Petition for Writ of Certiorari — Bergman v. Kansas (No. 06-472)

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Supreme Court. U.S.

() Pree aut US

No. 94-47 2 SEP 13 2006

OFFICE OF THE CLERK

In The

Supreme Court of the Anited States

ALEXANDER, KATHERINE, WILLIAM, and

JAMES BERGMAN, by and through their parents and

next friend, BRAD and LIBBY BERGMAN, et al.,

Petitioners,

STATE OF KANSAS, et al.,

Respondents.

On Petition For A Writ Of Certiorari

To The Kansas Supreme Court

PETITION FOR WRIT OF CERTIORARI

TRISTAN L. DUNCAN

(Counsel of Record)

SHOOK, HARDY & BACON L.L.P.

2555 Grand Blvd.

Kansas City, Missouri 64108-2613

Telephone: (816) 559-2040

Facsimile: (816) 421-5547

Attorneys for Petitioners

September 13, 2006

COCKLE LAW BRIEF PRINTING CO «800) 225 5964

OR CALL COLLECT (402) 342-2831

I. QUESTIONS PRESENTED

1. Does a State violate Equal Protection when it

purposefully disadvantages school children by unevenly

restricting funds available for public education and then

prohibiting under funded school districts from funding the

difference out of local funds?

2. Does a State violate the First and Fourteenth

Amendments when it purposefully but unevenly restricts

State funds available for public education and then prohib-

its the under funded school districts from funding the

difference out of local funds by imposing a mandatory cap

on spending on public education?

3. Did the Kansas Supreme Court violate the Four-

teenth Amendment’s Due Process Guarantee when it

refused to permit non-party parents and school children to

intervene in an action in which the Court indefinitely

suspended their right to use local funds to improve their

public education without giving them notice or an oppor-

tunity to be heard?

4. Did the Kansas Supreme Court violate the 14th

Amendment’s Due Process Guarantee when it ignored

common law limitations on its remedial discretion and

arbitrarily ordered the legislature to indefinitely suspend

petitioners’ liberty and property interests until the legisla-

ture funded an undefined level of public education for all

other children?

II. PARTIES TO THE PROCEEDING

Petitioners are parents and school children attending

the Shawnee Mission Unified School District No. 512 or

the Blue Valley Unified School District No. 229: Alexander,

Katherine, William, James, Brad, and Libby Bergman,

Patrick, Doug, Bob, and Debbie Dellinger, Madison,

Breanna, and Carol Rowe, Connor, Cameron, and Ann

Carollo, Sydney, Wyatt, and Kim Edmisten, Sarah, Na-

than, and Dan Goldman, Abigail, Parker, and Bonnie

Heying, Connor, Kylie, Courtney, and Tracy Rellihan, Ben

and Mary McBride, Graham and Noah Eidemiller, Janice

Langholz, Peter, Robby, Joseph, and Judy Moriarty, A.J.,

Will, Maureen and Trish Orth, Joe, Sydney, and Mary

Bahr, Maxwell, Emma, and Christine Braasch, Chase and

Susan Schaible Ainsworth, William, Harrison, and Brian

Short, Helen, Anna, and Mary Petrow, Johnnie, Danielle,

Alexandria, and Julie Norton, Morris, Charles, Ronald,

and Barbara Bronstein, Lauren, Erik, Janis, and Chris-

tian Hansen, Ryan, Michael, Daniel, Greg, and Laurie

Widrig, Lucy, Mary, and Dan Bush, Jonathon, Jefferson,

Caroline, Brad, and Rebecca Adams, Andrew, Alexandra,

Katie, Steve, and Lori Dykeman, Taylor, Zachary, Donna,

and Jim Wilson, Jason, Michael, Michelle, and James

Hoffman, Kristin, Eric, Mary, and Dave Larson, Grace,

John, and Aymi Foley, Max, Reilly, Brad, and Michelle

Agadoni, John Tyler, Megan, Caroline, Susan, and Mark

Koenig, Addison, Jillian, and Michelle Schlatter, Hannah,

Max, Janice, and Jeff Pinson, Emma, Cameron, David,

and Susan Keefer, John, Paige, Kathryn, and Jim Dussold,

Brenan Patrick, Conner James, Dillon Thomas, Linda, and

Timothy Cavanaugh, Tyler, Andre, Ahmet, and Lori

Kodanaz, Justin, Alexandra, Reid, Rhonda, and Patrick

iii

PARTIES TO THE PROCEEDING - Continued

Johnston, Mark, John, Steven, Jennifer, Steve, and Jody

Bolton, Blake, Erin, Benjamin, Phil, and Mary Hylton,

Bradley, Leslie, Doug, and Shea Dixon, Spencer, Kendra,

Betsy, and Tommy Avenia, Trent, Gardner, and Sheryl

Wright, Morgan, Elizabeth, Lynne, and Gerald Matile,

Marissa, Hayley, Stacey, and Howard Wizig, John, Joseph,

William, and Anne Blessing.

Respondents are the Attorney General of the State of

Kansas, the Kansas State Board of Education, and various

state officials charged with enforcement of the challenged

Kansas school finance statutes: Connie Morris, Janet

Waugh, Sue Gamble, John W. Bacon, Bill Wagnon, Kathy

Martin (substituted party), Ken Willard, Carol Rupe, Iris

Van Meter, Steve E. Abrams, Bob L. Corkins (substituted

party), the Salina Unified School District No. 305, the

Dodge City Unified School District No. 443, and parents

and school children attending those two school districts in

Kansas: Ryan Montoy, Lajuan and Mytesha Robinson,

Sierra and Seth Gwin, Rene Bess, Keely Boyce, Cruz

Cedillo, Lynette Do, Christopher and Monique Harding,

Joseph Hawkinson, Jennie Nguyen, Sandy, Nicole, and

Bruce Thu Pham, Andrea Bethke, Damian and Dylan

Arredondo, Eduardo Dominguez, Chris Freeman, Monica

Garcia, William Zachary Harrison, Robert Hindman, Alex

Jake, Yadira Moreno, Manuel Solorzano, Benjamin

Vicente, Brittany Ash-Clark, Jin Jeon, Jacob Stack,

Bronson Waite, Jacob Lemaster, Nicholas Woodfield

Brooke, Blaine Smith, Jerry Dix, Tanner Robidou, Justin

Hostetter.

Ill. CORPORATE DISCLOSURE STATEMENT

None of the Petitioners are a corporation that has

issued shares to the public, nor are any a parent corpora-

tion, a subsidiary or affiliate of corporations that have

done so.

IV. TABLE OF CONTENTS

Page

ee OIL sn pesnaceoseninanseunies i

Il, Parties to the Proceeding. ..........cssssesesscocsesesseees il

III. Corporate Disclosure Statement...................0+5 iv

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ge a I 0 ac sasetreuapeuneeitngeenis vii

VI. Opinions and Orders Below........................2..06- 1

ye RESELL ee oreo ROC ne OTE STOO OT 1

VII. Constitutional and Statutory Provisions ..........

Be IE OE CI Si oonccnvecowcccssvcceccenecncovcces 2

X. Reasons For Granting the Writ....................... 13

A. This case raises important issues of national

significance by seeking to test the constitu-

tionality of a state’s efforts to create equality

in its public school system by depriving some

children, who the state perceives, wrongly, as

privileged or advantaged, of equal protection

and fundamental liberties guaranteed to

them under the Constitution........................ 13

B. This case involves an important question of

federal law that has not been, but should be,

decided by this Court with respect to the

constitutional limits on a state court’s adju-

dication of the constitutionality of a state’s

school finance scheme under that state’s

constitution because, if left undisturbed, the

Kansas Supreme Court’s decisions disrupt

the balance of power within our federalist

system and interfere with the constitution’s

preservation of individual liberties............... 19

NRE EERE nN a A RENEE SLATE 23

V. TABLE OF AUTHORITIES

Page

CASES

Brotherhood of Railroad Trainmen v. Baltimore &

oe ee SS Lk; | OTe e ND 16

Brown v. Board of Ed. of Topeka, 347 U.S. 483

ERAT NeRRE EO Rate ee ACHE tT eA EL ETE 3

Buckley v. Valeo, 424 U.S. 1 (1976)..........c:ccccceessessreeeeereees 12

Devlin v. Scardetti, 536 U.S. 1 (2002)..........c eee eeceeeeees 3, 16

Honda Motor Co. v. Oberg, 512 U.S. 415 (1994).......... 12, 20

International Union, United Automobile, Aerospace

and Agricultural Implement Workers v. Scofield,

ee See Ce Ce ereheneeinasaidesinsessedaeabscustedninamvetinases 16

Keyishian v. Board of Regents of the University of

the State of New York, 385 U.S. 589 (1967)................. 12

Meyer v. Nebraska, 262 U.S. 390 (1923)...........ceceeseceeee sees 14

Missouri-Kansas Pipe Line Co. v. United States, 312

Bae Bee I ciecsecesvetsancccpaceentaccmnammbbasnniaoasaibiausin 17

Missouri v. Jenkins (Jenkins I), 495 U.S. 33 (1990)....12, 22

Montoy v. State (Montoy ID), 102 P.3d 1160 (Kan.

Es covcnimdcasciniasicsipsubdadinemansilammmssdienomaamseamia: a

Montoy v. State (Montoy III), 112 P.3d 923 (Kan.

RE Pisecouicusstecticsnneincconenecebeevsdisnnbeeddaiabindaniaddasanaiatabeadelannss 1,8

Montoy v. State (Montoy IV), 138 P.3d 755 (Kan.

Saath ss asussashoisdsinetbele und supbtaakiidicbeiesbiiaesisailcccbadeiaieidghiasaddainlieianiiliaapaaiais 1

Moore v. City of East Cleveland, 431 U.S. 494

PIE WF Picicikacsdchesitoscenieatdinbsdastiicadioadounmmadaddeitenteaaasmanpalis 11, 12,14

vil i

V. TABLE OF AUTHORITIES —- Continued

Page

Pierce v. Society of Sisters, 268 U.S. 510 (1925).......... 14, 15

Pruneyard Shopping Center v. Robins, 447 U.S. 74

E Fire Pcisisecsdiainsecednatesisadbdscddacentasaibaesianiciamaniameiaal 21

San Antonio Sch. Dist. v. Rodriguez, 411 U.S. 1

CRP aiciscinsetnisetavivinansenteaiiianmniiacmaneaaapidmaaals 11, 14

U.S.D. 229 v. State, 885 P.2d 1170 (Kan. 1994), cert.

denied, 615 U.S. 1144 (190B)...cccccsorocossessessonescoovereoscess 5,7

Village of Euclid v. Amber Realty Co., 272 U.S. 365

SPINE cocsnchsnineapesieivnictesiecninseaieveddeaietmesaaiani Glasiacaatoen 21

Young v. American Mini Theatres, Inc., 427 U.S. 50

Cea sccninscniheinsdintesssuticcsannstonsareeinatemainae aime eee 21

Zelman v. Simmons-Harris, 336 U.S. 639 (2002)............. 16

CONSTITUTIONAL PROVISIONS

Rye COME, PINE, 5. OE eskccscnticcvcstiiccamnnaaen 1, 21

Ue. Comat, Hamam, TRG, 6 F seccesissscocvscocessosves 1, 2, 20, 21, 22

Ses SUE, BG FF, Be cssicinccidasenineiennea nese 1, 21

Be, TE, TNE: GO Gi csictictsnccdacesnsariciadekeusacuee 2,8, 23

STATE AND FEDERAL REGULATIONS

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Sa. Far OOe OF BOM, scscsnscitncssiatsbabincndaataanin 4

Pete, FTI astiichensiccinsictadarseiiatclomeiameeaacan 2

VI. OPINIONS AND ORDERS BELOW

The Opinion of the Supreme Court of Kansas, dated

January 3, 2005, is reported at Montoy v. State (Montoy

IT), 102 P.3d 1160 (Kan. 2005). App. 81. The Opinion of the _

Supreme Court of Kansas, dated June 3, 2005, is reported

at Montoy v. State (Montoy III), 112 P.3d 923 (Kan. 2005).

App. 38. The Order of the Supreme Court of Kansas, dated

June 15, 2006, is unreported. App. 1. The Opinion of the

Supreme Court of Kansas dated July 28, 2006 is reported

at Montoy v. State (Montoy IV), 138 P.3d 755 (Kan. 2006).

App. 2.

Vil. JURISDICTION

On June 15, 2006, the Kansas Supreme Court denied

Petitioners’ Motion to Intervene without opinion. App. 1.

On July 28, 2006, that Court entered an order dismissing

the school finance case and releasing jurisdiction. App. 2.

This Court has jurisdiction under 28 U.S.C. § 1257(a).

VII. CONSTITUTIONAL AND

STATUTORY PROVISIONS

1. The First Amendment to the United States Con-

stitution provides in relevant part that: “Congress shall

make no law ... abridging the freedom of speech, or of the

press; or the right of the people peaceably to assemble, and

to petition the government for a redress of grievances.”

U.S. Const. Amend. I, § 1.

2. The Fourteenth Amendment to the United States

Constitution provides in relevant part: “No state shall...

deprive any person of life, liberty or property, without

due process of law; nor deny to any person within its

jurisdiction the equal protection of the laws.” U.S. Const.

Amend. XIV, § 1.

3. Article 6 §6 to the Kansas Constitution provides

in relevant part: “The legislature shall make suitable

provision for the finance of the educational interests of the

state....” Kan. Const. Art. 6 § 6.

6. The Kansas school finance statutes in relevant

part are set out in the Appendix to the Petition. K.S.A. 72-

6433(b)(9B). App. 92.

IX. STATEMENT OF THE CASE

“The year was 2081, and everybody was finally

equal. They weren’t only equal before God and

the law. They were equal every which way. No-

body was smarter than anybody else. Nobody

was better looking than anybody else. Nobody

was stronger or quicker than anybody else. All

this equality was due to the 211th, 212th, and

213th Amendments to the Constitution, and to

the unceasing vigilance of agents of the United

States Handicapper General.”

— by Kurt Vonnegut, Harrison Bergeron (1961)

attached in Appendices. App. 95.

“My story mocks the idea of legally eliminating

envy by outlawing excellence, which is precisely

what the legislature means to do in the public J

schools, by putting a cap on local spending on

them. Should it prevail it will be possible for me

to say there are no longer any truly excellent

public schools in all of Kansas. Talk about a level

playing field!”

— by Kurt Vonnegut, Unpublished Letter to the

Editor of the Lawrence Journal-World, dated

May 12, 2005 attached hereto in the Appendices.

App. 94.

This case may be the most important litigation since

Brown v. Board of Education, 347 U.S. 483 (1954). No-

where is the juxtaposition of the two most revered consti-

tutional values, liberty and equality, more at war and in

desperate need of constitutional reconciliation than in this

case. Here we have the question: How do you strike the

proper balance between the liberty and equality interests

of parents and local school districts who are willing and

able to do more for their children than what the state is

willing or able to provide and the equality interests of

those parents and school districts who are unwilling or

unable to do so? More importantly, who gets to decide the’

question — a state’s highest court or this Court?’

At bottom, this case asks whether it is constitutional

for a state to impose on public education spending caps

which, in effect, handicap some school districts who the

state perceives, wrongly, as privileged or advantaged, to

achieve the appearance of equality among all school

districts? More importantly, is it constitutional for a state

' As discussed herein, if petitioners are bound by the Kansas

Supreme court decisions, then they should be treated as a “party,” not

as strangers to the action, because they, in effect, are non-named class

members whose interests were not adequately represented by the

existing parties to the litigation and who timely objected to the argu-

ments advanced by plaintiffs on their behalf at the earliest opportunity

after they became aware of them. Devlin v. Scardetti, 536 U.S. 1 (2002)

(holding that non-named class members were entitled to appeal without

first intervening when petitioners’ interests were not adequately

represented by existing parties).

to impose mandatory spending caps, not to prevent some

school districts from being better than others, but to force

some schoo] districts into a permanently disadvantaged

state by prohibiting the taxpayers within under funded

districts from using their own money to fund the differ-

ence? When a state first deprives some of its children of an

equal learning opportunity and then wrests from their

parents the freedom to use their own money to make up

the difference, does such oppressive state action violate

the federal guarantee of equal protection and substantive

due process?

1. Historical Background.

In 1992, seven years prior to the filing of the underly-

ing lawsuit, the Kansas legislature amended the school

finance statutes to create a system of funding public

education whereby all schools in the state would receive

comparable per pupil operating expenditures. Before then,

dating back to Kansas’s statehood in the 1800s all school

districts in the state had been funded entirely from local

property taxes, and the per pupil operating expenditures

widely varied between school districts. Kansas School

District Finance and Quality Performance Act (SDFQPA),

K.S.A. 72-6405 et seg. These 1992 amendments changed

the system of funding public education by redistributing

tax revenue from local property, sales and income taxes to

all school districts in the state according to a weighted

formula. The formula established a foundational level of

education to which all children in Kansas were entitled -

the per pupil base rate. App. 85.

