Gannon v. State

• Citation: 402 P.3d 513,306 Kan. 1170
• Decision Date: 02 October 2017
• Docket Number: No. 113,267.,113,267.
• Parties: Luke GANNON, by his Next Friends and Guardians, et al., Appellees, v. STATE of Kansas, Appellant.
• Court: United States State Supreme Court of Kansas

306 Kan. 1170

402 P.3d 513

Luke GANNON, by his Next Friends and Guardians, et al., Appellees,

v.STATE of Kansas, Appellant.

No. 113,267.

Supreme Court of Kansas.

Opinion filed October 2, 2017

Stephen R. McAllister, solicitor general, argued the cause, and Jeffrey A. Chanay, chief deputy attorney general, M.J. Willoughby, assistant attorney general, Dwight R. Carswell, assistant solicitor general, Bryan C. Clark, assistant solicitor general, and Derek Schmidt, attorney general, were with him on the briefs for appellant State of Kansas; Arthur S. Chalmers and Jerry D. Hawkins, of Hite, Fanning & Honeyman, LLP, of Wichita, were with him on the briefs for appellant State of Kansas; and Jeffrey R. King, special assistant attorney general, argued the cause for appellant State of Kansas.

Alan L. Rupe, of Lewis Brisbois Bisgaard & Smith LLP, of Wichita, argued the cause, and Jessica L. Skladzien, of the same firm, and John S. Robb, of Somers, Robb & Robb, of Newton, were with him on the briefs for appellees.

Jeffrey R. King, of Collins & Jones, P.C., of Overland Park, was on the brief for amicus curiae Legislative Coordinating Council.

Per Curiam:

This is the fifth school finance decision involving these parties and Article 6 of the Kansas Constitution, which imposes a duty on the legislature to "make suitable provision for finance of the educational interests of the state." Kan. Const. art. 6, § 6 (b). The plaintiffs filed suit in 2010 asserting that the State violated this constitutional requirement by inequitable and inadequate funding of K–12 public education. A three-judge panel determined in 2013 after a trial that through K.S.A. 72-6405 et seq . (School District Finance and Quality Performance Act or SDFQPA) the State had inequitably and inadequately funded education for years in violation of Article 6.

A series of other panel decisions, legislative enactments, and four decisions by this court followed. In the latest of those decisions, filed in March of this year, we held that the 2015 legislative replacement for a by-then-repealed SDFQPA—the Classroom Learning Assuring Student Success Act (CLASS)—was constitutionally inadequate in both structure and implementation. Evidence showed that not only was the State failing to provide approximately one-fourth of all its public school K–12 students with the basic skills of both reading and math, but that it was also leaving behind significant groups of harder-to-educate students. And substantial competent evidence showed that the student performance reflected in this evidence was related to funding levels. We stayed the issuance of our mandate to provide the legislature an opportunity to bring the state's education financing system into compliance with Article 6 of the Kansas Constitution, cautioning that any remedy should also comport with equity. Gannon v. State , 305 Kan. 850, 855–56, 390 P.3d 461 (2017) ( Gannon IV ). The legislature responded by passing Senate Bill 19.

We now face the following question: Based upon the issues the parties brought before us, has the State met its burden of showing that this remedial legislation meets Article 6's adequacy and equity requirements? We hold the State has not. Even though S.B. 19 arguably makes positive strides, the state's public education financing system still has not been shown by the State to be "reasonably calculated to have all Kansas public education students meet or exceed the standards set out in Rose [v. Council for Better Educ., Inc. , 790 S.W.2d 186 (Ky. 1989) ] and presently codified in K.S.A. 201[6] Supp. 72-1127." Gannon v. State , 298 Kan. 1107, 1170, 319 P.3d 1196 (2014) ( Gannon I ) (articulating the test for adequacy). Additionally, that system, through its structure and implementation, is not providing school districts with "reasonably equal access to substantially similar educational opportunity through similar tax effort." 298 Kan. at 1175, 319 P.3d 1196 (articulating the test for equity).

Given these conclusions, we next consider remedy. As we acknowledged in Gannon IV , "Our general practice with previous school finance decisions has been to retain jurisdiction and continue to stay ... our own mandate to provide the legislature an opportunity to bring the state's education financing system into compliance with Article 6 of the Kansas Constitution. [Citations omitted.]" 305 Kan. at 856, 390 P.3d 461. We essentially continue that practice today for the same reasons cited in Gannon IV , i.e. , because the State has twice demonstrated its ability to cure constitutional infirmities recognized by this court in the school finance system. 305 Kan. at 856, 390 P.3d 461 ; see Montoy v. State , 282 Kan. 9, 24–25, 138 P.3d 755 (2006) ( Montoy IV ) (legislature's efforts in 2005 and 2006 constitute substantial compliance with prior orders; appeal dismissed); Gannon v. State , No. 113,267 (order dated June 28, 2016) (unpublished) (finding legislation cured equity constitutional infirmities in Gannon litigation for the 2016–2017 school year).

