McCleary v. State: what level of scrutiny is appropriate for legislative funding decisions

This is the fourth in a series of posts on the recent Washington Supreme Court decision,  McCleary v. State, enforcing the State's constitutional requirement to assure appropriate funding for public education.  You can jump to prior posts in the series using links below.  McCleary v. State deals with a number of important issues in education finance jurisprudence.  But I've been posting on one aspect of the decision, the part that holds that the State does not meet its constitutional obligation to public education, when it sets funding based on politics rather than a data based costing system.  Unless the state legislature bases funding on credible efforts to determine the cost of required programs, it is acting irrationally and irresponsibly.

We can agree, can't we, that respect for the constitutional requirement to provide a "thorough and efficient system of public schools throughout the state" as the Constitution provides, should afford some level of due diligence, some factual basis, to support the connection between the cost of  education and the revenues provided.   If the legislature were to mandate the construction of a bridge across the Mississippi River, and order that it be built for half of the cost necessary to keep that bridge from collapsing under the weight of traffic, surely we would all recognize that the legislature would be failing to meet its public responsibilities.   When the bridge collapsed, it would hardly be a defense to say, that the bridge was built at half price, because of political considerations.  How would we feel if legislators said,   "We couldn't build a safe bridge in Minneapolis, because we had to spread the money around to St. Paul and Mankato."   If the State orders a bridge built, it had better appropriate enough money to build it to state standards.  

If there is a role for the judiciary to play in policing this concept:  that the state must fund the cost of education that it mandates as part of the "general and uniform system of public schools,"  how should that scrutiny be exercised.   When judges review a law to determine that it is constitutional, they apply different levels of scrutiny, depending on the circumstances.   Suppose for example that the legislature sets the speed limit on trunk highways at 65 miles per hour.  Suppose a citizen is arrested for speeding at 67 miles per hour, and the citizen attacks the speed limit as arbitrary and capricious.  Suppose the citizen claims that the legislature had no reasonable basis to set the speed limit at 65, that the legislature held no hearings, performed no studies, had no data showing a lower accident rate at 65 miles per hour than 70 miles per hour.  Constitutional jurisprudence requires us to apply what is called the "rational basis test."

A memo prepared by the Minnesota legislative House Research explains:   "A rational basis test applies to economic regulation not involving suspect classifications and, thus, to most of the classifications involved in the tax laws.  In general, a classification has a rational basis and is constitutional, if it reasonably related to or has some rational relationship to the objective the legislature sought to achieve.  The rational basis test gives the legislature considerable flexibility in creating classifications."  

This rational basis test, if it applies, has several aspects to it.  One aspect is procedural.  We don't require the legislature to make specific findings to demonstrate that 65 miles per hour is a really good speed limit.  We don't require the legislature even to hold hearings on the speed limit, or to make a record of the data that supports the speed limit adopted.    We don't require that the legislature reviewed specific reports, or that it interviewed specific experts.  When the legislation is challenged in Court, the State can defend by offering evidence that the legislature did not consider.  As an on line law journal article explains, "In Beach Communications v. FCC, for example, the Court explained that “if there is any conceivable state of facts that could provide a rational basis” for a challenged law, it will survive rational basis review. And because the Court “never require[s] a legislature to articulate its reasons for enacting a statute, it is entirely irrelevant . . . whether the conceived reason for the challenged distinction actually motivated the legislature.”  Thus, not only is the government invited to dream up entirely post hoc rationalizations for challenged legislation, it has “no obligation to produce evidence” in support of those rationalizations either".

Now at in a later post, I am likely to argue that Minnesota's current funding process does not even pass muster under this minimum test, the lowest of all low levels of scrutiny, save the level that says, the Courts don't even afford judicial review of any kind.   But in Minnesota, as in the State of Washington, public education is a fundamental right.   The Constitutional education clause calls upon the judiciary to scrutinize legislative funding decisions more closely than that.   And so, one of the most important topics of discussion that we can have in this arena, is to examine levels of scrutiny that seem to make sense... that assure that the constitutional mandate is enforced, without the judiciary completely supplanting the legislative role altogether.  
We'll discuss some ideas for how the judiciary in Minnesota might exercise that function appropriately in the next post.

