Opinion ID: 2524503
Heading Depth: 2
Heading Rank: 1

Heading: Operation Financing

Text: [ถ 46] Following this court's decision in Campbell, the legislature retained the services of MAP to assist the state in developing a school finance distribution model which would purportedly assure adequate resources were distributed, with any disparities in funding based solely on cost, to provide a proper education for every child in Wyoming. To do so, MAP proposed, in its response to the Request for Qualifications issued by the legislature, it would first be necessary to determine the cost of the delivery of the goods and services contemplated by the basket in each economic region of Wyoming by going shopping for them. MAP contemplated the shopping as follows: Shopping in this context will involve determining salary and other compensation rates for professionals with training and experience comparable to teachers, counselors, administrators, etc., wage rates for classifications of employee skills utilized by school districts (e.g., craftspersons, secretaries, and food service workers), and the costs of consumable items and services used by schools (e.g., petroleum, instructional materials, utilities, selected maintenance and repair items, food). [ถ 47] However, MAP did not undertake that effort. Apparently concerned about the cost and time necessary to obtain the information, MAP chose instead to determine the costs to be included in the model based on statewide averages of past school district expenditures and professional judgment. Those costs would then be adjusted to reflect differences in student populations and cost of living throughout the state. This approach raises three fundamental questions this court must resolve to uphold the constitutionality of the system. First, can a system which attempts to estimate the actual cost of education, rather than measure it, meet the standard established by Campbell ? Second, does MAP's approach accurately estimate the actual costs a school district should incur to deliver the educational system deemed adequate by the legislature? A corollary of this second issue is whether the disparities from district to district are based upon differences in accurately estimated costs or mere arbitrary assumptions. If the answer to the first two questions is in the affirmative, the final question arises: Did the legislation actually adopted adequately fund those estimated costs? [ถ 48] With regard to the first question, it seems to us that actual measurement of the costs, shopping in the words of MAP, would have been far preferable. Certainly, such an approach would have avoided many of the complex questions and confusion presented in this litigation and would have minimized the need for our scrutiny of the system. However, we cannot say reliance on professionally developed estimates, based upon sound evidence including average past expenditures, results in an unconstitutional system. In addition, even the challengers do not argue the use of a model as a proxy for the cost of education is, in and of itself, improper. Consequently, we conclude the cost-based model approach chosen by the legislature is capable of supporting a constitutional school finance system. Surprisingly, we note the model has resulted in a similar magnitude of funding disparities as existed with the old wealth-based system. Prior to the new legislation, schools experienced an $8,133 per student difference between the highest and lowest funded districts. Today, the same districts (Sheridan County School District No. 3 which is the highest district and Park County School District No. 6 which is the lowest district) experience even a larger disparity of $10,016. [11] Supposedly, this disparity is now due to cost differences and not wealth differences. That conclusion can only be tested by strict scrutiny of the reasons for those differences in per student funding which is a task we are constitutionally obligated to undertake. [ถ 49] The second question is much more difficult to answer. The challengers argue a system built upon average past expenditures is necessarily flawed because the existing system was declared unconstitutional and, they argue, was already inadequately funding education. However, while Campbell concluded the old system had resulted in unconstitutional disparities between districts, absent was a holding that the system, as a whole, was underfunding education. Certainly, some districts were underfunded as a result of low assessed property valuations. At the same time, other districts were wealthy. The record in this case does not compel the conclusion that statewide average costs would necessarily fall below the cost of providing a constitutionally sound education. [ถ 50] While the situation is not ideal, MAP and the legislature had to start somewhere and trying to shop the actual costs of a system not yet fully implemented has as many inherent problems in attaining accuracy as does use of existing expenditures in a system currently delivering an education not deemed, as a whole, adequate. In general, we conclude use of past statewide average expenditures to estimate the cost of education was appropriate. [ถ 51] This leads us to the third question as to the adequacy of the legislation in funding the estimated costs. In addition to holding the constitution requires an equal educational opportunity for all Wyoming children, this court, in Campbell, held our constitution commands the legislature to provide and fund an education system which is of a quality `appropriate for the times' and that command goes well beyond simply allowing the legislature to dispense a minimal level of elementary and secondary education and then fund it as best it can amidst other competing priorities. Supporting an opportunity for a complete, proper, quality education is the legislature's paramount priority; competing priorities not of constitutional magnitude are secondary, and the legislature may not yield to them until constitutionally sufficient provision is made for elementary and secondary education. ... The constitution requires it be the best we can do. 907 P.2d at 1279. This court made it clear it is the job of the legislature to design the best educational system by identifying the `proper' educational package each Wyoming student is entitled to have. Id. Almost all states' highest appellate courts have considered challenges to school finance systems, and eighteen have concluded that the finance system was either unequal or inadequate, or both, under their state constitutions. Arizona, Ohio, and New York revisited and overturned decisions upholding school finance systems. Unlike the majority of states which emphasized additional funding, equalized funding, or basic education, Wyoming views its state constitution as mandating legislative action to provide a thorough and uniform education of a quality that is both visionary and unsurpassed. To that end, this court required the legislature to consider education as a paramount priority over all other considerations and has identified class space, class size, teacher quality, and local innovation as factors critical to its determination that the legislature is providing a quality education. Campbell, 907 P.2d 1238; Washakie, 606 P.2d 310; see also Joseph S. Patt, School Finance Battles: Survey Says? It's All Just a Change in Attitudes, 34 Harv. C.R.