Dwyer v. State

2015 CO 58, 357 P.3d 185, 2015 Colo. LEXIS 916, 2015 WL 5559755

• Court: Supreme Court of Colorado
• Decided: September 21, 2015
• Docket: 15SA22
• Status: Published

Opinions

CHIEF JUSTICE RICE

delivered the Opinion of the Court. .

1 1 In this original proceeding, we consider the legality of the "negative factor," a legislative enactment that operates to reduce education funding across all Colorado school districts. - Plaintiffs below sued the State of Colorado, the Commissioner of Education, and the Governor (collectively, "the State"), arguing that the negative factor is unconstitutional because it violates Amendment 23, a constitutional provision requiring annual increases to "statewide base per pupil funding." After the trial court denied the State's motion to dismiss, we issued a rule to show cause why. the motion should not be granted. We now conclude that Plaintiffs' complaint misconstrues the relationship between the negative factor and Amendment 23. By its plain language, Amendment 23 only requires increases to statewide base per pupil funding, not to total per pupil funding. We therefore hold that the negative factor does not violate Amendment 28: Accordingly, we make the rule absolute, and we remand the case to the trial court with instructions to dismiss Plaintiffs' complaint.

I.. Facts and Procedural History

T2 In 2000, Colorado voters passed Amendment 28, which requires annual increases to "statewide base per pupil funding" for public education. See Colo. Const. art. IX, § 17(1) (Amendment 23"). Ten years later, the General Assembly determined that "stabilization of the state budget requires a reduction in the amount of the annual appropriation to fund the state's share of total [education] funding." § 22-54-104(5)(g)(I), C.R.S. (2010). To accomplish this, it implemented the negative factor, See § 22-54-104(5)(g), C.R.S. (2011). The negative factor effectuates the General Assembly's goal by reducing each district's school funding by a fixed percentage. See infra ¶ 11.

3 Plaintiffs sued the State for declaratory and injunctive relief, arguing that the negative factor violates Amendment 23 and is thus unconstitutional. The trial court denied the State's motion to dismiss, finding that "Plaintiffs have alleged sufficient facts." The State petitioned us to exercise our original jurisdiction under C.A.R. 21. We issued a rule to show cause why the motion to dismiss should not be granted.¹

IIL - Original Jurisdiction

¶4 "Original relief pursuant to C.A.R. 21 is an extraordinary remedy that is limited both in purpose and availability." People v. Kailey, 2014 CO 50, ¶9, 333 P.3d 89, 92. Despite this, we "generally elect to hear C.A.R. 21 cases that raise issues of first impression and that are of significant public importance." In re Marriage of Wiggins, 2012 CO 44, ¶12, 279 P.3d 1, 5. The question presented in this case-which implicates the apportionment of nearly one billion dollars of state funding-is undeniably such an issue. Furthermore, because Plaintiffs' complaint presents a pure question of law, the existing record is sufficient, and allowing the case to proceed to trial would not further clarify the question of the negative factor's constitutionality.

III - Standard of Review

T5 The constitutionality of the negative factor is a question of law, which we review de novo. See Kailey, ¶12, 333 P.3d at 93. We presume that the negative factor is constitutional, and we will only void it if we deem it to be unconstitutional beyond a reasonable doubt. See Justus v. State, 2014 CO 75, ¶17, 336 P.3d 202, 208.

IV. Analysis

16 To resolve the constitutionality of the negative factor, we begin by charting the recent history of education funding in Colorado, examining Amendment 23, the negative factor, and their respective impacts on the State's school funding formula We then consider whether the negative factor violates Amendment 23's constitutional mandate. We conclude that, because Amendment 28 only requires increases to base per pupil funding, the negative factor does not violate the amendment.

A. Education Funding in Colorado

T7 Colorado awards education funding to individual school districts pursuant to the Public School Finance Act of 1994 ("the Act"). See §§ 22-54-101 to -137, C.R.S. (2015). Prior to the passage of Amendment 23, the Act calculated the "total program" funding for each district See § 22-54-104(1), C.R.S. (2000). To do so, it first caleu-lated a district's per pupil funding. See § 22-54-104(3), C.R.S. (2000). Per pupil funding could be broken into two main components: base funding and factor funding. Base funding, as designated by the term "statewide base per pupil funding," was uniform for all districts. See § 22-54-104(5)(a), C.R.S. (2000) (specifying the amount of base per pupil funding for seven different budget years, including $3,878 (plus $128.70 to account for inflation) for 2000-01). Factor funding, in contrast, varied for each district based on four factors: the personnel costs factor, the cost of living factor, the nonper-sonnel costs factor, and the size factor. See § 22-54-104(5)(b)-(e), C.R.S. (2000). The Act created a detailed framework to calculate these factors for each district. See id. It then combined these two components, computing each district's total per pupil funding according to the following formula:

((Statewide base per pupil funding x District personnel costs factor x District cost of living factor) + (Statewide base per pupil funding x District nonpersonnel costs factor x District size factor.

