Last Friday, I joined with William Mitchell student Nathen Berg to offer testimony on behalf of the Center for Negotiation and Justice to the Minnesota Education Finance Working Group. The Center is led by adjunct professor Jim Hilbert. The thrust of our testimony was to urge the Governor's Working Group to incorporate the requirements of Minnesota's Constitution in school funding reform. Here is the testimony that we delivered.
Testimony of the Center for Negotiation and Justice
William Mitchell College of Law
before the
Education Finance Working Group
October 5, 2012
The Center for Negotiation and Justice at William Mitchell College of Law has been working
to develop an analysis of the State of Minnesota’s constitutional requirements
with respect to public education. For
the last two years, Center faculty, students and advisers have met with
representatives of school districts, parents, community groups and school
organizations to promote dialog on how Minnesota might adjust its school
finance system to meet its requirements under the State Constitution. Based on those discussions and other analysis,
we think that it is likely Minnesota will face a constitutional challenge to
the current funding system in the near future.
We respectfully request that you review our written
testimony and take the following steps:
·
Recommend that the Governor
restart the process to identify the true cost of delivering mandated education services and to recommend that these
costs play an integral part in the Governor’s budget recommendations as well as
legislative action.
·
Confront recent court decisions
from across the country, specifically the Lobato
and McCleary decisions discussed
herein, that hold that the Constitution
requires that education finance must
be based on the true cost of delivering mandated educational services.
·
Make it clear in your report that the cost of delivering the services mandated
by the legislature is likely several billions of dollars greater than the current
funding provided.
·
Consider giving the Center an
opportunity to visit with your working group, or a subcommittee of your working group, so that
we might make a more detailed presentation focusing on the ways in which
Minnesota could begin to adopt a constitutionally compliant school finance
system.
In
our discussions with educational leaders in the last two years, we find that
there appears to be widespread consensus that the current school funding system
is failing. It is our
sense that to avoid constitutional challenge, prompt action is required. It is for that very reason that we hope to
inspire consideration of the latest constitutional approaches to state
education finance. We understand that
your mission is time-limited, but if time permits, we’d be willing to share the
results of our analysis to the working group at a more formal presentation.
We summarize this testimony as follows:
Based on
both Minnesota Supreme Court precedent and recent cases from other states, the
current Minnesota funding system is constitutionally deficient, and any reform
proposal should urge the Minnesota legislature to take prompt action to comply
with state constitutional requirements.
Since
1993, the year in which the Minnesota Supreme Court declared that Minnesota
schoolchildren have a fundamental right to an adequate education, Minnesota has
transitioned from a seat-based education system, requiring only delivery of
instruction, to a proficiency-based education system, requiring that all
students must be educated to proficiency in math, science, reading and
writing. This shift requires that the state develop a
cost-correlated school finance system. Your
report should urge the legislature to adopt a cost-correlated school finance
system, that is, to adopt a budgetary process that begins by determining the
reasonable cost of delivering state mandated education services, and to assure
that every district receives sufficient funding to deliver the services
required of that district.
Your
predecessor, the 2004 School Finance Reform Task Force, called upon the state
to implement such a system, recommending a rationally determined, learning-linked,
student-oriented and cost-based funding mechanism. This working
group should reaffirm that recommendation, and it should promote compliance
with the Minnesota Constitution by urging the Governor to complete the work of
the 2004 Task Force and now finally make transparent the actual cost of
delivering mandated education services.
In
this submission, we begin by discussing Minnesota’s primary case with respect
to Minnesota’s educational obligations under the state constitution, Skeen v. State 505 N.W.2d 299 (Minn. 1993). Skeen joins a long line of
constitutional cases from other states establishing a fundamental right to an “adequate”
education. Before proficiency mandates,
plaintiffs in these types of cases asked the courts to decide what an “adequate”
education means. Many of the leading
cases include detailed articulation of the minimum requirements of a 21st
century education. See, e.g., Rose v.
Council for Better Educ., Inc., 790 S.W.2d 186 (Ky. 1989); Connecticut
Coalition for Justice in Education Funding, Inc. v. Rell, 990 A.2d 206
(2010). In many of these “adequacy”
cases, the courts ultimately required the legislature to provide sufficient
funds to deliver that judicially required education.
This adequacy approach shifted to the judiciary a primary
responsibility to manage critical aspects of state education policy. However, the most recent State Supreme Court
decision on these issues, McCleary v. State, a Washington State Supreme
Court decision takes a different approach, one that recognizes the transition
to a state mandated proficiency system for public education. Under a proficiency-based system, the state
legislature sets expectations for student performance, not the courts, and
setting those standards is accomplished by state legislation or regulatory
standards. Thus, the Court does not need
to define an adequate education, because the legislature assumes its
responsibility to set educational standards.