-C.L. L.Rev. 547, 548-49 (1999); Campaign for Fiscal Equity, 719 N.Y.S.2d 475. Based upon the expert testimony in Campbell, we identified some aspects of a quality education, which included small classes and low pupil/teacher ratios for both rural and urban schools and ample, appropriate provisions for at-risk students and talented students. We are now faced with the difficult and unwelcomed task of determining whether the funding adopted by the legislature in 1999 meets the constitutional standard of the  best we can do. [ถ 52] The trial court concluded the funding was adequate for two reasons: 1) five of the challenging school districts had been accredited by the DOE, indicating to the court the basket was being delivered with the funding provided; and 2) the adequacy studies convened by the state had concluded the funding was adequate. We are not persuaded the accreditation of five school districts is helpful in determining whether the basket, only recently identified by the legislature, can be provided over the long term. [12] [ถ 53] After the trial court found in the first trial the state had not carried its burden of proving the funding for the middle and high schools met the constitutional standard, the state undertook two different studies with panels of out-of-state experts to prove the funding, although less than MAP would have provided, could be deemed adequate to deliver the basket. Eighteen out-of-state experts were utilized to remove any bias and were told they were undertaking a theoretical exercise without identifying the location of the schools. They were divided into four panels [13] and asked: Granted a fixed level of resources but with the freedom to use those resources as you see fit, can you design and staff a program that you believe would successfully deliver the basket to every student? Each team received three different fixed levels of resources, the resources contained in MAP 3, the 1997 legislation funding (HEA 2), and the 1998 legislation funding (SEA 2). They were provided the legislative list of the skills and knowledge areas constituting the basket but were not provided Wyoming's graduation standards, which are to be phased in over the next five years. Instead, they used varying curriculum standards from schools with which the panel members had experience. [14] The fourteen assumptions imposed are critical to evaluating the relevancy of the conclusions because some were not consistent with the Wyoming legislation. Those inaccurate assumptions included: 1) assume all special education costs were fully reimbursed when there is a year delay in those reimbursements; 2) assume all transportation, utilities, and food services were fully reimbursed when such reimbursement is also subject to a year delay in certain circumstances or unless the small school adjustment applies; 3) assume salaries are adequate to attract and retain qualified employees when that is disputed if unadjusted for inflation; and 4) assume the district was free to shift resources among categories in any way when none of the categories in the prototype model is funded above cost. [ถ 54] Each panel concluded the funding at each of the three funding levels was adequate, but each panel also added teachers to reduce the class size. Given the theoretical nature of the exercise, the inaccuracy of some of the assumptions, and the conclusion that more teachers and smaller class sizes were necessary, the adequacy panels can hardly be considered unequivocal endorsements of the adequacy of the 1999 funding system. We conclude the adequacy reviews are of little probative value. [ถ 55] This court has no desire, nor is it our constitutional responsibility, to pass judgment on each line item of the funding model. Those are legislative choices for which the legislators are accountable to their respective constituencies. However, the fundamental question of what is an education appropriate for the times is a constitutional one that we must answer. The state cites no authority requiring this court's constitutional inquiry to end upon blessing of the model without examination of its inputs. Our discussion in Campbell regarding the application of the doctrine of separation of powers to this issue is equally relevant today. Constitutional provisions imposing an affirmative mandatory duty upon the legislature are judicially enforceable in protecting individual rights, such as educational rights. Although this court has said the judiciary will not encroach into the legislative field of policy making, as the final authority on constitutional questions the judiciary has the constitutional duty to declare unconstitutional that which transgresses the state constitution. When the legislature's transgression is a failure to act, our duty to protect individual rights includes compelling legislative action required by the constitution. In school reform litigation, defenders of the funding scheme routinely advance the argument that the judiciary's determination of the nature and extent of the constitutional right to a quality education violates the separation of powers doctrine. That argument was aptly answered by the Kentucky Supreme court: The judiciary has the ultimate power, and the duty, to apply, interpret, define, construe all words, phrases, sentences and sections of the Kentucky Constitution as necessitated by the controversies before it. It is solely the function of the judiciary to so do. This duty must be exercised even when such action serves as a check on the activities of another branch of government or when the court's view of the constitution is contrary to that of other branches, or even that of the public. Rose v. Council For Better Educ. Inc., 790 S.W.2d 186, 209 (Ky.1989). Our proper role is interpreting the meaning of the language of งง 1 and 9 of Art. 7 in order to determine the duties those provisions impose upon the legislature. Campbell, 907 P.2d at 1264 (some citations & footnote omitted). [ถ 56] The state has argued strongly that decisions concerning the level of funding for the school finance system are a matter for the legislature upon which the court cannot encroach. The complexity of the block grant model system chosen by the legislature forces this court to scrutinize all aspects of the system because, if one assumption fails, many others are jeopardized. For this reason we now consider whether the contested components accurately reflect the cost a school district should incur to provide that component.
