TAOS MUN. SCHOOLS CHARTER SCHOOL v. Davis

• Decision Date: 03 September 2004
• Docket Number: No. 23,940.,23,940.
• Citation: 136 N.M. 543,102 P.3d 102
• Parties: TAOS MUNICIPAL SCHOOLS CHARTER SCHOOL, Plaintiff-Appellee/Cross-Appellant, v. Michael J. DAVIS, New Mexico State Superintendent of Public Instruction, in his official capacity, Defendant-Appellant/Cross-Appellee.
• Court: Court of Appeals of New Mexico

102 P.3d 102

136 N.M. 543

TAOS MUNICIPAL SCHOOLS CHARTER SCHOOL, Plaintiff-Appellee/Cross-Appellant, v. Michael J. DAVIS, New Mexico State Superintendent of Public Instruction, in his official capacity, Defendant-Appellant/Cross-Appellee.

No. 23,940.

Court of Appeals of New Mexico.

September 3, 2004.

Certiorari Denied October 25, 2004.

Ronald J. VanAmberg, Roth, VanAmberg, Rogers, Ortiz, Fairbanks & Yepa, L.L.P., Santa Fe, NM, Robert J. Malone, Taos, NM, for Appellee/Cross-Appellant.

Patricia A. Madrid, Attorney General, David A. Stevens, Assistant Attorney General, Santa Fe, NM, for Appellant/Cross-Appellee.

Certiorari Denied, No. 28,904, October 25, 2004.

OPINION

PICKARD, Judge.

{1} Taos Municipal Schools Charter School (TCS), which consists of two facilities located ten miles apart, each housing different grades of students, sought classification as two "public schools" so that it could secure additional funds that the State Department of Public Education (the State) offers to small schools. The State decided not to classify TCS as two "public schools," and TCS filed suit. The district court granted a declaratory judgment stating that TCS is two "public schools," each of which is entitled to the additional funds. The court also issued an injunction ordering the State to pay TCS the funds to which it would be entitled when its program costs were recalculated. The State appealed this decision. TCS cross-appealed the district court's decision not to issue a writ of mandamus and its decision not to award pre-judgment interest. Holding that TCS is not two "public schools" for funding purposes, we reverse the district court's decision. Accordingly, we need not decide the issues that TCS raises on cross-appeal.

FACTS AND PROCEEDINGS

{2} TCS is a charter school that is part of the Taos Municipal School District (the District). In its agreement with the District (the charter), TCS set out its plan for administration and curriculum. The charter consistently refers to TCS as a school, as opposed to multiple schools. TCS has one chief administrator, one governing council, and one curriculum.

{3} As TCS moved toward opening, it encountered difficulty in finding one facility that would provide adequate space for grades kindergarten through eight. TCS decided to operate in two facilities at two different sites about ten miles apart. The Randall Lane site houses grades kindergarten through four. The Arroyo Seco site houses grades five through eight.

{4} When TCS initially contacted the State to determine the budget, a state employee suggested that the two facilities would be eligible for additional funds because each would be treated as a separate school, with each meeting the criteria for the size adjustment factor in funding calculations. Later, the State informed TCS that the two facilities would not be considered two separate schools and that TCS would not meet the criteria for the adjustment. This resulted in an estimated 25% decrease in TCS's entire budget. Although TCS initially pursued an estoppel claim based on these two different representations, it does not seek review of the estoppel claim on appeal.

{5} TCS filed suit in the district court seeking a declaratory judgment that TCS was eligible for the size adjustment, a writ of mandamus to force the State to make the adjustment, an injunction to compel the State to pay the school the additional funds from the size adjustment, and pre-judgment interest on those funds. After the parties filed cross-motions for summary judgment and the State filed a motion to dismiss, the district court held a hearing. The district court decided that TCS was two public schools for purposes of funding calculations, and it issued a declaratory judgment and injunction against the State. It did not award pre-judgment interest.

DISCUSSION

1. Jurisdiction

{6} The State argues for the first time on appeal that the district court had no jurisdiction to hear TCS's claim for declaratory relief because there was no waiver of sovereign immunity. We review jurisdictional issues de novo. Weddington v. Weddington, 2004-NMCA-034, ¶ 13, 135 N.M. 198, 86 P.3d 623. In this case, however, neither party has thoroughly briefed this issue. Because a decision on this jurisdictional issue is not necessary in light of our ruling on the merits in favor of the State, we will address the merits of the district court's declaration and leave the complex and interesting issue of jurisdiction to another day.

