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A recent issue of State Court Docket Watch profiled an education finance case pending in the state of Kansas implicating important separation of powers principles. This case has since been decided by the Supreme Court of Kansas, with the issuance of a preliminary opinion, to be followed by a full opinion at a later date. In its decision, the Supreme Court affirmed part of a lower court decision finding the state legislature had not made suitable provision for education in the state. This case is one of many in which state courts are called upon to evaluate the adequacy of educational achievement and funding, and is representative of a muscular judicial branch that does not shy away from the political fray. This decision indicates state courts are willing, perhaps increasingly, to intervene in critical public policy decisions made by state legislatures about the allocation of public funds to varying state priorities.

Background

In 1999, two school districts and approximately three dozen students filed suit in the District Court of Shawnee County, Kansas, alleging the financing system established by the state legislature does not meet the Kansas Constitution’s requirement that the legislature “make suitable provision for finance of the educational interests of the state,” Art. 6, § 6(b), that it runs afoul of plaintiffs’ equal rights under the Kansas Bill of Rights, § 1, and violates their substantive due process rights. 

The plaintiffs challenged various elements of Kansas’ financing system, which, pursuant to the School District Finance and Quality Performance Act (“SDFQPA”), establishes a base rate for the minimum level of revenue a district will receive per pupil. The base rate set by the state is adjusted based on “weights” for various district and student characteristics deemed by the legislature to justify different funding levels. Examples of “weights” at issue in the case include adjustments for declining enrollment, new facility start-up costs, transportation, as well as the prevalence of students enrolled in vocational, bilingual and at-risk education programs. In addition to the “weights” that adjust per pupil revenues, the state allows districts to adopt a local option budget (“LOB”) to supplement their spending through an additional tax levy. This LOB is capped and districts raising too little funds per pupil statewide receive state supplemental aid. Finally, Kansas law authorizes, but does not require, school districts to assess property taxes that are separate from state funding mechanisms for certain capital expenditures. 

Plaintiffs alleged that these mechanisms resulted in unconstitutional disparities in educational expenditures per pupil between districts, and that the overall state level of funding failed to provide an adequate or suitable education for certain groups of students. The state defended the system by arguing that each category and weight was rationally related to a legitimate government purpose. The state conceded that the weights are not necessarily based on the actual costs attendant to any one particular student or district, but rather are based on legislative determinations about general characteristics and the different funding necessitated by those characteristics. The state further told the court that the LOB and local property tax mechanisms enacted by the state legislature promote the state’s legitimate interest in fostering local control over various aspects of education.

The Trial Court’s Decision

On September 8, 2003, Judge Terry Bullock issued a pretrial Memorandum Decision and Order laying out a series of legal conclusions that would frame the court’s analysis of the plaintiffs’ challenge after trial. See Montoy v. State, 2003 WL 23171455 (Kan. Dist. Ct., Sept 8. 2003) (“Pre-trial Order”). The Court elucidated standards for both prongs of the plaintiffs’ constitutional challenge to the school finance system: (1) equity, and (2) suitability. 

Critical to the equity analysis was the allocation of the burden under rational basis review. The court acknowledged that rational basis scrutiny applied to per pupil spending discrepancies, but found that that standard had been refined in U.S.D. No. 229 v. State, 256 Kan. 232 (1994) and an unpublished district court case, Mock v. State, Case No. 91-CV-1009, 31 WASHBURN L.J. 475 (Kan. Dist. Ct., Oct. 14, 1991) to shift the burden. Judge Bullock interpreted precedent to mean that “if challenged, the legislature must be prepared to justify spending differentials based on actual costs incurred in furnishing all Kansas school children an equal education opportunity.” Pre-trial Order, at Conclusion #18 (emphasis added). 

With respect to suitability, Judge Bullock stated in both his Pre-trial Order and his December 2 post-trial Memorandum Decision that he found no guidance in case law, the state constitution or statutes, or even in the State Board’s accreditation standards. “Accordingly, in the absence of any appellate court or even legislative suitability standard, this Court must craft one . . ..” Memorandum Decision and Preliminary Interim Order, Montoy v. Kansas, No. 99-C-1738, 2003 WL 22902963, at Conclusion #23 (Kan. Dist. Ct. Dec. 2, 2003) (“Memorandum Decision”). The Pre-trial Order explicitly disavowed the “objective criteria” preferred by some courts for determining the adequacy of states’ provision of education. Rather, the held that “a constitutionally suitable education (much like an efficient or an adequate education as provided for in the constitutions of our sister states) must provide all Kansas students, commensurate with their natural abilities, the skills necessary to understand and successfully participate in the world around them both as children and later as adults.”

