Gannon v. State

305 Kan. 850

390 P.3d 461

Luke GANNON, by his Next Friends and Guardians, et al., Appellees,

v.STATE of Kansas, Appellant.

No. 113,267

Supreme Court of Kansas.

Opinion filed March 2, 2017

Stephen R. McAllister, solicitor general, argued the cause, and Jeffrey A. Chanay, chief deputy attorney general, M.J. Willoughby, assistant attorney general, Dwight R. Carswell, assistant solicitor general, Bryan C. Clark, assistant solicitor general, and Derek Schmidt, attorney general, were with him on the briefs for appellant State of Kansas; Arthur S. Chalmers, Gaye B. Tibbets, Jerry D. Hawkins, and Rachel E. Lomas, of Hite, Fanning & Honeyman, LLP, of Wichita, were with him on the briefs for appellant State of Kansas.

Alan L. Rupe, of Lewis Brisbois Bisgaard & Smith LLP, of Wichita, argued the cause, and Jessica L. Skladzien and Mark A. Kanaga, of the same firm, and John S. Robb, of Somers, Robb & Robb, of Newton, were with him on the briefs for appellees.

Per Curiam:

This is the fourth school finance decision involving these parties and Article 6 of the Kansas Constitution, which imposes a duty on the legislature to "make suitable provision for finance of the educational interests of the state." Kan. Const. art. 6, § 6 (b). The plaintiffs filed suit in 2010 asserting that the State violated this constitutional requirement by inequitable and inadequate funding of K–12 public education. A three-judge panel was appointed to hear the case pursuant to K.S.A. 2009 Supp. 72-64b03. After a 16–day bench trial that produced a 21,000–page record, the panel issued a 250–page memorandum opinion and entry of judgment. In it, the panel determined that through K.S.A. 72-6405 et seq . (School District Finance and Quality Performance Act or SDFQPA), the State had inequitably and inadequately funded education in violation of Article 6.

On appeal, we affirmed the panel on equity and remanded for it to make determinations in the remedial phase. While we also affirmed that Article 6 contains a public education adequacy component, we determined the panel did not apply the correct standard in concluding the State violated that constitutional requirement. Gannon v. State , 298 Kan. 1107, 1111, 319 P.3d 1196 (2014) (Gannon I ). There, we interpreted Article 6, § 6(b) to include, as minimal standards of an adequate public education system, the seven educational "capacities" outlined by the Kentucky Supreme Court in Rose v. Council for Better Educ., Inc. , 790 S.W.2d 186, 212 (Ky. 1989), that had been essentially adopted by our legislature and codified in statute in 2005. 298 Kan. at 1170, 319 P.3d 1196. See K.S.A. 2005 Supp. 72-1127.

While we had recognized that adequacy and equity "do not exist in isolation from each other," on later appeals from panel decisions made on remand we chose to first address its treatment of the equity issue. 298 Kan. at 1199, 319 P.3d 1196. We accepted the parties' separate briefs on equity on September 2015 and later on the issue of adequacy. We resolved the equity issue through a series of decisions and orders followed by a special session of the legislature in June 2016 that produced additional school finance legislation and appropriations. Gannon v. State , 303 Kan. 682, 741–42, 368 P.3d 1024 (2016) (Gannon II ); Gannon v. State , 304 Kan. 490, 372 P.3d 1181 (2016) ( Gannon III ). We ultimately held that for the 2016–2017 school year, the legislative response cured the constitutional inequities confirmed to exist in our previous decisions. Sup. Ct. Order, Case No. 113,267 (June 28, 2016).

On remand the panel was also tasked with making an adequacy determination, complete with findings, after applying the more clearly defined Rose -based test to the facts. 298 Kan. at 1171, 319 P.3d 1196. We instructed that "the panel must assess whether the public education financing system provided by the legislature for grades K–12—through structure and implementation—is reasonably calculated to have all Kansas public education students meet or exceed the standards set out in Rose [citation omitted] and as presently codified in K.S.A. 2013 Supp. 72-1127." 298 Kan. at 1199–1200, 319 P.3d 1196.