[ถ 57] By far, the most expensive component of any education system is personnel, primarily classroom teachers. The record demonstrates those costs reflect 80 percent of the total. Consequently, the estimate of this component cost deserves the closest scrutiny. [15] If it cannot be concluded that the estimate of teacher costs reflects the actual cost of the teachers necessary to deliver the basket, the system cannot be constitutional. There are two aspects to estimating these costs, the number of teachers needed and the appropriate salary to be paid to those teachers. The trial court found that the method of determining the teacher salary component of the MAP model was acceptable and described it as follows: 25. Because there is only one purchaser of teacher services, MAP determined the price of hiring a new teacher, typically with little or no experience, by studying the most competitive market in the state for professionals with similar educational qualifications. This market is in Albany and Laramie Counties. 26. MAP compared the beginning teacher salaries offered by the three school districts in these two counties with the statewide average or mean starting salary. The beginning salary in Albany and Laramie Counties was slightly lower than the statewide average. MAP chose to use the higher figure, the statewide mean starting salary of $20,573.00, for the model. 27. To the average starting salary ($20,573.00), MAP added the average increase due to advanced education ($1,796.00), and the average increase due to greater experience ($9,389.00) for a total of $31,758.00 as the cost per teacher in the prototypical model. 28. The mandatory benefits for teachers, principally social security and Medicare taxes, are added to this figure, as is the cost of health insurance. For teachers, these amount to $6,034.00 and $3,641.00 respectively, as shown in the elementary, middle, and high school prototypical models. [ถ 58] The numbers used for the component were based upon 1996-97 school district expenditures. At that time, Wyoming's starting salary compared favorably with other states in the region. [16] Extensive evidence in the record indicates recruiting and retaining teachers is becoming more difficult not just in Wyoming but also nationally, [17] and certain communities in Wyoming may have more difficulty given the economic reality in their area. The use of a statewide average salary equalizes the previous disparity by supplementing the salary component for those districts that had lower than average salaries. The districts with higher than average salaries would presumably have paid higher salaries because of a higher cost of living, and, while the model would initially reduce their salary component to the average, it would ultimately adjust it upward based upon the regional cost-of-living adjustment. [18] The allocation to each district is then adjusted to account for increases in teacher seniority above the statewide average used in the salary component. Districts whose seniority increases over time receive additional funds. Likewise, districts whose teachers' seniority decreases will experience a reduction in funding. This adjustment, while revenue neutral to the state, has the potential to put additional pressure on individual districts which experience large numbers of teachers retiring in the next few years. Theoretically, as those teachers are replaced with more junior ones, the total salary costs of those districts should decrease. [ถ 59] The number of teachers needed to deliver the basket was also determined as part of the salary component of the model. The number of students per class dictates to a large degree how many teachers will be necessary. Class size is the biggest driver of education costs. At the same time, no other factor has been identified as more important to the quality of education than class size. The evidence demonstrates that class size has an effect on student outcomes, and that smaller class size can boost student achievement, particularly among at risk children. The advantages of small classes are clear. A teacher in a small class has more time to spend with each student. Fewer students mean fewer administrative tasks for each teacher. Student discipline and student engagement in the learning process improve in smaller classes. Campaign for Fiscal Equity v. State, 719 N.Y.S.2d 475, 509 (2001). [ถ 60] MAP identified an experiment conducted in Tennessee in the 1980s which systematically varied class size and which MAP described as one of the most powerful findings in all of instructional research. The Tennessee Student Teacher Achievement Ratio (STAR) project was a landmark study of the effect of class size on student achievement. 719 N.Y.S.2d at 510. The STAR project demonstrated that there is a significant causal relationship between reducing class size and improving student achievement. The effects were positive and durable, particularly for students who started in the smaller classes in kindergarten and stayed in them for 3-4 years. Such students continued to perform at a higher level on average than those students in the large class sizes. Id. In the study, one group of elementary classes had 15 students, and a control group had 22 students and a teacher aide. Students in the small classes experienced substantially higher achievement and continued to experience that higher achievement several years after elementary school. MAP's recommendations included what it, in consultation with Wyoming educators, believed were appropriate class sizes (MAP 3), [19] and those small class sizes were relied on as an important element of a quality education throughout the development of MAP's funding recommendations. In creating the simulations for review by the legislature, MAP also developed a slightly different class size/teacher number scenario (MAP 4), which its experts opined was capable of delivering the basket. [ถ 61] According to the MAP report, increasing class size by only one student saved $12 million. Leaving the class size decision ultimately up to the legislature, MAP