Court Opinion

ID: 9818836
Source: CourtListenerOpinion
Date Created: 2023-09-01 06:09:10.989029+00
Date Added: 2024-06-11T07:38:27.515617
License: Public Domain

JUSTICE MARQUEZ,
dissenting.
128 Plaintiffs allege that the "negative factor" created by the legislature in section 22-54-104(5)(g), C.R.S. (2010), circumvents the will of the Colorado electorate as expressed in Amendment 23 by effectively nullifying the Amendment's required increases to statewide base per pupil funding under the school finance formula. In concluding that the plain language of Amendment 23 allows the General Assembly's workaround, the majority ignores this claim. Although this case raises broad fiscal and policy issues of significant public importance, the narrow legal question before us is whether Plaintiffs have pleaded sufficient facts to survive a motion to dismiss. Because they have, I would discharge the rule to show cause. Therefore, I respectfully dissent.
129 Amendment 28 requires annual increases in "statewide base per pupil funding, as defined by the Public School Finance Act of 1994 ... on the effective date of this section." Colo. Const. art. IX, § 17(1). As the majority explains, although the Public School Finance Act ("the Act") does not actually define the term "statewide base per pupil funding," it establishes a formula to caleu-late education funding for school districts, and the "statewide base per pupil funding" is a component of that formula. Maj. op. ¶¶7-8, 20 & n.5. Everyone agrees that the plain language of Amendment 28 requires annual increases to the "statewide base per pupil funding" component of the formula. Everyone also agrees that the General Assembly has, in fact, increased the numerical value of base per pupil funding every year since the passage of Amendment 23. See § 22-54-104(5)(a)(VIII)-(XXII), C.R.S. (2015). The majority ends the analysis there, however, concluding that Amendment 23 has not been violated because the General Assembly has continued to increase the statewide base per pupil funding amount in the formula. Yet by focusing on the base component in isolation, the majority disregards the Plaintiffs' core claim: that the negative factor operates to eliminate those increases and now renders the base per pupil funding component of the formula ultimately irrelevant.
4 30 Under the school finance formula that existed "on the effective date" of Amendment 28, an increase to the "statewide base per pupil funding" necessarily generated an increase in a district's total per pupil funding. In other words, Colorado voters understood that, under the formula then in effect, increasing statewide base per pupil funding per Amendment 23 would yield an increase in total per pupil funding. The Blue Book1 confirmed this understanding of the operation of Amendment 23: It described the initiative to Colorado voters as a proposed constitutional amendment that would "increase[ ] *194per pupil funding for public schools" and provided a mathematical example demonstrating that the required annual increases to base per pupil funding would drive increases in total per pupil funding under the then-existing school finance formula referenced in the Amendment. Legislative Council of the Colo. Gen. Assembly, An Analysis of the 2000 Statewide Ballot Proposals 9-10 (Research Publ'n No. 475-0, 2000) (hereinafter "Blue Book").2
31 The Blue Book explained that, under Amendment 23, the state constitution would set minimum annual increases in funding, thus replacing legislative discretion to increase or decrease funding. Id. at 9. Following its passage, the Amendment operated as described in the Blue Book for several years. However, the General Assembly subsequently enacted the "negative factor" and fundamentally altered the school finance formula to calculate funding to conform to a legislatively predetermined spending cap. Hence, the legislature once again controls annual increases or decreases in school funding-just as it did before voters passed Amendment 23. In short, the funding that school districts actually receive now is' no longer driven by the increases to the base under Amendment 23 in concert with the finance formula in effect at its enactment. Instead, the legislature chooses a spending cap and calculates a corresponding "negative factor" that is applied to reduce the funding that districts 'otherwise would receive under the formula. The negative factor operates specifically to ensure that total spending does not exceed the legislature's predetermined cap.
