In a 4-2 decision, the Colorado Supreme Court has overturned a district court decision in the Lobato v. State lawsuit and ruled that the state’s current school finance system is constitutional.

Lobato v. State illustrationThe ruling, officially issued this morning, ends an eight-year court effort by a large group of parents and school districts to force changes in how the state’s schools are funded.

The decision quickly refocuses the broader school finance policy debate on the new funding formula proposed in Senate Bill 13-213, recently signed into law, and the $1 billion ballot measure that will be needed to support the new system.

Asked later Tuesday if the decision effectively closes the door on further school finance cases in the courts, lead plaintiffs’ lawyer Kathy Gebhardt said, “It could.” But, she added, “Reading between the lines, that was their [the justices'] intent.”

The decision

“The public school financing system enacted by the General Assembly complies with the Colorado Constitution,” Justice Nancy Rice wrote at the beginning of the court’s 27-page ruling. “It is rationally related to the constitutional mandate that the General Assembly provide a ‘thorough and uniform’ system of public education. … It also affords local school districts control over locally-raised funds and therefore over ‘instruction in the public schools.’ … As such, the trial court erred when it declared the public school financing system unconstitutional. We accordingly reverse.”

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Later in the ruling, Rice wrote, “While the trial court’s detailed findings of fact demonstrate that the current public school financing system might not be ideal policy, this Court’s task is not to determine ‘whether a better financing system could be devised, but rather to determine whether the system passes constitutional muster.’”

Rice was joined in the ruling by justices Brian Boatwright, Allison Eid and Nathan Coats. Chief Justice Michael Bender and Justice Gregory Hobbs dissented. Justice Monica Marquez, who earlier worked on the Lobato case while a member of the attorney general’s staff, did not participate in the case.

The ruling came less than three months after the court heard oral arguments in the case.

The dissents

Bender and Hobbs each wrote dissenting opinions to the majority opinion, and each signed the other’s dissent.

In his 18-page dissent, Bender wrote, “Today, the majority abdicates this court’s responsibility to give meaningful effect to the Education Clause’s guarantee that all Colorado students receive a thorough and uniform education. In my view, a thorough and uniform system of education must include the availability of qualified teachers, up-to-date textbooks, access to modern technology, and safe and healthy facilities in which to learn. The record, however, reveals an education system that is fundamentally broken. … Colorado’s education system is, beyond any reasonable doubt, neither thorough nor uniform.”

The chief justice quoted extensively from the trial record about deficiencies in the state’s schools.

He wrote in in a footnote he would give the legislature five years to adopt a new system and would have continuing court supervision of those efforts.

Hobbs’ 20-page filing went deeply into the history of the state constitution, and he wrote, “In creating the ‘thorough and uniform’ requirement, the framers intended that the legislature would establish and maintain a complete and comprehensive system of public education that consistently affords Colorado children the opportunity to develop the skills and knowledge necessary to participate fully in the opportunities and challenges of a dynamically growing state.”

He concluded, “As the record makes clear, it may take years – and significant effort – to reshape the current school finance system into one capable of supporting our rapidly growing and diversifying schools in compliance with the Education Clause’s mandate. Colorado should face this critical issue head-on.”

Plaintiffs react

Lobato sisters
Taylor Lobato (right) speaks to reporters about the supreme court’s ruling. Her sister Alexa, also a plaintiff, is at the left.

Gebhardt called the decision “a simply devastating day for the children of Colorado.”

Taylor Lobato, a Center High School graduate who was one of the original plaintiffs in the case, said, “The door has been slammed in the faces of the children of Colorado. … It makes me sad; it makes me upset.”

George Welsh, superintendent of the Center schools, said the court’s decision means “the Legislature has permission to do more with less. … The court has decided they can’t help us … but the people can” if they elect lawmakers who support increased funding for schools. (Read more reaction here).

The issues in the case

The central issue in Lobato was whether the current school funding system was “rationally related” to the state constitution’s requirement for a “thorough and uniform” system of public schools, and with the requirements of school-reform laws passed in recent years.

Plaintiffs also argued that the current finance system violates another constitutional provision guaranteeing local control of schools.

District Judge Sheila Rappaport
Denver District Judge Sheila Rappaport

Denver District Court Judge Sheila Rappaport agreed with the plaintiffs’ arguments in her December 2011 ruling and held the finance system to be unconstitutional.

But the high court ruled, “A ‘thorough and uniform’ system of public education is of a quality marked by completeness, is comprehensive, and is consistent across the state.” That requirement “simply establishes the constitutional floor upon which the General Assembly must build its education policy,” according to the decision.

Citing its ruling in an earlier school funding case, the court held such a system “does not demand absolute equality in the state’s provision of education services, supplies, or expenditures.” The court also ruled that local control is not violated by the current system.

Attorney General John Suthers and his staff also argued consistently that school finance was the responsibility of the “political” branches of government – the legislature and the governor – and wasn’t an area of judicial review.

When it revived the Lobato case in 2009 the supreme court ruled that the courts did have jurisdiction – called “justiciability” in legal language. Monday’s majority opinion specifically stated that the court had not changed its mind on that issue.