stated, the essence of the decision facing the Legislature in this case is a determination of the most cost effective class sizes Wyoming can now afford, considering its total resources and competing priorities. [ถ 62] The challengers contend the legislation ultimately adopted did not follow either the MAP 3 [20] or MAP 4 approaches and utilized larger classes and fewer teachers in the distribution formula. They are correct. A comparison of the two MAP prototypes (MAP 3 based on input from Wyoming educators), the 1997 legislation after the governor's veto, and the 1999 legislation follows: MAP 3 MAP 4 97 Legislation 99 Legislation after Veto Middle School Number in Class 20 21 23 21 Number of Teachers 17.5 16.7 15.2 17.7 High School Number in Class 17 19 22 21 Number of Teachers 41.2 36.8 31.8 33.3 [ถ 63] The legislature did not fully embrace either the MAP 3 or MAP 4 prototype. The elementary school model was funded basically pursuant to the MAP 3 model. However, the high school model reduced teachers from the MAP 4 model by three and a half and increased the class size by two. [21] Considering the revenue deficits the state believed it was facing in the years 1997-99, the legislature's motivation to shave the recommended class size and avoid the corresponding costs is understandable. However, if its approach fails to provide a proper education as commanded by the constitution, this court cannot condone the result. The difficulty both this court and the legislature face is determining how small the class sizes should be to assure a constitutionally adequate education. [ถ 64] At the 1999 trial, Dr. James Guthrie, a principal of MAP, testified that, since MAP began work in Wyoming, the per pupil increase in funds through the development of the school finance formula had, by the 1999 legislation, provided Wyoming educators with sufficient resources to offer an extraordinary [and] indeed [a] superior quality of schooling for the students in this state. Dr. Guthrie was asked if there was a proper range for classroom sizes in middle schools and high schools and whether the class sizes adopted by the 1999 legislation were appropriate. He responded that, as opposed to the scientifically verified benefit of small elementary school class sizes, no such research existed with regard to middle schools and high schools. However, it was his professional opinion that a class size of 21 for the higher grade levels would clearly be within the acceptable range and would enable a teacher to provide a proper education. The challengers provided no evidence to demonstrate the class size of 21 would prohibit the delivery of a proper education. [ถ 65] At this time, there is a lack of scientific data to support a specific class size range for middle schools and high schools. The evidence in this record indicates the class sizes adopted in the 1999 legislation were not unreasonable. That is not to say that any further deviation from the MAP 3 or MAP 4 models would be tolerated. It only means that, based on the information and evidence available today, the middle and high school class sizes do not appear to be unreasonable. We anticipate the statewide assessment processes being developed by the DOE, namely WyCAS, Terra Nova, and the National Assessment of Educational Progress, [22] will likely provide regular insight into the adequacy of the class sizes and the system's continued ability, or lack thereof, to deliver the basket. [ถ 66] A conclusion that the teacher salaries, as computed by the MAP model and as driven by class size, are reasonable is supported by the record. However, this conclusion must be qualified. The MAP experts contend the system must be reviewed on a regular basis to ensure continued cost-based components which permit delivery of the basket. Additionally, witnesses for both the state and the challengers testified to the looming teacher shortage crisis caused by one-third of teachers who will be retirement-eligible by the year 2004, significantly fewer graduates seeking teaching positions, and the aggressive recruitment of Wyoming teachers by other states offering considerably higher salaries and benefits. Already, Wyoming is documenting the failure to receive any applications to fill teaching positions in art, music, health, math, counseling, speech pathology, psychology, and administration. The legislature does not have the luxury of waiting until the crisis fully materializes before taking the action necessary to remain viably competitive regionally and nationally. During the 1999 trial, Dr. Guthrie testified that, in order to keep the model current, every five to six years the legislature must undertake a procedure to reexamine the model components to ensure their sustained validity. Therefore, we hold that, in order for teacher salaries, which comprise 80 percent of the total cost of education, and the school financing system as a whole to maintain cost-based validity, the legislature shall conduct a review of the components in 2001 and at least every five years. If, during the course of such a review process, evidence becomes available which indicates class sizes should be adjusted in order to provide Wyoming children with the best education available, the legislature shall act accordingly. [ถ 67] An additional qualification on the sufficiency of teacher salaries is required. Dr. Guthrie also testified at the 1999 trial that, in order for the model to remain cost-based, an external cost adjustment for inflation or deflation, as warranted, must be applied on an annual or, at a minimum, biennial basis. The external cost adjustment is to be discussed at some length in the pages which follow, but, suffice it to say, if teacher salaries are not adequately adjusted for inflation in keeping with our holding on the external cost adjustment, they will no longer be constitutionally cost-based. For these reasons, as qualified, we conclude the trial court's determination that the state met its burden of proving the revised system adequately provides for teacher salaries is not clearly erroneous and affirm its decision.