The Court’s job, under this new approach, is to assure that
the legislature does not abdicate its constitutional responsibility to credibly
determine the cost of state mandated services, and then to fund the mandated
services. A legislature cannot meet that
responsibility when it refuses to derive those costs in a responsible manner,
and the legislature needs the Governor’s executive leadership to get that job
done. As described more fully below, the
McCleary case holds that the legislature has a responsibility to correlate
the funds provided to school districts with the actual cost of state-mandated
education services. Under this approach,
the legislature no longer determines school funding by adjusting funding to
political pressure from competing interests, but rather determines funding
based upon data through a rational fact-based process. We think that the McCleary approach
has great merit and represents a sea-change in how courts from across the
country (including Minnesota) will evaluate state educational finance. It establishes that true school finance
reform begins with a systemic approach to determining the cost of state
mandated educational services.
The Constitutional Landscape for Education in
Minnesota
Minnesota’s
Constitution states:
“it is the duty of the
legislature to establish a general and uniform system of public schools
. . . . The legislature shall make such provisions by taxation or otherwise as
will secure a thorough and efficient system of public schools throughout
the state.” Minn.
Const., art. XIII, § 1.
In Skeen, the Minnesota Supreme Court issued its groundbreaking
decision that this education clause creates a fundamental right which is
enforceable by the courts. The Court
wrote:
[W]e hold that
education is a fundamental right under the state constitution, not only because
of its overall importance to the state but also because of the explicit
language used to describe this constitutional mandate. While a fundamental right cannot be found
absent constitutional mandate the Education Clause is a mandate, not simply
a grant of power. Skeen at 319.
(emphasis added and cites
omitted).
Importantly, Skeen was decided at a time when Minnesota’s state
education standards did not require that local school districts must educate
all students to a state determined level of proficiency. The plaintiffs in Skeen actually
conceded to the Court that the plaintiff school districts were already
adequately delivering all state mandated services and that all of their
students were receiving an adequate education.
The school districts in Skeen were claiming, instead, that their
lower property tax base made it more difficult for them to fund so-called
“excess levies.”
The Skeen plaintiffs chose not to contend that
funding deficiencies interfered with students’ fundamental rights to receive
state mandated services because Minnesota imposed no proficiency outcomes on
local districts. At that time, Minnesota’s
was a “seat-based” system that merely mandated that school districts
deliver to students a minimum number of hours of specified courses. A seat-based system does not force a school
to spend more money on students with educational disadvantages. A school can provide lower level courses on a
lower level track to students who are behind, and higher level courses to
higher level students who are at an average level or ahead. In a seat-based system, a school district can
adjust its programs, class sizes, and course offerings to the amount of funding
the state provides. Under a seat-based
system, a school district with a higher percentage of students with educational
disadvantages could avoid the additional cost of educating disadvantaged
students by simply refusing to close the educational gap.
Thus, the Skeen Court was
confronting a challenge to the uniformity of the property taxation system which
the plaintiffs admitted did not interfere with students’ fundamental rights to
an education. That is why the Minnesota Supreme Court refused to
strike down the “excess levy” system that existed in 1993. Although the mil rate imposed in some
districts was higher than others, in order to achieve the same excess levy
revenues, the education clause was not violated, because according to the
plaintiffs, all of the plaintiff districts nonetheless had enough resources to
meet state requirements.
During and after the Skeen litigation, Minnesota began the
transition to a proficiency-based educational system which mandates actual
delivery of minimum level of educational proficiency to all students. Arthur Levine of Columbia Teachers College recently
described this transition as moving from a system that provides teaching to a
system that provides learning. Once Minnesota
shifted to the minimum proficiency model, the cost of education for each
student varied dramatically, based on the level of literacy, language barriers,
home support for learning, disabilities, and for transferring students, the
level of their preparation in previous schools.
Moreover, because the State was now mandating a higher quality education
for all students, the total resources provided to all districts should have
risen to compensate for that requirement.
Nonetheless, the State never attempted to derive the additional cost of
meeting the new and higher standards.
Meeting the goal of proficiency simply costs more for
some students than others, and high cost students are concentrated in some
school districts and not in others.
While Minnesota has made modest efforts in providing compensatory
funding, those efforts are not based on evidence that the compensatory funding
is sufficient to make up the differential cost disadvantage; they are based on
political pressure. In special education
alone, based on our conversations and other analysis, there is a $700 million
deficiency in the funding as compared to the cost, and the differential is
distributed unequally among districts in a way that is not rationally related
to any legitimate end.
Since Skeen in 1993, no one has yet brought forward a
claim to the courts asserting that Minnesota’s current funding system fails the
so-called “rational basis test”, nor has a citizen yet brought a claim alleging
that state’s system interferes with the fundamental right to a state mandated
basic education, but it is our view that under current circumstances, both of
those claims would likely be successful.
