School Finance

Lawsuit claims school funding reduction mechanism unconstitutional

Updated 9 a.m. – A group of school districts and parents filed a lawsuit Friday arguing that the device used by the legislature to control annual K-12 spending, the so-called negative factor, is unconstitutional.

The suit, filed against the state in Denver District Court, argues that the negative factor violates Amendment 23, the constitutional provision that requires school funding to increase by inflation and enrollment growth every year.

The suit has been expected for some time and opens a new front in the policy war over the negative factor, a conflict that intensified during the 2014 legislative session. It’s estimated that use of the negative factor has cut about $1 billion a year from what school districts otherwise would have received for basic operating costs. (See text of suit here.)

The plaintiffs ask that the negative factor section be stricken from the state’s school funding law and that the legislature be barred from reinstating the factor in another form. The suit does not ask that lost funding be restored.

Lead lawyers in the case are Timothy Macdonald of Arnold and Porter and Kathleen Gebhardt of Children’s Voices, a Boulder public interest law firm. She was the lead lawyer in the long-running Lobato v. State school funding suit, which was thrown out by the Colorado Supreme Court in 2013. (Get full background on the Lobato case here.)

Kathleen Gebhardt / File photo
PHOTO: Scott Elliott
Kathleen Gebhardt / File photo

Gebhardt told Chalkbeat Colorado that the final decision to file was made on Tuesday, partly because recent state revenue forecasts (see story) indicate continued improvement in state finances.

“It’s a simple claim, just that the negative factor violates Amendment 23,” Gebhardt said, describing it as a very different case from the complex Lobato suit.

The plaintiffs in the new case include the Colorado Springs 11, Boulder Valley, Mancos, Holyoke and Plateau Valley school districts, along with the East Central Board of Cooperative Educational Services. Other plaintiffs are the Colorado Rural Schools Caucus and the Colorado PTA. Four sets of parents with children in the Kit Carson, Lewis-Palmer and Hanover districts also have signed on to the suit.

The lead plaintiffs are Lindi and Paul Dwyer, who have four daughters in the Kit Carson district, and the case takes their name, Dwyer v. State. Gov. John Hickenlooper and Education Commissioner Robert Hammond are the named defendants in the suit.

Lawyers from four Denver law firms have agreed to assist Gebhardt with the case without charge.

What Amendment 23 does

Passed by voters in 2000, A23’s backers intended for it to provide a predictable and growing source of funding for schools. The amendment’s goal was to restore per-pupil funding to 1988 levels over time. For the first 10 years after passage the amendment required that funding increase an additional 1 percent a year on top of the increases for inflation and enrollment.

State funding for schools comes in two chunks. The larger amount, base funding, provides an identical per-student amount to every district. The second chunk, called factor funding, gives districts varying additional per-student amounts based on district characteristics such as numbers of at-risk students, low enrollment and cost of living for staff.  Local property and vehicle tax revenues also contribute to what’s called total program funding for schools.

(A third, smaller pot of state support known as categorical funding provides money to districts for programs such as special education, gifted and talented and transportation. While A23 requires overall categorical funding to increase by inflation every year, the money is not distributed by the same formula that governs total program funding.)

The key fact is that up until the 2010-11 school year, the legislature applied the inflation-and-enrollment increase to both base and factor funding. (Because of the recession, in 2008-09 and 2009-10 the legislature cut school funding by other means.)

Behind the negative factor

School funding chart
Source: Colorado legislative staff. Click for larger view

With the economy still squeezing state revenues, in 2010 the legislature created the negative factor (originally called the stabilization factor) to control school spending as lawmakers continued to struggle with the overall state budget. It applied to the 2010-11 K-12 budget and has been in effect ever since.

The legal reasoning behind the negative factor is that A23 applies only to base funding, not to factor funding. And while the original A23 factors are intended to increase school funding, the negative factor gives lawmakers a tool for reducing it. This is the key issue under attack in the new lawsuit. The negative factor hasn’t been tested in court before. Its rationale is based on a 34-page 2003 memo issued by the Office of Legislative Legal Services at the request of then-Rep. Keith King, R-Colorado Springs. (Read memo here.)