1382 The issue, then, is how the negative factor impacts the increases to statewide base per pupil funding required under Amendment 23. Plaintiffs allege that the negative factor, in concert with the statutory cap under the altered formula, effectively eliminates the increases to statewide base per pupil funding under Amendment 23 and renders the base component of the formula irrelevant, In my view, Plaintiffs' Complaint states a viable claim that the negative factor violates Amendment 23. Accordingly, I would discharge the rule and permit the Plaintiffs to prove their claims at trial,
I. Background
33 I begin by briefly describing the circumstances that led to the voters' enactment of Amendment 23; I then examine the General Assembly's response to the fiscal exigen-cles of the last decade-the so-called "negative factor"-which has worked significant cuts to education funding.
‘A. Amendment 23
134 Per pupil spending in Colorado was significantly below the national average in 2000. Br. of Colo. Educ. Ass'n at 5. As a result, teacher pay lagged behind the national average, and Colorado had higher student-to-teacher ratios than in other states. Id. at 5-6, 9. Thus, Colorado educators were required to stretch limited resources further than their peers in other parts of the country.
1 35 In 2000, the Colorado Education Network succeeded in placing on the ballot an amendment to the Colorado Constitution that would "increase[ ] per pupil funding for pub-lie schools." Blue Book at 9. The Blue Book explained that, "[ulnder [Amendment 23], the state constitution sets a minimum increase in funding"-in contrast to the discretion the legislature then had to determine any increase or decrease in funding. Id. In de-seribing the principal arguments in favor of the proposed amendment, the Blue Book explained that Amendment 23 would reverse the "erosion" of funding to public schools and the negative effects such erosion had had on per pupil funding, teacher salaries, and class sizes. Id. at 11. In addition, by earmarking a portion of state revenue for public education, Amendment 28 would ensure that funding for public schools would not fall farther behind due to other constitutional *195spending limits placed on the legislature. Id. at 12.
136 Amendment 23 received 53% of the vote in the 2000 general election. See Colo. Sec'y of State, 2000 General Election Results, available at http://www.sos.state.co.us/ pubs/elections/Resultts/2000/2000General ElectionResults.pdf. Colorado voters thereby added to the constitution article IX, section 17, which states:
In state fiscal year 2001—2002 through state fiscal year 2010-2011, the statewide base per pupil funding, as defined by the Public School Finance Act of 1994, article 54 of title 22, Colorado Revised Statutes on the effective date of this section, for public education from preschool through the twelfth grade and total state funding for all categorical programs shall grow annually at least by the rate of inflation plus an additional one percentage point. In state fiscal year 2011-2012, and each fiscal year thereafter, the statewide base per pupil funding for public education from preschool through the twelfth grade and total 'state funding for all categorical programs shall grow annually at a rate set by the general assembly that is at least equal to the rate of inflation. |
(Emphases added.)
137 It is undlsputed that the plain language of Amendment 23 requires annual increases to the "statewide base per pupil funding" component of the school finance formula, in the Public School Finance Act of 1994 as that term was used in the Act "on the effective date" of Amendment 23. As explained by the majority, base per pupil funding is a component of the school finance formula in the Act; the base component is uniform for all school districts. Maj. op. ¶.7. Base funding is then adjusted under the formula to account for various district-specific factors such as personnel costs, cost of living, non-personnel costs, and size. These factors appear as multipliers to determine an individual district's per pupil funding. See id. Following Anmiendment 28's approval, the General Assembly has increased the statewide base per pupil funding amount by the rate of inflation plus one percentage point for budget years 2001-2002 to 2010-2011, and by at least the rate of inflation thereafter. § 22-54-104(5)(a)(XIII)-(XXII).
'( It is also undisputed that, under the statutory formula in effect when the voters approved Amendment 23, an increase in base per pupil funding. generated an increase to a district's total per pupil funding, assuming that 'a district's factors remained otherwise constant. As the majority acknowledges, until the General Assembly enacted the negative factor, the' required annual increases to statewide base per pupil funding resulted in corresponding increases to total funding. Maj op. ¶ 9.
