Is the 1994 Public School Finance Act Constitutional? The Lobato case proceeds with appellate briefs

by Julie Pelegrin

Last December, Judge Sheila Rappaport, Denver District Court found the “Public School Finance Act of 1994” (PSFA), article 54 of title 22 of the Colorado Revised Statutes, unconstitutional in the case of Lobato v. Colorado (“Lobato”). In a nutshell, Judge Rappaport found that the school finance system is not rationally related to the General Assembly’s constitutional duty to establish and maintain a thorough and uniform statewide public school system because the PSFA is not based on the actual cost of educating students to achieve statewide standards and the system of funding public schools significantly underfunds those costs. For the OLLS memorandum describing the trial court’s decision, click here.

In January 2012, the state Attorney General, representing the state defendants, appealed the case to the Colorado Supreme Court. In his opening brief filed July 18, the Attorney General presented three reasons why the Supreme Court should reverse the decision: 1) The issue of whether state funding for education is adequate is a political question that the Court can’t answer without violating separation of powers; 2) The trial court did not give deference to the General Assembly’s policy and funding decisions in deciding whether they are rationally related to providing a thorough and uniform education system; and 3) School districts are not entitled to full state funding to implement state educational mandates.

Before explaining his arguments for reversing the trial court opinion, the Attorney General  noted that Judge Rappaport made several rulings prior to the trial that affected the outcome. First, she did not require the plaintiffs to prove that the PSFA was unconstitutional beyond a reasonable doubt, which is the standard of proof that usually applies in cases that challenge the constitutionality of a statute. She also excluded any evidence as to how the General Assembly balances the spending limitations and competing demands in the constitution when it creates the state budget and decides how much money to appropriate to public schools. Judge Rappaport held that the need to fund other required or important state services was irrelevant to determining whether the General Assembly had appropriated enough money for the public schools.

To support his argument that the adequacy, and therefore constitutionality, of education funding is a political question that the courts cannot decide without violating separation-of-powers principles, the Attorney General made four points:

  • The constitution tasks the General Assembly, not the other branches, with establishing and maintaining the state’s system of public education;
  • There aren’t any legal standards for determining whether the General Assembly has fulfilled this responsibility or whether the amount appropriated for school finance is adequate;
  • Resolving this issue requires the Court to make policy decisions such as whether inadequate funding is the reason for low student achievement or whether local decisions concerning the use of state moneys affects performance; and
  • The Court can’t decide the issue without “disrespecting” the actions of the General Assembly in exercising its plenary power over appropriations or the actions of the Governor in recommending the budget and approving the appropriations.

Case law has recognized that when any one of these four conditions exists, the Courts should refuse to consider the case because the question presented is political rather than legal; the question should be decided through the political process. The Attorney General argued that the trial court’s decision violates the separation of powers because it usurps the General Assembly’s authority to establish education funding policy and appropriations amounts.

Next, the Attorney General argued that the trial court should have applied a very deferential standard in reviewing the PSFA: The rational basis standard. This standard is usually described as determining whether a law is rationally related to achieving a legitimate state purpose. In an earlier decision in this case, the Colorado Supreme Court identified the state purpose as establishing and maintaining a thorough and uniform system of public education. The Attorney General argued that the trial court gave no deference to the General Assembly’s policy and funding decisions in adopting and implementing the PSFA. The trial court did not take evidence on or consider how the General Assembly actually creates the budget and determines how much money to appropriate to public schools. Instead, the trial court held that the system for funding schools is irrational because it is not based on an estimate of the cost of educating each child to achieve proficiency on the state standards — the method proposed by the plaintiffs — and because the amount actually appropriated is significantly less than the cost estimates provided by the plaintiffs.

Finally, the Attorney General argued that the trial court erred in finding that the system for funding public schools violates local control. In her decision, Judge Rappaport found that the level of state funding for public schools is so low that school districts cannot implement the state education-reform mandates; this low-level of funding effectively violates the districts’ constitutional right to exercise control over instruction. The Attorney General argued that this conclusion is the same as saying that the constitution requires the public schools to be fully funded by state moneys. But Colorado has a long tradition of funding public education with a combination of state moneys and local tax revenues, an approach that Colorado courts have upheld. The Attorney General therefore argued that the trial court’s decision is incorrect as a matter of law.

The following groups each filed an amicus curiae brief, or “friend of the court” brief, in the case: a group of business interests; the University of Colorado; former Colorado Governors Lamm, Owens, and Ritter, filing jointly; the Colorado League of Charter Schools; and the Colorado Behavioral Health Care Council and Alliance. With the exception of the League of Charter Schools (which filed its brief only to address the trial court’s findings regarding charter schools), all of the amici briefs support the Attorney General’s position.

The amici that support the Attorney General’s position agree that the Lobato case presents a political question that should not be decided by the courts. They also argue in their briefs that, if the Court decides the question of whether the system for funding public schools is constitutional, the question must be decided in the full context of the other constitutional requirements for and limitations on state spending; the amount necessary to fund public education cannot be decided independent of the amounts necessary to fund other state services. The business interests group also makes the point that, if the Supreme Court upholds the trial court decision, the General Assembly will be forced to drastically cut funding for all of the other state services or successfully propose a massive tax increase, either of which will likely have significant and devastating effects on the state’s economy.

Assuming the Court does not extend the deadline, the plaintiffs must file their answer brief by August 17. Any person who wishes to file an amicus brief in support of the plaintiffs must do so by that date as well. The Attorney General will then have 14 days to file a brief in reply to the plaintiffs’ answer, if he chooses to do so. After all the briefs are filed, the Supreme Court will decide whether to hear oral arguments by the plaintiffs and the Attorney General. There is no set time in which the Supreme Court must issue its opinion.