Recent
Cases from Across the Country
That brings us to the recent Washington
State Supreme Court decision in McCleary
v. State, 173
Wash.2d 477 (2012), a case that addresses
the state’s constitutional obligation under a proficiency-based education
system. We have chosen to focus on McCleary
because it addresses circumstances in the State of Washington that are quite
similar to the current circumstances in Minnesota. As the McCleary decision explains, in
1992, the Washington legislature “took its first major step toward adopting a
performance-based education system.” In
the ensuing years, the State of Washington added and strengthened the
proficiencies required of all students, cementing Washington’s transition from
a “seat-based” education system to a “proficiency-based” system. By 2005, an official state study recognized
that although the requirements for students had dramatically changed, still the
legislature was funding public education based on its old funding formula,
subject only to minor tinkering that had not been based on genuine examination
of costs.
Despite this radical change in educational objectives,
the State legislature failed to reform funding to recognize the
cost-implications of this change in mission.
The Court explained:
“[D]espite
the shift to a performance based system more than a decade earlier, the funding
model for K-12 education has not been updated to reflect the new expectations
and has not addressed the question of how to use resources most effectively in
order to improve student outcomes. (citations omitted). McCleary
at 501.
In response to plaintiffs challenge to the
legislature’s failure to fund appropriately, the Washington Supreme Court held that
state legislation defining the proficiencies which school districts were
required to deliver “together define a basic education—the substance of the
constitutionally required education” under the State’s Constitution. McCleary at 523.
In fulfilling its duty, the Washington Supreme Court
held that the legislature has a responsibility to provide local school
districts with sufficient reliable funding sources to deliver the education
required.
The legislature’s duty to make ample provision for
funding the basic education program includes the requirement that funding be
accomplished by means of dependable and regular tax sources. McClearyat 526.
The
Court rejected voter approved excess levies as an appropriate funding source to
meet the State’s constitutional responsibility noting that in a prior case “we
rejected special excess levies as dependable and regular not only because they
are subject to the whim of the electorate, but alsobecause
they are too variable insofar as levies depend on the assessed valuation of
taxable real property at the local level.”
McCleary at 528. The delegation to local referendum of the
decision whether to meet the state's constitutional obligation to provide a
uniform basic education is generally held to be unconstitutional. See, e.g., Rose v. Council for Better
Educ., Inc., 790 S.W.2d 186 (Ky. 1989); Montoy v. State, 112 P.32
923 (Kansas 2005); Helena Elementary School Dist. No. 1 v. State, 769
P.2d 684 (1989). See also Horton v.
Meskill, 376 A.2d 359 (Conn. 1977).
The legislature cannot do its job,
the Court held, if it ignores the true cost of providing mandated
services. Accordingly, the Washington
Supreme Court found that the legislature has a duty to “correlate” the revenues
provide to the actual cost of state mandates:
The
trial court concluded that the State has failed to adequately fund the
“education” required by article IX, section 1. Substantial evidence supports
this conclusion. The evidence at trial showed that the State’s now-abandoned
basic education funding formulas did not correlate to the real cost of amply
providing students with the constitutionally required “education.” As a result,
the State has consistently failed to provide adequate funding for the program
of basic education,including
funding for essential operational costs such as utilities and transportation.
To fill this gap in funding, local districts have been forced to turn
increasingly to excess levies, placing them on the same unstable financial
foundation as the schools in Seattle School District.
McCleary at
529 (emphasis added).
The parallel between Washington and
Minnesota is striking. The legislature
in Washington had done exactly what Minnesota’s legislature has done –allocated
funding based upon the historical basic formula with minor adjustments that
reflect primarily political and state tax revenue considerations:
The
basic education funding formulas examined by the trial court did notcorrelate
to the level of resources needed to provide all students with an opportunity to
meet the State’s education standards. This disconnect had its genesis in the
legislature’s failure to update the funding formulas after the State
transitioned from a seat-based education system to a performance-based system
in 1992. The legislature continued to fund schools using the formulas adopted
in the Basic Education Act—formulas that were based on a snapshot of actual
staffing levels and school district expenditures in the mid-1970s, not the
level of resources needed to allow students to meet the new performance-based
standards.
McCleary at
530.
The
Court ordered
“The legislature must develop a basic education program geared
towarddelivering
the constitutionally required education, and it must fully fund that program
through regular and dependable tax sources.”
McCleary at 546-47.
Just
three weeks before the McCleary
decision, a state court in Colorado arrived at a similar conclusion. Lobato
v. State, slip op. Case No. 2005CV4794. In the Lobato decision, the District Court
again pointed out that Colorado’s legislature had carefully specified
educational outcomes which must be attained, but had never engaged in a
rational fact-based process to adjust state funding to the new more demanding
educational tasks. The Court explained:
Although the
standards-based education system intentionally established standards of educational
achievement and a method to measure accomplishment of those standards, the finance
system has never been adjusted to address the costs of meeting those standards.