After our March 2014 remand via Gannon I , the panel issued several rulings, primarily on the existing trial record. It ultimately declared the financing under the SDFQPA to be constitutionally inadequate under the Gannon I test. Soon thereafter the 2015 legislature enacted the Classroom Learning Assuring Student Success Act (CLASS) which repealed and replaced the SDFQPA. L. 2015, ch. 4, secs. 4–22; K.S.A. 2015 Supp. 72-6463 et seq . CLASS operates as a "block grant" to school districts, essentially freezing K–12 funding levels for fiscal years 2016 and 2017 at the fiscal year 2015 level until the Act expires on June 30, 2017, by which time a replacement financing formula was to have been studied, designed, and put in place by the legislature. The panel later declared CLASS unconstitutional for substantially the same reasons it earlier had declared the SDFQPA unconstitutional.

The State advances five basic issues arising out of the panel's actions on remand. Specifically, it complains (1) that the panel did not have jurisdiction to adjudicate the constitutionality of CLASS; (2) the state's compliance with Article 6 is a nonjusticiable political question; (3) the panel erred in not reopening the trial record and admitting additional evidence; (4) the panel's memorandum and order of December 2014 failed to adequately set out its findings of fact and conclusions of law pursuant to K.S.A. 2016 Supp. 60-252(a) ; and (5) the panel erred in holding that the state's K–12 public education financing system under CLASS is constitutionally inadequate.

After careful consideration of the arguments and the extensive record—including taking judicial notice of facts from accessible sources of indisputable accuracy at the invitation of the parties—we reject the State's contentions and affirm the panel's holding that the financing system is constitutionally inadequate.

We hold that CLASS does not meet the structure requirement contained in the Gannon I test. In effect, it is merely a fund created by freezing school districts' funding for 2 school years at a prior year's level. It also is only minimally responsive to financially important changing conditions such as increased enrollment.

We further hold that CLASS does not meet the implementation requirement of the Gannon I test for constitutional adequacy. Plaintiffs have shown through the evidence from trial—and through updated results on standardized testing since then—that not only is the State failing to provide approximately one-fourth of all its public school K–12 students with the basic skills of both reading and math, but that it is also leaving behind significant groups of harder-to-educate students. See, e.g. , U.S.D. No. 229 v. State , 256 Kan. 232, 244, 885 P.2d 1170 (1994) (some student populations to whom higher costs are associated). As of the 2015–2016 school year, some examples include:

• Approximately 15,000 of our state's African American students, or nearly one-half of their total student population, are not proficient in reading and math—subjects at the heart of an adequate education.

• Approximately 33,000 Hispanic students, or more than one-third of their student population, are not proficient in reading and math. When combined with the 15,000 underperforming African American students, the sum equates to approximately all the K–12 public school students in every school district in every county with an eastern boundary beginning west of Salina—more than one-half of the state's geographic area.

• More than one-third of our state's students who receive free and reduced lunches are not proficient in reading and math.

Plaintiffs have also proven by substantial competent evidence that the student performance reflected in this data is related to funding levels.

Accordingly, we conclude the state's public education financing system, through its structure and implementation, is not reasonably calculated to have all Kansas public education students meet or exceed the minimum constitutional standards of adequacy.

Given these conclusions, we next consider remedy. Our general practice with previous school finance decisions has been to retain jurisdiction and continue to stay the orders of the panel and our own mandate to provide the legislature an opportunity to bring the state's education financing system into compliance with Article 6 of the Kansas Constitution. See Gannon III , 304 Kan. 490, 372 P.3d 1181 ; Gannon II , 303 Kan. at 741–42, 368 P.3d 1024 ; Montoy v. State , 278 Kan. 769, 775, 102 P.3d 1160 (2005) (Montoy II ).

We continue that practice today because the legislature intended for CLASS only to be effective until June 30, 2017, and also because the State has twice demonstrated its ability to cure constitutional infirmities recognized by this court in the state's K–12 school finance system. See Montoy v. State , 282 Kan. 9, 24–25, 138 P.3d 755 (2006) (Montoy IV ) (legislature's efforts in 2005 and 2006 constitute substantial compliance with prior orders; appeal dismissed); Sup. Ct. Order, Case No. 113,267 (June 28, 2016) (finding legislation cured equity constitutional infirmities in Gannon litigation).

Once a new financing system is enacted, the State will have to satisfactorily demonstrate to this court by June 30, 2017, that its proposed remedy is reasonably calculated to address the constitutional violations identified, as well as comports with previously identified constitutional mandates such as equity. See Gannon II , 303 Kan. at 743, 368 P.3d 1024 ("[A]ny other funding system it enacts must be demonstrated to be capable of meeting the equity requirements of Article 6—while not running afoul of the adequacy requirement.").

For those purposes, the State will bear the burden of establishing such compliance and explaining its rationales for the choices made to achieve it. See Gannon II , 303 Kan....