What's the way forward?

Education leaders put on brave face in wake of Supreme Court ruling

Colorado education leaders say they will continue fighting for stronger education funding at the Capitol and perhaps at the ballot box following a Supreme Court ruling upholding the state’s current finance system.

But supporters of more funding face steep hurdles in their quest, based on the state budget situation and past history.

The Colorado Supreme Court on Monday rejected a constitutional challenge to the so-called negative factor, a formula the legislature uses to reduce annual school funding.

The decision in the Dwyer v. State lawsuit pretty much dashes the last hope for a sweeping fix to the tight funding situation that has vexed district leaders since 2010, when the negative factor was first used.

In that same time period, the Supreme Court has rejected two school funding lawsuits and voters defeated a proposed $1 billion tax increase to help support schools.

“K-12 is in for a bumpy ride,” said Tracie Rainey, executive director of the Colorado School Finance Project, a research organization.

Jane Urschel, deputy executive director of the Colorado Association of School Boards, had a slightly different take. Quoting the just-departed Yogi Berra, she said, “When you come to a fork in the road, take it. That’s where we are,” she added, saying education now faces “a short-term route and a long-term path” on funding.

The heart of the issue

School funding is driven by two things — Amendment 23 and a 1994 school finance law. The constitutional amendment, approved by voters in 2000, requires school funding to increase by enrollment growth and inflation every year.

Negative factor history
  • Fiscal year 15-16: $855.1M
  • FY14-15: $880M
  • FY13-14: $1.004B
  • FY12-13: $1.001B
  • FY11-12: $774M
  • FY10-11: $381M
  • FY09-10: $130M

The finance law divvies money up in two ways: Base funding, through which districts receive an equal amount per student, and factor funding, which gives districts varying amounts based on unique characteristics like size, number of at-risk students and staff cost of living.

Before the negative factor was created, the Amendment 23 formula was applied to both base and factor funding. The legal rationale behind the negative factor allows the formula to be applied only to the base, essentially allowing the legislature to reduce factor funding. Some argue the negative factor also has the effect of cutting the base.

It’s estimated use of the negative factor has cut school funding by about $5 billion since 2009-10. Support for basic school operating costs is about $6.2 billion this school year.

“The negative factor has had a devastating impact on school districts across Colorado,” said Lesley Dahlkemper, a member of the Jefferson County school board.

Does education face a “new normal?”

District leaders have been resisting the negative factor for five years, but some observers have concluded that tight funding is “the new normal” for schools. Opinions still differ in the wake of the court ruling.

“I don’t know how it’s not,” said Reilly Pharo Carter, executive director of Climb Higher Colorado, a group that advocates for high academic standards.

Others hope the situation will be temporary.

Milestones
  • 2000 – Amendment 23 passed
  • 2010 – A23’s 1 percent annual “bonus” expires; negative factor imposed
  • 2013 – Supreme Court rejects Lobato funding lawsuit; voters defeat $1 billion tax increase to help fund schools
  • 2014 – Despite intense lobbying, legislators make only modest trim in negative factor
  • 2015 – High court rejects Dwyer lawsuit

“We can’t allow it to be the new normal,” said Lisa Weil, executive director of Great Education Colorado, a funding advocacy group.

“We should not let anyone, legislators or the general public, think that because it’s the new normal it’s OK,” said Democratic state Sen. Andy Kerr of Lakewood, a Jeffco teacher and member of the Senate Education Committee. “We shouldn’t let anyone forget what the old normal was.”

Legislative prospects are dim

With the state courthouse door closed for now, education leaders are turning toward Urschel’s short-term route: the 2016 legislative session.

Advocates made a hard push to trim the negative factor in 2014 and tried again during the 2015 session. But lawmakers were able to make only small reductions.

“If we are serious about providing a high quality education to the students of Colorado, the legislature and the governor need to make increased school funding a high priority,” said Kerrie Dallman, president of the Colorado Education Association, the state’s largest teachers union.

