution. In January 2003, the Kansas Supreme Court reversed and remanded for trial, which was held the following summer. The trial court issued its decision in favor of plaintiffs in December 2003 and set a July 1, 2004 deadline for the State to enact a remedy.

In late 2004 and early 2005, the Kansas Supreme Court affirmed the trial court’s finding that the state education finance system was violating the Kansas Constitution and set an April deadline for remedial action by the legislature. The legislature acted by the deadline, but enacted legislation that provided substantially less funding than the amount deemed necessary by a 2002 costing out study the state had commissioned. The plaintiffs returned to the court, which found the remedy insufficient. In a rapid decision it issued in April, 2005, the Kansas Supreme Court ordered the legislature to provide $290 million, the amount the cost study had recommended for the first year of a multi-year phase-in by June 30. The Governor called a special session to respond to the Court order, and although the legislature failed to act by the requisite date, it did meet over the July 4th weekend and enacted a bill that appropriated the full amount the Court had ordered for the 2005-06 school year prior to the July 8 date the court had established to consider penalties for non-compliance. (The trial judge had recommended closing down the entire state public education system until such time as a constitutionally adequate finance system was in place.) The Court then ordered the Legislative Division of Post Audit (LPA) to incorporate the cost of outputs, as well as inputs, in a cost study to determine required funding levels for future years. In the event that the LPA failed to comply, the Court held that it would consider mandating additional funding for the 2006-07 school year based on the 2002 cost study. This would have resulted in an additional funding increase of $568 million.

In its 2006 session, the legislature responded to the supreme court’s concerns about adequate funding and equitable distribution of funds, increasing annual state funding by another $466 million, to be phased in over three years, and allocating almost one-third of the increase to mid-size and large districts and their disproportionately low-income, ELL, and special education students. The Kansas Supreme Court held that the new system complied with its earlier decisions in Montoy and closed the case in July 2006.

In January 2010, lawyers for the plaintiffs filed a motion with the Court to re-open Montoy v. State of Kansas. In their petition, the plaintiffs—Salina Unified School District 305, Dodge City Unified School District 443 and Schools for Fair Funding, Inc., a coalition of 74 school districts—alleged that the substantial funding reductions in state aid to Kansas’ school districts over the past year violate the court’s prior orders in the Montoy case and Article VI, § 6 of the Kansas constitution, which mandates “suitable provision for finance of the educational interests of the state.” Plaintiffs alleged that the legislature has continued a pattern of tax cuts and budget decreases—including five cuts last year that have effectively undermined any gains from the litigation—without considering “the actual costs of providing an adequate education.”

On February 12, the Kansas Supreme Court denied the motion to re-open. Chief Justice Robert E. Davis’ opinion for the court held that because re-opening an appeal that has been dismissed disturbs the finality of a judgment, the judiciary should exercise its power to re-open a case only “in extraordinary circumstances” and “as the last resort.” Justice Davis also alluded to other potential issues, including whether the original plaintiff, who may have graduated from school at this point, still had standing and whether all of the school districts that had participated in the original case would continue in future litigation. Additionally, Chief Justice Davis questioned the petitioners’ claim that re-opening the case would promote “judicial efficiency.” Their request for remand to the district court would require the plaintiffs to “go through essentially the same process as a new case: the filing of an amended petition…, discovery and trial.”

Recent Events

Gannon v. the State of Kansas

On November 2, 2010 a coalition of 63 Kansas school districts filed a new school funding lawsuit against the state claiming that the legislature failed to comply with the 2006 settlement ofMontoy v. Kansas. In addition to arguing that the budget cuts denied school districts the funds promised by the Montoy decision, the plaintiffs also argue that in recent years the cost of educating students has increased, and that there have been significant increases in overall enrollment and in the numbers of students eligible for free and reduced meals.

In a unanimous 110 page decision that avoided an immediate confrontation with the legislature, the Kansas Supreme Court in March 2014 expressly adopted the demanding standards for an adequate education originally adopted by the Kentucky Supreme Court in Rose v Council for Better Education, and then remanded the case to the District Court to reconsider under the newly-articulated standard its ruling that would have required the legislature to immediately increase school funding by over $400 million. Gannon v. State of Kansas. The three-judge district court panel had held that the extensive reductions in state aid that the legislature had enacted since 2009 are unconstitutional.

The Rose standards — which have also been adopted by five other state Supreme Courts —-  describe seven basic  goals of the state’s education system in substantive terms such as providing “ skills to enable students to function in a complex and rapidly changing civilization,”  “sufficient knowledge of economic, social and political systems to enable the students to make informed choices,” and “sufficient training or preparation for advanced training in either academic or vocational fields so as to enable each child to choose and pursue life work intelligently.”

On December 30, 2014, district court panel held that it was a “clear fact that constitutional inadequacy from any rational measure or perspective clearly has existed and still exists in the State’s approach to funding the K-12 school system.”  The ruling is consistent with the panel’s prior ruling in this case.

In this decision, the panel said that the Rose standards had previously been incorporated in state statutes and that it had implicitly been guided by them. Now the panel expressly held that the current system is unconstitutional under the Rose standards. Although advised by the Kansas Supreme Court to not rely solely on spending as “the touchstone for adequacy,” total spending again played a significant role in the panel’s decision because the defendants did not present any credible evidence to counter the two state-authorized cost studies that had been the basis for its prior decision. The panel essentially readopted its prior decision concerning funding amounts in its entirety. Among other things, the court also found a meaningful correlation between falling test-scores for Hispanic and African-American students, as well as economically disadvantaged students, and the state’s drastic, sustained funding reductions, which have yet to be restored to the more appropriate funding levels where consistent progress was being made in traditionally underperforming schools.

