Colorado K-12 Funding Suit Moves Forward

The Colorado Supreme Court has decided by a 4-3 margin in the case of Lobato v. State that a lawsuit alleging that the state of Colorado has failed to meet its minimum state constitutional duty to fund K-12 education may be considered on the merits by state courts.

Justices Rice, Coats and Eid dissented, primarily arguing that the courts should not be involved in this suit because it presents a political question. The dissent proposed a test to determine when a case presents a political question.

Similar suits have been brought, and have often prevailed (with serious problems in the enforcement area) in other states. The State had argued that the issue is a political question which the courts should leave to the Governor and Colorado General Assembly and that the Plaintiffs lacked standing to sue. The Colorado Supreme Court found that the parents had standing and that it was permissible for the school boards to be joined if they were raising the same claims as the parents.

The political question argument that is particularly strong when the state constitution also expressly provides for minimum funding levels for K-12 education under Amendment 23 and these rules have been obeyed. But, the Colorado Supreme Court recognized that the issue presented in the lawsuit is whether the families and districts bringing the suit have received adequate funding under a proper formula, not the aggregate level of funding for education for the state as a whole. In particular, the Plaintiffs argue that property tax base poor districts face an insurmountable burden in their attempt to raise adequate funds to operate their schools. The Colorado Supreme Court's rejection of the political question doctrine, more generally, leaves it more powerful in future constitutional disputes.

As the Colorado Supreme Court summarizes in it introduction to the case:

Plaintiffs are composed of two groups. The first group consists of parents from eight school districts across the state acting in their individual capacities and on behalf of their school age children (“plaintiff parents”). The second group consists of fourteen school districts in the San Luis Valley (“plaintiff school districts”). Plaintiffs brought suit against the State of Colorado, the Colorado State Board of Education, the Commissioner of Education, and the Governor (collectively “state defendants”), alleging constitutional deficiencies in Colorado’s public school financing system. Plaintiffs claim that the system, because it is underfunded and allocates funds on an irrational and arbitrary basis, violates the education clause’s mandate that the General Assembly provide a “thorough and uniform” system of public education. See Colo. Const. art. 6 IX, § 2. Plaintiffs further claim that the local school districts have standing to challenge the adequacy of the state’s public school financing system because severe underfunding and irrational disbursement of funds undermine the districts’ interest in local control over educational instruction and quality. See Colo. Const. art. IX, § 15.

The trial court and Colorado Court of Appeals resolved the case on the face of the Complaint without considering evidence. Both held that the school districts lack standing to sue. The trial court held that the parents lacked standing to sue, but the Colorado Court of Appeals reversed that ruling and instead had that their "claims present a nonjusiciable political question."

The Colorado Supreme Court's ruling, as it must in this procedural posture, assumes that all facts stated in the Complaint are true. The ruling still poses a difficult barrier for the Plaintiffs:

We have never applied the political question doctrine to avoid deciding a constitutional question, and we decline to do so now. We interpret this court’s decision in Lujan v. Colorado State Board of Education, 649 P.2d 1005 (Colo. 1982), to hold that it 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. Such a rational basis review satisfies the judiciary’s obligation to evaluate the constitutionality of the state’s public school financing system without unduly infringing on the legislature’s policymaking authority. The court’s task is not to determine “whether a better financing system could be devised,” Id. at 1025, but merely to determine whether the system passes constitutional muster.

As was the case in Lujan, this claim triggers the court’s responsibility to review the state’s public school funding scheme to determine whether the existing funding system is rationally related to the General Assembly’s constitutional mandate to provide a “thorough and uniform” system of public education. Treating the plaintiffs’ allegations as true, we hold that plaintiffs’ constitutional challenges to Colorado’s public school financing scheme are justiciable.

Article IX, section 17 of the Colorado Constitution (“Amendment 23”) does not affect our holding that the plaintiffs present a justiciable claim for relief. Amendment 23 prescribes minimum increases for state funding of education, but it was not intended to qualify, quantify, or modify the “thorough and uniform” mandate expressed in the education clause, which Lujan recognized as an appropriate subject for judicial review and interpretation. Amendment 23 neither relates to nor concerns the “thorough and uniform” mandate in the education clause and, therefore, does not affect our holding that the plaintiffs present a justiciable claim for relief.

Accordingly, the plaintiffs must be provided the opportunity to prove their allegations. To be successful, they 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. On remand, the trial court must give substantial deference to the legislature’s fiscal and policy judgments. It may appropriately rely on the legislature’s own pronouncements concerning the meaning of a “thorough and uniform” system of education. 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.

Hence, we reverse the judgment of the court of appeals. We remand this case to the court of appeals to be returned to the trial court for proceedings consistent with this opinion.

The rational basis test the trial court has been told to apply is extremely lenient. And, even if the state loses, it has considerable time and flexibility to take action to address the problem. But, since K-12 education is one of the largest parts of the state budget, the rest of the state budget (and the budget of other districts within the education budget) is highly sensitive to any compromises that are made to resolve this suit.

But, the Colorado Supreme Court's mere recognition that the claim could be valid if established gives school districts with modest property tax bases a better bargaining position in the school funding budget process.

The suit also adds fuel to the cause of good government advocates and people like Andrew Romanoff who have worked to simplify the state budget process through state constitutional reforms. Currently, the budget is so highly constrained under TABOR, Amendment 23, the balanced budget requirement, this decision, and other state and federal statutes, that Colorado is approaching a point where it may be impossible to comply with all of the legally binding limitations on the budget when revenues are low. While this case, by itself, isn't making particularly onerous demands upon the state, it could be the straw that breaks the camel's back and helps to create the political will needed to reach a larger compromise on state constitutional reforms to the state budget process and tax system.