[ถ 68] Salaries for administrators, including superintendents and principals, are based on statewide averages. The average salary bears no relationship to the size of the school or district or to the relative responsibilities of the employees. The formula provides compensation for a superintendent in the smallest district at the same rate as the superintendent in the largest district, despite greatly different responsibilities. Unlike the teacher salary component, the formula fails to provide any form of seniority adjustment for administrators or increase due to additional degrees or educational units, notwithstanding the fact that such adjustments are the accepted practice of Wyoming school districts. The effect is that the compensation for administrators' salaries bears little relationship to the actual costs incurred by any Wyoming school district and results in funding disparities for which the state has shown no compelling state interest. [ถ 69] A similar approach is taken with classified personnel such as aides, clerks, and operation and maintenance personnel, with similar problems resulting in unacceptable disparities. We reverse the trial court's decision to the contrary as clearly erroneous and hold that administrative and classified salaries should be adjusted in a fashion similar to teacher salaries to account for differences in experience, responsibility, and seniority. We further hold these changes shall be implemented no later than July 1, 2002.
[ถ 70] Costs of maintenance and operation, which include utility costs, are incorporated in the model based upon 1996-97 statewide averages per pupil relying again upon past expenditures by Wyoming districts. MAP recognized that a better estimate of this cost component could be achieved through a system based on the age and condition of the district's buildings rather than enrollment and suggested that a combination of per pupil costs and square footage would be the most accurate manner to approximate actual costs. However, MAP concluded that reliable information upon which to calculate such an adjustment was not available. [23] It recommended the data be collected and in the interim an average per pupil number be utilized because it is unlikely that the proposed formula will work an undue hardship on school districts for the period of time required to gather the necessary information. If there is one truth we have learned throughout the history of the educational funding issue, it is that we cannot predict how long it will take for the legislature to correct disparities. On its face, this component is not based upon the real and necessary costs of maintenance and operation of the state's schools. Many of these costs, utilities in particular, are not subject to the direct control of the districts and are unavoidable. Other programs should not suffer in order for districts to cover these costs. We reverse the trial court's decision and hold this component must be adjusted either by development of a formula which uses enrollment measured by ADM, building square footage, and number of buildings in the district or by reimbursement of actual costs subject to state oversight. [24] This change shall be implemented no later than July 1, 2002.
[ถ 71] Pursuant to Wyo. Stat. Ann. งง 21-13-320(b) and 21-13-321(b) (LEXIS 1999), special education and transportation costs are funded at 100 percent of a district's previous year's actual expenditures. However, the legislation provides that, if the ratio of spending on either of these two categories to total district spending increases, the amount of funding received for that category will be reduced by the excess which is over one hundred percent (100%) but less than one hundred ten percent (110%). Wyo. Stat. Ann. งง 21-13-320(e)(iii) (transportation), 21-13-321(b)(ii)(C) (special education) (LEXIS 1999). The following year, the DOE shall increase the amount the district receives by the amount reduced the previous year if the excess expenditures are found to be necessary to provide special education services or transportation operations for the school year in which they occurred. Wyo. Stat. Ann. งง 21-13-320(e)(iv) (transportation), 21-13-321(b)(ii)(D) (special education) (LEXIS 1999). [ถ 72] The school districts contend the 10 percent withholding limitation represents an arbitrary limit on reimbursement of actual costs incurred in providing essential educational services. However, districts experiencing an increase in spending will receive funding for the increase once they demonstrate to the DOE that these expenditures were necessary to provide services during the school year. Id. There is no limit upon the reimbursement of necessary transportation or special education expenditures. The legislation only requires that significant increases in expenditures be justified. Given the full reimbursement of legitimate expenses and the relatively small percentage of the budget these items represent, this does not amount to an infringement upon the right to an adequate education. We affirm the trial court's holding which stated that the special education and transportation reimbursement is not a constitutionally actionable penalty.