But none of the more than a dozen education leaders interviewed by Chalkbeat Colorado are optimistic.

“I hold absolutely no hope that our funding problems might be solved by the governor or the legislature,” said George Welsh, superintendent of the Canon City schools and a long-time advocate for smaller districts.

“It is not realistic to think that the governor and legislature will be able to ‘buy down the negative factor’ in the next few years,” said Chris Watney, president of the Colorado Children’s Campaign.

The key problem is that refunds required by the Taxpayer’s Bill of Rights, a slowing of state revenue growth, automatic increases in base school funding and required support of transportation will leave lawmakers with little extra cash for the 2016-17 budget.

“There aren’t extra dollars, there is no unused pot of money and the legislature does not have the power to create more dollars by printing them, deficit spending or by raising taxes. Thus, lobbying ‘pressure’ won’t succeed here because it can’t,” said Republican Sen. Chris Holbert of Parker, a member of Senate Education.

“I think we’re going to be lucky to keep the negative factor where it is,” said Kathleen Gebhardt, a lead attorney for the plaintiffs in the Dwyer lawsuit.

Some people are looking to changes in the hospital provider fee for short-term relief. That fee is assessed on hospitals to attract higher federal Medicaid funding, with the money paid back out in Medicaid reimbursements. Even though it’s not a tax and can’t be spent for non-Medicaid purposes, the $800 million a year generated by the fee counts against the state’s TABOR revenue cap and helps trigger tax refunds.

Gov. John Hickenlooper wants lawmakers to reclassify the fee so it doesn’t count as state revenue. Doing so would free up money for state spending.

Many education leaders support the governor.

“It’s a short-term strategy that would give us some breathing room,” said Boulder Valley Superintendent Bruce Messinger, who has been a leading voice on school funding.

Hickenlooper was unsuccessful in selling the idea to the 2015 legislature and likely will face a challenge in 2016, particularly with majority Republicans in the Senate, who don’t want to roll back TABOR refunds.

Going to the ballot

The long-term path for education leaders is developing some sort of education-funding ballot proposal for voters.

“I think it’s very likely we’ll have to go to the ballot,” Weil said.

But no one is predicting yet what a ballot proposal would look like. Options include raising the state revenue ceiling, a dedicated tax increase for K-12 or tinkering with Amendment 23.

Constitutional thicket
A variety of constitutional and legal provisions affect the state budget, including:
  • Balanced budget – The state constitution requires this
  • Taxes – TABOR says tax rates can only be raised by voters
  • Revenue cap – The amount of money the state can spend in a year is limited by TABOR
  • Refunds – If revenue exceeds the cap, the excess must be refunded to taxpayers, or lawmakers can propose a ballot measure allowing the excess to be spent
  • Other spending – State Medicaid spending is driven partly by federal requirements, and state law requires transfers to transportation and construction under some circumstances

Kerr and others note a ballot proposal could be a tough sell.

“There are people who have been talking about it all along, but I don’t see any appetite for going back to the ballot at this point,” he said, alluding to voter rejection of a proposed tax increase for K-12 education in 2013.

Any ballot proposal also would reopen discussions within the education community about changing school finance formulas. Both education reform advocates and poorer districts argue the formulas are outdated and inequitable.

“Equity, accountability and innovation … should be top of mind as we look for answers,” Watney said.

Broader constitutional fixes are being discussed in other quarters.

A group of civic and business leaders named Building a Better Colorado is holding public meetings around the state and studying a possible list of constitutional changes, not just to the state budget.

If that group moves ahead with a proposal, it will have to consider education, Gebhardt believes.

“If you don’t have K-12 support it’s going to be very difficult,” she said, because any campaign will need the “boots on the ground” provided by teacher and parent groups.

One last lifeline

There is one other court case still pending that could affect education funding.