§ 22-54-104(3), C.R.S. (2000),

T8 In addition to calculating per pupil funding, the Act determined each district's "at-risk funding," a computation involving a fifth factor, dubbed the "at-risk factor." See § 22-54-104(4), (5)(f), C.R.S. (2000). Finally, to derive the total program funding amount for each district, the Act multiplied the district's total per pupil funding by its "funded pupil count," then added the district's at-risk funding to that product. See § 22-54-104(2), C.R.S. (2000).

9 In 2000, voters passed Amendment 28. Although the amendment mandated changes to education funding, it did not alter the Act's formula. Rather, it required regular increases to one of the variables within that formula: statewide base per pupil funding. In particular, Amendment 23 provided that from 2001-02 through 2010-11, "the statewide base per pupil funding, as defined by the [Act] on the effective date of this section, for public education from preschool through the twelfth grade ... shall grow annually at least by the rate of inflation plus an additional one percentage point" (emphasis added). - The amendment further provided that for 2011-12 "and each fiscal year thereafter, the statewide base per pupil funding for public education" shall grow by at least the rate of inflation (thereby eliminating the "additional one percentage point" increase). In addition, the amendment demanded that "total state funding for all categorical programs ² shall grow annually" at the same rate (emphasis added). Following the passage of Amendment 23, the General Assembly methodically increased the designated amount of "statewide base per pupil funding" each year. Compare § 22-54-104(5)(a)(X), C.R.S. (2003) (providing for a base of $4,570.31 for 2003-04), with § 22-54-104(5)(a)(XVI), CRS. (2009) (providing for a base of $5,507.68 for 2009-10). Because the General Assembly did not otherwise change the Act's formula, these increases to the base resulted in commensurate increases to total education funding. Compare § 22-54-104(3), C.R.S. (2003), with § 22-54-104(3), C.R.S. (2009) (both establishing identical per pupil funding formulas).

1 10 In 2010, however, the General Assembly "determine[d] that stabilization of the state budget requires a reduction in the amount of the annual appropriation to fund the state's share of [education] funding for all districts." § 22-54-104(5)(g)(I), C.R.S. (2010). But while the General Assembly sought to decrease total education funding, it also needed to continue growing base funding pursuant to Amendment 23. Thus, the General Assembly could only effectuate its goal of stabilizing the budget by reducing factor-not base-funding. To accomplish this, it implemented the negative factor.

11 Strictly speaking, the negative factor lowers neither base funding nor factor funding. Instead, the negative factor operates in concert with a hard statutory cap on total education funding. The Act's formula to determine school funding for each district-again, a combination of uniform base funding and district-specific factor funding-remains intact. See § 22-54-104(2)(a)(IX), C.R.S. (2015). Now, however, total education funding across the state must equal a fixed statutory cap, albeit one that allows for Amendment 23's annual increases to statewide base per pupil funding. See, e.g., § 22-54-104(b5)(g)(D(F) (providing that, "for the 2015-16 budget year, the sum of the total program funding for all districts ... after application of the negative factor, is not less than" $6,283,955,787). To achieve this, the Act first calculates the imifial statewide total, summing up each district's total funding pursuant to the original formula, See § 22-54-104(b)(g)(II)(A). It then subtracts the statutory cap (the new statewide total) from this amount, and it divides the difference by the initial statewide total to derive a perdentage; this percentage is the negative factor. See id. Finally, for every district, the Act multiplies its initial total funding amount by the negative factor, then reduces the district's total funding by that product. See § 22-54-104(b)(g)(II)(B).³

12 Because the negative factor's mechanics are so convoluted, we will clarify them through a hypothetical. Suppose that Colorado were composed of three school districts: A, B, and C. Suppose further that, prior to the negative factor, District A received $5 million in education funding, District B received $10 million, and District C received $15 million; this results in an initial statewide total of $30 million. But now suppose that the Act provided for a statutory cap of $27 million for statewide education funding. To determine the negative factor, the Department of Education would subtract $27 million from $30 million, then divide the difference ($3 million) by the initial statewide total ($80 million)-this yields a negative factor of ten percent. Then, pursuant to section 22-54-104(5)(g)(II)(B), each district's initial funding amount would be cut by this ten-percent negative factor. Thus, District A's funding would be reduced from $5 million to $4.5 million, District B's funding would diminish from $10 million to $9 million, and District C's funding would drop from $15 million to $18.5 million. As a result, the new statewide total for education funding-$4.5 million from District A, plus $9 million from District B, plus $13.5 million from District C-now equals the statutory cap of $27 mil-Hon.