The Act included a supplemental means for funding

educational services called the Local Option Budget

(“LOB”). The LOB permitted local school districts to seek

voter approval for additional local taxes to improve the

education in that district. The Kansas school finance

formula, however, set a ceiling on the amount of money

any local school district could raise a local taxes for public

education. This ceiling is known as the cap on the local

option budget (the “Cap”). App. 13.

In 1992, the Blue Valley Unified School District No.

229 challenged the legislature’s school finance formula as

unconstitutional, including the cap on local spending.

U.S.D. 229 v. State, 885 P.2d 1170 (Kan. 1994), cert.

denied, 515 U.S. 1144 (1995). Applying a rationality

standard of review, the Kansas Supreme Court concluded

that all the funding differentials within the school finance

formula were rationally related to a legitimate govern-

mental objective and, therefore, were constitutional under

both the state and federal constitutions. App. 85.

Seven years later, in 1999, plaintiffs filed the underly-

ing lawsuit against the State of Kansas, the Kansas State

Board of Education, and various state officials responsible

for enforcing the statute, again challenging the school

finance scheme as unconstitutional under both the state

and federal constitutions. This time, however, the court

came to the opposite conclusion. App. 81, 88. At trial, the

court accepted plaintiffs’ federal equal protection argu-

ment and held that the school finance formula was not

rationally related to 4 legitimate governmental purpose

and caused a disparate impact on minority children. App. 84.

The trial court concluded that the plaintiffs had proven that

the insufficiency of funding was a proximate cause of the

plaintiffs’ poor performance on standardized tests. The court

was persuaded by plaintiffs’ argument that the “achievement

gap” proved plaintiffs were receiving a constitutionally

inadequate and inequitable level of education. App. 88-89.

The “achievement gap” is the difference between higher

test scores on standardized tests taken by Caucasian

students, on average, and the test scores of minorities,

bilingual, and special education children.

Plaintiffs argued that one of the most significant

factors contributing to low standardized test scores for

plaintiff school districts was large class sizes. The-trial

court agreed that class sizes in large to midsize school

districts had become “too large for adequate learning to

take place.” The district court concluded, therefore, that

the Kansas School District Finance and Quality Perform-

ance Act was unconstitutional.

This gross class size disparity was not unique to the

plaintiff school districts, however. Petitioners’ districts had

even larger average class sizes than the plaintiff school

districts. The cap prevented petitioners’ school districts

from achieving small class sizes commensurate with low

enrollment districts as well and prohibited them from

achieving the most important condition for improved

learning — small class sizes.”

? (See-Plaintiffs-Appellees brief at 34, 58, citing R. XXIII 447, R.

XLII, 602, R. XLIV, 3263-64) (“Dodge City, Garden City, Wichita,

Topeka, and Kansas City all now have pupil teacher ratios ranging from

17 to 1 to 22 to 1 compared to the significantly lower 7 to 1 and 12 to 1

pupil teacher ratios for some of the low-enrollment districts.”).

> December 2005 Legislative Post Audit Committee Cost Analysis,

Executive Summary, p.23. The Kansas Supreme Court referenced this

report in its 7/28/06 final opinion. The report concluded that smal class

size is the only proven determinant of improved academic performance:

“Four of Five class size studies we reviewed found that smaller classes

(Continued on following page)

Plaintiffs’ legal strategy, however, was to argue to the

court that petitioners’ school districts neither needed nor

deserved additional funding. App. 66. Plaintiffs painted a

picture of class warfare between “rich” school districts and

“poor” school districts and repeatedly described to the

court a disparity between “the haves and have nots.”

The reality was, however, that while petitioners’

schools were located in a property-rich area, their schools

were not wealthy. On a comparative basis, the plaintiff

school districts were, in fact, wealthier than petitioners’

school districts because they received more money from

the state in per pupil operating expenditures than did the

non-party school districts. Shawnee Mission students for

example receive $6,833, whereas Dodge City’s students

receive $8,216, over a $1,000 per pupil difference. See Ks.

Board of Education’s Per Pupil Expenditure Comparison

By District for 2005-2006 school year.

On March 24, 2004, the defendants appealed to the

Kansas Supreme Court, and on January 3, 2005, the court,

in effect, overruled its earlier decision in U.S.D. 229 and

affirmed the district court in part, concluding that the

legislature had failed to make suitable provision for the

finance of the public schools as required by Article 6, § 6 of

the Kansas constitution. Montoy v. State, 102 P.3d 1160

(Kan. 2005) (Montoy II). App. 81, 84. As a consequence, the

court ordered the legislature to pass new legislation which

would infuse substantially more money into public education

led to improved academic outcomes ... Studies of factors other than

class size were less consistent.”

* See 4/4/05 Letter from plaintiffs to the Kansas Supreme Court,

p.4.

and reallocate state funds according to new “guidelines,”

i.e., (1) the actual costs of funding “an adequate education”

and (2) equity. App. 90.

The court stayed the issuance of the mandate to allow

the legislature a reasonable time to correct the constitu-

tional infirmity in the school finance formula and set a

deadline of April 12, 2005 for that to be accomplished. App.

90-91. The legislature responded by enacting changes to

the school finance formula on March 30, 2005 (2005 H.B.

2247 (L. 2005, ch. 152], modified by 2005 S.B. 43 [L. 2005,

ch. 194] [collectively referred to as H.B. 2247]). See Montoy

v. State, 112 P.3d 923 (Kan. 2005) (Montoy III). App. 38.

For the first time since 1992, the legislature ad-

dressed the specific needs of many non-party school

districts, including petitioners’ school districts, by enacting

- local funding provisions beneficial to these school districts.

These new local funding provisions were known as: (1) a

new extraordinary declining enrollment factor, (2) an

increase in the cap on the local option budget, and (3) a

cost of living increase for teachers who live and work in

relatively more expensive urban areas (collectively, the

“local funding provisions”). App. 61-64, 65-67.

On June 3, 2005, however, the Kansas Supreme Court

held that the changes made by H.B. 2247 failed to bring

the state’s school financing formula into compliance with

Article 6 § 6 of the Kansas constitution. App. 75-80. Most

alarming was the court’s stay of the new local funding

provisions, including the increased cap, passed by the

legislature in H.B. 2247. App. 79. The court stated:

HB 2247’s increased dependence on local prop-

erty taxes, as decided by each school district, ex-

acerbates disparities based on district wealth.

We fully acknowledge that once the legisla-

ture has provided suitable funding for the

state school system, there may be nothing

in the constitution that prevents the legis-

lature from allowing school districts to

raise additional funds for enhancements to

the constitutionally adequate education already

provided. At least to the extent that funding re-

mains constitutionally equalized, local assess-

ments for this purpose may be permissible.

Clearly, however, such assessments are not

acceptable as a substitute for the state funding

the legislature is obligated to provide under Arti-

cle 6 § 6. That should pre-exist the local tax ini-

tiatives. (emphasis added.) App. 69..

Thereafter, on July 6, 2005, the legislature enacted

S.B. 3 (L. 2005 Special Session, ch. 2), and in a subsequent

opinion, the court ruled that it, in effect, complied with the

court’s June 3, 2005 order, for “interim purposes” only.

App. 11. The court retained jurisdiction to review further

legislative action in the 2006 session. Thereafter, the

legislature enacted changes to the school finance formula

yet again in S.B. 549 (L. 2006, ch. 197), which was signed

by the governor on May 19, 2006.

On July 28, 2006, the court determined that with S.B.

549, the legislature had complied with its prior orders and

dismissed the appeal with instructions to the trial court to

dismiss the case. App. 24. Although the court lifted the

stay, the court, in effect, upheld the cap on the local option

budget, and the cap continues in operation to this day. The

court’s conditions on the operation of local funding provi-

sions also continue in force. App. 26.

2. The manner of presenting the federal ques-

tions.

Although plaintiffs challenged the Kansas school

finance statutes on behalf of all children in Kansas,

petitioners never received notice of the lawsuit. App. 83-

84. Moreover, the rules governing class actions, joinder of

parties and claims, including necessary and indispensable

parties, appear to never have been followed.

Plaintiffs, in effect, acted as class representative but

did not adequately represent the interests of petitioners.

Plaintiffs opposed allowing any local taxation for public

education and, in the remedial phase of the case, vigor-

ously opposed removal, or lessening, of the cap in any way.

They urged the Court to redistribute funding away from

petitioners’ schools to their own schools. Their interests

could not have been more adverse. The state defendants

also failed to adequately represent petitioners’ interests

since they obviously sought to uphold the school finance

scheme, including the cap, as constitutional.

The first time petitioners became aware of the under-

lying lawsuit was when they read about it in the newspa-

pers sometime after the Kansas Supreme Court’s January

3, 2005 surprising ruling. App. 81. At that time, petition-

ers had no reason to suspect that the Court would change its

holding from its prior controlling precedent. More impor-

tantly, it was not until the Court’s June 3, 2005 Decision that

there was ever any hint that using local taxation for public

education, while constitutional, was nevertheless inequitable

and as such, impermissible. App. 69-79.

Petitioners first tried to protect their interests by

filing an amicus curiae brief during the court’s briefing

schedule prior to its June 3, 2005 Decision. App. 43. Then,

on June 13, 2006, petitioners filed a Motion to Intervene.

App. 1.

The federal questions pressed by petitioners were

clear and precise and are quoted in relevant part below:

“In Rodriguez, the United States Supreme

Court expressly reserved the question of the con-

stitutionality of state ceilings on local taxation

which inhibit under-funded schools from improv- -

ing their per pupil operating expenditures. The

high Court expressly stated it would address that

issue ‘another day’...”

1. Equal Protection Analysis.

In 1973, the United States Supreme Court

decided San Antonio Sch. Dist. v. Rodriguez, 411

U.S. 1 (1973), ... Justice White stated that he

believed a state’s ceiling on local taxation pre-

sented a federal constitutional question for under

funded schools. As he observed,

But state [Texas] law places a... ceil-

ing on the ... tax rate, a limit that

would surely be reached long before

Edgewood (the plaintiff school district)

attained an equal yield [to other school

districts]. Edgewood is thus precluded

in law, as well as in fact, from achieving

a yield even close to that of some other

districts. Rodriguez, 1 U.S. at 67.

2. Substantive Due Process Analysis.

For the reasons stated by Justice Stevens in

Nixon v. Shrink, 528 U.S. 377 (2000) and the

United States Supreme Court in Moore v. City

of East Cleveland, 431 U.S. 494 (1977) the Kan-

sas cap on expenditures for public education is

unconstitutional under a substantive due process

analysis because the cap unduly interferes with

the fundamental rights of citizens to spend their

own money on something they value, i.e., im-

provement of their children’s local public educa-

tion. Nixon, 528 U.S. at 398-399, citing, Moore »v.

City of East Cleveland, 431 U.S. 494, 513 (1977).

3. First Amendment Analysis.

The Kansas legislature’s purpose in setting a

ceiling on local taxes for improving public educa-

tion is allegedly to equalize funding among

school districts throughout the state for public

education. ... However, in Buckley v. Valeo, 424

U.S. 1 (1976), the United States Supreme Court

rejected government imposed spending caps for

similar egalitarian purposes as unconstitutional

deprivations of liberty under the First Amend-

ment.... The point was an uninhibited, wide-

open, robust marketplace of ideas was compro-

mised by such expenditure caps. See Keyishian v.

Board of Regents of the University of the State of

New York, 385 U.S. 589 (1967) (public education

as a locus for the uninhibited, wide-open, robust

marketplace of ideas deserving First Amendment

protection).

4. Procedural Due Process.

The federal Constitution imposes an ‘inher-

ent equitable limitation’ on a state court’s reme-

dial power through the Due Process Clause of the

14th Amendment ... [which this Court violated

in] staying the local funding provisions, citing,

Missouri v. Jenkins (Jenkins I), 495 U.S. 33

(1990) and Honda Motor Co. v. Oberg, 512 US.

415 (1994).”

Petitioners now seek certiorari to review the Kansas

Supreme court’s denial of their intervention in this case.

For all intents and purposes, petitioners were non-named

class members who were foreclosed from intervening of

right in public interest litigation and barred from assert-

ing their own claims at the time the Kansas Supreme

Court was determining the constitutionality of the school

finance statutes and fashioning relief. App. 83-84. As

virtual class members, petitioners are entitled to appeal.

Petitioners, therefore, seek review of the state Supreme

court’s decisions.

X. REASONS FOR GRANTING THE WRIT

A. This case raises important issues of national

significance by seeking to test the constitution-

ality of a State’s efforts to create equality in its

public school system by depriving some chil-

dren, who the State perceives, wrongly, as privi-

leged or advantaged, of equal protection and

fundamental liberties guaranteed to them under

the Constitution.

In a nation founded on individual liberty, self-

government, and local initiative, it is inconceivable that a

state would prohibit any community from enhancing

public education through civic self-sacrifice and collective

democratic action, but Kansas has done just that. The

state’s unstated, but ostensible, purpose is to make the

state’s public education uniform, but it accomplishes this

goal by obstructing its citizens’ freedom to use their own

money to educate their children.

An objective observer might wonder how there could

be any harm if children in one district or any district got

“too much” education. Maybe the thinking is that if chil-

dren learn “too much,” that is, if they excel, then, by

definition, they will no longer be “equal,” which outcome

must, according to the state, be prevented by severely

rationing the funds certain districts may raise from local

taxpayers. The state’s remedy is to impose an artificial

economic burden — a “cap” (read handicap) — to insure that

the spending per student remains artificially low and

cannot be overcome by the concerted democratic action of

local citizens.

Kansas is not alone. At least five other states also

impose spending caps on public education.’ This Court has

long held, however, that a parent’s ability to “do more for

one’s children,” including the “freedom to devote more

money to the education of one’s children,” is a fundamental

right under the Federal Constitution. San Antonio Sch.

Dist. v. Rodriguez, 411 U.S. 1, 48 (1973); Meyer uv. Ne-

braska, 262 U.S. 390 (1923); Pierce v. Society of Sisters,

268 U.S. 510 (1925); Moore v. City of East Cleveland, 431

U.S. 494 (1977). When the Kansas Supreme Court upheld

the state law capping local school taxes at 27-31% of the

* Alaska, AK Stat. 14.17.410(cX1) & (2) (23% spending cap), Colo-

rado, CRS 22-54-108(3b)(1) (20% cap on total program funding from

local sources); Kentucky, KRS, 157.440(2Xa) (no more than 30% of the

district’s budget can come from local levy); Minnesota, Minn. Stat. 126

C. 17(2) (any additional per pupil spending raised through local

resources must not exceed 18.2% of the district’s total formula allow-

ance); Montana, MCA 20-9-308. In contrast, the majority of states

appear to either not impose such caps on total spending for public

education or if they do, the caps can be overridden by a vote of the local

taxpayers.

state’s funding level for a school’s operating budget, a

federal question was triggered because Kansas’s cap on

local taxation deprives Kansas citizens of fundamental

federal rights.

Now Kansas citizens who vote to tax themselves more

for the education of their children will be in violation of

the state law and, arguably subject to punishment. We

still are free to spend unlimited amounts on things that

are not in the best interests of our children, like spectator

sports, video games, and junk food, but it is illegal for

petitioners to democratically vote an additional school tax

upon themselves for the purpose of improving the educa-

tion of all the children in their districts. Thus, the state

ceiling on local taxation strips them of their political

freedom.

As a result of the Kansas Supreme Court’s rulings,

petitioners will now be attending schools that are pur-

posely under funded by the state and have some of the

highest average class sizes in the state. They are forbidden

to use their own local funds to offset this disparity. Yet,

they are still required to fund the education of children in

districts that are not under funded and in which class

sizes are measurably smaller. App. 2-37.

Ironically, the constitution forbids outlawing private

schools; therefore, the wealthy can spend wnlimited sums

on their children’s private education — a disparate, but

constitutional, result. See Pierce v. Society of Sisters, 268

U.S. 510 (1925). The constitution also prohibits outlawing

vouchers, which means private schools already are subsi-

dized with public funds. The “freedom of choice” of parents

to educate their children in either public or private schools

is a superior constitutional value and therefore justifies

this disparate, but constitutional, result. See Zelman v.

Simmons-Harris, 336 U.S. 639 (2002). However, if the

average Kansas family wants to support their public

schools through higher voluntary local taxes, they cannot

do so. This “choice” is somehow less worthy of constitu-

tional protection.

Petitioners had an absolute right to be involved as

parties in the underlying action and appeal. Any remedy

the Kansas Supreme Court fashioned would impact

petitioners. App. 83-84. Petitioners were entitled to be

involved to defend their interests and make their constitu-

tional claims.

The Kansas Supreme Court’s refusal to permit peti-

tioners’ intervention to assert this federal question under

the unique circumstances in this case, therefore, deprived

petitioners of due process because it foreclosed petitioners’

access to the courts. See Intl Union, United Automobile,

Aerospace & Agricultural Implement Workers v. Scofield,

382 U.S. 205, 215-216 (1965). Although the Kansas Su-

preme Court did not permit petitioners to be parties to the

appeal, they normally would be bound by the Kansas

Supreme Court’s adverse judgment and decrees. Devlin v.

