K-12 Funding Fights Roil States’ Back-to-School Landscape

A variety of legislative disputes, court rulings, and a budget fight that has been stalled in no-man’s land for months loom large for education finance around the country as the new school year gets underway.

Perhaps the most turmoil for schools is taking place in Pennsylvania, where schools were operating in the 2014-15 academic year without any state funding due to an ongoing budget stalemate. But in other states, long-running legal battles over K-12 spending have either reached their conclusion or are getting close to the finish line.

And in a relatively quiet year for state elections, dueling ballot initiatives in Mississippi could provide some of the biggest headlines in a state that typically ranks near the bottom in per-pupil expenditures.

In Washington state, the ongoing dispute over school spending has more than a theoretical cost.

Although the state increased K-12 spending by $1.3 billion for the 2015-17 biennial budget, last month the state’s supreme court announced it was fining the state $100,000 until it satisfied the court’s 2012 ruling in the McCleary v. Washington case and further increased state support to schools.

Last year, the court had found the state in contempt for not doing so, although lawmakers have until 2018 to finish overhauling the school finance system under the McCleary ruling.

Held Hostage

But there’s a chance the state’s handling of the McCleary fine could become entangled with another of the court’s recent rulings: a 6-3 decision last month that struck down the state’s 2012 charter school law and has left nine charter schools and their supporters scrambling for funds.

Last month, members of the legislature selected eight lawmakers to a work group to address the court’s McCleary ruling. The group is slated to wrap up its work by Nov. 19 in time for a special session to address McCleary. Inslee warned work-group members against bringing charter schools into their discussions, stating in a letter to the members last month that, “Some families look to charter schools out of frustration with their local public schools. The answer is to remain committed to improving our public K-12 system.”

But state Rep. Chad Magendanz, the ranking Republican member of the House education committee and one of the lawmakers on the McCleary work group, said he was skeptical that satisfying the court concerning K-12 finance would be straightforward.

“The political fight to restore charters could stop everything, not just McCleary. Anything could be held hostage next session to try to restore charter schools,” said Magendanz, who supports charter schools, but not a political strategy that uses a solution to McCleary as a bargaining chip to restore funding for charters.

At the same time, Colorado’s highest court appears to have closed the book on a long-running dispute over cuts to school funding triggered by the Great Recession.

Last week, the Colorado Supreme Court rejected a complaint from several districts, the state PTA, and other groups in Dwyer v. Colorado that lawmakers had violated Amendment 23 of the state constitution. That amendment requires annual increases to “statewide base per pupil funding” and was approved by voters in 2000. Beginning in 2010, however, legislators made significant cuts to total K-12 aid, prompting the lawsuit. (In a broader 2013 finding, the same court upheld the constitutionality of the state’s school finance system in Lobato v. Colorado.)

In its 4-3 Dwyer ruling, the court found that because the state lawmakers’ method for reducing certain categories of K-12 aid to districts did not actually impact base per-pupil funding, they had not violated Amendment 23.

"[I]t was perfectly rational, not absurd, for voters to insist that the state annually increase base per pupil funding (which is uniform across all school districts) while simultaneously affording the General Assembly discretion to modify factor funding (which is specific to each individual district),” Justice Nancy Rice wrote for the majority, referring to voters’ approval of Amendment 23.

In a dissent, Justice Monica Marquez argued that lawmakers had been subverting the underlying intent of Amendment 23 by cutting overall state aid, writing, “Voters surely did not intend the annual increases to statewide base per-pupil funding to be pointless.”

Snapshot or Blurry Image?

In Texas, meanwhile, a long-running court battle over K-12 spending is relatively close to a conclusion. The state supreme court heard oral arguments earlier this month in Texas Taxpayer and Student Fairness Coalition v. Williams, in which a coalition of districts along with other groups, have argued that lawmakers’ $5.4 billion in state funding cuts in 2011 were unconstitutional. Last year, state District Court Judge John Dietz sided with the plaintiff districts in his ruling, which the state appealed.

In an exhibit submitted as part of the case, the Fort Bend Independent district stated that inflation-adjusted, per-student spending in Texas fell by $312 from 2003-04 to 2014-15, even as the percentage of economically disadvantaged students rose from 53 percent to 60 percent.

But in a brief filed last month, state Commissioner of Education Michael Williams and other plaintiffs argued that the 2011 funding cuts were merely a “snapshot” that has been superseded by subsequent events, such as lawmakers’ approval of a $1.5 billion increase to the state’s basic education allotment for the 2016-17 biennial budget. They added, “But the exposure for that photo has been very long, and the interim movement within the system has left a blurry image for the court to assess.”

Living on a Budget

In contrast to the special sessions in Washington state that produced gains for school aid, Alabama state spending on schools took a hit as lawmakers approach the start of a new fiscal year.

In order to fill a budget deficit, lawmakers agreed earlier this month to transfer tax revenue projected to yield $80 million in fiscal 2016 from the state’s Education Trust Fund, a K-12 budget that is separate from the general fund. (The fiscal year in Alabama begins Oct. 1.)

In previous budget negotiations, lawmakers had considered K-12 cuts as large as $250 million for fiscal 2016.

A different battle over K-12 funding will take place in Mississippi at the ballot box this fall.

Initiative 42, backed by those who want significant increases on K-12 spending, would require the state to provide an “adequate and efficient” system of public schools, and would specifically give the state’s chancery courts oversight of the legislature regarding this requirement. Republican lawmakers have vigorously objected, arguing that the courts do not have this power under the state constitution, and subsequently succeeded in placing Alternative 42 on the ballot. That alternative would give the legislature the power to oversee an “effective” system of schools. The sponsors of the original initiative have objected, arguing that the legislators are merely seeking to confuse voters through their alternative measure. However, earlier this month, Initiative 42 backers did drop a legal challenge in which they sought to have the ballot language for their measure expanded.

But the award for the most protracted budget battle featuring K-12 at its center goes to Pennsylvania. In the Keystone State, Gov. Tom Wolf, a Democrat elected last year on a pledge to significantly increase spending on schools, has been locked in a budget stalemate with Republicans, who control the legislature.

Wolf and Republican lawmakers have not been able to agree on a fiscal 2016 budget, and districts have yet to receive state aid for the 2015-16 school year. Compared to those in other states, school districts in Pennsylvania rely on local property taxes for an outsized share of their overall funding. The state has been effectively operating without a K-12 funding formula for several years.

The Chester Upland district south of Philadelphia reported last month that it could no longer afford to pay its staff. The Carbondale district recently took out a $900,000 loan to help cover its payroll, while the Clairton City district is withholding payments to vendors after taking out a $2 million loan earlier this year to cover costs.

“Some of the poorer districts rely heavily on the state revenue,” said Steve Robinson, a spokesman for the Pennsylvania School Boards Association. “Those are the ones that are really feeling the pinch right now without the state money.”