School-finance lawsuit hangs over 2014 legislative session

01/12/2014 6:50 AM

08/08/2014 10:21 AM

With no decision yet from the Kansas Supreme Court on a mammoth school-finance lawsuit, state legislators will begin their annual session amid deep uncertainty over the dominant issue of the year.

Depending on what the court decides, the outcome could be anything from more money for schools to a constitutional showdown over the balance of power between the courts and the Legislature.

Although they use different metaphors, Democrats and Republicans alike say the school ruling, whenever it comes, will influence just about everything that happens under the dome this election year.

“It’s the sword of Damocles hanging over the whole process,” said Senate Minority Leader Anthony Hensley, D-Topeka.

Senate President Susan Wagle, R-Wichita, called it “the gorilla in the room.”

“It impacts the rest of government – all of government,” she said. “Since the downturn of ’08, all agencies that were government funded have taken a hit … so if the court were to come in and ask for more money, it would impact other agencies that are funded with state dollars.”

House Minority Leader Paul Davis, D-Lawrence, called that “a false choice.”

“The state has a responsibility to fund higher education, to fund public safety and to fund our public schools,” he said.

The Supreme Court typically issues rulings and opinions each Friday.

Friday marked the final opportunity to rule on school finance before the lawmakers take their seats at the Capitol at 2 p.m. Monday. But Friday came and went with no decision, leaving the lawmakers in legislative limbo – unable to do much until they know what the courts will demand of them.

If the Supreme Court upholds a decision by a three-judge trial court, lawmakers could find themselves facing a court order to add more than $400 million a year to the funding for K-12 schools.

The trial court ruled the Legislature was not meeting its constitutional obligation to “make suitable provision for finance of the educational interests of the state.”

No one knows what the Legislature’s response would be, but a number of options have been laid on the table, including:

•  Defiance: Lawmakers might try to ignore a Supreme Court order to increase money for schools. Some conservative Republicans contend that their interpretation of the Constitution leaves it up to them to decide what constitutes “suitable” funding for schools.

“I think the response is going to be what I’m calling the necessary constitutional crisis,” said Ty Masterson, R-Wichita, chairman of the Senate Ways and Means Committee. “I know it will try to be spun into an educational funding issue, but fundamentally it’s a separation of powers issue. The court ruling a certain amount of spending is no different than us passing a law that prohibits them from rendering that decision. They’re both unconstitutional.”

Rep. Les Osterman, R-Wichita, was more direct.

If the court does order a big increase in school funding, “Who holds the purse strings? The Legislature,” Osterman said. “We wasn’t a party to the lawsuit, so therefore I don’t need to listen to you, judge.”

•  Repeal tax cuts: At Gov. Sam Brownback’s urging, lawmakers two sessions ago passed deep cuts in state income tax rates, including abolishing taxes on income from farms, sole proprietorships, limited liability companies and corporations organized under subchapter S of the federal tax code.

School attorney Alan Rupe argued before the Supreme Court that the tax cuts – worth $2.5 billion through 2018 – undermined the state’s argument that it can’t fund schools at pre-recession levels.

In response to an earlier Supreme Court ruling that schools were underfunded, the Legislature committed to providing schools $4,492 per pupil in base state aid.

That aid peaked at $4,400 in 2009. Now, it’s $3,838.

“We have to go back in and look at tax policy,” Hensley said. “The train has come off the track in my estimation. And we have a train wreck of a budget that was really a self-imposed crisis.”

Republicans, however, have expressed strong reservations about pulling back any tax cuts, which they passed at the governor’s urging in an effort to boost jobs and the state economy.

“I’m not willing to pull the plug,” said House Speaker Ray Merrick, R-Stilwell.

•  Shift money: Lawmakers could increase the funding for schools by drawing money from other areas of state government. Hensley and State Education Commissioner Diane Debacker said they met with Brownback on Dec. 11 and he told them he’s considering taking money out of state employee retirement and highway funds.

“When he said that I was somewhat stunned that would be his plan,” Hensley said.

Other areas that have been mentioned for potential cuts include corrections and the state university system.

A court demand for more base aid could also kill Brownback’s recently announced five-year plan to phase in all-day kindergarten, which would cost about $80 million.

•  Change the justices: At present, Supreme Court justices are chosen by the governor from three finalists picked by an independent commission of lawyers elected by members of the state bar and non-lawyers picked by the governor.

The Senate has passed a proposed constitutional amendment to allow the governor to make those selections on his own with confirmation by the Senate.

The House has not acted on the measure.

Both chambers passed a law last year changing the way Court of Appeals judges are picked, and Brownback appointed his office lawyer, Caleb Stegall, to the appellate court with his first nomination.

But because the selection of Supreme Court justices is written into the Constitution, a two-thirds majority in both chambers and a vote of the electorate is required to amend the Constitution to change that rule.

Although Democrats hold less than a third of House seats, Davis, the party’s choice to challenge Brownback, said he thinks there’s enough opposition in his caucus and among some Republicans to hold off the amendment another year.

•  Change the Constitution: The Senate also has passed a proposed constitutional amendment that would strip courts of their role in deciding whether lawmakers are providing suitable funding for education.

Supporters say that the courts have overstepped their authority.

“I believe a majority in the Senate does not believe that an unelected court has the right to insert themselves into the appropriating process, that by our Kansas Constitution only elected legislators and a governor can tax or spend ... the people’s money,” Wagle said.

Davis, however, said he doesn’t think that amendment would get two-thirds in the House either. He said the Legislature defining suitable education would be like Congress passing a bill allowing it to define freedom of speech.

•  Change the formula: The state’s school-finance formula is a complicated mass of moving parts designed to help ensure that children in poor urban and rural districts have roughly the same educational opportunity as students from richer districts in the Wichita and Kansas City suburbs.

While base state aid provides basic operational funding, districts receive additional money through “weightings” based on factors such as the number of disabled and at-risk students they educate. In addition, the state administers local school property tax money known as the “local option budget.”

Lawmakers could try to end-run an adverse court decision by rewriting the formula.

“There are a lot of ways to skin a cat,” Wagle said. “I personally believe our current formula for financing K-12 is broken. ... If the court’s going to focus on base state aid, then the Legislature better do the same.”

Republican lawmakers have long complained that they give more than base aid to the schools and they don’t get credit for that when the issue goes to court.

Rep. Steve Huebert, R-Valley Center, tried to advance that case last year with a bill that would have taken 10 percent of the local option budget and redefined it as base state aid. That would increase the base aid number without the Legislature having to spend more than it does now.

Huebert says it’s justified because it would give the state credit with the courts for general fund money that it adds to local option budgets of property-poor districts to help equalize their income with richer districts.

Huebert’s bill was put on hold by the House, pending the court decision. But it kept its place on the calendar, meaning it can be brought to the floor at any time.

“I still believe at the end of the day that is going to be a part of what happens,” he said.

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