Scardetti, 536 U.S. 1 (2002) (stating that non-named class

members, like petitioners, who have objected at the earliest

opportunity after first learning of the class representative's

adverse positions on behalf of the class have the power to

bring an appeal without first intervening); Brotherhood of

R.R. Trainmen v. Baltimore & O.R. Co., 331 U.S. 519, 524

(1947) (intervention is of right if petitioner is legally bound

by the decision and adversely affected by it “there being no

other way in which he can better assert the particular

interest which warrants intervention.... [A]nd since

petitioner cannot appeal from any subsequent order or

judgment in the proceeding unless he does intervene, the

order denying intervention has the degree of definitiveness

which supports an appeal....”); Missouri-Kansas Pipe

Line Co. v. United States, 312 U.S. 502, 508 (1941) (“[O]ur

jurisdiction to consider an appeal from an order denying

intervention thus depends upon the nature of the right. If

the right is absolute, then the order is appealable, and we

may judge it on its merits.”).

A related constitutional question, therefore, is: Are

petitioners bound by the Kansas Supreme Court’s ruling

that: “[While] there may be nothing in the constitution

that prevents the legislature from allowing school districts

to raise additional funds for enhancements. ... At least to

the extent that funding remains constitutionally equal-

ized, local assessments for this purpose may be permissi-

ble.... [Until then, however] such assessments are

not acceptable?” Thus, the Court seems to regard local

taxation to be “unacceptable” unless, or until, the legisla-

ture first funds a “constitutionally adequate education.”

App. 69. “That should preexist the local tax initiatives.”

App. 69.

In this extraordinary ruling, the Court, in effect,

admits the local funding provisions are constitutional, “we

fully acknowledge ... there may be nothing in the consti-

tution that prevents-the legislature from allowing school

districts to raise additional funds... .” App. 69. However,

even though they are constitutional, the court still prohib-

its them as “unacceptable” because the court believes such

self-help would be “disequalizing.” App. 7, 63. If petitioners

are bound by this, tk. are entitled to appeal the judg-

ment.

The Kansas Supreme Court never defined what

comprises a constitutionally adequate base education,

however. App. 31-34. As Justice Rosen stated in his con-

curring opinion, “ ... the decisions in this case demon-

strate that the model for a constitutionally adequate

education has not been a stationary, definable concept.”

App. 34. It is a “moving target.” App. 33. Therefore, peti-

tioners’ fundamental federal right to increase the funds

available for the education of their children is in limbo,

effectively held hostage by the Kansas Supreme Court,

pending an undetermined definition of an adequate base

level of education. App. 31.

While petitioners are seeking relief in federal court,

any lower federal court might require petitioners to

exhaust all of their administrative remedies, including an

appeal to this Court, before seeking relief there. As a

practical matter, the Court’s ruling already did and likely

will again chill future legislation to expand local funding

provisions or remove the cap entirely. App. 24.

The Court’s Decisions already induced the legislature

to adopt preferential treatment for other school children’s

needs, not based on any objective or neutral criterion but,

instead, based upon improper classifications of race, national

origin, and learning disabilities. App. 19, 84-85, 88. Plaintiffs’

entire case at trial and on appeal was premised on the

“achievement gap” between minority, bilingual, and

special education children versus Caucasian students.

App. 19, 84-85, 88. The remedy the Kansas Supreme Court

ordered was intended to correct this “achievement gap” by

forcing the state to reallocate more state aid to those

school districts with a higher proportion of these catego-

ries of students. App. 19, 84-85, 88. Thus, the funding

scheme devised by the legislature, at the direction of the

Court, involved a kind of reverse discrimination.

In contrast, a suspect-class neutral remedy would not

have ordered additional funding to those districts having

higher proportions of minority, bilingual, or special educa-

tion children, but instead would have ordered additional

funding according to objective and race-neutral perform-

ance-based criterion which would be directed at the

problem — non-proficiency on standardized tests, not the

color of a child’s skin. In this way, all children scoring

below the proficiency level would receive equal treatment.

Alternatively, ordering sufficient funding for smaller class

sizes in those districts lacking small average class sizes

similarly would have been a race-neutral remedy propor-

tionate to solving the alleged wrong.

B. This case involves an important question of

federal law that has not been, but should be, de-

cided by this Court with respect to the constitu-

tional limits on a state court’s adjudication of the

constitutionality of a state’s school finance

scheme under that state’s constitution because if

left undisturbed, the Kansas Supreme Court’s de-

cisions disrupt the balance of power within our

federalist system and interfere with the constitu-

tion’s preservation of individual liberties.

The legal battle regarding the adequacy of and equity

in funding K-12 public education is raging across the

country in state courts with conflicting results.” App. 25-

26. This battle involves claims by state legislators that the

court is usurping its authority to make policy in public

school finance. This battle is particularly intense in

* The Validity of Public School Funding Systems, 110 A.L.R. 5th

293 (2006 Supp. ).

Kansas. Many in the Kansas legislature have proposed

constitutional amendments to limit judicial authority or

want to require elections of judges in the future.’

Thus, the Montoy decisions pose a constitutional

crisis. By ignoring common law restrictions on its equita-

ble power, the Court engaged in arbitrary adjudication. As

in Honda Motor Co. v. Oberg, 512 U.S. 415 (1994), where

this Court struck down a highest state court’s interpreta-

tion of the state constitutional amendment on Fourteenth

Amendment procedural due process grounds because of

the state’s utter disregard of common law limitations on

remedial discretion, so here too, the Kansas Supreme

Court’s opinions and orders fail to comply with the tradi-

tional common law equitable doctrine limiting a state

court’s remedial discretion to the least obtrusive means to

democratic governance to remedy the constitutional

wrong. This absent procedure would “provide protection

against arbitrary and inaccurate adjudication.”

The equitable common law doctrine restrieting a

judicial remedial decree to the least restrictive means to

remedy the alleged constitutional wrong would not have

permitted the Kansas Supreme Court to stay or condition

local funding, a means not causally related to the court’s

alleged end. Local funding is not harmful to the plaintiff

school districts and is beneficial to other school districts

that need additional funding for public education to

achieve per pupil expenditures comparable to those

enjoyed by a majority of other school districts in the state.

” See, e.g., “Judicial Rulings Raise Ire,” 8/24/06, N.E. Johnson County

Sun, Vol. 56, No.34, p. 1A, 7A; “Penalty Right for Nuss,” 8/24/06, N.E.

Johnson County Sun, Vol. 56, No.34, p. 7A; www.sunpublications.com.

App. 24. Conditioning local funding on the state first

funding an undefined base level of education indefinitely

suspends petitioners’ liberty and property rights. It is,

therefore, an excessive and arbitrary remedy. The Federal

Constitution requires a more narrow tailoring of the

Kansas Supreme Court’s remedial decrees to comport with

the Fourteenth Amendment Due Process Guarantee.

Unhike the situation in Pruneyard Shopping Center v.

Robins, 447 U.S. 74 (1980), where this Court held that a

state court can interpret a state constitution’s first

amendment more broadly than the federal equivalent and

thereby augment free speech rights beyond what the

Federa! Constitution would protect, the state constitu-

tional provision at issue here does not protect such nega-

tive rights, i.e., individual liberties. Rather, Article 6 § 6, of

the Kansas Constitution involves a governmental benefit,

i.e., public education.

Since the Kansas Supreme Court’s interpretation of

the Education Article unduly impinges on petitioners’

federal liberty and property rights, it contravenes the

First and Fourteenth Amendments. As this Court in

Pruneyard stated, “Our reasoning ... does not .. . limit [a

state’s] sovereign right to adopt in its own Constitution

individual liberties more expansive than those conferred

by the Federal Constitution so long as [they do not]

contravene any other federal constitutional provision.” /d.

at 81 (citing Village of Euclid v. Amber Realty Co., 272

U.S. 365 (1926); Young v. American Mini Theatres, Inc.,

427 U.S. 50 (1976) (emphasis added)).

Thus, this case involves issues of vast national impor-

tance regarding preserving the balance of power within

our federalist system of government — a balance of power

designed to secure individual liberty. These issues are too

vital to this nation to allow the Kansas Supreme Court

Decisions to go unchallenged.

As Justice Kennedy forewarned:

This assertion of judicial power in one of the

most sensitive of policy areas, that involving

taxation, [for public education] begins a process

that over time could threaten fundamental a!-

teration of the form of government our constitu-

tion embodies. Missouri v. Jenkins (Jenkins I),

495 U.S. 33, 81. (Emphasis added.)

When this Court talks about a court’s remedial au-

thority being exercised in such a way that “over time [the

exercise of such power] could threaten fundamental

alteration of the form of government our constitution

embodies,” then fundamental freedoms protected by the

Fourteenth Amendment’s Due Process Guarantee are at

stake.

In the end, petitioners ask very little. They recognize

their civic duty to help fund other school districts located

in less property-rich areas and willingly hand over their

taxes for this purpose. They also enthusiastically support

state funding for those districts, which, like petitioners,

lack the necessary learning conditions proven to correlate

with higher test scores, i.e., small class sizes. However,

what is intolerable is the state’s concerted effort to arbi-

trarily, unjustifiably, and unreasonably restrict their

ability to voluntarily tax themselves to pay for additional

teachers to reduce class sizes — a benefit which the state

provides to others but intentionally withholds from peti-

tioners.

Absent the requested constitutional protection,

Kansas succeeds in outlawing excellence and making a

mockery of equality. :

XI. CONCLUSION

For the reasons stated above, the Court should grant

certiorari.

Respectfully submitted,

TRISTAN L. DUNCAN ,

(Counsel of Record)

SHOOK, HARDY & BACON L.L.P.-

2555 Grand Blvd.

Kansas City, Missouri 64108-2613

Telephone: (816) 559-2040

Facsimile: (816) 421-5547

Attorneys for Petitioners

App. 1

SUPREME COURT ORDER

DISTRICT CASE NO. 99C1738 S

IN THE SUPREME COURT

OF THE STATE OF KANSAS

DANIEL D CRABTREE

STINSON MORRISON HECKER LLP

12 CORPORATE WOODS SUITE 550

10975 BENSON

OVERLAND PARK KS 66210

CASE NO. 04-92032-S

RYAN MONTOY, ET AL.,

APPELLEES/CROSS-APPELLANTS,

THE STATE OF KANSAS, ET AL.,

APPELLANTS/CROSS-APPELLEES.

YOU ARE HEREBY NOTIFIED OF THE FOLLOW-

ING ACTION TAKEN BY THE COURT: MOTION TO

INTERVENE BY INDIVIDUAL STUDENTS AT USD

#512 AND USD 229. DENIED. RESPONSE NOTED.

DATE: 06/15/2006.

CAROL G. GREEN

CLERK

App. 2

IN THE SUPREME COURT OF

THE STATE OF KANSAS

No. 92,032

RYAN MONTOY, et ai.,

Appellees /Cross-appellants,

STATE OF KANSAS, et al.,

Appellants /Cross-appellees.

Appeal from Shawnee district court; TERRY L. BUL-

LOCK, judge. Opinion filed July 28, 2006. Appeal dis-

missed and remanded with directions.

Alok Ahuja, of Lathrop & Gage L.C., of Overland Park,

and Stephen R. McAllister, special assistant attorney

general, argued the cause, and Jeffrey R. King, of Lathrop

& Gage L.C., of Overland Park, David W. Davies, assistant

attorney general, and Phill Kline, attorney general, were

with Alok Ahuja on the briefs for appellant/cross-appellee

State of Kansas.

Dan Biles, of Gates, Biles, Shields & Ryan, P.A., of Over-

land Park, argued the cause, and Rodney J. Bieker, of

Kansas Department of Education, was with him on the

briefs for appellants/cross-appellees Janet Waugh, Sue

Gamble, John Bacon, Bill Wagnon, Connie Morris, Kathy

Martin, Kenneth Willard, Carol Rupe, Iris Van Meter,

Steve Abrams, and Bob Corkins.

Alan L. Rupe, of Kutak Rock LLP, of Wichita, argued the

cause, and Richard A. Olmstead, of the same firm, and

John S. Robb, of Somers Robb & Robb, of Newton, were

with him on the brief for appellees/cross-appellants.

App. 3

Patricia E. Baker and David C. Cunningham, of Kansas

Association of School Boards, of Topeka, were on the brief

for amicus curiae Kansas Association of School Boards.

Lara M. Owens and Mark R. Thompson, of Seigfreid,

Bingham, Levy, Selzer & Gee, P.C., of Kansas City, Mis-

souri, were on the brief for amicus curiae Kansas Families

United for Public Education.

David M. Schauner and Robert M. Blaufuss, of Kansas

National Education Association, cf Topeka, were on the

brief for amicus curiae Kansas National Education Asso-

ciation.

Stephen R. McAllister and Todd N. Thompson, of Thomp-

son, Ramsdell & Qualseth, P.A., of Lawrence, were on the

brief for amicus curiae Legislative Coordinating Council.

Bernard T. Giefer, of Giefer Law LLC, of WaKeeney, was on

the brief for amici curiae Unified School District No. 208,

Trego County, Kansas (WaKeeney), et al. (126 other

Kansas schoo] districts).

Bradley R. Finkeldei and Peter C. Curran, of Stevens &

Brand, L.L.P., of Lawrence, were on the brief for amicus

curiae Unified School District No. 229 (Blue Valley School

District).

Thomas R. Powell and Roger M. Theis, of Hinkle Elkouri

Law Firm L.L.C., of Wichita, were on the brief for amicus

curiae Unified School District No. 259, Sedgwick County,

Kansas.

Anne M. Kindling, of Goodell, Stratton, Edmonds &

Palmer, L.L.P., of Topeka, was on the brief for amicus

curiae Unified School District No. 512, Shawnee Mission,

Kansas.

App. 4

Per Curiam: This is the fifth time this case has been before

this court since the district court sua sponte dismissed the

case on November 21, 2001. In that initial appeal by the

plaintiffs, we reversed the district court and remanded the

case for further proceedings in Montoy v. State, 275 Kan.

145, 62 P.3d 228 (2003) (Montoy J). On remand, the district

court held that the Kansas School District Finance and

Quality Performance Act (SDFQPA), K.S.A. 72-6405 et

seq., was unconstitutional. The defendants appealed, and

on January 3, 2005, this court affirmed the district court

in part, concluding that the legislature had failed to make

suitable provision for the finance of the public schools as

required by Article 6, §6 of the Kansas Constitution.

Montoy v. State, 278 Kan. 769, 120 P.3d 306 (2005)

(Montoy II). We stayed the issuance of the mandate to

allow the legislature a reasonable time to correct the

constitutional infirmity in the school finance formula and

set a deadline of April 12, 2005, for that to be accom-

plished.

Although we held that increased funding would be re-

quired, we did not dictate the manner in which the legisla-

ture should amend the financing formula to bring it into

constitutional compliance, noting, as did the district court,

that “there are ‘literally hundreds of ways’ the financing

formula can be altered to comply with Art. 6, § 6.” 278

Kan. at 775. However, we did make it clear that the actual

costs of providing a constitutionally suitable education and

the equity with which the funds are distributed are critical

factors for the legislature to consider in crafting a suitable

formula for financing public education. 278 Kan. at 775.

The legislature responded by enacting changes to the

school finance formula on March 30, 2005. (2005 H.B. 2247

[L. 2005, ch. 152}, modified by 2005 S.B. 43 [L. 2005, ch.

App. 5

194] [collectively referred to as H.B. 2247].) See Montoy v.

State, 279 Kan. 817, 819, 112 P.3d 923 (2005) (Montoy II).

H.B. 2247 provided a funding increase of approximately

$142 million for the 2005-06 school year.

The changes made by H.B. 2247 included modifications to

the weighting components of the finance formula and

changes to the authority of certain districts to raise

revenue through local ad valorem property taxes. H.B.

2247 modified the funding formula by increasing the Base

State Aid Per Pupil (BSAPP), bilingual, and at-risk

weightings; phasing in increases in special education

funding; eliminating the correlation weighting (while

retaining the low enrollment weighting); and providing for

annual adjustments to general state aid funding levels in

accordance with the Consumer Price Index-Urban (CPI-

U).

With respect to local revenue generating provisions, H.B.

2247 provided for incremental increases in the 25 percent

cap on local option budgets (LOB) over the following 3

years to 30 percent in the 2007-08 school year; authorized

districts with high housing costs to levy a “cost-of-living”

ad valorem tax to*pay enhanced teacher salaries; and

authorized districts with extraordinary declining enroll-

ment to apply to the Board of Tax Appeals (BOTA) for

permission to levy an additional ad valorem tax.

H.B. 2247 also provided for a cost study to be performed by

the Legislative Division of Post Audit to “‘determine the

costs of delivering the kindergarten and grades one

through 12 curriculum, related services and other pro-

grams mandated by state statute in accredited schools.’”

279 Kan. at 821.

App. 6

After the new legislation became law, this court issued an

order to show cause directing the parties to address

whether the amendments to the financing formula met the

legislature’s constitutional obligation to “‘make suitable

provision for financing’” of the public schools. 279 Kan. at

820. The parties were directed to address whether the

actual costs of providing a suitable education were consid-

ered with respect to each component of the formula, as

well as the formula as a whole, “and whether H.B. 2247

exacerbates and/or creates funding disparities among the

districts.” 279 Kan. at 820.