A 2011 federal court lawsuit filed by some legislators, other elected officials and private citizens argues that TABOR violates federal constitutional guarantees that states have “representative” forms of government – including legislatures with the power to tax.

The case hasn’t been tried while procedural issues are being considered by the federal courts.

Learn more about school finance in Chalkbeat’s archives

Future of Schools

CPS $1 billion capital budget hearings: Questions, demands, and mixed feelings

PHOTO: Elaine Chen
Community members gave passionate testimonies at a public hearing at Malcolm X College for the proposed capital budget.

Chicago Public Schools surprised many when it dropped its biggest facility spending plan a few weeks ago with a big “B”—that stands for billion—in the headline.

Considering that the district had planned to spend less than $200 million on capital needs for the 2018-2019 school year, this plan represents a five-fold increase. It relies largely on bonds to pay for building improvements and introduces new schools amid steadily shrinking enrollment, mostly in areas around gentrifying neighborhoods.

Divergent opinions surrounding the capital budget emerged at three concurrent community meetings CPS held Thursday night at City Colleges sites around Chicago: Malcolm X, Harry S. Truman, and Kennedy-King. The Chicago Board of Education is scheduled to vote on the district’s $7.58 billion budget, including the capital plan, on July 25.

At the Malcolm X meeting, CPS Senior Policy Advisor Cameron Mock presented a map showing capital budget projects distributed evenly throughout the city, but, as CPS Chief Financial Officer Jennie Bennett acknowledged, “not all projects are equal.”

Bennett explained that “the allocation of these projects were really in large part due to feedback about need.”

Chalkbeat mapped out the costliest capital projects, and found that the West side, particularly the Southwest side, received the smallest concentration of large investments.

The map shows investments in facility needs over $5 million, all programmatic investments, all investments in overcrowding relief, investments in site improvements over $500,000, as well as sites of the two new classical schools. The map does not show the two new schools in Belmont Cragin and the Near West Side, because the district has not yet specified exact locations. The district also has not yet identified schools for many of its capital projects, such as technology and facility upgrades. See the full plan here.

At Thursday’s hearings, parents from schools that did receive significant funding, such as Christopher Elementary School in Gage Park and Hancock High School in West Elsdon, expressed thanks. But others asked for for more investment.

Residents questioned the plan to build a new $70 million high school on the Near West Side. Lori Edwards, a Local School Council member at Crane Medical Prep on the Near West Side, said that Crane desperately needed air conditioning and heating, doors with windows, and security cameras.

“I’m surprised that we can’t just get basic things instead of building a new high school,” she said.

Questions also surrounded the $44 million assigned for a new elementary school in Belmont Cragin on the Northwest Side to address overcrowding. A sophomore at Prosser High School in Belmont Cragin asked for investment in her school instead. At Prosser, she said, “there needs to be reconstruction in the classrooms, the paint on the walls is falling off.”

Leticia Neri, a mother of two students at Camras Elementary School in Belmont Cragin, was wary of adding a school to the neighborhood. Her children used to attend Burbank Elementary, which is also in Belmont Cragin. When Acero Roberto Clemente, a charter school, opened just two blocks down in 2013, she said that Burbank lost pupils.

However, Mock said the proposed new school was a response to demand in Belmont Cragin. And in fact, several miles north in Uptown, where CPS’s Chief Operating Officer Arnie Rivera and other officials led a meeting Thursday, a handful of Belmont Cragin residents argued in favor of the school.

Parent Mariela Estrada said Belmont Cragin Elementary, which her 9-year-old attends,  is overcrowded. While the district’s formula doesn’t label any Belmont Cragin school overcrowded, the numbers paint a different picture. Belmont Cragin Elementary’s 414 students share a building with Northwest Middle School’s 545 pupils.

“I am really, really grateful right now for what we are getting,” she said.

The North Side, as the map above shows, will receive the most capital funding. Several attendees expressed gratitude for investments in area schools, especially a new ADA compliant gym at McCutcheon Elementary in Uptown, and an expanded test-in Decatur Classical School program in West Ridge, that will add seventh and eighth grades. Students have to test into the city’s five highly competitive classical schools, and hundreds are turned away every year.

