Kansas Supreme Court justices grill state attorneys on school funding changes

Kansas Supreme Court Justice Marla Luckert, left, listens while Chief Justice Lawton Nuss asks a question during oral arguments in Gannon v. State of Kansas at the Kansas Supreme Court Friday, Nov. 6, 2015, in Topeka, Kan. The case, filed on behalf of several school districts, contends current school funding isn't equitable or adequate.

? Attorneys for the state of Kansas on Friday faced tough questions from the Kansas Supreme Court over recent changes in the school finance system, at one point forcing the state to admit it had no evidence to show that a new funding scheme enacted earlier this year is fair or equitable.

Those questions came during oral arguments in the equity portion of the ongoing school finance lawsuit, Gannon v. Kansas. That portion deals with how the state distributes so-called “equalization aid” for operating costs and capital expenses for the state’s 286 school districts.

In 2014, after an earlier Supreme Court order in the case, the Legislature added what was thought to be about $130-$140 million in equalization aid, money that subsidizes the local option and capital outlay budgets of lower wealth districts in order to hold down their property tax rates.

But because of changes in property valuation across the state, coupled with complexities in the funding formula, the price tag ended up being about $54 million higher than expected, prompting lawmakers to return this year and scrap the old funding formula and replace it with a system of block grants for the next two years.

In addition, lawmakers changed the way equalization aid is distributed, resulting in a net loss to many larger districts, including the Lawrence school district, which lost about $1.5 million, according to Superintendent Rick Doll.

In June, a three-judge panel in Shawnee County struck down those changes as unconstitutional. The state appealed that decision to the Supreme Court.

Some of the toughest questions came from Justice Dan Biles, a former attorney for the Kansas State Board of Education, who repeatedly asked attorneys for the state, “What evidence did the Legislature use to decide what it was doing would cure the inequities that were identified in (the first Supreme Court opinion)?”

“There are all kinds of school finance guys who will come in and say one thing or another,” Biles said. “My point is, you didn’t offer any evidence to support the characterization” that the new system is constitutional.

“That … was not supported by any expert opinion,” Arthur Chalmers admitted.

Chalmers was the lead attorney for the state throughout the trial of the case in 2012 and when it was remanded back to the trial court in 2014.

Kansas Supreme Court Justice Dan Biles asks a question during oral arguments in Gannon v. State of Kansas at the Kansas Supreme Court Friday, Nov. 6, 2015, in Topeka, Kan.

Representing the State of Kansas, attorney Art Chalmers argues his case in Gannon v. State of Kansas at the Kansas Supreme Court Friday, Nov. 6, 2015, in Topeka, Kan.

Once it was remanded, the state’s attorneys agreed, the burden of proof fell on the state to show that whatever changes they enacted complied with the court’s order, and that they met the constitutional standard of making sure all districts had substantially equal access to educational programs with substantially equal local tax rates.

The case began in 2010 after then-Gov. Mark Parkinson, a Democrat, began making deep, across-the-board budget cuts in the wake of collapsing state revenues brought on by the Great Recession. For a number of years after that, going into Republican Gov. Sam Brownback’s administration, the Legislature approved only flat funding to equalize local option budgets, despite rising costs. And it stopped funding equalization for capital outlay budgets altogether.

In 2014, the court said that created unconstitutional inequities between rich and poor districts. But it said the Legislature could solve that simply by fully funding those two formulas.

Justice Marla Luckert noted that while lawmakers did approve the funding that was suggested, it also changed the way that money is distributed.

“We need to look at both the structure and implementation,” she said. “In the remedy phase (of the case), the state chose to change the structure.”

Solicitor General Steven McAllister, a Kansas University law professor, argued that the Legislature made a “good faith effort”to comply with the court’s earlier order. And he argued that even if the new system is found unconstitutional, the court should give deference to the Legislature and give it time to come up with a solution.

Representing the State of Kansas, attorney Stephen McAllister argues his case in Gannon v. State of Kansas at the Kansas Supreme Court Friday, Nov. 6, 2015, in Topeka, Kan.

“Are you suggesting we should let an unconstitutional law go forward for two years while people work on it?” Biles asked.

Several of the justices also challenged a portion of the 2015 law that had received little attention previously, a “nonseverabiity” clause that says if any part of the new law is found unconstitutional, the entire funding system for public schools becomes null and void.

But the justices indicated that provision itself was probably unconstitutional because the Kansas Constitution requires the Legislature “to make suitable provision for the finance” of public education.

“Is it the state’s position that the day we say that (the new law is unconstitutional), the next day, the kids don’t go to school?” Biles asked.

“I don’t know that that would be the case,” McAllister replied. “Even if you assume you knock out the funding system, I would assume the schools have money. It may soon become an issue, but it would not be immediate that the schools would have to close, and many of them have substantial reserve funds as well.”

But Alan Rupe, lead attorney for the plaintiffs, said that should not be allowed.

“They can’t throw out a system and create an unconstitutional system,” he said.

“This needs to be fixed,” Rupe said at the opening of his arguments. “I’ve been before you eight times, and there is a pattern here in the times I’ve been before you.”

Attorney Alan Rupe, representing four Kansas school districts, makes a point during oral arguments in Gannon v. State of Kansas at the Kansas Supreme Court Friday, Nov. 6, 2015, in Topeka, Kan.

Rupe said that in the three major school finance lawsuits dating back to the early 1990s, the state has gone back on its promises to provide suitable funding and comply with court orders at least 10 times.

“We think that this has gone on quite long enough,” he said. “We are going to advocate that this court take prompt action. We ask the court to compel compliance with this court’s orders and with the Constitution.

The court has not indicated when it will rule, although it did put the case on an expedited schedule because it affects funding for the current school year.

In the spring, the court will hear oral arguments in the much larger portion of the case, challenging the overall adequacy of Kansas school funding, and the trial court’s ruling that the state may need to add as much as $500 million a year in new funding.