“Amendment 23 precludes the General Assembly from purporting to grow the base but then slashing overall education funding by fundamentally revamping or jettisoning the [finance] formula as in effect in 2000,” the suit argues.

The policy debate

Negative factor impact
  • $5.9 billion K-12 funding in 2014-15 with
  • $6.8 billion without

A23 isn’t the only constitutional provision that applies to the state budget. Among other things, the constitution requires a balanced state budget every year, limits the amount of new revenue that can be spent even in years of high growth and restricts property taxes in a way that has reduced growth of local district revenues.

Because of those restrictions, policymakers who support the negative factor argue that it’s necessary to prevent K-12 spending from consuming larger and larger shares of the state’s general fund budget and squeezing out other state programs.

With state revenues improving, reduction of the negative factor was the top priority for education interest groups during the 2014 legislative session. Their proposals ranged as high as $275 million. In the end lawmakers agreed to a $110 million reduction.

The Hickenlooper administration and legislative budget experts resisted a larger buy down, arguing that a bigger amount would put too much pressure on the state budget in future years. That can happen because reducing the negative factor puts more money into K-12 base funding, which is subject to A23’s multiplier in the future.

Lawsuit backers met with key lawmakers near the end of the session, but legislators reportedly refused to be swayed by any possibility of a suit.

What happens next

As usually happens in these kinds of constitutional cases, the attorney general is expected to ask the district court to dismiss the suit. If that happens, the plaintiffs would appeal to the Colorado Court of Appeals.

Assuming the case stays alive in district court one way or another, both sides could file their written arguments by the end of the year – creating a pile of legal documents for the 2015 legislature to ponder as lawmakers consider the 2015-16 budget and how big a negative factor to include.

Interest groups already are gearing up to push for additional factor buy downs in 2015, and a live lawsuit will provide additional fuel and tension for the debate.

 

taking action

Denver to dismiss students early as teachers rally for more school funding

PHOTO: RJ Sangosti/The Denver Post
Colorado educators rallied outside the State Capitol on April 16, 2018. More rallies are planned for next week. (Photo by RJ Sangosti/The Denver Post)

The Denver school district will cut short the school day on April 27 after the local teachers union announced its members would join an afternoon rally at the Colorado Capitol to advocate for more state education funding.

District-run schools will have an “early-release” day with students being dismissed sometime between 11:30 a.m. and 1:30 p.m., Denver Public Schools spokeswoman Jessie Smiley said. Exact dismissal times will depend on a school’s transportation schedule, she said.

Innovation schools, which are district-run schools with additional autonomy, can opt out of the early dismissal and operate on a normal schedule, according to a letter from Superintendent Tom Boasberg that explains why the district is declaring an early-release day. Denver Public Schools is the largest school district in the state, with 92,600 students.

Several charter schools also plan to dismiss students early so teachers can participate in the rally. They include schools in the district’s two biggest homegrown charter networks, DSST and STRIVE Prep, according to officials from those networks.

Other Colorado school districts have canceled school for a whole day. Colorado has among the lowest level of school funding in the country, and a recent study ranked the state last for the competitiveness of its teacher salaries.

Read Boasberg’s letter in full below.

Dear DPS Community,

As we have been communicating with you, DPS has been working extraordinarily hard and in partnership with superintendents across the state to press our state government to restore education funding to our schools, and ensure our students and our educators receive the supports and compensation they deserve.

In Colorado, the state funds education at an average of $2,500 per student less than the national average. That is short-sighted and wrong. Our state needs to dramatically increase our investment in education, and all of our voices play a vital role in this effort.

The statewide teachers association, the Colorado Education Association, is planning a statewide rally of educators on Friday, April 27 to advocate for greater state funding and expects that many of our teachers will participate. As such, we’ve been working with our teachers on a plan that will have as minimal impact as possible on our students and families

Given the number of teachers expected to participate in CEA’s event that afternoon, we have decided to schedule an early release day for all district-managed schools on Friday, April 27. Innovation schools can opt out of the early release schedule and decide to operate on a normal schedule. We felt it was important to get a decision on this as early as possible so schools and families can plan ahead.

The planned early release will not impact student meals. We are committed to feeding every child every day, so bagged lunches will be available for every student on April 27.