B. The Negative Factor
139 Colorado later faced severe budgetary constraints as a result of the financial crisis of 2007-2008 and the recession that followed,. As described by the majority, the General Assembly determined in 2010 that "stabilization of the state budget require[d] a reduction in the amount of.the annual appropriation to fund the state's share of total program funding." Maj. op. ¶10 (quoting § 22-54-104(5)(g)(I), C.R.S. (2010). In short, the legislature sought to cut education funding. See id.
{40 Legislators did not make these cuts lightly. One of the bill's sponsors acknowledged that they were "very painful" but were "necessary given the economic times." Second Reading of H.B,. 10-1369 before the House, 77th Gen. Assemb., 2d Sess. (Mar. 19, 2010) (statement. of Rep. Scanlan). Similarly, Senator Hudak explained:
This is a terrible cireumstance for us to be in. And it's because the economy is so bad that we at this point don't appear to have any choice.. .. 'I just wanted to explain to you why I, somebody who was part of the group that put Amendment 23 on the ballot, could even consider voting in favor of the bill.
Second Reading of H.B. 10-1369 before the Senate, 77th Gen. Assemb., 2d Sess. (Mar. 31, 2010) (statement of Sen. Hudak). The legislature nevertheless proceeded with these cuts by enacting the stabilization factor in paragraph (g) of section 22-54-104(5). Ch. 246, sec. 3, § 22-54-104(b)(g)(I)(II), 2010 *196Colo. Sess. Laws 1095, 1095-97. The General Assembly later renamed the stabilization factor the "negative factor" and extended its application to future budget years. Ch. 305, sec. 3, 4, § 22-54-104(b)(g)(I)-(III), 2011 Colo. Sess. Laws 1463, 1464-66.
{41 In enacting this legislation, the legislature fundamentally altered the school finance formula in the Act. As described by the majority, the legislature now determines, at its discretion, a cap on total funding. Maj, op. ¶¶ 11, 14 n.4. This cap is subtracted from the initial statewide total (Le., the total funding amount that would be generated under the original school finance formula) The difference is divided by the initial statewide total to derive a reduction percentage called the "negative factor." Id. at ¶11; § 22-54-104(b)(g)(II)(A). The "negative factor" is then applied to reduce by a uniform percentage amount the funding that each school district otherwise would receive under the formula. Maj. - op. ¶11; - § 22-54-104(b)(g)(II)(B). Put differently, the General Assembly now decides what total spending will be each year and then reverse-calculates a negative factor to reduce the funding amount that the formula would otherwise generate to achieve the legislature's desired result.
142 As the majority necessarily recognizes, the negative factor "operates to reduce education funding across all Colorado school districts." Maj. op. ¶1. These funding reductions led Plaintiffs to file this lawsuit challenging the constitutionality of the negative factor. Compl. ¶4. Specifically, Plaintiffs' Complaint alleges that the funding cap and negative factor in section 22-54-104(5)(g) negate the will of the electorate by rendering Amendment 28's required increases to the base component in the formula essentially meaningless. Id. at ¶¶36-39. Expressed mathematically, Plaintiffs assert that base per pupil funding is now used both as a numerator and a denominator in the formula, thus canceling out the effect of any increases to base per pupil funding. See Appendix A.3 According to Plaintiffs, by reducing the total per pupil funding that districts otherwise would receive under the formula, the negative factor operates to nullify the annual increases made to the base component, thus violating Amendment 23. Compl. ¶¶38, 44.
II. Analysis
A. Standard of Review and Principles of Constitutional Construction
143 A motion to dismiss under C.R.C.P. 12(b)(5) for failure to state a claim tests the formal sufficiency of a plaintiff's complaint. Qwest Corp. v. Colo. Div. of Prop. Taxation, 2013 CO 39, ¶12, 304 P.3d 217, 221. Such motions are disfavored and should not be granted if relief is available under any theory of law. Colo. Ethics Watch v. Senate Majority Fund, LLC, 2012 CO 12, ¶16, 269 P.3d 1248, 1253. In reviewing a trial court's ruling on a C.R.C.P. 12(b)(5) motion, we accept the material factual allegations in the complaint as true and view them in the light most favorable to the non-moving party. Id.
