Kansas Supreme Court justices grill attorneys for the state at school finance hearing

Visibly frustrated Kansas Supreme Court justices hammered attorneys for the state Friday over what legislators knew – or should have known – when they scrapped the longstanding school finance formula in favor of Gov. Sam Brownback’s plan to fund schools using block grants.

The issue is whether the block grant plan is constitutional and whether it complies with a 2014 Supreme Court order to fix inequities in funding between property-rich and property-poor school districts.

That issue had appeared settled when lawmakers voted last year to fully fund state aid to help equalize the poorer districts’ property tax and building funds.

But when that turned out to be more expensive than the Legislature expected, lawmakers repealed the formula and, at the governor’s urging, passed Senate Bill 7, creating a system of block grants to school districts based on current funding.

The idea was to essentially freeze funding for two years while the Legislature tries to write a new permanent formula to fund schools.

A three-judge school-finance court ruled SB 7 unconstitutional this summer and ordered the state to restore the old formula. The Supreme Court is hearing the state’s appeal, and Friday’s oral arguments gave justices a chance to question lawyers before rendering a decision.

Solicitor General Stephen McAllister, representing the state, acknowledged that fully funding the formula would have complied with the court’s 2014 order, but said that wasn’t the only way to comply.

“SB 7 is a reasonable effort to try to hold the status quo, roughly, while that happens,” McAllister said. “The Legislature here … in good faith, is trying to consider whether the current system really serves Kansas best.”

Much of Friday’s discussion centered on how to remedy the situation if the Supreme Court overturns SB 7. If that happens, there is no backup plan to finance schools.

One possibility is that schools could be closed until the Legislature comes up with a way to fund them. That’s considered possible but unlikely, because neither side has asked for that.

Another possibility is that the Supreme Court could uphold the school finance court’s decision and order the state to restore the old funding formula. But that could anger lawmakers who already think the courts have overstepped and infringed on their authority to set the budget.

No one knows what would happen if the Legislature defied such an order.

McAllister suggested the Supreme Court could offer an opinion advising the Legislature about what it has to do to comply with the state constitution’s mandate of adequate and equitable funding and giving lawmakers time to act.

Attorney Alan Rupe, a longtime school-finance lawyer representing school districts including Wichita, said the state just wants to prolong the litigation and avoid fully funding schools indefinitely.

“Simply, this needs to be fixed,” Rupe told the justices. “I’ve been in front of you eight times, and there is a pattern here.”

He said that in case after case, courts have found school funding inadequate, and the Legislature has agreed to fix it, then backed off, forcing schools to go back to court to try to force compliance.

He said the plaintiff in his first school-finance lawsuit is now 35 years old. The named plaintiff in the current litigation was a fifth-grader when the case started and is now a sophomore in high school.

“We think this has gone on quite long enough,” he said.

Cost of full funding

Several justices expressed frustration that state lawyers had told them the Legislature would provide full funding of the formula and then backed away from that.

They pointed out that the current proceedings wouldn’t be happening if the state had provided full funding.

Justice Lee Johnson said the 2014 order said flat out that the state would be in compliance with its constitutional duty to fund schools if it fully funded the formula.

“I don’t know how we could have been any more clear than that,” he said.

State lawyers argued that the Legislature had made a good-faith effort to comply with the 2014 court order, but that fully funding the previous formula would have cost $52 million to $54 million more than the Legislature appropriated based on estimates at the time.

That led to a heated exchange between Justice Dan Biles and McAllister, who is representing the state.

“The reality is the (state) Board of Education gave them numbers that told them, ‘You need $130- to $140 million to fully fund this,’ ” McAllister said. “That was the information they were …”

Biles interrupted, saying, “Counselor, that’s not right. You guys have said that so much it becomes frustrating to hear.”

Biles said the evidence clearly shows that the projection was based on hypotheticals and estimates and that Dale Dennis, deputy commissioner of education, had warned state officials that some of the data in the calculations was old.

“Everybody knew there was a lot of play in the joints,” Biles said. “The light bulb should have gone on for somebody that said, ‘Well, we know that $134 million isn’t the right number and it needs to go higher.’ ”

McAllister asserted that light bulb didn’t come on for lawmakers until this year’s legislative session.

“But everyone knew that earlier than that,” Biles said.

McAllister disagreed.

“With all due respect, your honor, I don’t want to belabor the point and I’ll accept however you want to characterize it, but my perception is at the time the Legislature passed that bill in April of 2014, that they genuinely believed that it would take $130- to $140 million to fully fund it.”

Test scores

The oral arguments originally were planned for one hour, then extended to two hours – one for each side.

But the justices continued to pepper the state’s lawyers – McAllister and Art Chalmers of Wichita – with questions for more than an hour and a half.

They ran out of questions for Rupe after about 40 minutes.

The justices were noticeably gentler when questioning Rupe, although Justice Eric Rosen did press him on what harm lower funding is causing for students.

“If you look at NAEP (test scores), Kansas ranks high,” he said. NAEP is the National Assessment of Educational Progress, a series of standardized math and reading tests administered to students across the country.

Rupe replied that “averages tend to hide the problem” with schools. He said the NAEP statewide average masks an achievement gap for poor and other difficult-to-teach student populations.

“Those kids are being left behind,” he said.

The NAEP scores in the court case are two years old, the latest available when the lawyers had to file their appeal briefs.

Since then, the 2015 scores have come out, showing a nearly across-the-board decline for Kansas students.

Fourth-graders meeting basic achievement levels dropped by 6 percentage points; fourth-grade reading and eighth-grade math were down 3 points.

The only gain was a 1 percent increase in eighth-grade reading.

Rupe said he couldn’t introduce the updated scores Friday because of court rules limiting the lawyers to arguing facts that were already in the record.

Wichita schools Superintendent John Allison, who attended the oral arguments, said that increased school funding several years ago had improved scores. And through 2013, districts were seeing a “residual effect” on achievement that’s now starting to wear off, he said.

“When you look at states that have made cuts to education, the quick look would tell you that there were drops there,” Allison said.

Wichita is one of four districts that brought the lawsuit over funding, with Hutchinson, Dodge City and Kansas City.

Ruth Wood, vice president of the Goddard school board, also attended the arguments and said her district is supporting the districts that sued.

She said one of the lesser-known consequences of SB 7 had cost Goddard about $118,000 in funding.

As part of the block grant process, districts had to give money back to the state for a fund to meet “extraordinary needs” of districts that could demonstrate they were especially harmed by the change in funding mechanisms. Goddard sought extra funding for an enrollment increase of about 100 pupils but got next to nothing, Wood said.

“We paid in like $120,000 to the extraordinary needs fund and we got back like $2,000-something,” she said.

This story was originally published November 6, 2015 at 12:41 PM with the headline "Kansas Supreme Court justices grill attorneys for the state at school finance hearing."