After an expedited briefing and argument schedule, on

June 3, 2005, this court held that the changes made by

H.B. 2247 failed to bring the state’s school financing

formula into compliance with Article 6, § 6 of the Kansas

Constitution. 279 Kan. at 840. This court considered each

component of the formula, the new local ad valorem tax

authorizations, and the overall funding provided by the

changes as a whole and held that although H.B. 2247

provided a significant funding increase, it still failed to

provide constitutionally suitable funding for public educa-

tion because the changes were not based on considerations

of the actual costs of providing a constitutionally adequate

education and exacerbated existing funding inequities. 279

Kan. at 839-40.

Specifically, this court found that the increases in the

BSAPP, at-risk weighting, bilingual weighting, and special

education funding all varied substantially from the cost

information in the record, and that the State had failed to

provide any cost basis to support the amount of funding

provided. 279 Kan. at 831-33, 839. Further, this court

noted that the low enrollment weighting was not altered,

and although we had specifically sought cost justifications

App. 7

for this significant funding component, none was provided.

279 Kan. at 836.

Moreover, this court found certain components of the

amended formula exacerbated unjustified inequities in the

distribution of funding. For example, we found that the

funding disparity caused by the low enrollment weighting

was exacerbated by the elimination of the correlation

weighting for middle-sized and large districts. By rolling

those funds into the BSAPP, low enrollment districts were

given “even more of the funds that previously were de-

voted to balancing the disparities in per pupil funding

caused by the low-enrollment weighting.” 279 Kan. at 836.

We also found that “H.B. 2247’s increased dependence on

local property taxes, as decided by each school district,

exacerbate(d] disparities based on district wealth.” 279

Kan. at 839.

We held that the new cost-of-living property tax provision

was not based on any evidence that there was any link

between high housing costs and higher education costs or

that the 17 districts that would benefit from the provision

pay higher teacher salaries. We noted that the evidence at

trial demonstrated the opposite — that the districts with

high-poverty, high at-risk student populations are the ones

that need help attracting and retaining teachers. 279 Kan.

at 835.

This court also held that H.B. 2247’s two extraordinary

declining enrollment provisions were potentially “ex-

tremely disequalizing because they are unlimited and

have been designed to benefit a very small number of

school districts.” 279 Kan. at 838.

App. 8

With respect to the increase in the LOB cap, this court

found that the failure to provide for equalizing state aid

for the new level of LOB authority worsened wealth-based

disparities between districts, because districts with high

assessed property values can generate maximum LOB

revenues with far less tax effort than districts with lower

assessed property values and median family incomes. 279

Kan. at 834.

Moreover, this court found it significant that H.B. 2247 did

not attempt to correct the problem identified in Montoy II,

namely, that unconstitutional underfunding has forced

some districts to “use the LOB to fund the State’s obliga-

tion to provide a constitutionally adequate education

rather than enhancements,” as the LOB was originally

intended. 279 Kan. at 834.

This court also concluded that the Legislative Division of

Post Audit (LPA) cost study provided for by H.B. 2247 was

insufficient to determine the actual and necessary costs of

providing a constitutionally suitable education because it

would examine only the cost of “inputs” — the curriculum,

programs, and related services required by law, and would

not consider the costs of “outputs” — the cost of achieving

measurable standards of proficiency. 279 Kan. at 842-43.

Accordingly, the court required the cost study to incorpo-

rate the costs of outputs in addition to the statutorily

mandated elements of a K-12 education. 279 Kan. at 343.

Because time was running out for school districts to prepare

for the 2005-06 school year, there was no evidence of the

actual costs of a suitable education other than the Augen-

blick & Myers (A&M) study, and the litigation had been

pending since 1999, this court accepted the A&M study “as

a valid basis to determine the cost of a constitutionally

App. 9

adequate public education” and ordered the legislature to

implement for the 2005-06 school year a minimum funding

increase of $285 million above the 2004-05 funding level,

which included the $142 million provided by H.B. 2247.

279 Kan. at 844-45. The $285 million increase represented

one-third of the $853 million estimated cost of implement-

ing A&M’s recommendations.

Deferring to the cost study analysis to be performed by

LPA, this court held that implementation of the remaining

two-thirds of the A&M recommendation would be contin-

gent upon the results of the LPA study. However, absent

compliance, this court stated we would consider ordering

an increase in funding of the remaining $568 million for

the 2006-07 school year, in addition to other remedies. 279

Kan. at 846.

This court also ordered a stay on the increased LOB cap,

the cost-of-living weighting, and both extraordinary

declining enrollment provisions, due to their potential to

exacerbate inequities in funding. 279 Kan. at 846. We

retained jurisdiction, stating that further action, if neces-

sary “will be taken by this court as is deemed advisable to

ensure compliance with this opinion.” 279 Kan. at 847.

The governor then called the legislature into special

session. See Governor’s Proclamation of June 9, 2005. By

July 2, 2005, the legislature had failed to comply with this

court's June 3, 2005, opinion, so we issued an order direct-

ing the parties to appear on July 8, 2005, and show cause

“why this Court should not enter an ORDER enjoining the

expenditure and distribution of any funds for the opera-

tion of Kansas schools pending the Legislature’s compli-

ance with this Court’s June ruling regarding minimum

App. 10

funding increases for the 2005-06 school year.” Montoy,

Order of July 2, 2005.

Thereafter, on July 6, 2005, thetegislature enacted S.B. 3

(L. 2005 Special Session, ch. 2), which provided a funding

increase of $147 million over the $142 million provided by

H.B. 2247.

With respect to the various components of the formula,

S.B. 3 increased the BSAPP by another $35 to $4,257;

increased the at-risk weighting from .145 to .193; in-

creased funding for special education by raising the excess

cost reimbursement from 88 percent in 2006-07 to 92

percent; lowered the enrollment cut-off for the low enroll-

ment weighting from 1,725 students to 1,662; restored the

correlation weighting with a threshold of 1,622 students;

eliminated the cap on LOB equalizing supplemental state

aid and increased access to LOB equalization for districts

with lower property valuations by raising the AVPP

entitlement from the 75th percentile to the 81.2 percentile;

replaced the extraordinary declining enrollment (EDE)-

BOTA provision with a similar declining enrollment

provision that applies more broadly to any district with a

decline in enrollment from the previous year; and provided

for matching state aid for districts with lower property

valuations.

S.B. 3 also amended the cost study provision to require the

LPA to conduct two cost studies: One would study the cost

of inputs, and the other would estimate the cost of meeting

student performance outcome standards adopted by the

State Board of Education (Board). See K.S.A. 2005 Supp.

46-1131.

The parties appeared before the court on July 8, 2005. The

issue before the court at the July 8 proceeding was

App. 11

whether the new legislation complied with this court’s

June 3, 2005, order for a minimum funding increase. At

that hearing, all parties agreed that S.B. 3 complied with

the court’s June 3, 2005, order.

On July 8, 2005, this court held: “The legislature, by

enacting S.B. 3, has complied with our June 3 opinion

regarding the minimum funding increase” for the 2005-06

school year, and we approved the school finance formula,

as amended by H.B. 2247 and S.B. 3, “for interim pur-

poses.” Montoy, Order of July 8, 2005. Further, because

S.B. 3 increased LOB equalization and provided increased

access to such equalization, this court lifted the stay on

the provision increasing the LOB authority. Order of July

8, 2005. The stay on the EDE-BOTA provision was lifted

as well, because S.B. 3 replaced it with a new. provision

designed to benefit a larger number of districts. The stays

on the cost-of-living weighting and the EDE-Joint Com-

mittee on State Building Construction (JCSBC) provisions,

however, were continued.

This court retained jurisdiction “to review further legisla-

tive action which may modify, repeal, or make permanent

the temporary solution contained in S.B. 3.” Order of July

8, 2005.

On January 9, 2006, LPA completed and submitted to the

legislature the cost study report commissioned by H.B.

2247/S.B. 3. As pointed out by the State in its argument

before this court, the legislature referred to this report

throughout its 2006 session and sought further input and

explanation from LPA during the session.

Thereafter, the legislature enacted changes to the school

finance formula in S. B. 549 (L. 2006, ch. 197), which was

signed by the governor on May 19, 2006.

App. 12

The plaintiffs then filed a motion for a show cause order

and briefing schedule, and on May 22, 2006, this court

ordered the parties to brief and argue the issue whether

S.B. 549 satisfies our court’s prior orders.

Rather than modifying the provisions of S.B. 3/H.B. 2247,

the legislature materially and fundamentally changed the

way K-12 is funded in this state.

S.B. 549 adopted a 3-year funding scheme for K-12. It also

alters the formula components by creating two additional

at-risk weightings: the high-density at-risk weighting

which provides additional at-risk funding for districts with

high percentages of at-risk students; and the nonproficient

at-risk weighting, which provides $10 million in additional

funding in 2006-07 for students who are not proficient in

reading or math, but are not classified as at-risk (eligible

for the federal free lunch program).

An additional fundamental change occurred in providing

flexibility to local districts to spend money received for at-

risk, preschool at-risk, and bilingual education programs

interchangeably. More significant are the changes that

S.B. 549 made in the LOB.

The school finance formula provided a feature designed to

equalize the ability of districts with lower property wealth

to raise money through the use of the LOB. The formula

was designed so that districts with an assessed valuation

per pupil (AVPP) below the 75th percentile would receive

supplemental aid in an amount designed to bring them up

to par with the district at the 75th percentile of AVPP.

Under this formula, districts with an AVPP above the 75th

percentile would not receive supplemental state aid.

K.S.A. 72-6434.

App. 13

The legislature has increased equalization in two ways.

First, it increased the LOB equalization threshold from

the 75th percentile to the 81.2 percentile of AVPP. K.S.A.

2005 Supp. 72-6434(a). Accordingly, districts with an

assessed valuation per pupil below the 81.2 percentile

would receive supplemental aid on the LOBs in an amount

designed to bring those districts up to par with the dis-

tricts at the 81.2 percentile of AVPP.

Second, the 25 percent LOB cap on supplemental general

state aid was eliminated. See S.B. 3, sec. 12 (b). In S.B.

549, the LOB authority was increased to 30 percent for the

2006-07 school year and 31 percent for 2007-08 and

thereafter. An election would be required to adopt an LOB

in excess of 31 percent. S.B. 549 did not change the AVPP

threshold and did not impose a limit on equalization

supplemental aid.

S.B. 549 further requires that such supplemental state aid

be used to meet accreditation requirements, provide

programs required by law, and improve student perform-

ance. §.B. 549, sec. 20(e)(1). The 3-year cumulative total of

such aid under S.B. 549 is $74 million. Added to H.B.

22471S.B. 3’s increase of $47.7 million, the estimated

increase since Montoy IJ is $121.7 million.

Under the prior structure, LOB state aid funding has

never been considered part of the foundation level of

funding provided by the State for a district’s basic operat-

ing expenses. However, S.B. 549 now requires that sup-

plemental state aid be applied to meet basic educational

requirements, essentially making LOB state aid part of

the foundation level of funding.

Further, the original intent and purpose of the LOB

(which would necessarily include LOB state aid) was to

App. 14

allow individual districts to fuhd enhancements to a

constitutionally adequate education provided and financed

by the funding formula. Montoy III, 279 Kan. at 834 (citing

Montoy II, 278 Kan. at 774). S.B. 549, however, now

provides that school districts are required to use LOB

state aid moneys to fund basic educational expenses.

The plaintiffs point out that these changes to the LOB

state aid do not provide new money and are nothing more

than a “money renaming scheme.” Regardless of whether

LOB state aid is new money, the point is that these

changes to the equalizing state aid provisions of the LOB

component of the formula fundamentally alter the struc-

ture of the funding system.

In addition, S.B. 549 increases the BSAPP from $4,257 to

$4,316 in 2006-07; to $4,374 in 2007-08; and to $4,433 in

2008-09. That amounts to an increase of $101.25 million

over the 3 years, and $183.75 million since January 3,

2005. The low enrollment weighting adjustment was

lowered to 1,637 pupils in 2006-07 and 1,622 pupils in

2007-08 and 2008-09: The high enrollment weighting

(formerly the correlation weighting) threshold was lowered

to correspond to the changes in the low enrollment weight-

ing, resulting in $18.5 million over the 3-year period.

At-risk weighting was increased to 0.278 for 2006-07,

0.378 for 2007-08, and 0.456 for 2008-09, resulting in an

estimated 3-year cumulative increase of $152.55 million.

The 3-year total for high-density at-risk is $29.6 million.

Bilingual weighting remained unchanged at .395 (based

upon the number of student contact hours in a bilingual

program). Special education excess costs reimbursement is

set at 92 percent, totaling an estimated $80.3 million over

3 years, and $111.5 million since January 3, 2005. S.B. 549

App. 15

provides an estimated total funding increase of $466.2

million. The total increase in funding since January 3,

2005, is an estimated $755.6 million.

S.B. 549 leaves intact the cost-of-living weighting, which is

a new local property tax levy intended to allow districts

with higher regional costs to raise additional revenue,

purportedly to fund higher teacher salaries, although the

requirement that funds be used for that purpose was

removed from the statute. See 279 Kan. at 835. While we

stayed the effect of this provision last year due to concerns

about wealth-based disparities, nevertheless, this new

component alters the funding formula.

We begin our analysis by addressing the State’s first

argument that (1) the school finance formula challenged

by the plaintiffs no longer exists, and thus, the case is

moot, and (2) this court cannot engage in the fact finding

necessary to determine the constitutionality of S.B. 549.

The first argument was raised in Montoy III, and we

rejected it because this case was and continues to be in the

remedial stages, or to be more precise, the compliance

stage. It continues to have no merit, and we again reject it.

As to the State’s second part of the argument, we agree

that this court is an appellate court and not a fact-finding

court. The constitutionality of S.B. 549 is not before this

court. It is new legislation and, if challenged, its constitu-

tionality must be litigated in a new action filed in the

district court. We have already made the determination

that the school finance formula which was before this

court in Montoy II was unconstitutional. The school

finance system we review today is not the system we

reviewed in Montoy II or Montoy III. The sole issue now

before this court is whether the legislation passed in 2005

App. 16

and S.B. 549 comply with the previous orders of this court.

If they do then our inquiry ends and this case must be

dismissed. A constitutional challenge of S.B. 549 must wait

for another day.

The State argues alternatively that the legislature has

been highly responsive to the court’s orders in enacting the

2005 legislation and S.B. 549 and, therefore, the appeal

should be dismissed. It points out that the 2005 legislation

and S.B. 549 together provide annual increased funding by

the 2008-09 school year of $755.6 million over that pro-

vided in 2004-05. The State further asserts the manner in

which the funds are to be distributed is directly responsive

to the concerns expressed by the court in its prior orders

regarding at-risk students, special education students, and

middle- and large-sized districts. The State also urges the

court to lift the stay on the cost-of-living weighting.

Although noting it has some concerns with S.B. 549, the

State Board of Education contends that S.B. 549, in

conjunction with the changes made by the 2005 legisla-

tion, makes “suitable provision for finance” of the public

schools as required by Article 6, § 6 of the Kansas Consti-

tution, as construed by this court, and requests the court

to release jurisdiction of the case.

The plaintiffs contend that S.B. 549 fails to comply with

this court’s prior orders and fails to make suitable provi-

sion for finance of the public schools as required by Article

6, §6 of the Kansas Constitution. The plaintiffs contend

the funding increases and formula components of S.B. 549

are not based on the actual and necessary costs of provid-

ing a suitable system of finance of public education and do

not distribute funding equitably, exacerbating existing

constitutional deficiencies.

App. 17

Specifically, the plaintiffs contend that S.B. 549’s funding

for the 2006-07 school year is not based on actual and

necessary costs because the funding it provides under the

components of the formula is significantly less than the

funding increase LPA concluded to be the actual and

necessary costs of meeting the mandated performance

standards for 2006-07. As a remedy, the plaintiffs request

that we order the legislature to implement the LPA Cost

Study Analysis outcomes based recommendations for the

2006-07 school year.

The State contends that in determining whether S.B. 549

complies with this court’s orders, it would be inappropriate

for the court to rely on the LPA Cost Study Analysis as

evidence of actual costs because it is not part of the record

on appeal, and the validity of its conclusions have not been

subjected to expert analysis and judicially determined

through operation of the fact-finding process.

The plaintiffs contend the LPA Cost Study Analysis is part

of the legislative history of S.B. 549 and, therefore, may

properly be considered by the court. They argue that this

court may accept the LPA Cost Study Analysis as substan-

tial competent evidence of the actual and necessary costs

of achieving the State Board’s mandated proficiency

standards because it was designed and funded by the

legislature, performed by its employees, subject to its

direction, and presented to the legislature.

First, we reject the State’s contention that we may not

consider the LPA Cost Study Analysis in determining

whether the legislature complied with our orders. Al-

though the LPA Cost Study Analysis is not evidence in the

record on appeal, it is part of the legislative history of S.B.

549. Cf, Urban Renewal Agency v. Decker, 197 Kan. 157,

App. 18

160, 415 P.2d 373 (1966) (historical background, legislative

proceedings, and changes in a statute during course of

enactment may be considered by the court in determining

legislative intent).