Once legislation is enacted, the State will have to satisfactorily demonstrate to this court by June 30, 2018, that its proposed remedy brings the state's education financing system into compliance with Article 6 of the Kansas Constitution regarding the violations identified, i.e. , both adequacy and equity. For those purposes, the State will continue to bear the burden of establishing such compliance and explaining its rationales for the choices made to achieve it. 305 Kan. at 856, 390 P.3d 461 (citing Gannon v. State , 303 Kan. 682, 709, 368 P.3d 1024 [2016] [ Gannon II ], which held that the party asserting compliance with a court decision ordering remedial action bears the burden of establishing that compliance).

Staying the issuance of our mandate until June 30 is consistent with our general practice. But we also "must heed our duty to ensure Kansas students receive the education system guaranteed them by the Constitution." Gannon II , 303 Kan. at 744, 368 P.3d 1024. Without counting today's decision, the education financing system has been judicially declared to be inadequately funded for at least 12 of the last 15 years—through school year 2016–2017. So after June 30, 2018, " 'the demands of the Constitution cannot be further postponed.' " 303 Kan. at 744, 368 P.3d 1024 (quoting Edgewood Independent School Dist. v. Kirby , 804 S.W.2d 491, 498 [Tex. 1991] ). We agree with the Wyoming Supreme Court: " '[S]taying the judicial hand in the face of continued violation of constitutional rights makes the courts vulnerable to becoming complicit actors in the deprivation of those rights.' " 303 Kan. at 739, 368 P.3d 1024 (quoting State v. Campbell County School Dist. , 2001 WY 90, ¶ 33, 32 P.3d 325 [2001] ).

The State will have ample time and opportunity, whether by regular legislative session, special session, or a combination thereof, to bring the system into constitutional compliance so that we can make such a judgment—by that date.

Historical perspective

The parties agree that the framework of S.B. 19 is essentially based on the SDFQPA that existed for approximately 23 years. Accordingly, it is helpful to revisit the history set forth in Gannon IV , 305 Kan. at 876–80, 390 P.3d 461, and supplement it with later developments.

U.S.D. No. 229

Since 1992, the SDFQPA had established the formula and mechanism through which most funds for K–12 public education were obtained by Kansas school districts. See U.S.D. No. 229 v. State , 256 Kan. 232, 275, 885 P.2d 1170 (1994) (upholding the constitutionality of SDFQPA as originally enacted and implemented). The formula provided a fixed amount of funding for each student through "base state aid per pupil," also known as BSAPP. A district's full-time equivalent enrollment was adjusted by adding various weightings based on the proven recognition that the needs of some students require more resources for their education than others. These included such things as low enrollment, special education, vocational, bilingual education, and at-risk student weighting factors, which added funds for those needs. Once a school district's enrollment was adjusted per the weightings, that figure was multiplied by the BSAPP. The resulting product was the amount of state financial aid to which the school district was entitled.

Funding for the BSAPP was derived from two sources: local effort and state financial aid. The majority of school districts' local effort consisted of property tax funds, as each district was statutorily required to impose a mill levy—20 mills per K.S.A. 2016 Supp. 72-6470 —upon taxable tangible property in its territory. Because property values vary widely throughout the state, the amount of money each district could raise by the required mill levy also varied widely. So the State provided additional funds to less wealthy districts through "general state aid."

If a district's local effort funds equaled its state financial aid entitlements, it received no additional money from the State, i.e. , general state aid. And if a district's local effort funds exceeded its state financial aid entitlement, the excess was remitted to the State. For those districts qualifying for general state aid, their amount was what remained after subtracting their local effort funds from their state financial aid entitlement.

Local effort and state financial aid—as calculated using BSAPP and enrollments—comprised most of the funds available for K–12 education. But school districts could access additional funds in several ways.

First, a local school board could impose an additional mill levy on property in its district to fund a local option budget (LOB) to augment the funds that were distributed through the BSAPP. The revenues produced by the LOB mill levy could not exceed an amount equal to a set percentage or "cap"—historically as low as 25%—of a district's state financial aid. K.S.A. 72-6433(b)(9)(B). After application of a statutory formula, in order to account for...