Kansas Trial Court Declares Funding System Unconstitutional
Court Relies on Costing-Out Study and Says "Money Matters"

On December 2, 2003, in Montoy v. State, the District Court of Shawnee County, Kansas, after a bench trial earlier this year and oral argument in November, declared the state education finance system unconstitutional. The Kansas legislature enacted the current funding scheme, the School District Financing and Quality Performance Act of 1992 (SDFQPA), in 1992, in response to the Mock v. State fiscal equity litigation, and the Kansas Supreme Court declared the legislation constitutional in Unified School District No. 229 v. State in 1994.

Backsliding and Inequities

Since 1994, however, the legislature has removed and amended key provisions of the 1992 law and added new provisions, the combination of which has led to funding disparities that now exceed 300%. Applying a "rational basis test" to the funding system, the court found the present scheme to be irrational and in violation of Article 6, the Education Article, of the state constitution due to "its failure to provide equity in funding for all Kansas children."

The Montoy plaintiffs also claimed that the funding system has an adverse disparate impact on students who are minorities or English language learners and those with disabilities. The court heard convincing testimony that most of these students attend school in the small number of urban school districts in Kansas and that those districts receive the least per-pupil funding, despite the fact that these students are more expensive to educate. Therefore, the court held that the funding system, as to these students, violates both Article 6 and the Kansas Constitution's equal protection clause.

Costing-Out Study and Inadequacy

In addition to alleging funding inequities, the Montoy plaintiffs also claimed that funding was inadequate to provide the "suitable education" guaranteed by the state constitution. The court heard testimony on a costing-out study conducted in 2001-2002 for the Legislative Coordinating Council. The study calculated the cost of providing a "suitable education" using both the professional judgment and successful schools methodologies.

For the study the state defined "suitable education" using required course offerings and other programs and services as "input" measures and percentages of students scoring satisfactory on reading and math assessments as "output" measures. The study concluded that "the funds provided to Kansas schools were $853 million short of adequate for a suitable education," as defined by the Legislature - over $1 billion, according to the court, when adjusted for inflation and for items excluded from the study, such as transportation and facilities.

Of Course Money Matters

The defendants argued that money doesn't matter in education, that "there is no correlation between spending and student learning." Dr. Eric Hanushek testified for the defendants, but, as summarized by the court, "testified that money spent wisely, logically, and with accountability would be very useful indeed. He concluded by agreeing with this statement: 'Only a fool would say money doesn't matter.'" (See the Hoke County v. State decision, from North Carolina, for this underlying quote regarding Dr. Hanushek's testimony in that case.)

Furthermore, the court heard testimony from Kansas educators who "almost with one voice, laid out the strategies necessary to teach the most challenging students." Their recommended strategies included:

Smaller class sizes
New learning strategies and professional development for teachers
More and better trained teachers
Principals who encourage innovation and reward achievement
Expanded learning times, and
Preschool.

The court also cited compelling evidence from the Dodge City school district, which received extra funding in the form of grants and used the money for some of these strategies to generate major achievement gains. The court declared: "'Money doesn't matter?' That dog won't hunt in Dodge City!"

NCLB

Defendants further asserted that any school meeting the "adequate yearly progress" (AYP) requirements of the federal "No Child Left Behind" (NCLB) law was providing a suitable education. Regarding this argument, the court referred to the fact that failure rates as high as 70.9% (in high school math) are adequate to meet the AYP requirement in Kansas at this time and said, "obviously, the attainment of such AYP status in no way indicates" a suitable education. Moreover, the court pointed out that the substantial achievement gaps for some groups of Kansas students, "if not corrected, will soon violate . . . No Child Left Behind."

July 1, 2004 Deadline

The court issued an interim order and set a deadline of July 1, 2004, to allow a full legislative session for "our Legislature and our state's chief executive [to] step up to the challenge to bring the Kansas school funding scheme into compliance" with the state constitution. The court provided remedial guidelines, which include making the funding system more equitable, more adequate (at a cost estimated to be over $1 billion more than the nearly $4 billion currently spent on Kansas's 467,000 K-12 students), and providing more resources for the school districts educating the state's most vulnerable students.

The court retained jurisdiction and plans to reconvene in July to review the actions taken to remedy the current constitutional violations.

Trends

The Montoy trial court's decision is consistent with trends in school funding litigations and remedial orders across the country. For many years, courts in most of these cases have concluded unequivocally that money matters in education, rejecting state defendants' assertions to the contrary. More recently, courts have also been relying on their state's own student learning standards to measure the quality of education available to and received by schoolchildren (e.g. Hoke County v. North Carolina; CFE v. New York; Lake View v. Arkansas; Hancock v. Driscoll (Massachusetts)), and they are more frequently ordering cost-based funding reforms.

Another trend that is causing controversy in states with declining rural populations, like Kansas, are proposals for state-imposed school and school district consolidations. Although the Montoy decision does not mention consolidation, rural communities in Kansas will become concerned if the state, in its efforts to remedy the constitutional violation, considers consolidating small rural schools. Visit the Rural Trust website for information on consolidation proposals and the advantages of small schools.

Prepared by Molly A. Hunter, December 2, 2003