Even so, not all North Side residents felt their schools would receive what they need, and many questioned CPS’ process for planning improvements.

A mother of a student at Schurz High School, in Old Irving Park, thanked CPS for a plans to install a new athletic field, but mentioned the school’s leaky roof, faulty heating system, green and black mold under carpets, and peeling paint in the auditorium. “It’s gross,” she said.

Parent Dawne Moon, said Kilmer Elementary School in Rogers Park is “not currently a safe environment.” Moon, a Local School Council member,  complained of rusted lockers, “bathrooms that smell like urine, even after they are cleaned,” temporary covers over holes in the roof that keeps water from pouring into classrooms, and of bricks falling from the ceiling in the school’s gym.  

“We can hope that the next brick doesn’t fall on a kid,” she said.

Betsy Vandercook, co-chair of the education committee at Network 49, a progressive neighborhood group based in Rogers Park, said schools in her neighborhood would get less than what adjacent communities like Edgewater and West Rogers Park would receive.

“Rogers Park is not, for whatever reason getting the same resources that many other North Side communities are getting,” she said about the capital budget proposal. “Take this back, look at it again, look at what is and isn’t needed.”

budget season

New budget gives CPS CEO Janice Jackson opportunity to play offense

PHOTO: Elaine Chen
Chicago Public Schools CEO Janice Jackson announced the district's $1 billion capital plan at Lázaro Cardenas Elementary School in Little Village.

Running Chicago’s schools might be the toughest tour of duty in town for a public sector CEO. There have been eight chiefs in a decade – to be fair, two were interims – who have wrangled with mounting debt, aging buildings, and high percentages of students who live in poverty.

Then there’ve been recurring scandals, corruption, and ethics violations. Since she was officially named to the top job in January, CEO Janice Jackson has had to clean up a series of her predecessors’ lapses, from a special education crisis that revealed families were counseled out of services to a sexual abuse investigation that spotlighted a decade of system failures at every level to protect students.

But with budget season underway, the former principal finally gets the chance to go on the offensive. The first operations budget of her tenure is a $5.98 billion plan that contains some good news for a change: 5 percent more money, courtesy of the state revamp of the school funding formula and a bump from local tax revenues. CPS plans to funnel $60 million more to schools than it did last school year, for a total of $3.1 billion. Put another way, it plans to spend $4,397 per student as a base rate — a 2 percent increase from the year prior.

CPS’ total budget comes out to $7.58 billion once you factor in long-term debt and an ambitious $1 billion capital plan that is the focus of a trio of public hearings Thursday night. When it comes to debt, the district owes $8.2 billion as of June 30, or nearly $3,000 per every Chicago resident.

“The district, without a doubt, is on firmer footing than it was 18 months ago, but they’re not out of woods yet,” said Bobby Otter, budget director for the Center for Tax and Budget Accountability. “When you look at the overall picture (the $7.58 budget), they’re still running a deficit. This is now the seventh year in a row they are running a deficit, and the amount of debt the district has, combined with the lack of reserves, leaves them with little flexibility.”

Earlier this week, standing in front of an audience of executives at a City Club of Chicago luncheon, Jackson acknowledged that it had been an “eventful” seven months and said she was ready to focus on strategies for moving the district forward. “I won’t be waiting for next shoe to drop or wasting time and resources waiting for next problem. I want to design a system to educate and protect children.”

“I’m not in crisis mode,” she added.

Here’s what that looks like in her first year when you just consider the numbers. The biggest line items of any operating budget are salaries, benefits and pensions: Taken all together, they consume 66 percent of CPS’ planned spending for the 2018-2019 school year. Rounding out much of the rest are contracts with vendors ($542.6 million, or 9 percent), such as the controversial janitorial deals with Aramark and SodexoMAGIC; charter expenditures ($749 million, or 13 percent); and spending on transportation, textbooks, equipment, and the like (12 percent).