After an eight day trial, on December 2, 2003, Judge Bullock found Kansas’ school funding system unconstitutional. He found for the plaintiffs under both of their theories: the system violated state and federal equal protection clauses because it permitted inter-district funding disparities unsupported by empirical evidence of actual differences in the cost of education in those districts; and, it violated the state constitution’s education clause because it failed to provide what the court considered adequate total resources to provide all Kansas children with a suitable education, as defined by the court.

He reasoned that such disparities could pass rational basis scrutiny “only if there are rational reasons that are based on actual increased costs necessary to provide children, or particular children, in that district with an equal educational opportunity. Again, the increased costs must be essential in providing the students in that district with educational opportunities equal to that provided to students in that and other districts.” Memorandum Decision, at Conclusion #21 (emphasis added).

As for the suitability challenge, the court concluded that the system failed to provide a constitutionally adequate education. In coming to this conclusion, Judge Bullock applied the non-objective standard he had formulated in his pretrial order, and relied heavily on a study commissioned by the state legislature in 2001. This study was an evaluation by consultants of “the cost of a suitable education for Kansas children.” K.S.A. 46-1225.

The Supreme Court’s Review

The sweeping remedial order entered by the district court in May 2004 was stayed pending appellate review. In August 2004 the Supreme Court of Kansas heard oral argument. A preliminary decision was issued on January 3, 2005, in which the court affirmed in part and reversed in part the District Court’s decision.

The supreme court rejected the district court’s equal protection findings, concluding that the district court had identified correctly, but misapplied the standard under rational basis scrutiny. Because the funding differentials provided by the state formula are rationally related to a legitimate purpose, the court concluded that the SDFQPA does not violate the equal protection clauses of the Kansas or federal Constitutions. With respect to the district court’s conclusion that the financing formula had an unconstitutional disparate impact on minorities and/or other classes, the supreme court noted that “to establish an equal protection violation on this basis, one must show not only that there is a disparate impact, but also that the impact can be traced to a discriminatory purpose.” Because no such purpose was shown, the SDFQPA could not be unconstitutionally based solely on disparate impact.

However, the supreme court affirmed the district court’s conclusion that the legislature had failed to meet its burden under Art. 6, § 6 of the Kansas Constitution to “make suitable provision for finance” of the public schools. Of the many interesting things about the court’s preliminary opinion, two stand out. First is the court’s analysis of the language of the Constitution, on which their preliminary decision heavily rests. Second, the practical implications of this decision are deeply troubling for the separation of powers in Kansas and elsewhere. 

First, the supreme court agreed with the plaintiffs that the state of Kansas does not make adequate financial provision for education. Before examining the factual record, the supreme court indicated it must first examine the standard for determining suitability: “First and perhaps foremost it must reflect a level of funding which meets the constitutional requirement that ‘the legislature shall provide for intellectual, educational, vocational and scientific improvement by establishing and maintaining public schools…’ The Kansas Constitution thus imposes a mandate that our educational system cannot be static or regressive but must be one which ‘advance[s] to a better quality or state.’” (emphasis in original) (quoting Kansas Const. art. 6, § 1 and Webster’s II New College Dictionary 551 (1997) (defining “improve”)). Thus, the supreme court interpreted the language of the state Constitution to require improvement in the system, rather than improvement of individual student’s intellectual, educational, vocational and scientific abilities, or the abilities of Kansas schoolchildren or residents as a whole. Using that standard, the supreme court then relied on the study commissioned by the legislature, which found that current funding levels were inadequate to meet legislatively-determined standards for suitability in the state. It is notable that the state maintained throughout the litigation that this standard, and the study performed to evaluate it, were never explicitly adopted by the legislature, but were merely meant to be advisory in assisting the legislature make policy determinations.The implications of the supreme court’s reasoning and decision are important beyond the obvious implications for separation of powers in Kansas. This decision will no doubt be studied and interpreted in the ongoing debate over both the adequacy of education financing in states across the country, and which branch of government is the most appropriate arbiter of that adequacy. As noted in the previous article on this case, state courts increasingly are called upon to evaluate the equality and adequacy of the education financing systems adopted by state legislatures, with results that carry weighty implications for the separation of powers – between branches of government as well as political subdivisions – within the states. In Montoy v. Kansas, the Kansas Supreme Court has indicated its willingness to become involved in these disputes, effectively predetermining legislative priorities for the use of taxpayer money and invalidating or modifying the state’s internal organization and distribution of power between localities and the statehouse. As more such education litigation is filed, litigated, and appealed, other state courts will take note of Kansas’ decision, and may follow suit.

* Megan Brown is an attorney practicing in Washington, D.C.

Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at info@fedsoc.org.