Kansas Supreme Court Declares School Funding Formula Constitutionally Inadequate, Gives Legislature Until June 30 to Enact New Constitutional Formula

Earlier this month, the Kansas Supreme Court issued an opinion in Gannon v. Kansas holding that the state’s current system of funding public education was inadequate under the state's constitution. The Court relied primarily on two points for its holding: (1) the state had cut the level of funding provided during the recent financial downturn leading to a decrease in the number of educational professionals and programs and (2) the performance of Kansas students while favorable overall, was less favorable for certain sub-groups. The Court gave the legislature four months to "satisfactorily demonstrate[] to this court that any [new] K-12 public education financing system the legislature enacts is capable of meeting the adequacy requirements of Article 6 [of the Kansas constitution.]"

History of the Gannon Litigation

The Gannon case began in 2010 when school districts and individual parents brought a lawsuit challenging the state’s school funding formula in Kansas state court. After a 16-day bench trial, a three-judge panel held that the state’s current funding formula was both inequitable and inadequate under Article 6 of the Kansas Constitution. In 2014, the Kansas Supreme Court affirmed on the issue of equity but found that the panel had applied the wrong standard for adequacy. According to the Court, the "adequacy component is met when the public education financing system provided by the legislature for grades K-12—through structure and implementation—is reasonably calculated to have all Kansas public education students meet or exceed the standards set out [by the Kentucky Supreme Court] in Rose [v. Counsel for Better Education, Inc.] and presently codified in" Kansas statutes. The Rose standards are:

1. Sufficient oral and written communication skills to enable students to function in a complex and rapidly changing civilization
2. Sufficient knowledge of economic, social, and political systems to enable the student to make informed choices
3. Sufficient understanding of governmental processes to enable the student to understand the issues that affect his or her community, state, and nation
4. Sufficient self-knowledge and knowledge of his or her mental and physical wellness
5. Sufficient grounding in the arts to enable each student to appreciate his or her cultural and historical heritage
6. Sufficient training or preparation for advanced training in either academic or vocational fields so as to enable each child to choose and pursue life work intelligently
7. Sufficient levels of academic or vocational skills to enable public school students to compete favorably with their counterparts in surrounding states, in academics or in the job market

The Supreme Court thus remanded the case to the three-judge panel for a determination under the adequacy standard set forth by the Court.

On remand, the three-judge panel found that the state’s funding formula was inadequate under the Rose test. Shortly thereafter, the Kansas legislature enacted the Classroom Learning Assuring Student Success Act (CLASS) which repealed the old funding formula. Under CLASS, school districts received block grants for the 2016 and 2017 fiscal years set at the level of funding supplied in fiscal year 2015. The Act was set to expire on June 30, 2017, by which time the legislature intended to have a new funding formula in place. The three-judge panel declared CLASS unconstitutional for the same reasons it declared the previous funding formula unconstitutional.

The Supreme Court’s Most Recent Opinion

The Kansas Supreme Court agreed with the three-judge panel that CLASS is constitutionally inadequate. First, the Court concluded that CLASS’s structure violates Article 6 of the Kansas constitution because it "does not profess to be a school finance formula." Instead, it was an interim measure that "merely fr[oze] the K-12 funding levels for fiscal years 2016 and 2017 at the levels for fiscal year 2015." The Court took issue with the fact that the interim provision was "only minimally responsive to financially important changing conditions such as increased enrollment, in general or by subgroup."

The Court next turned to whether CLASS’s implementation was unconstitutional. According to the Court, both inputs (funding) and outputs (student achievement) are relevant to whether the implementation of the Act was adequate. Looking at inputs, the Court reiterated its previous holding that "funds from all available resources, including grants and federal assistance, should be considered." Nonetheless, the Court found that there was substantial evidence to support the panel’s holding. The Court pointed to the state’s reduction in funding starting in 2009 (after the national economic downturn) as compared to the increase in student populations. According to the Court, the decreased funding caused districts to have to eliminate educational professionals and programs, including over 1,500 teacher positions (at a time that statewide enrollment was increasing). The Court endorsed the panel’s finding that these cuts "impacted other staff members and extracurricular functions of the K-12 system that are vital to the achievement of the Rose standards."

Turning to the issue of outputs, the Court recognized that overall, the performance of Kansas students on various tests compared favorably to the performance of students nationally. The Court went on, however, to examine the performance of specific subgroups—including African American students, Hispanic students, ELL students, disabled students, and poor students—finding that there was an "achievement gap" between these subgroups of students and students overall. The Court noted that a large percentage of students in these subgroups were not proficient in reading or math. In addition, the percentage of students in these subgroups that were not proficient had increased from the 2011-2012 school year to the 2015-2016 school year. The Court acknowledged that the state had changed proficiency standards starting in the 2012-2013 school year, thus potentially making comparisons to prior years awkward. But the Court determined that it need not "resolve these methodological concerns to a fine point” because "[n]o party [] challenged the [education] department’s ability or authority to adopt various standards or tests." The Court also examined ACT scores and graduation rates for some of the subgroups of students, and determined that an "achievement gap" was shown by those comparisons as well. Based on these "achievement gaps," the Court concluded that CLASS’s implementation was not constitutional.

Having found CLASS inadequate, the Court explained that the legislature would have until June 30, 2017—the date the Act was set to expire—to demonstrate to the Court than the any new funding formula that would take its place is constitutional. The Court warned that "if by June 30, 2017, the state has not satisfactorily demonstrated to this court that any K-12 public education financing system the legislature enacts is capable of meeting the adequacy requirements of Article 6, . . . then the state’s education financing system is constitutionally invalid and therefore void."