[ถ 73] As MAP explained: Some number of students in every school district present extraordinary educational challenges that frequently require services of a nature or quantity that imply extra costs.... The proposed Cost Based Block Grant Model has embedded within it a strategy for meeting the challenges presented by students with special characteristics. Critical to the assessment of whether these adjustments for students who present special challenges are cost-based is the underlying principle that MAP built into the model of small schools, small classes, teaching specialists, and professional development resources for teachers. If the classes and schools remain small, MAP contends the adjustments are adequate and represent the reasonable additional costs schools will incur to deal with these students. It is interesting to note that MAP makes no mention of any additional costs that may be incurred by schools which are much larger than the prototypes. Most Wyoming students attend schools that are much larger than those assumed in the prototype. [25]
[ถ 74] Certain types of students require additional instruction which results in higher than average educational costs. Generally, special needs students are those considered to be at risk students and gifted and talented students. At-risk students include economically disadvantaged youth (EDY) and limited English speaking students (LES students). [26] MAP and the legislature concluded additional funding was needed to allow Wyoming schools to properly deal with students at-risk of failure. At-risk students require specially tailored programs and more time spent on all aspects of academic endeavor in order to improve their academic achievement. The primary need of schools with concentrations of these students is increased adult attention in the school setting. The record contains no evidence of any effort to determine either the actual expenditures of Wyoming schools or the cost schools should incur when dealing with at-risk students appropriately. [ถ 75] In the 1997 order, the trial court determined the number of students who have applied for and are qualified to receive federally subsidized free and reduced priced lunches, used in legislation as an indicator of EDY, was questionable and the trigger for the additional funding was arbitrary. Using such lunch counts, particularly at the secondary levels, may under count the number of economically disadvantaged youth if, for varying reasons, they do not take advantage of the federal program. The formula for eligibility for such adjustment is an arbitrary 150% of the statewide average per district. No adjustment is provided for school districts that have 149% of the statewide average and complete adjustment is made for anyone with more than 150%. [ถ 76] The trial court similarly found that the adjustment for LES restricts reimbursement to an arbitrary cutoff point. It reserved ruling on these issues while the legislature reviewed this problem. However, in the 1999 order, the trial court upheld the EDY and LES adjustments even though there was no change in those adjustments and no new evidence to indicate the allocations were cost-based. The trial court was apparently convinced that the MAP model made accommodations in other areas, such as smaller class sizes, and therefore the EDY and LES adjustments were constitutional. We reverse, and our conclusion is supported by the trial court's 1997 findings. [ถ 77] In addressing EDY, the model provides $500 for each student enrolled in the free and reduced lunch program in school districts where the concentration of these students is equal to or greater than 150 percent of the statewide average. Schools with 149 percent of the statewide average and schools with students at risk for reasons other than the need to enroll in the free lunch program receive no additional funding. This formula cannot, and does not, represent the real and appropriate cost of educating EDY. The testimony of Laramie County School District No. One in this case is painfully similar to its testimony over five years earlier in Campbell. Then, the school district received only half of the $1.2 million required to fund the costs of its alternative high school, an undisputedly appropriate method of dealing with at-risk students, leaving the rest to be deducted from other programs. Under the new system, Laramie County's situation remains unchanged. Not only is the EDY adjustment not cost-based, its completely arbitrary 150 percent trigger results in dramatic differences in funding even among districts that border each other and, consequently, are likely to have similar student characteristics. While use of the free lunch enrollment may serve as a partial proxy by roughly identifying EDY, it fails to capture students equally at-risk for other reasons. MAP rejected other measures such as identifying low achieving students by arguing it would reward failing schools. While that argument may have superficial appeal, it ignores the reality that a large concentration of low achieving students causes increased costs. [27] [ถ 78] The amount of the supplement for EDY is likewise arbitrary and admittedly not based on the cost of the full range of at-risk programs. Instead the $500 figure was based upon the approximate cost per student of a program called Success for All which was aimed at improved reading at the elementary level. [28] While this program may be one appropriate method for dealing with at-risk elementary school children, relying on it exclusively ignores the needs of the full range of at-risk students. The record contains no evidence concerning the cost of dealing with economically disadvantaged middle or high school youth which, we can assume, requires more than enhanced reading programs and may necessitate programs and services such as alternative schools, after school programs, and