2. Is TCS Two "Public Schools" for Funding Purposes?

{7} This case requires us to interpret the statutes governing public school funding and charter schools. We review issues of statutory interpretation de novo. Bd. of Comm'rs of Dona Ana County v. Las Cruces Sun-News, 2003-NMCA-102, ¶ 19, 134 N.M. 283, 76 P.3d 36. Our goal is to ascertain legislative intent, which is primarily indicated by the plain language of the statute. Id. When the statute's language is clear and unambiguous, we give the statute its plain meaning. Id.

a. Charter Schools

{8} The Public School Code, codified at Chapter 22 of our statutes, includes the 1999 Charter Schools Act. NMSA 1978, §§ 22-8B-1 to -15 (1999, as amended through 2003). Charter schools fulfill a variety of goals, including the facilitation of innovative teaching styles, the creation of new opportunities for teachers, and the increased interaction of schools and the communities they serve. Section 22-8B-3. Charter schools are responsible for their own operation and are largely held to the same standards as other public schools. Section 22-8B-4.

{9} Individuals or groups who wish to start a new charter school put together a detailed application including the school's mission, governing structure, educational plan, and budget. Section 22-8B-8. The local school board has the authority to approve applications for charter schools in its area. Section 22-8B-6(A). After a local school board approves a charter school, the approved application becomes a contract, known as a charter, that contains all the agreements that the board and the charter school have made. Section 22-8B-9.

b. Public School Funding Formula

{10} The Public School Code addresses funding using two broad categories: operational funding and capital funding. The Public School Finance Act, NMSA 1978, §§ 22-8-1 to -45 (1967, as amended through 2004), governs the operational funding of New Mexico's public schools. Charter schools receive the funds for their operational costs through the same allocation process as other public schools. See § 22-8B-13.

{11} Generally, public schools must fund capital expenditures from other sources. Section 22-8-41(A) (prohibiting school districts from spending operational funds on building acquisition or construction unless they meet certain criteria). Public schools often finance capital expenditures through bonding. See NMSA 1978, §§ 22-19-2 and -3 (1967). Additional capital funding is governed by the Public School Capital Outlay Act, NMSA 1978, §§ 22-24-1 to -9 (1975, as amended through 2004); see also NMSA 1978, §§ 22-25-1 to -10 (1975, as amended through 2004) (Public School Capital Improvements Act). Schools may also get short term capital financing through the School District Bond Anticipation Notes Act. NMSA 1978, § 22-19B-2 (2002). A charter school must either raise its own money for start-up capital costs or negotiate for funds or facilities with the local school board. Section 22-8B-4(D), (G). The legislature has also created a Charter Schools Stimulus Fund that provides money for start-up costs and building renovation costs. Section 22-8B-14. After a charter school is established, the Public School Capital Outlay Act requires local school boards to take their charter schools' continuing capital needs into consideration. Section 22-24-5(B)(9)(f).

{12} A key feature of New Mexico's public school operational funding scheme is the state equalization guarantee distribution, which is a formula through which the State apportions federal and local revenue for schools equitably among the state's school districts. Section 22-8-25; see also Bd. of Educ. for Carlsbad Mun. Sch. v. State Dep't of Pub. Educ., 1999-NMCA-156, ¶ 2, 128 N.M. 398, 993 P.2d 112. The Secretary of Public Education, who was known as the State Superintendent of Public Instruction when this litigation commenced, works with local school boards to calculate how many "program units" each school district has using a formula detailed further below. Section 22-8-25(D); see also § 22-8-12.1 (explaining the information that local school boards provide in the process). The legislature assigns a dollar value per program unit. See § 22-8-2(I). The State gives each school district its share of funds based primarily on how many program units it has. Section 22-8-25(D).

{13} The State calculates program units using a formula set out in the statutes. The calculation begins with basic program units, which are tabulated by multiplying student enrollment in each of four age brackets by the cost differential factor for that bracket. Section 22-8-20. To this base figure, the State adds a number of special factors, such as special education program units or bilingual multicultural program units. Section 22-8-21 (special education program units); Section 22-8-22 (bilingual multicultural education program units). The factor at issue in this case is the size adjustment program unit. Section 22-8-23.

{14} In smaller schools, fixed operational costs like curriculum development and administration must be distributed among fewer students. See Lewis D. Solomon, Edison Schools and the Privatization of K-12 Public Education: A Legal and Policy Analysis, 30 Fordham Urb. L.J. 1281, 1299 (2003) (describing economies of scale in school operation). Because the cost differential factor used to calculate basic program units is based on estimated operational costs per student, the size adjustment factor addresses the...