Links
McCleary v State, Washington's Groundbreaking School Finance Decision

 McCleary v. State, Part I  

McCleary v State Requires Legislature to Base Funding on Actual Cost
Jvonkorff on Education McCleary v. State, Part II
McCleary v State and Determining the Cost of Education
Jvonkorff on Education McCleary v. State, Part III
 McCleary v. State: what level of scrutiny is appropriate for legislative funding decisions
Jvonkorff on Education McCleary v. State, Part IV
Correlating the cost of education: fund the child.
Jvonkorff on Education  McCleary V. State Part V
Summary of Decision Network for Excellence
Washington Supreme Court Blog  
JvonKorff on Education, The Rose Decision 
Minnesota's School Finance System is Unconstitutional, Part I
Minnesota's School Finance System is Unconstitutional, Part II
Minnesota's School Finance System is Unconstitutional, Part III
Minnesota's School Finance System is Unconstitutional, Part IV

McCleary v State and Determining the Cost of Education

This is the third in a series of posts on the recent Washingto Supreme Court decision,  McCleary v. State, enforcing the State's constitutional requirement to assure appropriate funding for public education.  In  the first post, we introduced the Supreme Court's reaffirmation of the concept that State's constitutional Education Clause must be enforced by the judiciary.  In legal terms, we say that claims against the state challenging constitutionally inadequate funding are "justiciable."   The 79-page McCleary decision covers a lot of legal ground.  In the second post,  we began a discussion of just one of the principles propounded by McCleary, that  the basic education funding formulas did not correlate to the real cost of amply providing students with the constitutionally required education.  In my view, this is the central issue in constitutional funding jurisprudence today.

Minnesota's Constitution, Article XIII, section 1 states:

UNIFORM SYSTEM OF PUBLIC SCHOOLS. The stability of a republican form of government depending mainly upon the intelligence of the people, 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.

I believe that if the Minnesota Constitution's requirement to secure a "thorough and efficient system of public schools throughout the state" means anything at all, that it means that the legislature and governor must fund the true cost of the education that they mandate, and that means to engage in a deliberate effort to determine costs.   How can it be "thorough and efficient" to demand that a product be produced for ten million dollars, providing only five? The "thorough and efficient" requirement, I believe, begins with actually making a credible effort to determine the cost of providing that mandated education within the framework established by Minnesota law.  

Any credible costing system must begin by costing the current system of education, based on the legislative requirements we face today.   For example, the current Minnesota law on special education, and the administration of that law, is costing about $1.4 billion per biennium more than the revenues provided.   Now there are experts somewhere who claim that if the laws were rewritten, and if various legal constraints were lifted, that we could deliver a creditable special education program for less that we do today.     But I believe that the Constitution does not allow the legislature to fund public education at a level that might work if all of those requirements were lifted, but then leave the requirements in place.    That is not a thorough and efficient system of public education.  If the legislature wants to fund special education at a lower price, then the constitution requires, I believe, that it implement reforms that are necessary to make it possible to deliver the lower cost services.  That's the lesson of McCleary v. State and cases like it.

