New Budget Cuts Threaten School Funding Settlements
By David Harrison, Staff Writer
The lawsuit was neither unexpected nor unfamiliar. Kansas schools have been arguing with lawmakers for years over school appropriations, filing lawsuits that have frequently ended up in the state Supreme Court. In 2006, the dispute appeared to have been laid to rest when the court signed off on the legislature's decision to send an additional $755 million to the schools. But state budget cuts last year slashed $303 million in education spending. And so the districts are back in the courts.
Kansas is far from alone in this respect. School funding suits also are working their way through court systems in California, New Jersey and Indiana. More are likely to be filed in the months ahead, as legislatures — confronted with yet another year of deep budget cuts — opt to scale back education spending. School officials and attorneys in Texas and New Mexico already have talked about pursuing legal action. Education policy experts say the coming legislative sessions could set off a whole new wave of school districts dragging lawmakers to the courthouse.
"Some of them may say the only recourse they have is to challenge the funding mechanism," says Robert Toutkoushian, a professor of higher education at the University of Georgia.
Over the past two years, schools got by on cash reserves, stimulus money and other forms of federal aid to prop up their budgets. But with reserves drained and stimulus funds about to run dry, many education officials are likely to find themselves struggling with drastic cuts in funding at a time when the economy remains sluggish.
Equal vs. adequate
Since the 1970's, all but six states have seen funding lawsuits brought by school districts and school advocates. The first wave of cases centered on the question of whether funds were being equitably distributed, since high property-tax districts could afford to send more money to schools than less well-off areas. Those cases met with limited success.
Starting in the 1980's, school advocates shifted their strategy and began relying on requirements in most state constitutions that governments provide adequate education for a state's children. Those efforts picked up steam after the No Child Left Behind Act and various state initiatives imposed benchmarks that school districts were required to meet. Advocates argued that students could not meet standardized test targets without increases in school funding. About two-thirds of those cases were successful, according to the National Access Network, which tracks school finance lawsuits.
In most cases, courts ruled that lawmakers had to determine how much money it would cost to provide an adequate education and then commit to spending that money. In New York, for instance, a long-running lawsuit ended in 2007 when lawmakers agreed to allocate roughly $7 billion for the state's schools, to be phased in over four years.
One result of these cases was to shift more responsibility for school funding away from local governments and onto the states. Instead of relying on local property taxes, schools now relied more heavily on state tax revenues. When the economy was strong, it wasn't hard for lawmakers to promise more money without having to raise taxes. But the fiscal crisis of the past couple of years has forced state governments to cut back, to the dismay of education advocates.
"Constitutional rights don't get put on hold because there's a recession or financial constraints," says Michael Rebell, executive director of the Campaign for Education Equity and a leader in New York's school funding lawsuit.
Texas legislators, responding to a state Supreme Court ruling, placed a more restrictive cap on local property tax rates in 2006 but assumed more of the burden for school funding at the state level. Lawmakers increased the business tax to pay for the change but so far revenues have not met expectations. With the state now facing a roughly $21 billion shortfall over the next two years, school leaders have warned that significant cuts could send them back to the courts for relief.
Indiana's local property taxes, which had been a major school revenue source, were capped in 2008. The legislature agreed to take on more of the task of funding schools and raised the sales tax to compensate for the lost income. But the recession has put a dent in sales tax receipts, which have traditionally been more volatile than property taxes.
Escaping the mandate
Kansas presents one of the most clear-cut cases. Last year, the state enacted a temporary one-cent sales tax increase in part to meet the court-imposed school-funding mandate. But now, a looming $500 million deficit for the 2012 fiscal year has education officials worried about drastic school spending cuts. Meanwhile, last month's elections strengthened the Republican majority in the House and sent U.S. Senator Sam Brownback, a conservative Republican, to the governor's mansion. GOP lawmakers have talked about repealing the sales tax increase, to the dismay of many school advocates.
Republican lawmakers have vowed to defend themselves aggressively against the schools' lawsuit. "We're going to stand up and fight this thing and not take it lying down like we did last time," says Kansas state Senator Dick Kelsey. To Kelsey and many of his legislative colleagues, the state Supreme Court overreached by telling lawmakers to increase funding for education. Only the legislature can make decisions on appropriations, Kelsey says, an argument he plans to take to the U.S. Supreme Court if the schools prevail in state court once again.
To John Robb, the attorney representing a consortium of 63 Kansas school districts, four of which are plaintiffs in the most recent suit, the legislature is shirking its responsibility. "They are using the recession as the excuse to somehow negate a case that took six trips to the Kansas Supreme Court," he says. "The state controls the checkbook. If the state wants more resources, they just get more resources. But we're on this huge tax cutting binge."
The latest wave of school funding lawsuits will take years to work its way through court systems around the country. And it's unclear how successful plaintiffs are going to be in this round. But school officials still could benefit from filing suit or threatening to sue even if they are unlikely to see money in the short term. "If nothing else, school districts can raise the awareness of the problems," says Molly A. Hunter, of the Education Law Center in New Jersey.
That already appears to be the case in Nevada, one of only six states that have never had a school funding lawsuit. So far, nobody in Nevada has threatened to sue, but state Sen. Mo Denis is worried nonetheless. A 2006 report commissioned by the legislature found that the state would need to increase education spending by at least $2.3 billion annually to provide an adequate education. That would be an unimaginable expense in a legislative session during which lawmakers will have to fill a $3.2 billion overall budget gap. Education makes up about 65 percent of the state budget, which means it will almost certainly face some cuts, according to Denis.
"Somebody could sue," he says. "The concern is then our ability to govern gets turned over to the courts, which isn't a good way to run your education system."