Kansas Supreme Court upholds school finance law; retains jurisdiction

The Kansas Supreme Court today said the Kansas Legislature had “substantially complied” with its order to add an inflation adjustment to the multi-year funding plan approved last year. But the court said it will retain jurisdiction over the Gannon case to ensure the Legislature complies with that plan. 

The 2018 Legislature adopted a plan to increase foundational state aid per pupil over a five-year phase-in period designed to restore funding to the 2009 level, adjusted for inflation. In response the court found that method acceptable to provide constitutionally suitable funding but ruled that the Legislature needed to provide additional funding to cover the impact of inflation during the phase-in period.  

The 2019 Legislature increased base state aid per pupil by approximately $90 million statewide for each of the next four years. The plaintiffs argued that this actually provided only $90 million in additional aid annually, and that by 2023, an additional $270 million would be required to meet the inflation target they said the court suggested in its previous ruling. 

In today’s decision, the court said “we did not prescribe a particular method for how to make satisfactory adjustments for inflation. Nor did we identify a specific amount of corrective funding needed. Rather, we left it to the State to determine how to account for inflation in compliance with our mandate, subject to our further review.” 

Noting the “extraordinarily complex” nature of school finance and “the inexact nature of accounting for years of future inflation on millions of dollars,” the court said the bill passed by the 2019 Legislature “substantially complies” with previous orders. “Its planned addition of approximately $90 million per year for four years would cover the $100 million increase in principal—due to past and present inflation—from approximately $522 million to about $622 million. And by employing estimates and projections now available, it also protects against the devaluing effects of future inflation on the $622 million. At the end of those four years, that protection for the base aid is provided through indexing to a CPI (Consumer Price Index) standard.” 

Although the court sided with the state in approving the inflation adjustment, it sided with the plaintiffs in retaining jurisdiction and not dismissing the case. “While we do conclude S.B. 16’s financial adjustments to the safe harbor plan bring the State into substantial compliance with our Gannon VI mandate, we retain jurisdiction to ensure continued implementation of the scheduled funding.” That means the plaintiffs can quickly appeal to the courts if the Legislature fails to fully implement that law, rather than beginning an entirely new judicial proceeding. 

The inflation adjustment approved by the court was developed by the Kansas State Department of Education; proposed by the State Board of Education; recommended by Gov. Laura Kelly and adopted by bi-partisan majorities of the both the House and Senate. It was supported by KASB and a broad range of other public education groups. 

Opposition came from the plaintiffs and Schools for Fair Funding, who said it did not provide an adequate inflation adjustment, and legislators who said the future funding increases contained in the plan would create state deficits in future years, requiring either higher taxes or reductions in other state programs. 

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