Although one of the primary purposes of standards-based education was to
provide objective measures of achievement that could be costed-out and funded,
the two systems have remained out of touch and actually diverging, with no
meaningful effort to analyze and align funding levels with educational costs. Lobato at
181.
The
change to standards-based education represents a massive change in mission that
requires the legislature to address the cost of those changes head-on:
In recent years, new educational goals
linked to school readiness and postsecondary and workforce readiness were
mandated, and measurements of school and school district performance with
sanctions for failures have been implemented as part of educational
accountability. Again, these changes in
the education system have added and will continue to add significantly to the
costs of education, but the finance system has been completely unresponsive. As a result, there is not enough money in the
system to permit school districts across the State to properly implement
standards-based education and to meet the requirements of state law and
regulation . . . . The problem has been
compounded by the fact that during this same time Colorado and virtually every
school district have experienced significant demographic changes, particularly
in the number and concentrations of English language learners, ethnic
minorities, and children of poverty. The number of children with severely
disabling conditions has also grown. There are now significantly larger
percentages of students with more expensive educational needs. The educational
achievement requirements for these students are the same as for general
education students, but the cost to achieve proficiency and growth requirements
among these students is much higher . . . .
Once again, the State has not attempted to quantify and fund the costs
of providing educational services to these and similarly situated students with
special needs. Lobato at 181-82.
The McCleary
and Lobato decisions tie directly to
the work of the 2004 School Finance Reform Task Force which recognized that
Minnesota’s school funding formula must be:
a rationally
determined, learning-linked, student-oriented and cost-based Instructional
Services Allocation. (See Inve$ting in our Future, Seeking a fair,
understandable and accountable, twenty-first century education finance system
for Minnesota, Recommendation #1).
The
Task Force’s recommendation represents a bipartisan recognition that ignoring
the actual cost of meeting state requirements makes meaningful reform
impossible. A Pioneer Press article in 2004 reported on the work of the
Task Force:
The governor's
task force is recommending a funding formula based on the actual cost of
providing a student with an education sufficient to meet state standards. But
the proposal stops short of setting that cost. Schools would still get
additional funding help for certain challenges, such as poverty and students
who are learning to speak English.
Similar panels have had limited results in recent years trying to
improve and simplify the state's K-12 funding system. Former state senator and task force member Duane
Benson said legislators typically look only at how such changes would affect
their local schools. Benson said he's optimistic lawmakers will look hard at
this proposal and adopt most of it.
"When change comes, sometimes it's a little scary. This can be a
little bit scary, but I think doing nothing can be more scary," Benson
said.
In
fact, the Task Force was on the brink of making public the fact that
Minnesota’s education budget was then approximately $2 billion short of meeting
mandated education services when the 2004 Task Force was summarily terminated
by Governor Pawlenty. As a result, for
another eight years, four bieniums, Minnesota made no effort to develop a
“rationally determined, learning-linked, student-oriented cost-based funding
formula.”
Eight
years after the task force correctly pointed out that the education finance
system must be “rationally determined” and “cost-based,” still neither the
Governor nor the legislature have made an effort to develop the cost data
necessary to establish an appropriate funding strategy.
Conclusion
Thank
you for considering our testimony on the importance of addressing
constitutional requirements in your efforts to reform Minnesota’s education
finance system. Your efforts will fail
if you merely advocate that the legislature add money or move it from one place
to another. A reformed system should be
based on the actual cost of providing state mandated educational services. The governor’s budget should be founded on
cost data. When the governor delivers
his budget, he should make transparent to the legislature what it actually
costs to deliver the programs that his budget and state law mandates. Any other approach
is not rational, is not constitutionally sound and will simply perpetuate the
flaws in the current system.
The Center for Negotiation and Justice at
William Mitchell College of Law develops coursework and provides community
advocacy to explore, develop, and advance the connection between principled
negotiation and social justice advocacy, combining these two critical
disciplines into a focused study and practice using negotiation as a means of
promoting social justice. The executive
director, Jim Hilbert, was one of the plaintiffs’ lawyers on the 1995 adequacy
case, Minneapolis NAACP v. State of Minnesota et al. For more information on the Center, please
visit http://web.wmitchell.edu/negotiation-justice/.
The Court
recognized the legislature’s authority to redefine basic education, but warned
that in so doing, it must exercise its authority within constitutionally
prescribed bounds, any reduction of programs or offerings from the basic
education program must be accompanied by an educational policy rationale. That
is, the legislature may not eliminate an offering from the basic