The tragedy is that in Minnesota, the legislature never makes even the most minimal effort to determine what the average teaching cost should be, in order to maintain a highly qualified reliable teaching force.  Neither the legislature nor the governor make an honest effort to total up the cost of textbooks, teachers, transportation, and all the rest, and then fund it.   We use a funding system that merely provides revenue in the amount that the legislature wills, and mandates program that the legislature wills, without connecting actual cost to revenue.    Early in his term in office, Governor Pawlenty recognized the logic of this basic idea...that public school funding should be rationally based on data.    To this end, on June 14, 2003, Governor Pawlenty named a 19-member Task Force to focus on Minnesota's school finance system.  The first recommendation of that Panel, found in its Report "Investing in our Future", was that Minnesota’s 21st century educational funding formula should be a rationally determined, learning-linked, student-oriented and cost-based Instructional Services Allocation.  To begin that effort, the Task Force recommended that an Instructional Services Allocation funding approach should be developed for Minnesota schools building on a professional panel's research-based judgment.   Suggestions that the Task Force Study might result in a $2-billion increase in school funding essentially torpedoed that effort and the governor cancelled the task force's work.

A pioneer press article in 2004 explained:

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.

As I explained in the prior post, the State of Washington engaged in a similar effort.  But in Minnesota, the effort to develop cost-based public school funding was derailed even more decisively than in Washington.   As the results began to materialize, the Governor cancelled the task force's work amidst partisan cross accusations.

How should the Governor and legislature go about accomplishing this objective, of funding education based upon valid data and non-partisan logic?   First and foremost, Governor Dayton should restart the costing out process that Governor Pawlenty abandoned.  The Governor had an opportunity to correct Governor Pawlenty's mistake, but instead, he created a task force designed to paper over the problem.  Its mission statement was not to make the true cost of education transparent, but rather to attempt to assure that current funding is distributed as fairly as possible without significantly rocking the boat?   During the next legislative session, the legislature should be setting school funding policy based on the true cost of mandated services.  If it does not, it is time to challenge that abdication of responsibility in court.

 Links
McCleary v State, Washington's Groundbreaking School Finance Decision

 McCleary v. State, Part I  

McCleary v State Requires Legislature to Base Funding on Actual Cost
Jvonkorff on Education McCleary v. State, Part II
McCleary v State and Determining the Cost of Education
Jvonkorff on Education McCleary v. State, Part III
 McCleary v. State: what level of scrutiny is appropriate for legislative funding decisions
Jvonkorff on Education McCleary v. State, Part IV
Correlating the cost of education: fund the child.
Jvonkorff on Education  McCleary V. State Part V
Summary of Decision Network for Excellence
Washington Supreme Court Blog  
JvonKorff on Education, The Rose Decision 
Minnesota's School Finance System is Unconstitutional, Part I
Minnesota's School Finance System is Unconstitutional, Part II
Minnesota's School Finance System is Unconstitutional, Part III
Minnesota's School Finance System is Unconstitutional, Part IV

McCleary v State Requires Legislature to Base Funding on Actual Cost

In yesterday's post, I began a discussion of the recently issued Washington State Supreme Court decision in McCleary v. State regarding funding of public education.  Today, I want to carry forward that discussion by focusing on the part of the decision that discusses the legislature's obligation to base the funding formula upon the true cost of the educational program mandated by the legislature.  The case is instructive, because the issues facing the State of Washington bear a striking resemblance to the circumstances here in Minnesota in many respects.   Both states, Washington and Minnesota, transitioned from what the McCleary Court describes as a seat-based education system  to a performance-based system. And both states have failed to adjust their funding approach the significant change in costs that results from that transition.

 In a seat-based system,  the state mandates that each school district supply a certain amount of total "seat-time"  for all students, and it mandates as well, a certain amount of seat time in particular subjects, such as math, social studies, science, reading, the arts and so on.  

In a seat-based paradigm, public education sold time in a chair, with a teacher at the front of the classroom.  The quality of the teaching and the curriculum was locally determined and locally adjusted.  If local schools were confronted with less prepared students, they could spend more to make up the shortfall, or they could adjust their graduation expectations downward accordingly.   Under the seat-based education system,  Minnesota lacked any state mandate regarding the degree of difficulty of the subjects taught to the students occupying those seats, nor any state mandate as to the level of educational proficiency that students must attain in order to be issued a high school diploma.   Under the seat based paradigm, costing public education was much simpler, because you can produce an hour of seat time for any student at the same price, regardless of the student's particular educational challenge. If the funding were reduced, you could increase class size, cut textbooks, and even lower the rigor of a school district's educational expectations.