Also, the planned early release day will not impact the 34th Annual Shakespeare Festival. The festival will follow its regular schedule. Transportation will be provided to students who go back to school after the celebration.

We are working with Transportation Services to provide accurate information about transportation for Friday, April 27. We will share this information as soon as it’s available.

We are communicating with school leaders and families to provide you with answers to your questions about your school’s schedule, transportation, and after-school activities. Please look for a detailed communication from your student’s principal by the end of the day Thursday, April 19.

As in every case, our students’ safety is our top priority, and we will make necessary revisions to these plans to prioritize their well-being. Thank you for your support of our educators and your partnership in our students’ education.

Best,
Tom

Still walking

Colorado teachers plan more walkouts, and Jeffco canceled classes one day next week

Colorado teachers march around the state Capitol Monday, April 16, to call for more school funding and to protect their retirement benefits. (Erica Meltzer/Chalkbeat)

Teachers from Colorado’s two largest school districts are planning back-to-back walkouts next week to call for more funding for education – and they could be joined by other districts.

Jeffco Public Schools canceled classes for April 26, next Thursday, after many teachers there said they plan to go to the Capitol, while the union representing Denver classroom teachers said they plan to walk out midday April 27, next Friday, to rally at the Capitol early in the afternoon.

In a press release, the Denver Classroom Teachers Association said Denver teachers would be leading a statewide walkout. Corey Kern, the union’s deputy executive director, said he’s not sure yet how many other districts will be represented.

The announcements come after hundreds of teachers marched at the Capitol during a day of action Monday to protect their retirement benefits and call for more school funding. Enough teachers left the suburban Englewood district that classes were canceled there.

Colorado consistently ranks in the bottom tier for school funding and teacher pay, though there is considerable variation around the state. A recent study ranked Colorado last for the competitiveness of its teacher salaries, and nearly half the state’s districts are now on four-day weeks. The 2018-19 budget takes a big step toward restoring money cut during the Great Recession, but the state is still holding back $672 million from what it would have spent on K-12 education if it complied with constitutional requirements to increase per-pupil spending at least by inflation each year.

The wave of teacher activism reflects a national movement that has seen strikes, walkouts, and marches in West Virginia, Oklahoma, Arizona, and Kentucky. Unlike other states, lawmakers here can’t raise taxes to send more money to schools or approve teacher raises on their own. Voters would need to approve more money, and local school boards would need to increase salaries.

Teachers interviewed at Monday’s march said they recognize the fiscal constraints in Colorado, but they’re also inspired by the actions of their colleagues in more conservative states.

Many teachers also said they fear that reductions in retirement benefits could lead to an exodus of younger teachers, further squeezing a profession that struggles to recruit new workers and suffers from high turnover.

A House committee made changes to a pension overhaul this week that removed the provisions teachers found most objectionable, like raising the retirement age and making teachers pay more out of their paychecks, but the final form of the bill still needs to be hashed out between Democrats in the House and Republicans in the Senate.

Jason Glass, superintendent of the 85,000-student Jefferson County district, sent an email to parents Tuesday that said classes would be canceled next week due to a “labor shortage.” Teachers who miss school are required to use their allowed leave time.

Glass called the level of education funding in Colorado “problematic.”

“Public education staff, parents, and other supporters have become increasingly vocal in their advocacy for increased funding for our K-12 public schools and the stabilization” of the state pension plan, he wrote. “There is a belief among these groups that years of low funding is having a significant impact on our ability to attract quality candidates into the teaching profession, and is impeding the ability to effectively deliver the high level of educational experience our students deserve.”

Glass apologized for the “inconvenience” to families and reminded parents that April 26 is also “Take Our Daughters and Sons to Work Day.”

Denver Public Schools, the state’s largest district with 92,000 students, announced late Tuesday that there would be early dismissal April 27, with more details to come.

“Officials across the country and specifically lawmakers in the statehouse must finally recognize that a quality education cannot be provided on the cheap.” Denver union president Henry Roman said in a press release about the walkout. “If we want Colorado’s current economic prosperity to continue, we need to realize the importance of strong schools.”

Advocates are trying to place a $1.6 billion tax increase for education on the November ballot. Voters have twice rejected similar measures in recent years.