A closer look at how some of those items are allocated offers a window into Jackson’s vision. The Board of Education is scheduled to vote on the plan July 25.

Investing in choice

Earlier this month, the district announced a nearly $1 billion capital plan, funded by bonds, that would support new schools, technology upgrades, and annexes at some of the district’s most popular campuses. The operating budget, meanwhile, accounts for the people and programs driving those projects. It proposes nearly doubling the staff, from 10 to 17, in the office that manages charters, contract programs, and the creation of new schools. It reestablishes a chief portfolio officer who reports directly to the CEO. And it adds expands access to International Baccalaureate programs and Early College STEM offerings. In a letter at the beginning of the 2019 Budget Book, Jackson said such expansions “move the district closer to our goal of having 50 percent of students earn at least one college or career credential before graduating high school.” 

Advocating for students

The budget seeds at least two new departments: a four-person Office of Equity charged with diversifying the teacher pipeline, among other roles, and a 20-person Title IX office that would investigate student abuse cases, including claims of student-on-student harassment.

Leaning into high schools

Fitting for a budget designed by a former high school principal – Jackson was running a high school before age 30 – the plan leans in to high schools, establishing $2 million to fund four new networks to oversee them. (That brings the total number of networks to 17; networks are mini-administrative departments that track school progress, assist with budgeting, and ensure policy and procedures are followed.) And it earmarks $75 million across three years for new science labs at neighborhood high schools. What’s more, it supports 10 additional career counselors to help campuses wrestle with a graduation mandate – set forth by Mayor Rahm Emanuel – that seniors have a post-secondary plan to graduate starting with the Class of 2020.

Throwing a lifeline to small schools

The budget also sets forth a $10 million “Small Schools Fund” to help schools with low enrollment retain teachers and offer after-school programs. It also earmarks an additional $5 million to help schools facing precipitous changes in enrollment, which can in turn lead to dramatic budget drops.   

Supporting modest staff increases

After a round of layoffs were announced in June, the budget plan adds at least 200 teachers. But the district would not provide a clear accounting of whom to Chalkbeat by publication time. Earlier this week, it announced plans to fund additional school social workers (160) and special education case managers (94).

The district plans to add positions for the upcoming 2018-2019 year.

As Chicago Teachers Union organizer and Cook County Commissioner candidate Brandon Johnson pointed out in an impromptu press conference earlier this week in front of district HQ, the budget is still “woefully short” on school psychologists, nurses, and counselors. And it doesn’t address the calls from parents to restore librarians and instructors in such subjects as art, music, physical education — positions that have experienced dramatic cuts since 2011. “What is proposed today still leaves us short of when (Mayor Emanuel) took office,” Johnson said. “The needs of our students must be met.”

Principal Elias Estrada, who oversees two North Side schools, Alcott Elementary and Alcott High School, said he was still figuring out how the additional staffing would work. He’s getting another social worker – but he oversees two campuses that sit three miles apart, so he figures he’ll have to divide the person’s time between campuses. Estrada asked the board at Monday’s budget hearing to help him understand the criteria it uses to determine which schools get extra staff or additional programs, like IB. “I need a counselor, a clerk, and an assistant principal,” he said; currently those positions also are shared between the elementary and the high school.

After the meeting, he said that schools might have gotten slightly bigger budgets this year, but the increase was consumed by rising salaries and he wasn’t able to add any positions. What’s more, his building needs repairs, but it didn’t get picked for any of the facilities upgrades in the $1 billion capital plan that accompanied the budget.

“What is the process?” he asked. “The need is everywhere.”

At two public hearings on Monday, fewer than a dozen speakers signed up to ask questions of the board, central office administrators, or Jackson.

To see if your school is getting one of the newly announced positions or any funding from the capital plan, type it in the search box below.