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

grand bargain

Colorado lawmakers think they can still find a school finance fix that eluded them for two years

Two years ago, Colorado lawmakers established a special committee to dig deep into the state’s complex school finance problems and propose legislation to fix at least some of them.

Near the end of their tenure, instead of proposing solutions, lawmakers are asking for more time.

If a majority of legislators agree to keep the committee going, its work will take place in a new political environment. For the past four years, Democrats have controlled the state House and Republicans have controlled the state Senate. The makeup of the committee reflected that partisan split. Now Democrats control both chambers, and they ran on an agenda that included increasing funding for education.

But Amendment 73, a tax increase that would have generated $1.6 billion for schools, failed, leaving lawmakers with roughly the same pot of money they had before.

School district and union leaders have warned against changing the way the state distributes money to schools unless there’s more money in the system. Otherwise, efforts to make the formula fairer will end up reducing funds to some districts. Put another way: They want a bigger pie, not different-sized pieces of the same pie. But Colorado voters didn’t bake a bigger pie.

For state Rep. Alec Garnett, the Denver Democrat who serves as vice chair of the committee, that’s an indication lawmakers need to develop a bipartisan proposal that voters would pass.

“We are where we are because none of the ideas have been right,” he said. “The ideas that have been brought forward have been rejected by the legislature and by the people of Colorado. It’s really important that this committee be seen as the vehicle that will get us a solution.”

Republican state senator-elect Paul Lundeen, the committee chair, said he sees broad consensus that Colorado’s school finance formula needs to put the needs of students rather than districts first.

“I’m an optimist,” he said. “I believe we will achieve a formula that is more student-centered.”

State Sen. Rachel Zenzinger, an Arvada Democrat, agreed that a bipartisan approach is important to showing voters that “all voices were heard,” but she also pointed to a political landscape that has changed. The committee should be bipartisan, she said, “as long as we are able.”

Not everyone thinks it makes sense to keep going.

We obviously support improving our school finance formula and appreciate the work and discussions of the committee, but without meaningful new money, we don’t believe in creating winners and losers,” said Amie Baca-Oehlert, president of the Colorado Education Association, the state’s largest teachers union. “This is a new day. It’s time to get fresh perspectives from a new legislature. We believe the committee should not continue and is outdated. It is no closer to real funding solutions than when it started two years ago.”

A representative of the Colorado Association of School Executives, which represents superintendents, said the organization would take up this question with its members later in the month.

Discussions among lawmakers on the committee have been frustrating and circular at times, with consensus elusive not only on the solutions to the problem but on which problem is the most important to address. A consulting firm that worked with the committee for most of that two-year period ultimately failed to produce the simulation model lawmakers hoped to use to test new funding formulas because a key staff member left. Then decisions got put on hold to see how the election would turn out.

Legislators said the last two years of work have not been a waste at all but instead have laid the groundwork for coming discussions. They put on an optimistic face.

“The key is bipartisanship across the board,” Garnett said. “If Republicans and Democrats and the General Assembly say to voters, ‘Here is how we want to change the formula, but we need your help,’ that is the Colorado way.”

Garnett said those who have been at the table so far — a reference to school district superintendents who brought their own proposal last year — cannot continue to control the conversation.

“The tables have not been big enough to get support,” he said. “We can’t do this alone, but no one else can do it alone either.”

The committee unanimously supported an extension, but could disagree at the next meeting, set for mid-December, on changing the makeup or scope of the committee. Right now, it has five Democrats and five Republicans, with five members from the House and five from the Senate.

The original authorizing legislation was extremely broad. Zenzinger said it might make sense to set aside issues about which there has been stalemate. That would give Republicans less room to press their priorities.

Also in the mix: governor-elect Jared Polis has made his own education promises, especially funding full-day kindergarten. Some people question whether that’s the best use of scarce education dollars, which they might like to spend on special education or expanding preschool.

Garnett said he doesn’t think asking voters for more money is off the table, but it should be part of a broader conversation about changing constitutional limits on the growth of Colorado’s budget. A new formula could be created with a trigger, should voters agree to that change.

“This challenges everyone,” he said. “It requires Republicans to dig into the crisis, and it requires Democrats to dig into what needs to happen at the classroom level.”

school facilities

Cold temps close Memphis state-run schools, highlighting bigger issue of repairing costly, aging buildings

PHOTO: Caroline Bauman
Georgian Hills Achievement Elementary was one of four school closed Tuesday due to heating issues.

More than 1,200 students in Tennessee’s turnaround district stayed home from school on Tuesday because their school heating systems weren’t working properly.

Temperatures dipped below 35 degrees, and four schools in the Achievement School District opted to cancel classes because of boiler issues: Georgian Hills Achievement Elementary School, Frayser Achievement Elementary School, Corning Achievement Elementary School, and Martin Luther King Jr. High School. In addition, Kirby Middle School decided to close Wednesday.

Aging school buildings in Memphis have caused headaches and missed school time for Shelby County Schools and the Achievement School District, which occupies buildings rent-free from the local district. Just last week, Hamilton High School in Shelby County Schools closed for two days after a power outage caused by heavy rain, and Kirby High School remains closed because of a rodent infestation. Kirby’s students are being housed in different schools for the rest of the semester while repairs are made to rid the school of pests. And Shelby County Schools had to deal with the dropping temperatures on Tuesday as well, with Westwood High School and Oak Forest Elementary ending classes early due to their own heating issues. Westwood High will remain closed Wednesday.

But Tuesday’s closures for state-run schools point to a larger issue of facilities: In a city full of older school buildings needing expensive updates, who pays, and who does the work? There is a formal maintenance agreement between the two districts, but the lines that divide responsibilities for repairs are not always clear.

Shelby County Schools is responsible for bigger fixes in the state district, such as new roofs or heating and air conditioning systems, while the state district’s charter operators are responsible for daily maintenance.

Bobby White, chief of external affairs for the Achievement School District, said they are working with Shelby County Schools to resolve the heating problem at the three elementary schools, two of which share a building. But he said that the issues won’t be fixed by Wednesday, and the schools will remain closed.

“We know it throws off our teachers and students to miss class,” White said. “It’s an unfortunate situation. And it underscores the larger issue of our buildings not being in good shape.”

The charter organization Frayser Community Schools runs MLK Jr. High School as part of the Achievement School District, and a spokeswoman for Frayser said they were handling the boiler repairs on their own as opposed to working with Shelby County Schools. School will remain canceled at the high school on Wednesday.

“Currently our maintenance team is working with a contracted HVAC company to rectify the heating issue,” Erica Williams told Chalkbeat. “Unfortunately, it was not resolved today, resulting in school being closed Wednesday. While our goal is to have school as soon as possible, we want to make sure it’s in a comfortable environment for our students.”

The state district was created in 2012 to turn around the state’s lowest-performing schools by taking over local schools and giving them to outside charter organizations to run. Shelby County Schools has a crippling amount of deferred maintenance for its school buildings, including those occupied by the state district, that would cost more than $500 million. The Shelby County district prioritizes how to chip away at that huge cost based on how many children are affected, the condition of the building, and the type of repair, spokeswoman Natalia Powers told Chalkbeat, adding that the district has made some major repairs at state-run schools.

But Sharon Griffin, chief of the Achievement School District told Chalkbeat previously that one of her goals is to resolve problems more quickly with Shelby County Schools when a major repair is needed to avoid lost class time.