additional security. [ถ 79] Similar issues are raised with the formula for supplemental funding of the costs incurred in educating LES students. When certain concentrations of these students occur in a district, extra resources, such as bilingual aides and teachers, are needed. Without any evidentiary support, MAP recommended additional funding where such students exceed 20 students per grade level or 25 percent of the schoolwide ADM. Then, based upon experience in Connecticut, the funding was proposed and adopted at 1.15 times the number of identified students, or approximately $900 per student. Given the lack of evidence that $900 reflects the actual additional costs and the relatively small amount of funding likely to be required to cover those costs, actual reimbursement of identifiable, legitimate, state-approved costs, such as bilingual teachers, more appropriately meets the standard established in Campbell. [ถ 80] The state's response to the obvious problems with these formulas repeats MAP's mantra that small schools and small class sizes are already contained in the model and are the most recognized method for dealing with at-risk students. The state further contends that schools are free to use their block grants to add more teachers and create smaller classes. This argument wears fairly thin when it is always conditioned upon the caveat that the model, and its class sizes, was only a recommendation to the legislature which was free to, and did, adopt somewhat larger classes and fewer teachers. Further, even the state agrees no other components of the models were overfunded, which leaves the schools without any real option but to take funds from other programs. To do so would damage those same programs by reducing their funds below cost. [ถ 81] The problems in developing a formula to accurately capture the true cost of adequately dealing with at-risk students seem insurmountable. If so, the legislature must assure that schools are fully reimbursed for the funds necessary to educate at-risk students with the most effective and current methods possible. No one can argue the urgent need our society faces to minimize the failure of students and the increased social costs that unavoidably follow. We hold the adjustments for funding EDY and LES students result in disparities in funding which are not justified by any compelling state interest and which do not reflect the cost of adequately educating these students. The state is directed to fund the actual and necessary costs of EDY and LES students, subject to state oversight. Although we do not foreclose the possibility of the state in the future developing an accurate formula with which to distribute adequate funds in lieu of direct reimbursement, for the above stated reasons, accomplishing that task will not be easy or swift. Until that time, we cannot allow the needs of at-risk students to be ignored or other students to be denied a complete education because a school's funds must be diverted to address those needs. [29] We do not foreclose the possibility that some portion of the actual costs may be covered by the $500 EDY supplement and the 15 percent LES supplement and do not prohibit the use of those formulas for partial funding. These changes shall be implemented on or before July 1, 2002. [ถ 82] Finally, the challengers argue the funding for gifted and talented students is arbitrary and attenuated from actual costs. MAP recommended, and the legislation provides, additional funding so that gifted and talented students' potential may be realized. The state provides an additional $9 per total ADM to fund gifted and talented programs. This amount is based upon the assumption that three percent of the entire student population is comprised of gifted students. [30] Over time, society's view and the views of educational researchers concerning intelligence and giftedness have changed. There is no objective definition of gifted. Rather, a broad measure of intelligence has been recognized. Where there used to be a unitary construct in which gifted students were believed simply to have more of what everyone else had, there is now a more refined definition[ ] ... where giftedness is seen as multi-dimensional. [31] The significance of this shift in the definition of giftedness is that [t]here is an emerging consensus in the field that efforts should move from a focus on nurturing the talents of a few identified students to programs that aid to seek out and develop talents in as many students as possible. Students who are educated using methods focusing on the talent development of as many students as possible have been shown to perform as well as or better than students who have been taught in more dated and conventional gifted and talented programs. [ถ 83] MAP recommended Wyoming revise its program due to the modern view of giftedness, and MAP recommended a modest increase in statewide funding for gifted and talented students. Ultimately, the legislature provided more than double the amount recommended by MAP. [ถ 84] The gifted and talented program, which existed prior to the new legislation, provided that districts could identify up to 3 percent of their students as gifted and receive up to $150 per student or a prorated amount assuming the state's $350,000 limit had been exceeded. The new statute results in approximately $450,000 being appropriated for gifted students, but it is distributed on an ADM basis and results in approximately $9 per ADM. There is a net increase in funding distributed on an equitable basis. While this court may have reached a different result concerning how much money is enough to allow gifted students to develop their maximum potential, that judgment is the prerogative of the legislature. No evidence exists in the record to support a finding that this approach does not meet the standards of the constitution.