113 Now, to Vlsuahze the mterplay between the negative factor and Amendment 28, consider District A in the context of per pupil funding: Reeall that District A, prior to the negative factor, received $5 million in total education funding. See supro ¶12. Now suppose that District A has 500 pupils. Therefore, prior to the negative factor, District A's total per pupil funding would have been $10,000 ($5 million divided by 500 pupils). But because the ten-percent negative factor reduced District A's total funding from $5 million to $4.5 million, see supra ¶12, it commensurately reduced District A's per pupil funding from $10,000 to $9,000 ($4.5 million divided by 500 pupils)." The question is whether this reduced level of per pupil funding has dropped below Amendment 23’s mandated amount.

114 To answer this question, suppose we are in the 2015-16 budget year. In that year, Amendment 23 required a base per pupil funding amount of $6,292.39. See § 22-54-104(5)(a)(XXIT). Thus, before the negative factor, District A's. total per pupil funding of $10,000 broke into two components: $6,292.39 in base per pupil funding, plus an additional $3,707.61 in factor funding. After the negative factor, District A's total per pupil funding dropped to $9,000: the same $6,292.39 in base per pupil funding, plus a reduced $2,707.61. in factor funding. As such, despite the negative factor's application, District A's lower per pupil funding amount ($9,000) remains above the constito-'tionally mandated base per pupil funding amount ($6,292.39). Thus, in practical terms, the negative factor has decreased District A's factor funding by $1,000 without diminishing its base funding.⁴

15 This hypothetical illustrates the theory behind the negative factor: how it reduces total education funding, but not so drastically as to drop any individual district's total per pupil funding below the required base. The question, of course, is whether the procedure demonstrated in this hypothetical is in fact constitutional. Having examined the relevant statutory framework, we now address whether the negative factor has unconstitutionally diminished statewide base per pupil funding below the levels required by Amendment 23.

B. The Negative Factor Has Not Violated Amendment 23

1 16 As we have demonstrated, the practical operation of the negative factor is highly intricate. Legally speaking, however, Plaintiffs' challenge to the negative factor presents a surprisingly straightforward question of constitutional interpretation. Quite simply, this case is about one thing: the meaning of the term "base." >

T17 The State essentially argues that "base" is synonymous with "floor." It contends that Amendment 23 only requires incremental increases to the floor set by the Act's finance formula, and that the General Assembly retains discretion to adjust additional funding as allocated by the factors. As such, the State' distinguishes "base" from "total," positing that while Amendment 23 mandates increases to base per pupil funding, it does not in the same breath prohibit decreases to total per pupil funding.

118, Plaintiffs proffered definition -of "base" is more creative. They contend that, in using the word "base," Amendment 23 necessarily intended to "capture the essential qualities" of the variable called the "base." Response Brief at 23 (emphasis removed). They further contend that the base's "essential quality ... made it the starting point to be increased formulaically by [the] factors," thereby "yielding higher per pupil funding." Id. (emphasis removed). Thus, Plaintiffs argue that Amendment 23 requires increases to total per pupil funding, as effected through adjustments to the base.

119 To resolve this dispute, we need only turn to our standard principles of constitutional interpretation. "When interpreting a constitutional amendment adopted by citizen's initiative, we 'give effect to the electorate's intent in enacting the amendment.'" Colo. Ethics Watch v. Senate Majority Fund, LLC, 2012 CO 12, ¶20, 269 P.3d 1248, 1253 (quoting Davidson v. Sandstrom, 83 P.3d 648, 654 (Colo.2004)). To do so, we "give words their ordinary and popular meaning." Id., 269 P.3d at 1253-54. Thus, we have recogmzed that "[If the language of an amendment is clear and unambiguous, then it must be enforced as written." Id., 269 P.3d at 1254. Only where the amendment's language "is susceptible to multiple interpretations" do we look beyond it to ascertain the voters' intent. See id.; see also Sandstrom, 83 P.3d at 654-55 ("If the intent of the voters cannot be discerned from the language ... [clourts may determine [it] 'by considering other relevant materials such as the ballot title and submission clause and the biennial "Bluebook," which is the analysis of ballot proposals prepared by the legislature" (quoting In re Submission of Interrogatories on House Bill 99-1325, 979 P.2d 549, 554 (Colo.1999))). Finally, we note that voters "must be presumed to know the existing law at the time they amend or clarify that law." Common Sense Alliance v. Davidson, 995 P.2d 748, 754 (Colo.2000).