But once you change to the proficiency paradigm, as both Washington and Minnesota have done,  it becomes necessary to project the actual cost of getting different students to the mandated level of proficiency.   This change, from measuring time in chairs to measuring proficiency occurred in Minnesota the early 1990's.  But Minnesota's legislative and executive branches never adjusted the funding of education to reflect that change, indeed, never developed and implemented methods to cost the new state mandates.  McCleary v State holds that the State does not meet its constitutional obligation to public education, when it sets funding based on politics rather than a data based costing system.  Unless the state legislature bases funding on credible efforts to determine the cost of required programs, it is acting irrationally and irresponsibly.

It stands to reason, certainly, that the cost of delivering students to a pre-set level of proficiency is going to be significantly greater (inflation adjusted), than the cost of simply putting them in classrooms and hoping that they take advantage of  the standard curriculum delivered by the teacher.   Its like the difference between going to the car-dealer and saying, give me all the car you can give me for $20,000, or going to the car dealer and saying, I need a car with 4 wheel drive, exceptional power and handling, and sports-car looks.   Once you specifiy the end result, the cost is likely to rise significantly.

But in both Washington and Minnesota, and in many other states, the legislatures generally focused not on the cost of the newly specified educational result, but instead focused on how much money has historically been provided to public education, and then sought to adjust the level of funding based on existing revenues, tax policy, and the political philosophy of the legislators.

This issue is perhaps the most important issue in school finance.   It permeates the problems we face here in Minnesota, and it was a central focus of the McCleary decision.   The Washington Supreme Court pointed out that State of Washington had actually completed a study by nationally recognized experts Picus and Odden  the results of which led to an estimate that education was underfunded by about $2 billion.  The Supreme Court's opinion details in pages and pages, other studies and reports showing that the current funding system in Washington did not rationally connect to the State legislature's legislative package of basic educational programs. Slip opinion pages 19-35.  The Court explained:

“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.” The report further surmised that “[s]table and significantly increased funding is required to support the evolving needs of our education.  Opinion, pages 23-24.

 The Supreme Court found that the State could not meet its obligation without connecting actual cost to actual revenues:

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 [an] unstable financial foundation......The basic education funding formulas examined by the trial court did not correlate 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.  Because the State’s funding formulas did not correlate to the actual cost of maintaining its basic education program, state funding for “basic education” consistently fell below the mark.  

Whether you think that we have enough school funding, too much, or too little, surely we can all agree that it makes sense that when the legislature determines school funding, it should start by determining how much it should cost to deliver the education that the legislature wants to accomplish.   In my next post, I'll discuss the implications of this important concept:  that the legislature must engage in an effort to connect actual cost of mandated programs to the revenues provided.

Links
McCleary v State, Washington's Groundbreaking School Finance Decision

 McCleary v. State, Part I  

McCleary v State Requires Legislature to Base Funding on Actual Cost
Jvonkorff on Education McCleary v. State, Part II
McCleary v State and Determining the Cost of Education
Jvonkorff on Education McCleary v. State, Part III
 McCleary v. State: what level of scrutiny is appropriate for legislative funding decisions
Jvonkorff on Education McCleary v. State, Part IV
Correlating the cost of education: fund the child.
Jvonkorff on Education  McCleary V. State Part V
Summary of Decision Network for Excellence
Washington Supreme Court Blog  
JvonKorff on Education, The Rose Decision 
Minnesota's School Finance System is Unconstitutional, Part I
Minnesota's School Finance System is Unconstitutional, Part II
Minnesota's School Finance System is Unconstitutional, Part III
Minnesota's School Finance System is Unconstitutional, Part IV