[ถ 85] No adjustment is made for the admittedly higher costs of educating vocational students. The state contends those costs are contained within the assumptions in the model for numbers of teachers and costs of equipment and supplies. However, those amounts were based on statewide average expenditures, which necessarily resulted in penalizing schools with extensive vocational programs. Moreover, the trial court determined in its 1997 order: There are higher costs associated with the provision of vocational and technical training in Wyoming schools, and there is no provision in the prototypical models for funding those higher costs. However, without any change in the model to adjust for vocational and technical training, the trial court upheld the absence of a vocational adjustment in its 1999 order. We reverse the trial court's 1999 holding as being clearly erroneous and base our conclusion on the record evidence from both the 1997 and 1999 trials which is consistent with the trial court's 1997 findings. [ถ 86] The elimination of disparities required by Campbell did not anticipate the reduction in existing programs. Vocational and technical training is included in the legislature's basket of educational goods and services. MAP has admitted [i]t is generally accepted in the education community that vocational education is more expensive to provide than other forms of instruction. What has traditionally made vocational education more costly than academic education are relatively smaller classes and the need for more costly equipment and supplies. We hold that, in order to provide vocational and technical training, the actual costs of providing vocational teachers and equipment must be examined, included as a line item in the MAP model, and funded accordingly. These changes shall be implemented on or before July 1, 2002.
[ถ 87] The cost figures in the most current legislation do not account for inflation since 1996-97. Both MAP and the trial court recognize the obvious. There will undoubtedly come a time when inflationary cost increases render the funding levels inadequate to deliver the basket. The legislature addressed this problem in ง 21-13-309(r), which provides: (r) The joint appropriations interim committee shall submit a recommendation to the legislature and governor, not later than November 1 of each year, regarding whether an external cost adjustment should be made, and if so, the amount of the adjustment. Of course, neither the legislature nor the governor is obligated to act on such a recommendation, if made. [ถ 88] In this regard, the only inflationary adjustment since at least 1996-97 has been the adoption of ง 21-13-309(o)(i)(A), which provides 1.3 percent for new inflation effective for the 2000-2001 school year, but specifically excludes any inflation adjustment for the years preceding the 2000-2001 school year. See ง 21-13-309(o)(i)(A)(II). The tough question for both the legislature and this court is when and how should inflation adjustments be made in order to ensure the finance system is consistently cost-based. Wyoming teacher salaries now rank 42nd in the nation. Salaries actually being paid by districts are now 6 percent to 40 percent greater than the salaries within the statutory prototype. By pure force of logic, it is evident the 1996-97 salaries which were found to adequately reflect the cost of teachers at that time have not been held constant by the funding contained in the statute and are now significantly below costs. [32] While we agree that the lack of an internal, automatic cost adjustment in the statute may not in and of itself render the system unconstitutional, without such adjustments, legislative inaction appears inevitable, and, ultimately, funding of education will be below cost in contravention of the constitution. [33] [ถ 89] As previously noted, MAP advised the legislature that teacher salaries must be inflation-adjusted on an annual or, at a minimum, biennial basis and that the model components must be thoroughly reviewed every five to six years to ensure continued cost-based validity. Therefore, we hold that the legislature shall conduct a review of all the components every five years to ensure that funding accurately reflects the actual costs school districts are paying because of current market or economic conditions. Because the numbers contained within the model and codified in the statute are based on actual 1996-97 costs, an inflation adjustment is overdue. Four years have passed, and only a 1.3 percent adjustment has occurred which does not reflect the actual inflation during those four years. Based on the state's own evidence in this record and common sense, we cannot condone that result. [ถ 90] This court does not relish the idea of reviewing this matter on a continuing basis in perpetuity and is quite sure the legislature does not desire that result either. As long as the state continues to rely upon a cost of education model based upon historic actual costs to determine the appropriate funding for schools, regular and timely inflation adjustments are essential to funding the real cost of education. We adopt the opinion of the state's experts [34] and hold that the model and statute must be adjusted for inflation/deflation every two years at a minimum. Given the acceptance of all parties of validity of the WCLI, adjustments made consistent with that index will be presumed to be adequate. If other methods of adjustment are chosen by the legislature, they must be structured to assure quality of education remains adequate. It will be of great assistance to this court and all interested parties if the adjustment is adopted as a separate component of the model which would avoid the potential confusion, as occurred in this case, whether adjustments to the model for other reasons should be considered as inflation adjustments. The model and statute must be adjusted for inflation no later than July 1, 2002, and each biennium thereafter so long as a cost of education model using historic costs is relied upon for the basis of education funding. The amount of the adjustment required will depend, obviously, on the timing of the adjustment. [ถ 91] Because teacher quality is critical to providing a constitutional education and all parties recognize the looming national problem of a teacher shortage, the legislature is also directed to monitor the supply of qualified teachers and take appropriate action should national conditions continue to worsen to the detriment of Wyoming schools. It is unacceptable for essential teaching positions to remain unfilled or to be consistently filled by unqualified applicants.
[ถ 92] MAP and the legislature also recognized the model needed adjustments to accommodate differences in schools due to size and location which impact their costs of education. The question we must resolve is whether the adjustments are based on actual differences in cost or whether they represent unconstitutional disparities in funding.