Gannon v. State
303 Kan. 682
| Kan. | 2016Background
- Gannon I (298 Kan. 1107 (2014)) held Article 6 of the Kansas Constitution contains both adequacy and equity components and affirmed that elimination of capital outlay aid and proration of supplemental general state aid (beginning FY2010) created unconstitutional wealth-based disparities. The case was remanded to a three-judge district panel to enforce/cure those inequities.
- The 2014 Legislature enacted H.B. 2506 to fund capital outlay and supplemental general state aid for FY2015; initial district-court findings concluded substantial compliance based on estimates, but final FY2014 valuations and local budget choices increased the true liabilities by ~ $54 million.
- The 2015 Legislature (S.B. 4 and S.B. 7) (1) revised FY2015 aid formulas, reducing equalization payments by ~ $54 million, and (2) repealed the SDFQPA and created CLASS, a block-grant scheme that froze FY2016–17 funding at the (reduced) FY2015 levels.
- On remand the district panel reopened equity relief, held S.B. 7 failed the Gannon I equity test (for capital outlay and supplemental general state aid) for FY2015 and prospectively for FY2016–17, struck or invalidated certain statutory changes, ordered payments restoring prior-formula entitlements, and sua sponte joined state officials.
- The State appealed. The Kansas Supreme Court: (1) dismissed the joined officials as unnecessary parties; (2) held the panel had authority to review CLASS and S.B. 7 under the Gannon I mandate; (3) affirmed that the State failed to cure the equity infirmities for FY2015 and that CLASS carried those infirmities forward; (4) denied plaintiffs’ attorney-fee request as procedurally forfeited; but (5) declined to enforce the panel’s specific remedial orders immediately and stayed issuance of the mandate through June 30, 2016 to give the Legislature another chance to cure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Joinder of state officials (Treasurer, Secretary) | Joinder necessary to enforce payments and injunctions | Joinder unnecessary because injunctions bind state officers and contempt remedies exist | Dismissed officials in official capacities and Treasurer in personal capacity; joinder unnecessary under K.S.A. 60-219 and K.S.A. 60-906 |
| Scope of remand — may the panel review CLASS (FY2016–17) | Gannon I required the panel to apply its equity test to any legislative response, including CLASS | Panel exceeded remand scope because CLASS substantially changed funding | Panel acted within mandate; Gannon I explicitly authorized review of legislative cures, and CLASS is principally a freeze/extension of FY2015 calculations, so review was proper |
| Whether State cured equity violations for capital outlay and supplemental general state aid (FY2015 and FY2016–17) | H.B. 2506 and later appropriations/increases meant districts received more funding; reductions were modest and not shown to deny substantially similar opportunity; presumption of constitutionality should apply | Legislature’s formula changes and CLASS reductions disproportionately harmed lower-wealth districts entitled to aid and thus failed the equity test | State bears burden in remedial phase; substantial evidence supports panel: amendments reduced equalization only for aid-receiving (lower-wealth) districts, widening disparities; State failed to show cure for FY2015 and CLASS carried inequities forward to FY2016–17 — affirmed |
| Remedies & fees | Plaintiffs sought enforcement (payments, injunctions, reinstatement of prior statutes) and attorney fees | State argued panel remedy invaded separation of powers, was premature, and appellate stay appropriate; fees forfeited | Court recognized inherent judicial remedial power but declined to enforce the panel’s remedial orders immediately; denied attorney fees as not raised below; stayed mandate through June 30, 2016 to permit Legislature another opportunity to cure |
Key Cases Cited
- Gannon v. State, 298 Kan. 1107 (2014) (adopted equity and adequacy framework and remanded to district panel to enforce/cure inequities)
- Montoy v. State, 279 Kan. 817 (2005) (remedial-phase burden on State; precedent on review of legislative cures)
- Rose v. Council for Better Educ., 790 S.W.2d 186 (Ky. 1989) (adopted for adequacy standard guiding legislature’s required educational capacities)
- Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391 (Tex. 1989) (wealth-based disparities and the principle that tax effort must correlate with access to revenues)
- DeRolph v. State, 89 Ohio St. 3d 1 (2000) (judicial remedial authority in school finance cases)
- Campbell County School Dist. v. State, 907 P.2d 1238 (Wyo. 1995) (judicial enforcement and active remedial role when legislature fails to cure constitutional violations)