Gebhardt said she wasn’t sure how to interpret the decision. “I don’t really know how to get in the heads of the justices. … I am a little concerned they set the bar so low,” she said, adding, “I read the opinion, and they didn’t give us any guideposts. … There’s no guidance in there as to what a thorough and uniform system is.”

She also said she was disappointed that “all of the facts and all of the evidence were completely disregarded.”

Implications of the ruling

There could have been far-reaching implications if the court had upheld Rappaport’s decision, perhaps including major changes in education laws by the legislature and years of continuing court review.

Cost estimates presented during the five-week trial in 2011 projected that the state might need as much as an additional $4 billion a year to fund an education system based on true costs.

Critics of Rappaport’s ruling, including Gov. John Hickenlooper and legislative Republicans, warned that implementation of Rappaport’s decision could squeeze state spending for programs other than education and tie the legislature’s hands when setting budget priorities.

Such concerns appear to be off the table, given the court’s ruling. Because the case is based on state constitutional issues, there are no federal appeals possible. Gebhardt said the plaintiffs could ask the Colorado high court for a rehearing, but no decision has been made on doing that.

So, attention now turns to SB 13-213 and its accompanying ballot issue. (Proponents haven’t yet decided which version of the proposed tax increase to take to voters.)

While that plan proposes a significant increase in funding and major reallocations of how K-12 support is spent, it is not based on calculations of how much funding would be required to achieve the student competency goals contained in current state education policy.

Gebhardt, who has raised concerns in the past about SB 13-213, said Tuesday, “There are some good things in Sen. Johnston’s bill … there are some concerns.” She’s primarily concerned with a variation of the yet-to-be-submitted ballot measure that would alter Amendment 23, the current constitutional formula for funding schools. The bill is sponsored by Sen. Mike Johnston, D-Denver.

Who’s who in Lobato

Lawyer Kathy Gebhardt
Lobato case plaintiffs’ lawyer Kathy Gebhardt speaks with reporters. Members of the Lobato family are behind her.

The plaintiffs included 67 individuals – parents and students – who live in six school districts, plus 21 school districts. The Lobatos, a ranching family from the San Luis Valley, gave the case its name. They were represented by Children’s Voices, a non-profit Boulder law firm led by Gebhardt, and by a variety of private lawyers. An additional 27 individuals living in four districts entered the case later as intervening plaintiffs and were represented by the Mexican American Legal Defense and Educational Fund.

The defendants were Hickenlooper, the State Board of Education and education Commissioner Robert Hammond. They were represented by Attorney General John Suthers and his staff.

The plaintiffs had support in a dozen “friend of the court” briefs representing 28 organizations or groups of people, including the Colorado Education Association, the Colorado Association of School Boards, the Colorado Association of School Executives, the ACLU of Colorado and the Bell Policy Center. A friend of the court is referred to as “amicus curiae” in legal language.

A smaller number of amicus briefs were filed in support of the state’s case. Groups filing those briefs included the University of Colorado Board of Regents, three former governors, a coalition of business groups and two health care groups.

History of the case

First filed in 2005, the case was thrown out first by a Denver District Court judge and then by the Colorado Court of Appeals. Both ruled the courts didn’t have jurisdiction over school finance.

The supreme court overturned those decisions in an October 2009 ruling, a decision that came to be know as Lobato I. A five-week trial was held starting in August 2011, followed by Rappaport’s ruling late that year.

Reactions to Lobato ruling

Gov. John Hickenlooper – “We are complying to the requirements in the constitution. It doesn’t necessarily say that we have sufficient funding in education right now, and even after working hard to add additional funding this year to the construction of school buildings and the state education fund, we — clearly, I think most people would agree that we are underfunded in education. But I think what the Supreme Court said was that this was not the right way to increase that funding.”

Attorney General John Suthers
Attorney General John Suthers / File photo

Attorney General John Suthers – “The Attorney General’s Office is pleased that, after a long and circuitous route through the courts, the Colorado Supreme Court has finally recognized that the state’s education funding system satisfies constitutional standards. The court’s ruling confirms that the Lobato case has been a distraction from the task at hand – improving our education system through meaningful, effective and efficient change.” (Full text of statement)Senate Minority Leader Bill Cadman, R-Colorado Springs – “The Colorado Supreme Court’s decision on the Lobato lawsuit is important to all of us; it affirms the constitutional authority of an elected legislative body to represent the people of this state. This is such a core tenet of our Constitution that I am surprised the court’s decision was not supported unanimously by the justices. The legislature is given the power to create a state budget for good reason – the people’s money needs to be protected from any group who would use the court system to bypass the Constitution.”

Kerrie Dallman, Colorado Education Association president – “It’s important to note the Supreme Court did not dispute that public education in Colorado would benefit from additional funding. Colorado students deserve a better-funded school system. That’s why our Legislature and Gov. Hickenlooper passed the Future School Finance Act. And that’s why our members will unite with a diverse coalition of groups dedicated to making public school investment a top priority in this state. Together, we will implore every community to do right by our kids this November and give them the resources they need to succeed.”

Thomas A. Saenz, MALDEF president – “The Colorado Supreme Court’s timorous decision today, abandoning the state to a dim future of inadequately educated citizenry, encapsulates the folly in failing to ensure, at a national level, an equitable and quality education for all. The public in Colorado can and should demand better of its public servants.”