120 These principles compel the conclusion that Amendment 28 only requires increases to statewide base per pupil funding, not total per pupil funding. We know that this is what Amendment 23 means, because this is exactly what Amendment 28 says. Onee again, the amendment provides for annual increases to "statewide base per pupil funding, as defined by the [Act] on the effective date of this section." That "effective date" was the year 2000. The term "statewide base per 'pupil finding" appeared a dozen times in the 2000 version of the Act, and each time, its meaning was clear: It was a single variable within the Act's larger per pupil funding formula. See § 22-54-104(3), C.R.S. (2000) Therefore, Amendment 23 does not demand that total per pupil funding increase; it merely requires that this single variable increase.⁵

'{21 The additional language in Amendment 28 only buttresses our conclusion. To wit, in addition to requiring annual increases of "statewide base per pupil funding ... for public education from preschool through the twelfth grade," Amendment 28 further mandates annual increases of "total state funding for all categorical programs" (emphasis added). This discrepancy between "base" and "total" cannot be accidental. Rather, it is reflective of the voters' intent to adjust school funding in two different ways: increasing base per pupil funding for standard public education, and augmenting total funding for categorical programs. If voters had wished to increase "total" per pupil funding rather than "base" per pupil fundmg, they would have said so.

122 Plaintiffs argue that interpreting Amendment 28 in this fashion produces an absurd result. See Bickel v. City of Boulder, 885 P.2d 215, 229 (Colo.1994) ("[Aln unjust, absurd or unreasonable result should be avoided when construing a constitutional provision."). To be sure, we are mindful that we must not engage in overly technical constructions of constitutional amendments if doing so would contravene the voters' intent. See Sandstrom, 83 P.3d at 654. But our interpretation of Amendment 23-a reading rooted in the amendment's plain language-is neither overly technical nor absurd. It is hardly technical to interpret the term "statewide base per pupil funding" precisely as it was defined in the Act, especially given that Amendment 23 explicitly incorporates that definition. See § 22-54-104(b)(a), C.R.S. (2000). And it was perfectly rational, not absurd, for voters to insist that the State annually increase base per pupil funding (which is uniform across all school districts) while simultaneously affording the General Assembly discretion to modify factor funding (which is specific to each individual district).

28 Of course, the negative factor calculation does not hinge on the particular characteristics of a given district; rather, the negative factor cuts every district's funding by the same percentage. See supra "11. Seizing on this, Plaintiffs advance a complex supplemental argument. They contend that, because the General Assembly is reducing total education funding without adjusting any of the district-specific factors, such cuts must stem from reductions to the other element in the funding formula, i.e., the base.

1] 24 Plaintiffs miss the forest for the trees. The origin of the funding reduction is irrelevant. The result of the reduction-that is, whether the State has reduced any district's per pupil funding below the base level set by Amendment 23-is all that matters. The State has not done so, and in fact, Plaintiffs do not allege otherwise. Instead, Plaintiffs allege that the State has reduced statewide base per pupil funding below Plaintiffs' proposed definition of the term. As we have established, this definition is incompatible with the, plain language of Amendment 23. Therefore, Plaintiffs' complaint stems from a faulty premise, and their mathematical argument is thus a red herring.⁶ At the end of the day, the State has not reduced statewide base per pupil funding below its constitutional minimum. That fact torpedoes Plaintiffs' lawsuit.

125 Finally, we reject Plaintiffs' contention thatthe Act's fnclusion of a "savings clause" proves that the negative factor is unconstitutional. This savings clause provides that a district's total funding "shall be the greater of" (a) the amount as calculated by the standard formula and the negative factor, or (b) the minimum level of base funding multiplied by the district's number of pupils. See § 22-54-104(b)(g)(III), C.R.S. (2015). Essentially, the savings clause functions as a failsafe. It ensures that, in the event that the negative factor did reduce funding levels for a particular district below those mandated by Amendment 23, that district would still receive its minimum amount of base funding in compliance with the amendment. Thus, the savings clause makes certain that the very theory of Plaintiffs case-ie., that the negative factor reduces a district's funding below constitutionally prescribed levels-never becomes a reality. Therefore, contrary to revealing the negative factor's constitutional infirmity (as Plaintiffs contend), the savings clause does the exact opposite: It ensures that the negative factor cammot function to violate Amendment 23.

T26 In sum, we conclude that "statewide base per pupil funding" as articulated in Amendment 23 refers only to that single variable within the Act's school finance formula, not to total per pupil funding. Because we reach_ this conclusion from the amendment's plain language, we 'need not resort to examining secondary sources to discern the voters' intent. See Colo. Ethics Watch, ¶20, 269 P.3d at 1254.

V. Conclusion

T27 Plaintiffs allege that the State has improperly reduced statewide base per pupil funding in violation of Amendment 23. In so doing, they confuse "base" with "total." Interpreting the term "statewide base per pupil funding" according to its plain and statutorily defined meaning, we hold that the negative factor has not reduced the base below its constitutional minimum and thus does not violate Amendment 23. Therefore, Plaintiffs have failed to state a claim for relief. Accordingly, we make our rule absolute, and we remand this case to the trial court with instructions to dismiss Plaintiffs' complaint.

JUSTICE MARQUEZ dissents, and JUSTICE HOOD and JUSTICE GABRIEL join in the dissent.

1 . In its motion to dismiss, the State also argued that the trial court lacked subject matter jurisdiction and that Plaintiffs lacked standing. Because the State did not pursue these arguménts in its petition for a rule to show cause, we do not address them here.

2 . The amendment defined "categorical programs" as discrete educational programs-as distinct - from - general - education-including "transportation programs, English language proficiency programs, expelled and at-risk student programs, special education programs (including gifted and talented programs), suspended student programs, vocational education programs, small attendance centers, comprehensive health education programs, and other current and future accountable programs specifically identified in statute as a categorical program." ' Colo. Const. art. IX, § 17(2)(a).

3 . For simplicity, our generalized walkthrough of this scheme elides minor provisions elsewhere in the statute. See, e.g., § 22-54-104(4.5) (calculat'ing each district's "on-line funding"); § 22-54-104(4.7) (calculating each district's "extended high school funding"). These provisions produce a de minimis impact on school funding, and they are irrelevant to our analysis of whether the negative factor violates Amendment 23.

4 . For brevity, this hypothetical only applies to a single budgetary year. Going forward, Amendment 23 will continue to elevate the minimum . statewide base per pupil funding threshold every year. The General Assembly has accounted for these annual increases by continually raising the statutory cap on 'total statewide funding. See § 22-54-104(5)(g)' (memorializing the statutory cap for different fiscal years, including $5,225,244,885 in 2010-11, $5,524,046,767 in 2013-14, and $6,233,955,737-in 2015—16).

5 . Plaintiffs point out that "statewide base per pupil funding" does not appear in the "definitions" section of the 2000 Act. See § 22-54-103, C.R.S. (2000). They thus contend that the term was necessarily ambiguous at the time of the enactment. - But this construction is far too severe, Section 22-54-104, the provision in which the term appears (and the fulcrum of the State's entire system of awarding school funding), contains a multitude of other terms that are critical to the formula but do not appear in the "definitions" section. For example, section 22-54-104(5)(b) explains in detail how to calculate a district's "size factor." Yet under Plaintiffs' theory, this procedure would be rendered ambiguous because the term "size factor" doés not appear in the "definitions" section of the Act. Such a result is patently illogical, as is declaring "statewide base per pupil funding"-a term that section 22-54-104(5)(a) quantitatively defines for seven different budget years-to be ambiguous simply because it does not appear in section 22-54—103. That a term is absent from a statute's "definitions" section does not automatically mean that the entire statute fads to define that term.

6 . Plaintiffs and their amici also contend that the Act's revised finance formula now "cancels out" the variable of "statewide base per pupil funding," thereby rendering the base meaningless. See Response Brief at 13-14; Brief for Department of Business Officials of the Colorado Ass'n of School Executives as Amicus Curiae Supporting Respondents at 17 ("The General Assembly could state any amount in [the Act] for the Base-'$2', ©$20,000', or even '2,000 Unicorns'- and the result would be the same."). This argument fails for the same reason. Whether or not the base possesses algebraic significance within the funding formula is immaterial. What matters is whether the resultant funding levels have actually dropped below the required base.