The LPA Cost Study Analysis was commissioned by the

legislature in order to assist in determining the actual

costs of providing a suitable funding system. The legisla-

ture dictated the parameters of the study, the study was

conducted by its employees, subject to the legislature’s

direction and oversight, the study was presented to the

legislature early in the 2006 session, and there was an

ongoing dialogue between the legislature and LPA con-

cerning the study during the course of the legislative

session. See Memorandum of April 21, 2006 from LPA to

all legislators. See also K.S.A. 2005 Supp. 46-1131 (com-

missioning LPA to conduct the Cost Study Analysis,

setting the parameters of the study, and directing LPA to

submit its report to the legislature by a date certain or

request additional time); K.S.A. 46-1101 (legislative post

audit committee comprised of five -senators and five

members of the house of representatives); K.S.A. 46-1102

(LPA headed by the post auditor, who is appointed by the

legislative post audit committee); and K.S.A. 46-1103

(establishing LPA, and providing that its employees are

under the direct supervision of the post auditor in accor-

dance with the policies adopted by the legislative post

audit committee).

Accordingly, we may consider the LPA cost study as part of

the legislative history of S.B. 549 in determining legisla-

tive intent as it is relevant to the question whether the

legislature has complied with our orders in this case. That

does not mean, however, that we may consider the findings

and conclusions in the report as substantial competent

App. 19

evidence of the actual and necessary costs of providing a

suitable education.

The cost study has not been subjected to the fact-finding

processes of litigation through which the parties were

permitted to examine the validity and accuracy of the

study, including the methodology and policy decisions

supporting the study, the qualifications of the persons

participating in the study, the assumptions underlying the

study's conclusions, and the veracity of the underlying

data. Although such inquiry is vital to determining the

validity of the study’s conclusions and the degree of weight

to accord the study if offered at trial in the district court,

this is an extraordinary appeal and the legislature had the

opportunity to analyze the methodology and policy deci-

sions of the LPA Cost Study Analysis, and thus to accept or

reject its findings as a factor in determining what is

suitable finance for the Kansas school system.

There is no question that the legislature has substantially

responded to our concerns that the funding formula failed

to provide adequate funding for students in middle-sized

and large districts with a high proportion of minority

and/or at-risk and special education students and that the

special education, bilingual, and at-risk student weighting

factors were distorted by the lack of any actual cost basis.

S.B. 549 and the 2005 amendments together provide an

estimated annual increased funding by the 2008-09 school

year of $755.6 million over that provided in 2004-05. Of

that total, $246 million — almost one-third — is directed to

at-risk students: $206.5 million in new funding by 2008-09

has been provided through increases in the at-risk weight-

ing from .10 to .456 by 2008-09; $29.6 million in additional

at-risk funding is directed to districts with high percentages

App. 20

of at-risk students; and $10 million is provided to students

who, though not classified as “at-risk” under the free lunch

eligibility criteria, nevertheless are not proficient in math

or reading, based on statewide proficiency assessments.

Bilingual funding has been increased from .2 to .395,

adding $11 million in new funding as of 2005-06. Further,

and significantly, the new legislation provides districts

with the ability to use at-risk and bilingual funding

interchangeably, giving districts with these students

greater flexibility to use those funds to meet their needs.

Special education excess cost reimbursement has been

increased from 85 percent at the time of Montoy II to 92

percent, and provides by 2008-09 an additional $111.5

million in new funding.

The legislature also responded to our concerns about the

equitable distribution of funding. Equity does not require

the legislature to provide equal funding for each student

or school district. In Montoy II, we rejected the plaintiffs’

claim that the school finance act violated the Equal

Protection Clause of the United States and Kansas Consti-

tutions. What is required is an equitable and fair distribu-

tion of the funding to provide an opportunity for every

student to obtain a suitable education.

Our concerns about the low enrollment weighting were

addressed by reducing its relative significance in the

funding formula by increasing funding to middle- and

large-sized districts with high percentages of special needs

students. The legislature has substantially increased the

at-risk weighting, including the new high-density weight-

ing designed to provide additional funding to middle- and

large-sized districts with high percentages of at-risk

students. S.B. 549 and the 2005 amendments together

App. 21

have provided non-low enrollment districts with an addi-

tional $47 million in new funding through the high en-

rollment weighting (formerly the correlation weighting),

while reducing entitlement to the low enrollment weight-

ing by lowering the cut-off from to 1,725 pupils to 1,622 by

2007-08. In addition, we note that by restoring and in-

creasing the high enrollment weighting, the legislature

was directly responsive to our concern in Montoy III that

the elimination of the correlation weighting exacerbated

the disparities caused by the low enrollment weighting.

Further, the legislature responded to our concerns about

wealth-based disparities inherent in the LOB by increas-

ing the equalizing LOB state aid AVPP percentile.

Our prior orders have made it clear that we were con-

cerned that the then existing financing formula was

distorted and provided disparate funding because it was

based on former spending levels with little or no consid-

eration of the actual costs and present funding needs of

Kansas public education.

The legislature has responded to this concern. The legisla-

ture has undertaken the responsibility to consider actual

costs in providing a suitable system of school finance by

commissioning the LPA to conduct an extensive cost study,

creating the 2010 Commission to conduct extensive moni-

toring and oversight of the school finance system, and

creating the School District Audit Team within LPA to

conduct annual performance audits and monitor school

district funding as directed by the 2010 Commission. In

addition, the new legislation contains numerous provisions

designed to improve reporting of costs, expenditures, and

needs.

App. 22

These new components provide the fundamental frame-

work for a cost-based funding scheme in which the legisla-

ture will be regularly provided with the relevant, accurate

information necessary to meet its constitutional obligation

to provide and maintain a suitable system of financing of

Kansas public schools.

We also find that the LPA Cost Study Analysis was consid-

ered by the legislature in making the decisions that

underlie the formula changes in S.B. 549 and, thus, the

legislature was responsive to our prior orders to consider

actual costs. We note the plaintiffs’ contention that be-

cause S.B. 549 does not provide funding at the levels

recommended by LPA’s cost study, it was not based on

actual costs and, therefore, fails to provide constitutionally

suitable funding. However, implicit in that argument is

the conclusion that the LPA Cost Study Analysis is credi-

ble evidence of the actual costs of education. As discussed

above, we cannot reach that conclusion.

Nonetheless, as we stated in Montoy II: “It is clear in-

creased funding will be required; however, increased

funding may not in and of itself make the financing

formula constitutionally suitable.” 728 Kan. 775. Further,

in Montoy III we said:

“As set forth earlier in this opinion, the Legislative Divi-

sion of Post Audit has been commissioned to conduct a

comprehensive and extensive cost study to be presented to

the 2005-06 legislature. With such additional information

available, the legislature should be provided with the cost

information necessary to make policy choices establishing

a suitable system of financing of Kansas public schools.

“We conclude, however, that additional funding must be

made available for the 2005-06 school year to assist in

App. 23

meeting the school districts’ immediate needs. We are

mindful of the Board’s argument that there are limits on

the amount the system can absorb efficiently and effec-

tively at this point in the budget process.” 279 Kan. at 845.

The legislature is not bound to adopt, as suitable funding,

the “actual costs” as determined by the A&M and LPA

studies. On the other hand, the legislature cannot ignore

the LPA study as it did the A&M study. In commissioning

the cost study, the legislature clearly stated in H.B. 2247,

Section 3:

“‘(a) In order to assist the legislature in the gathering of

information which is necessary for the legislature’s consid-

eration when meeting its constitutional duties to: (1)

Provide for intellectual, educational, vocational and

scientific improvement in public schools established and

maintained by the state; and (2) make suitable provision

for the finance of educational interests of the state, the

division of post audit shall conduct a professional cost

study analysis to determine the costs of delivering the

kindergarten and grades one through 12 curriculum,

related services and other programs mandated by state

statute in accredited schools.’” 279 Kan. at 840-41.

We are mindful of the fact that the funding of public

education is extraordinarily complex, just as we are

mindful of the realities of the legislative process. We

conclude that the legislature’s efforts in 2005 and in 2006

S.B. 549 constitute substantial compliance with our prior

orders, through which it will have provided by 2008-09 at

least 755.6 million additional dollars to the education of

the State’s most precious asset — our children.

App. 24

The determination that the funding system failed to

provide for suitable funding of the public schools as re-

quired by Article 6, § 6 of the Kansas Constitution was the

culmination of an extensive 8-day bench trial of this case

before the district court, with testimony generating over

1300 pages of transcripts, and over 300 exhibits consisting

of thousands of pages, a large number of which were

spreadsheets and other documents showing the financial

operation and impact of the funding formula for school

districts statewide. All of this evidence pertained to the

issue at hand — whether the school funding formula as it

existed at that particular time was constitutional, Our

opinion affirming the district court’s determination on that

issue was made on the basis of that extensive record.

As previously noted, in response to our orders, the legisla-

ture has amended the school finance formula three times.

The most recent changes made in S.B. 549 have now so

fundamentally altered the school funding formula that the

school finance formula that was at issue in this case no

longer exists. It has been replaced with a fundamentally

different funding scheme for which there are no facts and

figures in the record from which we could determine how

it will operate over the next 3 years.

We recognize that we could remand this case to the district

court to allow the plaintiffs to amend their pleading to

challenge the new funding formula. However, we decline to

do so, electing instead to end this litigation. We do so for

two reasons.

First, we note the point made by the Chief Justice of the

Ohio Supreme Court in DeRolph v. State:

App. 25

“A review of sixteen other state Supreme Court decisions

that have declared their systems for funding public educa-

tion unconstitutional reveals that a majority of those

decisions remanded the case to a trial court. However, it is

those states that have had the most difficulty producing a

final plan that met the Supreme Court’s opinion of consti-

tutionality. For example, in New Jersey the issue has been

through the courts for a period of twenty years and is now

again pending in the New Jersey Supreme Court. Similar

experiences, though not as dramatic, have occurred in

Arizona, Arkansas, California, New Hampshire and Texas.

In each of these states, either the final public school

funding plan is not yet approved by the Supreme Court of

the state after several years of litigation after remand or

the plan has been approved only after several years of

litigation.” DeRolph v. State, 78 Ohio St. 3d 419, 421-422,

678 N.E.2d 886, 888 (Ohio 1997) (Moyer, C.J., concurring

in part and dissenting in part) (disagreeing with the

majority's decision to remand the case to the district court

pending legislative compliance so the trial court could hear

evidence concerning the remedy after it is enacted and

determine any new legislation’s constitutionality).

See also Abbott v. Burke, 119 N.J. 287, 575 A.2d 359 (1990)

(Abbott IT) (Public School Education Act held unconstitu-

tional); Abbott v. Burke, 136 N.J. 444, 643 A.2d 575 (1994)

(Abbott III) (court ordered legislature to enact constitu-

tional system and retained jurisdiction); Abbott v. Burke,

149 N.J. 145, 199-200, 693 A.2d 417 (1997) (Abbott IV)

(thereafter, court ordered interim increased funding and

remanded the case to district court for hearings on the

special needs of urban students and to determine the costs

of funding those needs); Abbott by Abbott v. Burke, 153

N.J. 480, 710 A.2d 450 (1998) (Abbott V) (on appeal from

App. 26

district court decision after extensive hearings, court

ordered specific, detailed, comprehensive reform plan);

DeRolph v. State, 78 Ohio St. 3d 193, 213, 677 N.E.2d 733

(1997) (DeRolph I) (remanded to district court pending

legislative compliance); DeRolph v. State, 89 Ohio St. 3d 1,

36-38, 728 N.E.2d 993 (2000) (DeRolph IT) (on appeal after

extensive proceedings in trial court, court allowed the

State more time to continue to refine system, set out areas

of concern to address, and retained jurisdiction).

Second, S.B. 549 is a 3-year plan; thus, it may take some

time before the full financial impact of this new legislation

is known, a factor which would be important in any

consideration of whether it provides constitutionally

suitable funding. Indeed, as the Board’s attorney pointed

out at oral argument, we do not even know at this time

how districts used the funding increase provided by the

2005 amendments.

The previous orders of this court affirming the judgment of

the district court in part and reversing in part are reaf-

firmed in this opinion. We lift the stays imposed on the

cost-of-living weighting and the extraordinary declining

enrollment-Joint Committee on State Building Construc-

tion Provision. We dismiss this appeal and remand to the

district court with directions to dismiss the pending case.

NUSS, J., not participating.

ROSEN J., concurring: Every child in Kansas has a

fundamental right to an education guaranteed by the

Kansas Constitution. I, therefore, agree with the concur-

rences to Montoy v. State, 278 Kan. 769, 120 P.3d 306

(2005) (Montoy ID), previously filed by Justices Beier,

Davis, and Luckert. In addition to their thorough constitu-

tional analysis, I note that every child is mandated to

App. 27

attend school. K.S.A. 2005 Supp. 72-1111. Our legislature

has required all Kansans with control over or charge of a

child to send that child to school. K.S.A. 2005 Supp. 72-

1111. This requirement upon parents and guardians for

the compulsory education of their children is paralleled by

the requirement upon the legislature to provide that same

constitutionally mandated education. Likewise, the citi-

zens of Kansas through our state constitution have im-

posed a duty on the legislature to “make suitable provision

for finance of the educational interests of the state.” Kan.

Const., Art. 6, § 6(b). It is our duty, as the arbiters and

champions of the Kansas Constitution, to enforce each

child’s fundamental right to an education. Any analysis of

the issues in this case must necessarily begin with an

understanding of this right and the duties associated with

that right.

Further, I concur with the majority’s conclusion that S.B.

549 (L. 2006, ch. 187) complies with this court’s prior

orders and order to dismiss this case. I write separately to

express my disagreement with the majority's analysis for

concluding that S.B. 549 complies with this court’s prior

orders; to express my concern with including equalizing

local option budget (LOB) state aid as part of the State’s

funding obligation; and to note my disagreement with the

dissent remanding this case to the district court.

I disagree with the majority's analysis for concluding that

S.B. 549 (L. 2006, ch. 197) complies with this court’s prior

orders. Although the majority opinion highlights the in-

crease in funding for various categories of students, the

analysis provides no linkage between those increases and

the actual costs as determined by the Division of Legislative

Post Audit (LPA) study or the Augenblick & Myers (A&M)

study. I recognize that the legislature has appropriated

App. 28

substantially more money to the State’s school system.

However, this court did not simply order the legislature to

appropriate substantially more money.

In Montoy II, this court required the legislature to con-

sider the “(1) actual costs of providing a constitutionally

adequate education and (2) funding equity” to fulfill its

constitutional duty for making a “suitable provision for

finance of the educational interests of the state.” 278 Kan.

at 775. The Montoy III court further ordered that the cost

study commissioned by the legislature to be performed by

the LPA incorporate consideration of the costs of outputs

in addition to inputs. 279 Kan. at 843.

LPA completed a study in January 2006, estimating the

costs for providing an education based on four different

models, including three inputs-based models, distin-

guished by class size, and one outputs (or outcomes)-based

model. Although the results of the LPA study may be

considered as part of the legislative history for determin-

ing legislative intent, I agree with the majority's analysis

that we cannot consider the study as evidence because it

has not been subjected to the fact-finding process of

litigation. Nevertheless, the completion of the LPA cost

study substantially complies with our order in Montoy III.

According to the LPA study, the costs of educating Kansas

children using an outcomes-based model requires an

additional $399 million in state funding for the 2006-07

school year. The legislature thereafter enacted S.B. 549,

which provides a 3-year plan for increasing school funding

by approximately $466.2 million. In the first year of the

plan, 2006-07, the legislature increased school funding by

$194.5 million. In the second year of the plan, 2007-08, the

App. 29

increase is $149 million, and in the third year of the plan,

2008-09, the increase is another $122.7 million.

The plaintiffs argue that the legislature has fallen well

short of the $399 million in additional funding necessary

to meet the outcomes-based model costs for the 2006-07

school year. The State and the Kansas Board of Education

(Board), on the other hand, argue that 5.B. 549 substan-

tially complies with this court’s order to consider the

actual costs of education because it was based on the

results of LPA’s cost study. To support their argument, the

State and the Board assert that the overall state funding

provided for 2006-07 will exceed the $399 million increase

recommended in the LPA study. However, their argument

depends on the inclusion of equalizing LOB state aid as

part of the State’s funding obligation in accordance with

section 20 of S.B. 549. Because LPA did not include equal-

izing LOB state aid as part of the State’s funding for basic

operating costs when it calculated the amount of increased

funding needed for the outcomes-based education model,

the State and the Board argue that the $399 million figure

must be reduced by the amount of equalizing LOB state

aid.

According to the State and the Board, in 2005-06, the

State provided $222 million in equalizing LOB state aid.

The State argues that after deducting the $222 million

from LPA’s recommended increase of $399 million, the

total funding increase would be reduced to approximately

$180 million. Because S.B. 549 provides $194.5 million in

new funding for the 2006-07 school year, the State and the

Board assert that the legislature has exceeded LPA’s

recommended funding increase.

App. 30

Upon closer scrutiny of the State’s figures, it appears the

State’s calculation fails to account for approximately $38

million. This is because LPA’s $399 million figure does not

include the approximately $38 million in additional

equalizing LOB state aid that would be required if LPA’s

funding recommendation were adopted. The new funding

provided by S.B. 549, however, does include that $38

million increase. Nevertheless, this discrepancy is not

significant enough to alter my analysis. If LPA’s $399

million figure is adjusted to include an additional $38

million in increased LOB state aid funding, and $222

million is deducted from that, LPA’s recommendation, as

adjusted, would be $215 million.

When that figure is compared with the $194.5 million

funding increase provided by S.B. 549 for 2006-07, there is

substantial compliance with LPA’s recommended funding

increase for the outcomes-based model. Accordingly, I

conclude that the State has substantially complied with

this court’s order to consider the “actual costs of providing

a constitutionally adequate education.” Montoy III, 279

Kan. at 830.

In addition to requiring the State to consider the actual

costs for providing a constitutional education, this court

required the funding to be equitably distributed. Montoy

II, 278 Kan. at 775. I find that the legislature has been

responsive to our order to provide for equitable distribu-

tion of funding in two significant ways. Our equity con-

cerns included disparate funding between the low

enrollment districts and the middle- and large-sized

districts with high percentages of special needs students. I

agree with the majority that the significant increases in

funding directed to the middle- and large-sized districts

has reduced the relative significance of the low enrollment

App. 31

weighting in the formula. The legislature has also re-

sponded to our concerns about LOB inequities due to

property value disparities by raising the assessed valua-

tion per pupil (AVPP) from the 75th percentile to the 81.2

percentile for equalizing LOB state aid. K.S.A. 2005 Supp.

72-6434(a).

However, I have some concern with the new provisions of

S.B. 549 that include equalizing LOB state aid as part of

the State’s funding toward meeting its constitutional

requirement to suitably fund public education. My concern

centers on the fact that in order to receive LOB state aid,

districts have to impose a local property tax levy by

enacting an LOB. Essentially, the State is arguing that

- allowing local districts to levy property taxes as a condi-

tion for receiving equalizing LOB state aid is synonymous

with providing state funding. However, because the LOB is

optional and some school boards or taxpayers may reject a

local tax to support their school district, children in

districts in which base level funding is inadequate and in

which an LOB is not adopted, or is not adopted at the full

cap, may not have the funds necessary for a constitution-

ally adequate education. In other words, if equalizing LOB

state aid would be necessary to fund a district’s basic

educational costs, and a district or its voters choose not to

adopt LOB funding in full or in part, the legislature has

not met its constitutional duty to those children in that

district. Counting equalizing LOB state aid as part of the

State’s foundation funding in essence shifts the legisla-

ture’s constitutional responsibility to the local school

districts. While the legislature may constitutionally allow

local districts to choose to provide extras beyond the

minimum constitutionally adequate education, Montoy III,

279 Kan. at 839, it cannot allow districts to choose to fund

App. 32

less. By including equalizing LOB state aid to establish

that S.B. 549 provides adequate funding, the legislature is

essentially making the LOB funding mandatory in those

districts where a constitutionally adequate education is

not provided by base level state funding.

As of 2003, all but four of the Kansas school districts have

epted into the LOB funding, and many were at the maxi-

mum cap as it then existed. Because there is such a high

level of participation in the LOB funding, my concern

about the equalizing LOB state aid does not alter my

conclusion that S.B. 549 substantially complies with our

order to consider actual costs and equitably distribute the

State’s education funding. However, so long as the legisla-

ture allows the LOB to remain an optional funding source

rather than a mandatory one, my concern may be relevant

in any subsequent challenge to the funding formula as

amended by S.B. 549. In the school districts that receive

less than the base level of state funding and which would

have been eligible for equalizing LOB state aid but do not

adopt an LOB at all, or adopt an LOB in an amount lower

than the amount necessary to generate the funding short-

fall, the State is arguably still responsible for providing

constitutionally adequate funding. If other school districts

begin opting out in part or in full of the LOB funding, the

equitable distribution of state funding may be at risk.

Such heavy dependence on a local contribution has histori-

cally caused disparity and equity concerns which have led

to Kansas school finance litigation, including this case. We

must never again allow a funding scheme that makes the

quality of a child’s education a function of his or her

parent’s or neighbors’ wealth.

The inclusion of equalizing LOB state aid in S.B. 549

provides an essential financial log in keeping afloat the

App. 33

raft of adequate funding for the education of Kansas

children. However, if local communities at some future

time decide to remove that log, the delicate raft will have a

difficult time remaining afloat, and, again, the constitu-

tional right of all Kansas children to a suitably funded

education could soon find itself imperiled.

I further note my disagreement with the dissenting

position that this case should be remanded for factfinding.

Although I agree that the LPA study cannot be considered

as evidence, I reject the conclusion that we cannot evalu-

ate the legislature’s compliance with this court’s prior.

orders without remanding the matter. Following the

dissent’s analysis, we could only evaluate the legislature’s

compliance with this court’s prior orders if the legislature

had followed the A&M study because it was the only cost

study in evidence. If this court had intended to require

adherence to the A&M study, it should not have deferred

further consideration pending the completion of the new

cost study, as it did in Montoy III.

In rejecting the dissenting position, it is important to note

that I am not accepting the LPA study as a model for a

constitutionally adequate education. The A&M study

estimated the costs for an educational model based on

certain inputs and outcomes. The LPA study, on the other

hand, estimated the costs for completely different educa-

tional models, either based on inputs or outcomes, but not

a combination of the two. Without evidence and expert

opinions regarding the adequacy of each LPA educational

model, this court cannot conclude that the LPA model

would provide a constitutionally adequate education. If we

were to require such evidence before making a decision, we

would find ourselves trying to hit a moving target unless

each new cost study estimated the costs for exactly the

App. 34

same educational model. However, the decisions in this

ease demonstrate that the model for a constitutionally

adequate education has not been a stationary, definable

concept.

In Montoy I, this court ruled that accreditation standards

may not be an adequate model. 275 Kan. at 155. In Montoy

II, the court reiterated that accreditation standards may

not always be adequate and then relied on the legislature’s

own definition of “suitable education” in K.S.A. 46-1225(e)

(statute authorizing A&M study) to conclude that the

standard was not being met. 278 Kan. at 774-75. In

Montoy III, this court adopted the educational model from

the A&M study as a constitutionally adequate education.

Montoy III, 279 Kan. at 844. However, the Montoy III

court also interjected another educational model by requir-

ing the legislature to estimate the costs for achieving the

outputs as necessary elements of a constitutionally ade-

quate education. The Montoy III court also defined a

constitutionally adequate education in accordance with

K.S.A. 72-6439, the statute that requires the Kansas

Board of Education to adopt an accreditation system based

upon an improvement in performance.

As long as the target model for a constitutionally adequate

education continues to move, the litigation in this case

could continue in perpetuity. Each new cost study based on

a new model would require factual testing at the district

court before this court could determine whether the

amended legislation is constitutional. Such a process

would extend into an indefinite future, and the children of

Kansas need a resolution of this matter now. Therefore,

based on my analysis that the legislature has substan-

tially complied with this court’s prior orders, I concur with

the result of the majority opinion dismissing this case.

App. 35

BEIER, J., concurring in part and dissenting in part: I

concur with much in the majority's opinion, including its

implicit decision not to interfere with immediate imple-

mentation of 2006 S. B. 549 (L. 2006, ch. 197). Implemen-

tation must proceed, pending further order of this court.

As we have previously observed, time is of the essence.

Kansas school administrators, employees, and students

need to plan for the coming school year and those that

follow, with the assurance that the state funds promised

by the legislature and governor by way of S.B. 549 will

actually be forthcoming.

I respectfully dissent from the majority’ decision to

dismiss this action, leaving for another day in a future

lawsuit the determination of whether S.B. 549 meets the

standard of Article 6, § 6 of the Kansas Constitution. That

issue is alive in this action. Constitutionality has always

been and remains squarely presented. Further, our earlier

opinions and orders in this case consistently and correctly

equated compliance with this court’s directives to adher-

ence to the legislature’s constitutional mandate. I am not

willing to divorce these concepts now. If the State has

demonstrated compliance with our directives, the legisia-

ture has corrected the constitutional deficiencies in the

Kansas design for school finance. The converse would also

be true: If the State has not demonstrated compliance with

our directives, the legislature has not corrected the consti-

tutional deficiencies in the school finance design. Logically

and legally, if we meant what we have said, one cannot be

satisfied without the other.

Reduced to its essence, our June 3, 2005, Supplemental

Opinion had two components. The first dealt with the need

for increased funding in the 2005-06 school year. That

component is moot. The second component dealt with

App. 36

constitutionality of Kansas’ school finance design beyond

the 2005-06 school year. With regard to that component,

we said:

“(If (1) the post audit study is not completed or timely

submitted for the legislature to consider and act upon it

during the 2006 session, (2) the post audit study is judi-

cially or legislatively determined not to be a valid cost

study, or (3) legislation is not enacted which is based upon

actual and necessary costs of providing a suitable system

of finance and which equitably distributes the funding, we

will consider, among other remedies, ordering that, at a

minimum, the remaining two-thirds ($568 million) in

increased funding based upon the [Augenblick and Myers]

(A&M) study be implemented for the 2006-07 school year.”

Montoy v. State, 279 Kan. 817, 846, 112 P.3d 923 (2005).

The problem facing the parties and this court now is that,

on the appellate record before us, we cannot know the

status of (2) or (3) above. The soundness of the methodology

and conclusions of the Legislative Division of Post Audit

(LPA) cost study have not been tested by a typical adver-

sary process. No evidence has been admitted on the ways in

which the members of the legislature considered actual and

necessary costs or equity. Without testimony and documen-

tary evidence in the record to evaluate on these matters,

this court simply cannot conclude the State has carried the

burden placed upon it last year to demonstrate that the

legislature’s actions brought Kansas’ school finance system

into compliance with the state constitution. The appropriate

way to respond is not to throw the plaintiffs out of court. It

is to retain jurisdiction, acknowledge the factual deficien-

cies of the record, and remand to the district court for

further proceedings focused on the constitutionality of the

finance system, as altered by S.B. 549.

App. 37

The district court proceedings could include any necessary

substitution or realignment of parties, amendment of

pleadings, appropriate discovery, and, finally, trial. Such a

trial would, among other things, test the methodology and

conclusions of the LPA study and the soundness of legisla-

tors’ consideration of it in their crafting of S.B. 549. It

would also give us a record on the actual adequacy and

equity effects of S.B. 549, including the redesignation of

local option budget equalization aid, a redesignation never

mentioned by any party in 2005 but upon which the State

now wishes us to rely heavily to dismiss this case. Such a

trial, and the careful study of the district court, also could

illuminate whether a need for further remedial action

persists, and, if so, what form it should take.

There is no question that the legislature has made sub-

stantial efforts to improve the adequacy and equity of our

school finance system. The political realities of the legisla-

tive process make perfection unattainable, and no amount

of money committed to public education will ever solve all

of the problems of Kansas’ urban poor or of its rural

communities losing population. Still, because I am unwill-

ing to graft a “good enough for government work” phrase

onto Article 6, § 6 of our state constitution, I would permit

this case to continue in the district court, where it may be

finally resolved or prepared for further, much better

informed review by myself and my colleagues.

LUCKERT, J., joins in the foregoing concurring and

dissenting opinion.

END

App. 38

IN THE SUPREME COURT OF THE STATE OF KANSAS

No. 92,032

RYAN MONTOY, ez ai.,

Appellees/Cross-appellants,

STATE OF KANSAS, et al.,

Appellants/Cross-appellees.

SUPPLEMENTAL OPINION

Appeal from Shawnee district court; TERRY L. BUL-

LOCK, judge. Supplemental opinion filed June 3, 2005.

2005 House Bill “247 is not in compliance with the Janu-

ary 3, 2005, opinion of this court and fails to remedy the

constitutional infirmities in the Kansas School District

Finance and Quality Performance Act (SDFQPA), K.S.A.

72-6405 et seq., identified in that opinion.

Kenneth L. Weltz, of Lathrop & Gage L.C., of Overland

Park, argued the cause, and Curtis L. Tideman, Alok

Ahuja, and Jeffrey R. King, of the same firm, and David W.

Davies, assistant attorney general, and Phill Kline, attor-

ney general, were with him on the briefs for appel-

lant/cross-appellee State of Kansas.

Dan Biles, of Gates, Biles, Shields & Ryan, PA., of Over-

land Park, argued the cause, and Rodney J. Bieker, of

Kansas Department of Education, and Cheryl Lynn Whe-

lan, of Lawrence, were with him on the briefs for appel-

iants/cross-appellees Janet Waugh, Sue Gamble, John

Bacon, Bill Wagnon, Connie Morris, Kathy Martin, Ken-

neth Willard, Carol Rupe, Iris Van Meter, Steve Abrams,

and Andy Tompkins.

App. 39

Alan L. Rupe, of Kutak Rock LLP, of Wichita, argued the

cause, and Richard A. Olmstead, of the same firm, and

John S. Robb, of Somers Robb & Robb, of Newton, were

with him on the briefs for appellees/cross-appellants.

Wm. Scott Hesse, assistant attorney general, was on the

brief for defendants/cross-appellees Governor Kathleen

Sebelius and State Treasurer Lynn Jenkins.

Jane L. Williams, of Seigfreid, Bingham, Levy, Selzer &

Gee, of Kansas City, Missouri, was on the briefs for amicus

curiae Kansas Families United for Public Education.

Patricia E. Baker and Zachary J.C. Anshutz, of Kansas

Association of School Boards, of Topeka, were on the briefs

for amicus curiae Kansas Association of School Boards.

David M. Schauner and Robert M. Blaufuss, of Kansas

National Education Association, of Topeka, were on the

briefs for amicus curiae Kansas National Education

Association.

Joseph W. Zima, of Topeka Public Schools, was on the brief

for amicus curiae Unified School District No. 501,

Shawnee County, Kansas.

Michael G. Norris and Melissa D. Hillman, of Norris,

Keplinger & Hillman, L.L.C., of Overland Park, were on

the brief for amici curiae Unified School Districts Nos.

233, 229, and 232, Johnson County, Kansas.

Anne M. Kindling, of Goodell, Stratton, Edmonds &

Palmer, L.L.P., of Topeka, was on the briefs for amicus

curiae Unified School District No. 512, Shawnee Mission,

Kansas.

App. 40

Bernard T. Giefer, of Giefer Law LLC, of WaKeeney, was

on the briefs for amici curiae Unified School District No.

208, Trego County, Kansas (WaKeeney), et al. (60 other

Kansas school districts).

Thomas R. Powell and Roger M. Theis, of Hinkle Elkouri

Law Firm L.L.C., of Wichita, were on the briefs for amicus

curiae Unified School District No. 259, Sedgwick County,

Kansas.

Janice L. Mathis, of Rainbow/PUSH Coalition, of Atlanta,

Georgia, was on the brief for amicus curiae Rain-

bow/PUSH Coalition.

Cynthia J. Sheppeard, of Weathers & Riley, of Topeka, was

on the briefs for amicus curiae Kansas Action for Children.

Bob L. Corkins, of Lawrence, was on the brief for amicus

curiae Kansas Taxpayers Network.

Kirk W. Lowry, of Kansas Advocacy & Protective Services,

of Topeka, was on the brief for amicus curiae Kansas

Advocacy & Protective Services.

Martha B. Crow, of Crow, Clothier & Associates, of

Leavenworth, was on the brief for amicus curiae Martha

B. Crow. Dr. Walt Chappell, of Wichita, was on the brief for

amicus curiae Educational Manageme. Consultants.

Tristan L. Duncan and Daniel D. Crabtree, of Stinson

Morrison Hecker L.L.P., of Overland Park, were on the

brief for amici curiae Individual Students in the Shawnee

Mission Unified School District No. 512.

Per Curiam: This case requires us to review recent school

finance legislation to determine whether it complies with

our January 3, 2005, opinion and brings the state’s school

App. 41

financing formula into compliance with Article 6, § 6 of the

Kansas Constitution. We hold that it does not.

FACTS

In our January opinion, this court reversed the dis-

trict court in part and affirmed in part, agreeing that the

legislature had failed to make suitable provision for

finance of the public school system and, thus, had failed to

meet the burden imposed by Article 6, § 6 of the Kansas

Constitution. Montoy v. State, 278 Kan. 769, 102 P.3d 1160

(2005) (Montoy IT). Among other things, we held that the

Kansas School District Finance and Quality Performance

Act (SDFQPA), K.S.A. 72-6405 et seq., as funded, failed to

provide suitable finance for students in middle-sized and

large districts with a high proportion of minority and/or

at-risk arid special education students; some school dis-

tricts were being forced to use local option budgets (LOB)

to finance a constitutionally adequate education, i.e,

suitable education; the SDFQPA was not based upon

actual costs, but rather on former spending levels and

political compromise; and the failure to perform any cost

analysis distorted the low-enrollment, special education,

vocational education, bilingual, and at-risk student

weighting factors.