As further evidence of the state’s constitutionally inadequate funding system, the court noted that total school spending since FY2009 had risen only 1.9% against an 11% rise in inflation over the same period – resulting in a 9.1% reduction in purchasing power over that same time period (i.e., between FY2009 and FY2015).  And to the extent that local funding sources might act to make up some of these budget deficits – primarily for the wealthier districts in the state – this only served to further underscore the inadequacy of the state’s current funding system and the legislature’s willingness to hinge students’ right to a constitutionally adequate education on “fortuity and local largesse rather than … enforceable constitutional substance,” reasoned the court.

The three-judge panel issued a declaratory ruling that established parameters for legislative action, although the Court also added that “this Court stands always ready on proper application to act to enforce our Kansas constitution. “ The case then returned to the state Supreme court.

In 2015, while the merits of the Gannon case were still pending before the Supreme Court,  the three-judge panel issued a temporary restraining order that struck down key provisions of the state’s new school funding formula, holding that the new system was unconstitutional.  The statutory changes had been initiated by Gov. Sam Brownback to help balance his budget by reducing school outlays by about $54 million. The panel ruled that the new K-12 funding system—which dispensed with the per-pupil formula in favor of a block-grant mechanism —–violated the state constitution “both in regard to its adequacy of funding and in its change of, and in its embedding of, inequities in the provision of capital outlay state aid and supplemental general state aid.”

In February 2016, the Kansas Supreme Court upheld the equity aspect of the panel’s decision and held that if the Kansas legislature does not cure its current constitutional violations and provide equitable levels of funding to the plaintiff school districts by June 30, 2016, then the entire public education system will be shut down for the next school year. Feb. 11, Decision. It still has not acted on the adequacy aspects of the panel’s decision.

Specifically, the court’s February 11th decision held:

In short, if by the close of fiscal year 2016, ending June 30, the State is unable to satisfactorily demonstrate to this court that the legislature has complied with the will of the people as expressed in Article 6 of their constitution through additional remedial legislation or otherwise, then a lifting of the stay of today’s mandate will mean no constitutionally valid school finance system exists through which funds for fiscal year 2017 can lawfully be raised, distributed, or spent.

In its 2016 session, the legislature adopted modifications to its funding system and submitted a brief to the Court that claimed that these changes met the compliance requirements of the Court’s February order. In a decision issued on May 27, 2016, the Court held that although the changes to the capital outlay formula passed constitutional muster, the changes to the local outlay provisions did not and that the state had not complied with its February order. The Court re-iterated its intent to enforce its order by shutting down the entire public school system throughout the state for the next school year if the state does not enact acceptable new legislation by June 30, 2016.

Responding to the state Supreme Court’s firm insistence that the state comply with the June 30, 2016 deadline it had established for providing additional funding to low-wealth school districts, the Kansas legislature, meeting in special session, passed a bill that restored $38 million in funding for the affected districts. The bill was signed by the governor on June 27. A day later, the Supreme Court issued a ruling stating that this legislation satisfied the outstanding equity issues in the case. The Court’s order also reminded the parties that it had not yet ruled on the lower court’s recommendations regarding outstanding adequacy issues, and that it would set a date in the future for a hearing on this matter.

Patrella v. Brownback

On June 1, 2015, the United States Court of Appeals for the Tenth Circuit upheld the District Court’s denial of the order against the state’s cap on the amount of property tax revenues that a local district can raise for schools. Plaintiffs in Patrella v. Brownback argued that the state limited their ability to raise local taxes, resulting in the discharging of school staff and the reduction of other educational services. The decision, which emphasized, “Equity in education is obviously a legitimate governmental interest,” strongly rejected these claims.

Rejecting a petition filed by the plaintiffs, in December, 2015, the United States Supreme Court declined to review the 10th Circuit’s Decision.

Costing-Out

The Legislative Coordinating Council hired education finance experts to conduct a study of the cost of providing an adequate (“suitable” in the Kansas Constitution) education. The study, released in May 2002, was based on a detailed adequacy definition, including “inputs” and “outcomes,” and it used both the “professional judgment” and “successful schools” costing-out methodologies. The study concluded that Kansas needed to increase K-12 education spending by $853 million. An analysis of the study is at Kansas Fact Sheet 2002.

After increasing state education funding in 2005, the legislature directed its Legislative Division of Post Audit (LPA) to conduct a follow-up cost study. Released in January 2006, this study estimated the need for a school funding increase of at least $399 million beyond the increase enacted in 2005. Analysis of this study is at Kansas Fact Sheet 2006.

Useful Resources

Charles Berger, Equity Without Adjudication: Kansas School Finance Reform and the 1992 School District Finance and Quality Performance Act, 27 Journal of Law & Education 1 (January 1998).

Richard E. Levy, Gunfight At the K-12 Corral: Legislative vs. Judicial Power in the Kansas School finance Litigation, 54 Kan. L. Rev. 1021 ( 2006).

Last updated August 2016

Previous post:

Next post: