12/19/2011

School Funding Victory for Plaintiffs in Colorado

On December 9, 2011, the District Court for Denver County, Colorado issued a 183-page judgment in favor of the plaintiffs in Lobato, et al. v. The State of Colorado, et al., Case No. 2005CV4794. Plaintiffs claimed that the existing school funding formula violated the Colorado Constitution because it failed to provide for a "thorough and uniform" public education system, and further argued that the finance statutes failed to provide the financial resources needed for school boards to exercise local control. After exhaustively recounting the evidence presented at trial, the court concluded that Colorado's "entire system of public school finance . . . is not rationally related to the mandate of the Education Clause" and ordered that the system "be revised to assure that funding is rationally related to the actual costs of providing a thorough and uniform system of public education." Finding that such a revision was a legislative and executive function in the first instance, the court opted to "provide the legislature with an appropriate period of time to change the funding system so as to bring the system in compliance with the Colorado Constitution."

Colorado employs a standards-based approach to student achievement. Under this theory, compliance with "a fully aligned set of academic content standards, programs of instruction, and standardized assessments applicable to all students across the state" should result in increased student proficiency. The court did not condemn this methodology, but nevertheless opined that "the public school finance system has failed to respond to the increasing resource needs driven by standards-based education." The court stated that "[a]t the very least, the public school finance system must be rationally related to accomplishing the requirements of the State's own standards-based education and education accountability systems . . . ."

The court further criticized the State for implementing a funding system that "has never been designed or funded on the basis of the known or knowable cost of providing a constitutionally adequate system of public education." Relying heavily on a study conducted by Augenblick, Palaich and Associates, Inc. that purported to quantify the cost of providing a "thorough and uniform" education, the court concluded that Colorado was underfunding its public education system by up to $3.58 billion dollars. The court explained that this disparity prevented districts from hiring effective teachers, providing resources needed to satisfy Colorado's standards, maintaining adequate facilities and addressing the specialized needs of under-served student populations. The court asserted that school districts "have the knowledge necessary to improve performance and meet the constitutional and statutory standards, but they are prevented from doing so by the deficiencies in the school finance system." Accordingly, the court held the "State and Board of Education have defaulted in their constitutional responsibility to align the school finance system to the mandates of the Education Clause," such that "Colorado public school children are not receiving the thorough and uniform educational opportunities" required by the Constitution.

Moreover, the court found that districts could not exercise local control "because all of [the districts'] resources go to meeting state requirements as opposed to the specific needs of their communities. There is no funding left over to provide programs important to their communities." The court felt that the existing school finance laws usurped local decision-making authority and prevented school boards from implementing policy at the local level, as required by the Colorado Constitution. The court opined that "districts are left to meet 21st century education standards with 1980s funding and it cannot be done." As such, the court held that the funding system "prevents school districts from implementing the Education Clause mandate at a local level in violation of the local control mandates" in the Colorado Constitution.

Ultimately, the court ordered the State to "design, enact, fund and implement a system of public school finance that provides and assures that adequate, necessary and sufficient funds are available in a manner rationally related to accomplish the purposes of the Education Clause and the Local Control Clause." However, the court stayed the enforcement of this relief "in order to provide the State with a reasonable time to create and implement a system of public school finance that meets the mandates of the Education Clause and Local Control Clause." The stay will remain in effect until the Colorado Supreme Court's final disposition of any appeal or the conclusion of the 2012 legislative session.

Stinson Morrison Hecker LLP attorneys have extensive experience successfully litigating all forms of education litigation, including constitutional challenges and school funding lawsuits. Please contact John Munich at jmunich@stinson.com or 314-259-4555 for additional information.