We further held that among the critical factors for the

legislature to consider in achieving a suitable formula for

financing education were “equity with which the funds are

distributed and the actual costs of education, including

appropriate levels of administrative costs.” We provided

this guidance because “the present financing formula

increases disparities in funding, not based on a cost

analysis, but rather on political and other factors not

App. 42

relevant to education.” We also held that “increased

funding will be required.” Montoy IT, 278 Kan. at 775.

We stayed the issuance of the mandate to allow the legis-

lature a reasonable time to correct the constitutional

infirmity in the then existing financing formula. Rather

than suspend the funding of education, we ordered that.

the present financing formula and funding would remain

in effect until the court took further action, noting: “The

legislature, by its action or lack thereof in the 2005 ses-

sion, will dictate what form our final remedy, if necessary,

will take.” We set a deadline of April 12, 2005. Montoy IJ,

278 Kan. at 776.

The legislature timely responded by enacting 2005 House

Bill 2247 on March 30, 2005, which was modified by 2005

Senate Bill 43, passed during the veto session (collectively

H.B. 2247). The Governor allowed the bill to become law

without her signature, and the new legislation was deliv-

ered to this court.

On April 15, 2005, we issued an order which, among other

things, directed the parties to file briefs addressing

“whether the financing formula, as amended by H.B. 2247,

meets the legislature’s constitutional burden to ‘make

suitable provision for finance’ of the public schools.”

The parties were first directed to address 10 specific

components of the financing formula. With respect to each

of the components, as well as to the formula as a whole,

the parties were asked to address our special concern as to

whether the actual costs of providing a suitable education

was considered and whether H.B. 2247 exacerbates and/or

creates funding disparities among the districts.

App. 43

Second, the parties were asked to address whether addi-

tional fact-finding would be necessary, and, if so, how that

fact-finding should be pursued.

Third, the parties were asked to address what remedial

action should be ordered and on what timetable in the

event the court concludes, without additional fact-finding,

that the financing formula, as amended by H.B. 2247, is

still unconstitutional.

The parties were ordered to appear before this court on

May 11, 2005, to show cause why the court should or

should not find that H.B. 2247 complied with our January

opinion. We recognized that the burden of proof had been

on the plaintiffs to show that the SDFQPA, as it existed at

the time of the filing of the action herein, was constitu-

tionally infirm. We held that because the plaintiffs had

prevailed, the burden of proof had “shifted to the defen-

dants to show that the legislature’s action has resulted in

suitable provision for the financing of education as re-

quired by Article 6, § 6.”

Pursuant to our April order, the defendants, State of

Kansas (State) and the Board of Education members and

Commissioner of Education (Board), filed separate briefs.

The plaintiffs filed a response brief. Ten amici curiae

briefs were filed. Oral arguments were heard by this court

on May 11, 2005.

We must now decide if H.B. 2247 remedies the SDFQPA

infirmities identified in our January opinion and thus

makes suitable provision for financing of education as

mandated by Article 6, § 6 of the Kansas Constitution. To

do that, we first need to identify the changes H.B. 2247

makes in the SDFQPA.

App. 44

H.B. 2247 modifies the school finance system in several

ways. First, it alters the Base State Aid Per Pupil (B

SAPP) and several of the weightings and other factors that

affect the formula. It increases bilingual and at-risk

weightings; it eliminates correlation weighting; it provides

for phased-in increases in funding of special education

excess costs at a statutorily prescribed level; and it pro-

vides for increases in general state aid based on the

Consumer Price Index-Urban (CIP-U). It does not substan-

tively change the low-enrollment weighting provision as it

existed at the time of the January opinion.

Second, it provides certain districts the authority to raise

additional revenue through local ad valorem taxes upon

taxable tangible property within the district. Specifically,

it provides a phased-in increase in the LOB cap. Before

H.B. 2247 was enacted, a school district could enact a LOB

that was as much as 25 percent of its state financial aid.

K.S.A. 72-6433(a)(1)(A)-(D); K.S.A. 72-6444. H.B. 2247

makes incremental increases in this cap of 27 percent in

the 2005-06 school year, 29 percent in 2006-07, and 30

percent in 2007-08. H.B. 2247 also authorizes districts

with high housing costs to levy additional ad valorem

taxes upon the taxable tangible property within the

district. The rationale for this provision is to allow dis-

tricts to pay enhanced teacher salaries. In addition,

districts with extraordinary declining enrollment may

apply to the Board of Tax Appeals (BOTA) for permission

to levy an ad valorem tax on the taxable tangible property

of the district in an amount authorized by BOTA.

Third, H.B. 2247 makes several nonformula changes. It

provides for statutorily mandated areas of instruction;

establishes an 11-member “2010 Commission” to provide

legislative oversight of the school finance system; and

App. 45

provides for a study by the Legislative Division of Post

Audit to “determine the costs of delivering the kindergar-

ten and grades one through 12 curriculum, related ser-

vices and other programs mandated by state statute in

accredited schools.”

Fourth, H.B. 2247 limits all new local capital outlay mill

levies to eight mills. SDFQPA originally capped the capital

outlay level at four mills, but the cap was completely

removed in 1999.

Fifth, certain changes to H.B. 2247 made by S.B. 43 are

slated to become effective July 1, 2005, while other provi-

sions became law upon publication in the Kansas Register.

See S.B. 43, secs. 27, 28.

The estimated grand total for H.B. 2247’s fiscal impact is

approximately $142” million in additional state funding

for the 2005-06 school year.

DISCUSSION AND ANALYSIS

Overall, the State claims that the constitutionality of the

school financing formula as amended by H.B. 2247 is not

properly before this court. In its view, this case can ad-

dress only the former financing formula, which no longer

exists. Regarding the important issue of consideration of

actual costs, the State contends that the legislature did

consider such costs to the extent, possible. At oral argu-

ments, the State repeatedly claimed that our focus should

be limited to whether the legislature had authority to pass

school finance legislation, suggesting any further interven-

tion by this court would offend the separation of powers

doctrine and the carefully calibrated system of checks and

balances among our three branches of government.

App. 46 :

In the alternative, the State generally argues that if the

financing formula’s constitutionality remains at issue,

H.B. 2247 should enjoy a presumption of constitutionality

and the burden of proof should be upon the plaintiffs to

demonstrate otherwise. Moreover, if the court should

determine that further fact-finding is necessary on the

constitutional issue, the case should be remanded for

further proceedings, with the present legislation remain-

ing in effect until the remand produces another district

court ruling. Finally, as another alternative, the State

argues that if this court holds the legislation unconstitu-

tional, without remand, then our only authority is to strike

it in toto. In that event, the State contends, the legislature

would have to enact new legislation, because.this court

has no authority to impose an interim funding plan.

In contrast, the Board argues that the issue before us is

whether the State complied with our January opinion. It

generally disagrees that the legislation fully meets the

legislature’s constitutional obligation. It also argues that

H.B. 2247’s modifications to the financing formula were

not based upon the actual costs of providing a suitable

education. However, because the legislation commissions a

cost study, the Board asserts this court should uphold the

legislation as an adequate interim first step in a multi-

year remedial response. It urges us to hold that the

changes made by H.B. 2247 are sufficient pending the

results of the cost study, i.e., an installment on the first

remedy year toward what may very well be a much larger

obligation based on the evidence in this case.

The Board strongly disagrees, however, with the legisla-

tion’s provisions allowing increased funding authority

based solely on local ad valorem property taxes, because it

believes these provisions exacerbate funding inequities

App. 47

based on district wealth. It asks that these provisions be

stricken, with the remainder of H.B. 2247 taking effect to

enable school districts to plan for the rapidly approaching

school year with the benefit of increased state aid. The

Board also specifically disagrees with the parameters of

the legislature’s proposed cost study and expresses con-

cerns that merely studying how much money has been

spent over the years on a broken school financing system

will be of little assistance. As a result, it argues that

additional fact-finding will be necessary to determine the

future costs of providing a suitable education.

The plaintiffs argue the increases in funding “fall grossly

short of what is actually necessary to provide a constitu-

tionally suitable education.” They agree with the Board

that actual costs were not considered and allege that the

legislation was the result of political compromise and what

the majority of the legislature believed it could provide

without raising taxes. They also agree with the Board that

the three provisions dependent on local ad valorem prop-

erty taxes compound the formula’s unjustified funding

disparities.

The plaintiffs further argue that additional fact-finding is

unnecessary. They ask us to (1) declare the legislation

unconstitutional; (2) direct the Board to design a tempo-

rary school funding plan that incorporates recommenda-

tions from the 2001 Augenblick & Myers Study (A&M

study), and direct the State to implement the plan, on a

temporary basis, by July 1, 2005; (3) direct the State to

enact constitutional legislation for funding public educa-

tion; and (4) retain jurisdiction to ensure our orders are

followed.

App. 48

With this overview of the parties’ arguments in mind, we

turn to consideration of more specific contentions.

In support of its argument that the financing formula, as

amended by H.B. 2247, is no longer properly before us, the

State relies on Knowles v. State Board of Education, 219

Kan. 271, 547 P.2d 699 (1976). It characterizes Knowles as

“indistinguishable” from the situation before us. In fact,

the State’s reliance on Knowles is misplaced because

Knowles was before this court in an entirely different

procedural posture.

In Knowles, the district court struck down the 1973 School

District Equalization Act as unconstitutional. Because the

legislature was in session when the judgment was entered,

the district court withheld issuing a remedy in order to

give the legislature time to correct “the inequities.” The

legislature amended the 1973 School District Equalization

Act effective July 1, 1975. The district court took judicial

notice of the new bill, declined to hear new evidence,

dissolved the injunction, and dismissed the case. The

district court held that because the legislature enacted

new legislation, the law as it existed on the date of the

decision no longer was in effect. Thus any determination

concerning the constitutionality of the old law was moot,

and any issue of the constitutionality of the new legisla-

tion was an entirely new matter that must be litigated in a

new action. Knowles, 219 Kan. at 274.

The Knowles plaintiffs appealed the order dissolving the

injunction and dismissing the case. This court found the

new legislation had not rendered the case moot and

reversed and remanded the matter to the district court for

additional fact-finding on the changes made to the for-

mula. This court rejected the plaintiffs’ request that it rule

App. 49

on the constitutionality of the new legislation, stating that

the facts and figures necessary to demonstrate plaintiffs’

claims as to the new legislation were not part of the record

before the court. Knowles, 219 Kan. at 278.

In Knowles, this court did not review the 1973 Act in the

first instance; nor did it reach an independent conclusion

as to the constitutionality of that Act. In contrast, in the

instant case, not only was the issue of the constitutionality

of the SDFQPA before this court pursuant to our appellate

jurisdiction, but also we evaluated the district court’s

findings of fact to determine if they were supported by

substantial competent evidence and determined the school

financing formula was unconstitutional. In addition, the

statutory amendments at issue in Knowles were made in

response to the district court’s declaratory judgment

issued while it still had jurisdiction over the case. Here,

H.B. 2247 arose as a remedy in response to a specific order

of this court while we retained jurisdiction. Due to these

differences, the following statement in Knowles actually

supports our continuing review at this juncture:

“The right of persons to challenge the constitutional effect

of a law upon their persons or property should not be

aborted every time the law is amended by the legislature.

In some instances amendments occur almost annually

with minimal impact upon the overall effect of the law. It

is entirely possible that the 1976 legislature will again

amend this Act.

“The nature of this controversy is such that the rights of

the parties continue to be affected by the law. It is an

ongoing e@ntroversy which can be adjudicated in the

App. 50

present action as well, if not better, than in a new action

filed.” Knowles, 219 Kan. at 279-80.

In short, this court’s retained jurisdiction allows a review

to determine if there has been compliance with our opin-

ion.

The State’s next argument — that if the provisions of H.B.

2247 are properly before us, we must presume that the

new statute is constitutional — has already been rejected.

(Order, 4/15/05.) While this presumption normally applies

to initial review of statutes, in this case we have already

determined the financing formula does not comply with _

Article 6, §6. H.B. 2247 was passed because this court

ordered remedial action. The State now presents its

remedy for our determination of whether it complies with

our order.

The Ohio Supreme Court faced the same argument after

the Ohio Legislature passed school finance legislation in

response to the court’s ruling that the system was uncon-

stitutional. It also rejected the argument, stating:

“The legislature has the power to draft legislation, and the

court has the power to determine whether that legislation

complies with the Constitution. However, while it is for the

General Assembly to legislate a remedy, courts do possess

the authority to enforce their orders, since the power to

declare a particular law or enactment unconstitutional

must include the power to require a revision of that enact-

ment, to ensure that it is then constitutional. If it did not,

then the power to find a particular Act unconstitutional

would be a nullity. As a result there would be no enforce-

able remedy. A remedy that is never enforced is truly not a

remedy.” (Emphasis added.) DeRolph v. State, 89 Ohio St.

3d 1, 12, 728 N.E.2d 993 (2000).

App. 51

Typically a party asserting compliance with a court deci-

sion ordering remedial action bears the burden of estab-

lishing that compliance, and our April 15 order made the

allocation of that burden clear in this case. See also

DeRolph v. State, 83 Ohio St. 3d 1212, 1212, 699 N.E.2d

518 (1998) (state must meet burden by preponderance of

evidence standard).

We also reject the State’s related argument that the

doctrine of separation of powers limits our review to the

issue of whether the legislature had the authority to pass

~ such legislation. Any language in U.S.D. No. 229 v. State,

256 Kan. 232, 236-38, 885 P.2d 1170 (1994), to this effect is

inapplicable here because of this case’s remedial posture.

Even now, however, we do not quarrel with the legisla-

ture’s authority. We simply recognize that the final deci- -

sion as to the constitutionality of legislation rests

exclusively with the courts. Although the balance of power

may be delicate, ever since Marbury v. Madison, 5 U.S. (1

Cranch) 137, 2 L. Ed. 60 (1803), it has been settled that

the judiciarys sworn duty includes judicial review of

legislation for constitutional infirmity. We are not at

liberty to abdicate our own constitutional duty.

Again, like arguments have been raised in other state

courts. Other state courts consistently reaffirm their

authority, indeed their duty, to engage in judicial review

and, when necessary, compe! the legislative and executive

branches to conform their actions to that which the consti-

tution requires.

For example, in Lake View Sch. Dist. No. 25 v. Huckabee,

351 Ark. 31, 54-55, 91 S.W.3d 472 (2002), the court re-

viewed legislation passed after its 1994 determination that

App. 52

the Arkansas school financing system violated the educa-

tion provisions of that state’s constitution. The Arkansas

Supreme Court stated:

“This court’s refusal to review school funding under our

state constitution would be a complete abrogation of our

judicial responsibility and would work a severe disservice

to the people of this state. We refuse to close our eyes or

turn a deaf ear to claims of a dereliction of duty in the field

of education. As Justice Hugo Black once sagely advised:

{T]he judiciary was made independent because it has...

the primary responsibility and duty of giving force and

effect to constitutional liberties and limitations upon the

executive and legislative branches.’ Hugo L. Black, The Bill

of Rights, 35 N.Y.U.L. Rev. 865, 870 (1960).

__—

“The Supreme Court of Kentucky has emphasized the

need for judicial review in school-funding matters. The

language of that court summarizes our position on the

matter, both eloquently and forcefully, and, we adopt it:

‘Before proceeding ... to a definition of “efficient” we must

address a point made by the appellants with respect to our

authority to enter this fray and to “stick our judicial noses”

into what is argued to be strictly the General Assembly’s

business.

‘ ... [In this case] we are asked — based solely on the

evidence in the record before us — if the present system of

common schools in Kentucky is “efficient” in the constitu-

tional sense. It is our sworn duty to decide such questions

when they are before us by applying the constitution. The

duty of the judiciary in Kentucky was so determined when

the citizens of Kentucky enacted the social compact called

App. 53

the constitution and in it provided for the existence of a

third equal branch of government, the judiciary.

‘ ... To avoid deciding the case because of “legislative

discretion,” “legislative function,” etc., would be a denigra-

tion of our own constitutional duty. To allow the General

Assembly (or, in point of fact, the Executive) to decide

whether its actions are constitutional is literally unthink-

able.

‘The judiciary has the ultimate power, and the duty, to

apply, interpret, define, and construe all words, phrases,

sentences and sections of the Kentucky Constitution as

necessitated by the controversies before it. It is solely the

function of the judiciary to so do. This duty must be

exercised even when such action services as a check on the

activities of another branch of government or when the

court’s view of the constitution is contrary to that of other

branches, or even that of the public.’” (Emphasis added.)

Almost 60 years ago the Kansas Supreme Court addressed

the separation of powers issue in the non-school finance

case of Berentz v. Comm'rs of Coffeyville, 159 Kan. 58, 152

P.2d 53 (1944). There the appellants challenged a pension

act on the grounds it violated Article 2, § 17 of the Kansas

Constitution. Finding the challenge meritorious, this court

noted:

“(T]his court has always approached consideration of

questions challenging the constitutionality of statutes with

a disposition to determine them in such manner as to

sustain the validity of the enactment in question. It has

repeatedly recognized, as we do now, the rule that it is the

duty of the court to uphold a law whenever such action is

possible. In so doing it has not, however, lost sight of the -

fact that constitutions are the work not of legislatures or of

App. 54

courts, but of the people, and when in its calm and deliber-

ate judgment, free from the influences frequently responsi-

ble for legislative enactments, it determines rights

guaranteed by its provisions have been encroached upon it

has, with equal consistency, recognized its duty and obliga-

tion to declare those enactments in contravention of consti-

tutional provisions.” (Emphasis added.) 159 Kan. at 62-63.

