Funding Frequently Asked Questions

Questions Regarding Supreme Court Decision

On October 19, 2009, the Colorado Supreme Court ruled that the public school finance system must be reviewed by the courts to assure that it meets the constitutional requirement of a "thorough and uniform" system of public education. In a 4-3 decision, the Court held that the claims of the plaintiff parents, school children, and school districts in Lobato v. State may proceed to trial. The Court specifically held that public school districts could participate as plaintiffs in the litigation.

Q:  What school finance issues are involved in the Lobato case?

A:  The Lobato case challenges both the level of funding and the method of determining funding in all aspects of the finance system, including the Public School Finance Act, categorical programs, and capital construction. As examples, the Court referred to the following allegations in the complaint:

1. PSFA total program funding is determined by "historical spending levels and political compromise," not by a "valid determination of the actual costs to provide" a constitutionally adequate education or one that meets the requirements of education reform legislation.
   
2. Categorical and other supplemental funding intended to meet the needs of underserved and minority student populations are "insufficient and irrationally distributed." The Court specifically referred to deficient and irrational funding for ELL, special education, and low-income students.
   
3. Capital construction funding that is completely funded from widely disparate local property tax bases does not adequately meet the educational needs of students and prevents school districts from effectively exercising local control over instruction.
   

Q:  What did the Colorado Supreme Court say about the requirements of the Education Clause?

A:  The Court affirmed that the Education Clause includes a "substantive mandate" to the state that is subject to review by the courts. That mandate is met only if "thorough and uniform" educational opportunities are available in each school district and each school district has the control necessary to implement the mandate at the local level. The Court rejected the argument that the legislative branch has "unchecked power" that could "potentially allow[] it to ignore its constitutional responsibility to fashion and to fund a ‘thorough and uniform’ system of public education."

The Court stated that:

[I]t is the responsibility of the judiciary to determine whether the state’s public school financing system is rationally related to the constitutional mandate that the General Assembly provide a "thorough and uniform" system of public education.

The Court did not define the level of educational opportunities necessary to meet the "thorough and uniform" at this early point in the litigation. That will be part of the evidence to be presented during the trial process that lies ahead. However, the Court held that in giving meaning to those terms:

[T]he General Assembly’s own laws and pronouncements, as well as other courts’ interpretations of similar state education clauses, can assist the court in assessing whether the General Assembly has adequately implemented the "thorough and uniform" mandate of the education clause.

The Court specifically noted that education reform statutes with "proficiency targets and content standards . . . may also be used to help evaluate the constitutionality of the legislature’s actions."

In summary, when the case goes to trial:

To be successful, [Plaintiffs] must prove that the state’s current public school financing system is not rationally related to the General Assembly’s constitutional mandate to provide a "thorough and uniform" system of public education.

Q:  What is the role of the school districts in the Lobato litigation?

A:  The lower courts had held that school districts did not have "standing" to bring suit against the State for violating the Education and Local Control Clauses. The Supreme Court reversed those rulings. However, it did not completely resolve the school district standing question. The Court held that because the plaintiff parents had standing and the school districts were asserting the same claims as the parents, it was not necessary to resolve whether the school districts had standing independent of the parents. The Court concluded, therefore, that "the school districts may continue as plaintiffs in this case."

School districts have a critical interest in the outcome of the litigation. The Court’s ruling is sufficient to permit school districts to participate as plaintiffs and assist in the presentation and resolution of the case.

Q: What positive results could the litigation provide?

A: The litigation will determine if the level and methods of financing the public schools meet the mandate of the Education Clause. That determination will include the question does the school finance system provide the funds needed to meet the requirements of the education reform statutes and the Consolidated State Plan. If it is determined that the finance system is not rationally related to accomplishing these purposes, the Court will hold that it is not constitutional, and the legislature will be required to respond accordingly in a reasonable period of time.

In the words of the Court:

If the trial court finds the current system of public finance irrational and thus unconstitutional, then that court must permit the legislature a reasonable period of time to change the funding system so as to bring the system in compliance with the Colorado Constitution.

A successful outcome will require the legislature to devise and fund a constitutional finance system within the parameters established at trial. The fact that such a change may require additional funding will not prevent the courts from taking the necessary action to assure a constitutional system of school finance:

[T]he legislature is constitutionally mandated to implement a "thorough and uniform" system of public education. This mandate imposes a judicial constraint, or check, on the legislature’s general appropriations power, giving the court the authority to review the merits of the plaintiffs’ claims.

The Court did not attempt to define what steps it could take if the legislature fails to respond appropriately. However, it has clearly stated that its options are not foreclosed by the legislature’s appropriations power.

Q: What are the next steps in the litigation?

A: The case will now be remanded to the Denver District Court for trial. We anticipate that a trial could occur within the next twelve to eighteen months. At trial, evidence must be presented that support the plaintiffs’ claims that the public school finance system is not "rationally related" to accomplishing the mandate of the Education Clause. These issues will include the following ones identified by the Supreme Court:

[P]laintiffs allege that the PSFA base funding amount and statutory increases are based on "historical compromise," as opposed to a      rational determination of the amount it would cost to implement the "thorough and uniform" mandate of the cost of providing an education that meets the standards and goals mandated by education reform efforts. . . . [P]laintiffs allege that the current funding levels do not allow students the opportunity to meet the standards and objectives established in education reform legislation. . . . [P]laintiffs allege that funding for underserved student populations and capital construction is insufficient and irrationally dependent on local property taxes. Plaintiffs further allege that the state’s public school financing system is unconstitutionally irrational because it prevents the district from implementing the education clause mandate at a local level.