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Louisiana School Board Association

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The Funding Crisis? Education’s Continuing Saga - Wednesday, January 18, 2012

Hear the Echoes No. 37

The Funding Crisis?


Education’s Continuing Saga






Governor Bobby Jindal has gone to great lengths, and caused to be spent an inordinate amount of political campaign cash and effort, to elect a Supermajority of Board of Elementary and Secondary Education members, and legislators who might help the Governor further a corporate education agenda.  Such a first of its kind concentrated effort to position total control of education policy in the governor’s hands serves notice on citizens that change is coming.  Shortly following the election, Gov. Jindal’s office announced additional funding cuts are needed, and that revenue estimates for 2011/2012-likely will drive state spending to even lower levels.


Local school districts have suffered for three years with removal of the 2.75 growth factor in the Minimum Foundation Program formula, and from passing down from legislative line item funding for private school bus services and text book costs, stipends for National Board Certified Teachers, and massive increases in employee retirement and health care.  The administration also siphoned off well over $150 million in federal stimulus funding intended for local public schools.


In local school budget planning for still more fiscal stress, school boards face a daunting task.  With increasing frequency discussions turn to staging a fight in favor of increased funding for schools.  The Governor and his corporate reformers raise objection to that. 


One strategy being discussed is a lawsuit insisting that the state appropriate funds adequate to meet true costs of legislatively enacted Grade Level Expectations.  Foundation for such a legal move must include a clear understanding of the funding process.


As a result of a successful 1987 Constitutional amendment effort, unique among the states, Louisiana voters now make a significant portion of school finance formula development process a matter of explicit constitutional text.   Under amended Section 13(B), the State Board of Elementary and Secondary Education must conduct a study to determine the cost of providing a "minimum foundation program” of education, and must construct a formula for distributing the funds to school districts "equitably,” and arrive at a total level of proposed funding for the year.   These BESE duties—now constitutionally mandated—are similar to those once imposed only by statute in Louisiana. 


 Once those tasks are completed, the board submits its formula, complete with spending levels plugged in, to the legislature for approval.  The legislature has three choices at this point. It can (1) approve the formula as submitted and fund the system at the levels reflected in the formula; (2) send the formula back to the board for revision; or (3) send the formula back for revision, but include its own proposals for revisions (e.g., increases or decreases in certain or overall funding levels).  The legislature may not simply overrule the BESE and decide unilaterally how and at what level to fund the state’s schools. The process continues until the board submits a proposed formula that the legislature approves, which it then has the absolute duty to fully fund. 


 Importantly, if the board and the legislature reach an impasse, then the state constitution also mandates that the formula on which the board and the legislature most recently reached agreement, including the levels of funding used, becomes the default formula for the current year.


Comparing the text of the initial 1974 provision and the current provision reveals that the two substantive legislative duties found in the initial provision—the duty to provide funds sufficient to ensure a "minimum foundation program” and the duty to provide for the "equitable distribution” of the funds—are preserved.   Added to these substantive legislative duties, however, are constitutionally mandated procedures for fulfilling such duties.


It is clear that the Louisiana reformers knew, based on past experience, that the BESE would generally seek to increase expenditures, but that the legislature would sometimes seek to decrease expenditures, so the soft floor (the most recently approved MFP)  placed in the amended text signals to both parties that recalcitrance will not allow them to achieve their goals—thus motivating the parties to negotiate in good faith.  The soft floor does not have the effect of absolving the entities of their responsibilities.  On the contrary, it incentivizes their performance.  As a bonus, the soft floor also seems intended to hold harmless the students and local educational agencies in the state in the event of true political impasse or apathy.  It is possible that the force of the clear responsibilities set forth in Section 13(B) could forestall litigation entirely by textually mandating the sort of procedure that a school finance judgment might explicitly or implicitly require anyway.


What might provoke a legal challenge?


In the aftermath of Katrina/Rita relief funding and the national stimulus enactments New Orleans schools received a flood of federal dollars to restore public schools in the metro area.  At times the New Orleans area schools were funded at twice the level of the average Louisiana school district.  Most funding authorities concur with a recent Tulane University Cowen report that school funding in the city has arrived at the edge of an abyss.  Such funding cannot be continued absent the federal infusions and significant philanthropic contributions as well.


The current reforms in New Orleans have as their backstop the constitutional guarantee that the budget will not deadlock, and that if it does, the prior budget will apply.  Education finance suits, for good or ill, are inherently political events.   In most cases such suits arise from a perceived legislative disinvestment in education, either over time, or more commonly, through decentralization, which results in a lower proportion of educational expenses being funded directly by the state. 


Louisiana’s constitutional provision goes a long way toward preventing any such state-level disinvestment in any given year because it textually defaults the state budget to the prior year’s spending levels.  Nevertheless, it is certainly still possible that such disinvestment could occur either in one year or over time if both the legislative and executive branches were to desire it. That is, even the state constitution’s process-based provisions may not be enough to prevent an actual political crisis from occurring in Louisiana once the funding cliff reaches the state, and New Orleans is likely to bear the brunt of this crisis if it occurs.  The crisis could take the form of a legislative enactment calling for reductions in spending that does not result from the mandated negotiation process. It could also result from total legislative and executive inaction or apathy. Or, it could result from collaboration between the legislature and the executive branch to reduce spending due to an agreed exigency that makes maintenance of current spending levels impossible.


In any case, New Orleans and all other local districts are likely to see significant funding decreases.  If so, then litigation may result, just as it resulted from sharp spending decreases in 1986.


By altering the duties under the education article, the people of Louisiana may have sent the judiciary a message of permission.  The clear allocation of textual authority would support a reasonable interpretation that the drafters/people wanted the process, as opposed to the substance, of the legislative act to be reviewable.  If so, then political crises resulting from unilateral legislative action to defund education may be subject to judicial resolution without presenting any separation of powers problems.  If the legislature has ignored its duty to negotiate, then the court ought to possess the textual authority to order the legislature to engage in the negotiation process. This should also be true for the executive branch through the BESE.


Most legal challenges, nationally, are won only when education stakeholders are able to define the term adequate education so that cost can then be calculated.  In Louisiana the legislature and the executive (via BESE) have defined adequacy by adopting the Grade Level Expectations (GLE) for each K-12 grade.  Some would suggest that the cost element to cover expense of achieving GLE has also been established in funding level for the state-run RSD.


Doubtless the second Jindal administration will act with vigor to respond to its suggested fiscal crisis and having gained control of BESE and playing a strong hand in endorsing leadership positions in the Legislature there is a suggestion that the three-legged stool of checks and balances (executive-legislative-judicial) has been subverted and only a judiciary stands in the way of dictatorial control of Louisiana education.


(Source for Constitutional information:  Scott R. Bauries, "State Constitutional Design and Education Reform:  Process Specification in Louisiana” University of Kentucky College of Law, Journal of Law and Education, Vol. 40, 2011).