Our holding in Berentz is consistent with decisions in

other states when a challenge has been made to the

constitutionality of school finance systems and a separa-

tion of powers issue has arisen during the remedial phase.

We agree with the conclusions drawn by one commentator

reviewing those cases:

“(Jjudicial monitoring in the remedial phase can help

check political process defects and ensure that meaningful

relief effectuates the court’s decision.

“Thus, when these defects lead to a continued constitu-

tional violation, judicial action is entirely consistent with

separation of powers principles and the judicial role.

Although state constitutions may commit educational

matters to the legislative and executive branches, if these

branches fail to fulfill such duties in a constitutional

manner, ‘the Court too must accept its continuing constitu-

tional responsibility .. . for overview . . . of compliance with

the constitutional imperative.’ Moreover, unlike federal

courts, state courts need not be constrained by federalism

issues of comity or state sovereignty when exercising

remedial power over a state legislature, for state courts

operat within the system of a single sovereign.

“Nor should doubts about the court’s equitable power to

spur legislative action or to reject deficient legislation

impede judicious over-sight. An active judicial role in

App. 55

monitoring remedy formulation i: well-rooted in the

courts’ equitable powers. As long as such power is exer-

cised only after legislative noncompliance, it is entirely

appropriate.” (Emphasis added.) Note, “Unfulfilled Prom-

ise: School Finance Remedies and State Courts,” 104 Harv.

L. Rev. 1072, 1087-88 (1991).

We now turn to this court’s specific concerns about

whether the actual costs of providing a constitutionally

adequate education were considered as to each of the

formula components and the statutory formula as a whole,

and whether any unjustified funding disparities have been

exacerbated rather than ameliorated by H.B. 2247. In this -

determination we will be guided, in large part, by the

A&M study, despite the State’s criticism of it and our

knowledge that, at best, its conclusions are dated. We do

so for several reasons.

First, the A&M study is competent evidence admitted at

trial and is part of the record in this appeal. See Montoy II,

278 Kan. at 774 (within the extensive record on appeal

“there is substantial competent evidence, including the

Augenblick & Myers study, establishing that a suitable

education, as that term is defined by the legislature, is not

being provided”).

Second, the legislature itself commissioned the study to

determine the actual cests to suitably and equitably fund

public school systems; it also maintained the overall author-

ity to shape the contours of the study and to correct any

A&M actions that deviated from its directions during the

process. (See K.S.A. 60-460[h]). As we stated in Montoy IT:

“(Tlhe legislature directed that a professional evaluation

be performed to determine the costs of a suitable educa-

tion for Kansas school children. In authorizing the study,

App. 56

the legislature defined ‘suitable education.’ K.S.A. 2003

Supp. 46-1225(e). The Legislative Education Planning

Committee (LEPC), to whom the task of overseeing the

study was delegated, determined which performance

measures would be utilized in determining if Kansas’

school children were receiving a suitable education. The

evaluation, performed by Augenblick & Myers, utilized the

criteria established by the LEPC, and, in part, examined

whether the current financing formula and funding levels

_were adequate for schools to meet accreditation standards.

and performance criteria. The study concluded that both

the formula and funding levels were inadequate to provide

what the legislature had defined as a suitable education.”

Montoy II, 278 Kan. at 773-74.

Third, the A&M study is the only analysis resembling a

cost study before this court or the legislature.

Fourth, both the Board and the State Department of

Education recommended that the A&M study recommen-

dations be adopted at the time the study was completed

and sent to the legislature.

With the A&M study as background, we next examine the

provisions of H.B. 2247 in light of the two guiding consid-

erations set forth in our January opinion: (1) actual costs

of providing a constitutionally adequate education and (2)

funding equity.

BASE STATE AID PER PUPIL

BSAPP is the foundation upon which school district

funding is built, as state financial aid to schools is deter-

mined by multiplying BSAPP by each district’s “weighted

enrollment.” See K.S.A. 72-6410(b). When the SDFQPA

App. 57

was first implemented in 1992, BSAPP was set at $3,600.

It remained at that level until 1995, when it was increased

by $26 to $3,626. Small increases were funded each year

thereafter until the 2002-03 school year. During the years

of increases, the amounts ranged from an additional $22 to

$50 per student. From 2002 until 2005, the statute al-

lowed for a BSAPP of $3,890; however, only $3,863 was

funded. Over the span of time from when the SDFQPA was

implemented in 1992 until 2005, the legislature increased

the BSAPP only a total of $263. As the plaintiffs point out,

if the BSAPP had been increased to keep up with inflation,

in 2001 alone the increase would have been $557. The

A&M study recommended increasing the base to $4,650 in

2001, resulting in $623.3 million in additional funding (in

2001 dollars).

H.B. 2247 increases the BSAPP from $3,890 to $4,222.

Only $115 of the $359 increase is “new” money; the bal-

ance was achieved by eliminating the correlation weight-

ing and shifting those dollars to BSAPP. The $115 increase

translates to $63.3 million in additional funding flowing

into the financing formula for the 2005-06 school year.

The State argues the legislature considered actual costs in

deciding upon the increase.

The plaintiffs point out that the legislature had the A&M

study recommendations, as well as the results of a 2005

survey conducted by Deputy Commissioner of Education

Dale Dennis for the Senate Education Committee. The

survey, which requested cost information from selected

school districts, showed the BSAPP should be $6,057. The

plaintiffs argue that the legislature ignored the A&M and

Dennis figures, instead looking at historical expenditures

and arbitrarily choosing a BSAPP level based on political

App. 58

compromises and what it believed it could afford without

raising taxes.

The Board contends that the increase in the BSAPP,

coupled with increases in the at-risk and bilingual weight-

ings, provide a substantial increase in funding for those

middle-sized and large districts with a high proportion of

such students. By implication, this is an argument that

the BSAPP increase helps equalize the finding disparity

suffered by those districts.

The plaintiffs, on the other hand, claim that increasing the

BSAPP only exacerbates the inequities in the system

because the formula was not adjusted to make distorted

weights, such as the low-enrollment weight, correspond to

actual costs. For example, for every $1 of base funding

that middle-sized or large districts receive, some low-

enrollment districts receive $2.14. The plaintiffs assert Dr.

Bruce Baker’s testimony at trial and his earlier report

described this effect.

At a minimum, the increased BSAPP provided for in H.B.

2247 substantially varies from any cost information in the

record and from any recommendation of the Board or the

State Department of Education.

AT-RISK

H.B. 2247 increases funding for at-risk students from .10

of the BSAPP to .145. This increased weighting, when

applied to the higher BSAPP, results in an increase of $26

million targeted to at-risk students. The A&M study

recommended a weight of .20 for districts with 200 or

fewer students, .52 for districts with 1,000 students, .59

for districts with 10,000 students, and .60 for districts

App. 59

with 30,000 students, resulting in a range of $1,491 to

$2,790 per student (in 2001 dollars).

Both the State and the Board contend the increased

funding for at-risk students is significant. The Board

argues that, pending performance of a new cost study,

H.B. 2247 should be viewed as a good faith effort toward

legislative compliance with our January 3, 2005, opinion.

The plaintiffs, on the other hand, contend that the in-

creased funding level remains significantly lower than

that recommended by the State’s own expert witness in

1991, before the SDFQPA was enacted. That expert, Dr.

Allan Odden, recommended a .25 minimum weight to

provide an extra $1,000 for each eligible at-risk student.

Neither the State nor the Board contend that actual costs

of educating at-risk students were considered.

BILINGUAL

H.B. 2247 increases the weighting for bilingual programs

from .2 to .395 for the 2005-06 school year and thereafter.

When applied to the higher BSAPP, the result is an $11

million increase in state aid. The Board computes the

effects of these changes to be an additional $1,668 per

bilingual student, a 115.7 percent increase. A&M recom-

mended that the bilingual weighting increase be based on

student enrollment and that it range from .15 to .97,

providing $1,118 to $4,510 per bilingual student.

The plaintiffs point out that this weighting is limited to

“contact hours,” usually a maximum of two hours per day

for each student. This means the $1,668 amount must be

reduced by 2/3, to $556 per actual bilingual student.

App. 60

The State contends that it considered the actual costs of

providing a suitable education for bilingual students. That

contention is based solely on the House Select Committee

on School Financing’s reliance on historical data showing

what school districts had already been spending under the

financing formula we have held to be unconstitutional.

The Board makes no argument as to the weighting’s

relationship to actual costs; it simply repeats that it

regards the change in the weighting as a good faith effort

toward compliance.

Although the increase in this weighting is significant, it

still differs substantially from the cost information in the

record.

SPECIAL EDUCATION

H.B. 2247 provides for a multi-year phased-in increase in

state reimbursement for special education excess costs

from 85 percent in the 2005-06 school year to 88 percent in

2006-07 and 91 percent in 2007-08 and thereafter. Accord-

ing to the evidence at trial, the State had been funding

only 85 percent of the excess costs of special education. For

fiscal year 2005, however, only 81.7 percent of the average

excess costs of special education were funded. Reimburse-

ment at 85 percent thus results in a total finding increase

of $17.7 million for the upcoming school year.

The plaintiffs contend that anything less than 100 percent

reimbursement for a district’s special education costs is a

failure to fund the actual costs of a suitable education. The

State and the Board both disagree, contending less than

100 percent reimbursement furthers the State’s policy of

discouraging school districts from over-identifying stu-

dents as eligible for special education money.

App. 61

The defendants have failed to point to any evidence that

any district has ever over-identified students; and, when

asked at oral arguments, the State’s counsel responded

that he was not aware of any district that had intention-

ally inflated its number of such students to maximize

reimbursement. Furthermore, the A&M study recom-

mended a range, based on student enrollment, of weights

from .90 to 1.50, resulting in a nearly $102.9 million (in

2001 dollars) increase in finding — a stark contrast to the

$17.7 million provided by H.B. 2247.

N BUDGET

H.B. 2247 provides a phased-in increase in the LOB cap

from the current 25 percent to 27 percent in the 2005-06

school year, 29 percent in the 2006-07 school year, and 30

percent in the 2007-08 school year and thereafter.

The plaintiffs argue local districts have been forced to use

the LOB to cover the inadequacies of state funding. They

also argue the use of the LOB increases disparities and

exacerbates inequities.

The Board takes issue with the legislature’s failure to

provide for equalization for the new level of LOB authority

above 25 percent for the 2005-06 school year only. The

absence of equalization means the dollars for the optional

increases must come entirely from each district’s property

tax base, which can worsen wealth-based disparities.

The State argues that the LOB acts as a counterweight to

low-enrollment weighting, at-risk weighting, and perhaps

even bilingual weighting, because the middle-sized and

large districts expected to benefit from the increased LOB

“receive little, if any, of these weightings.”

App. 62

This argument fails because increasing the LOB does not

address inadequate funding of middle-sized and large

districts that have high concentrations of bilingual, at-

risk, minority, and special education students, high pupil-

to-teacher ratios, and high dropout rates, but also have

low median family incomes and low assessed property

valuation. For example, the Emporia school district

demonstrates that size of enrollment does not necessarily

correlate with high property valuations or low numbers of

students who are more costly to educate.

The original intent and purpose of the LOB was to allow

individual districts to levy additional property taxes to

fund enhancements to the constitutionally adequate

education provided and financed under the legislative

financing formula. The evidence before the trial court

demonstrated that the inadequacy of the formula and its

funding had forced some districts to use the LOB to fund

the State’s obligation to provide a constitutionally ade-

quate education rather than enhancements. See Montoy II,

278 Kan. at 774. H.B. 2247 does nothing to discourage this

practice.

We also agree with the plaintiffs and the Board that, in

fact, the legislation’s increase in the LOB cap exacerbates

the wealth-based disparities between districts. Districts

with high assessed property values can reach the maxi-

mum LOB revenues of the “district prescribed percentage

of the amount of state financial aid determined for the

district in the school year” (K.S.A. 72-6433[a][1], amended

by S.B. 43, sec. 17) with far less tax effort than those

districts with lower assessed property values and lower

median family incomes. Thus, the wealthier districts will be

able to generate more funds for elements of a constitution-

ally adequate education that the State has failed to fund.

App. 63

COST-OF-LIVING WEIGHTING

H.B. 2247 authorizes a new local property tax levy for

cost-of-living weighting. As originally enacted, the purpose

of this weighting was to “finance teacher salary enhance-

ments.” H.B. 2247, sec. 19. In S.B. 43, sec. 12, the legisla-

ture removed this limiting provision and no purpose for

the additional funding is now stated in the law. This

weighting is available in those districts where the average

appraised value of a single-family residence exceeds 125

percent of the state average, as long as the district has

already adopted the maximum LOB. This is estimated to

amount to a total funding increase of $24.6 million for the

17 districts that would currently qualify.

This provision, the State asserts, is necessary to allow

districts with high housing costs to recruit and retain

high-quality teachers and is based on the actual costs of

providing an education in those 17 districts that would

qualify.

Counsel for the State could not substantiate, when asked

at oral arguments, its rationale that those 17 districts pay

higher salaries or would pay higher salaries to teachers or

that higher education costs are linked to housing prices.

Further, as the plaintiffs noted, the evidence at trial

demonstrated that it is the districts with high-poverty,

high at-risk student populations that need additional help

in attracting and retaining good teachers.

Furthermore, we note that this weighting, like the in-

crease in the LOB cap, demonstrates the State is not

meeting its obligation to provide suitable financing. Also,

as with the other property-tax based provisions of H.B.

2247 there is a potentially disequalizing effect. Moreover,

since the original reason given for the enhancement,

App. 64

teacher salary increases, has been removed from the

legislation, the funds generated can be used for any

purpose.

LOW-ENROLLMENT WEIGHTING

Low-enrollment weighting provides a sliding scale of

adjustments for districts with fewer than 1,750 students;

as district enrollment decreases past that number, the size

of the adjustment increases. In other words, smaller school

districts receive more favorable treatment based on the

premise that they require additional funding to balance

economies of scale at work for larger districts.

H.B. 2247 did not substantively change the low-enrollment

weighting; it remains a significant component of the

financing formula. Extrapolating from State Department

of Education data, the plaintiffs argue that total state

spending on the low-enrollment weighting in 2003-04 was

$226,189,852. In comparison, total state spending in 2003-

04 on at-risk students was $47,123,964 and on bilingual

students was $8,352,964. The plaintiffs also note that

application of the various weighting factors results in a

large disparity in per pupil aid, ranging in 2002-03 from

$16,968 to $5,655, and this disparity is largely caused by

the low-enrollment factor.

Because of the significant impact of low-enrollment

weighting on the financing formula, in our January

opinion and April order we sought cost justifications for

it. In response to questions from the court at oral argu-

ments, counsel for the State could not provide any cost-

based reason for using the 1,750 enrollment figure or for

the weight’s percentage. This absence of support is

particularly troubling when we consider the disparity

App. 65

this low-enroliment weighting may produce. H.B. 2247 has

the potential to worsen this inequity because it eliminates

correlation weighting for districts with 1,750 enrollment or

more. The funds allocated for correlation weighting were

transferred to the BSAPP; this gives low-enrollment

districts even more of the funds that previously were

devoted to balancing the disparities in per pupil funding

caused by the low-enrollment weighting.

EXTRAORDINARY DECLINING ENROLLMENT

In addition to the declining enrollment provision of K.S.A.

2004 Supp. 72-6407(e)(2), H.B. 2247, as amended by S.B.

43, created two provisions concerning extraordinary

declining enrollment. First, H.B. 2247 authorizes a district

with “extraordinary declining enrollment,” defined as

declining enrollment over 3 years at a rate of 15 percent or

150 pupils per year, to apply to the Board of Tax Appeals

(BOTA) for permission to levy an additional property tax if

it has already adopted the maximum LOB. See H.B. 2247,

sec. 29, repealed and replaced by S.B. 43, sec. 13. Cur-

rently only four districts potentially would qualify for this

provision. We will refer to this provision as the EDE-BOTA

provision.

Second, H.B. 2247 requires districts entitled to equalizing

supplemental capital improvements state aid on their

bonds to seek approval from the Joint Committee on State

Building Construction (JCSBC) prior to issuing new bonds

if the district has had an “extraordinary declining enroll-

ment,” defined for purposes of this section as declining

enrollment over 3 years at a rate of 5 percent or 50 pupils

per year. If approval is denied, the district can still issue

the bonds, but it does not receive any state aid on the

App. 66

bonds. See H.B. 2247, sec. 28, repealed and replaced by

S.B. 43, sec. 14. We will refer to this provision as the EDE-

JCSBC provision.

The State asserts that these provisions, which are in-

tended to help districts absorb lost revenue from declining

enrollments, ensure consideration of actual costs because

districts seeking to access authority for this additional

local tax levy must document need before BOTA or JCSBC.

The Board contends it is difficult to assess the financial

impact of these provisions because the money available

under them is potentially

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