144 Although we avoid constructions of constitutional amendments that would "hinder basic government functions or cripple the government's ability to provide services," Barber v. Ritter, 196 P.3d 238, 248 (Colo.2008), we have also made clear that "courts should not engage in a narrow or technical construction of [an] amendment if doing so would contravene the intent of the electorate," Davidson v. Sandstrom, 83 P.3d 648, 654 (Colo.2004). Rather, courts must give words their ordinary and popular meaning to ascertain what the voters believed the amendment to mean when they adopted it. Id. Ultimately, our duty in construing a constitutional amendment is to give effect to the intent of the electorate in enacting the amendment. See Lobato v. State, 218 P.3d 358, 375 (Colo.2009); Washington Cnty. Bd. of Equalization v. Petron Dev. Co., 109 P.3d 146, 150 (Colo.2005).
B. Application
145 Plaintiffs' complaint meets the C.R.C.P. 12(b)(5) standard. Because the trial court properly concluded that Plaintiffs have alleged sufficient facts to state a claim *197that the negative factor violates Amendment 23, I would discharge the rule to show cause.
T 46 The plain language of Amendment 28 requires annual increases to the "statewide base per pupil funding" component of the school finance formula. And it is undisputed that the General Assembly has, in fact, increased that dollar figure each year since the passage of Amendment 28. According to Plaintiffs, however, what has changed is that the negative factor, which is applied to reduce the end product generated by the statutory formula, effectively wipes out those increases to statewide base per pupil funding. By focusing on the term "statewide base per pupil funding" in isolation, the majority ignores the Plaintiffs' core allegation.
T 47 As the majority correctly observes, we presume that the voters are aware of existing law when they enact a constitutional amendment. See maj. op. ¶19 (citing Common Sense Alliance v. Davidson, 995 P.2d 748, 754 (Colo.2000)); see also Bickel v. City of Boulder, 885 P.2d 215, 229 (Colo.1994). As described above, under the formula in effect when voters passed Amendment 23, increases to statewide base per pupil funding necessarily yielded increases to a district's total per pupil funding, assuming the district's factors otherwise remained constant. The Blue Book informed voters that Amendment 23 would "increase[ ] per pupil funding for public schools" under the school finance formula then in effect and even provided a mathematical example illustrating how increases to statewide base per pupil funding under that formula yielded increases to average (total) per pupil funding for school districts. Blue Book at 9-10.
1148 Crucially, the formula that existed on the effective date of Amendment 28 contained nothing to counteract the effect of increases to base per pupil funding. That is, nothing in the law when Amendment 28 was enacted suggested to voters that increases to statewide base per pupil funding could be nullified by application of something like a negative factor,
149 Yet, according to Plaintiffs' Complaint, the negative factor does exactly that by rendering increases to base per pupil funding meaningless. Compl. ¶38. As demonstrated in Appendix A, the negative factor actually cancels out base per pupil funding in the formula. Voters surely did not intend the annual increases to statewide base per pupil funding to be pointless-yet according to Plaintiffs' allegations, the negative factor renders them so. The majority's view that nominal increases in base per pupil funding are all that is necessary to satisfy Amendment 23 ignores the Plaintiffs' core claim. Maj. op. ¶¶1, 6, 20; cf. Davidson, 83 P.3d at 654 ("Courts should not engage in a narrow or technical construction of [an] amendment if doing so would contravene the intent of the electorate.")4 Indeed, under the majority's view, the legislature can eliminate the school finance formula entirely so long as each district receives the statewide base per pupil funding amount. Maj. op. ¶24 & n.6. Such a view cannot possibly comport with the voters' understanding of Amendment 23.
150 Accepting the allegations in Plaintiffs' Complaint as true and viewing them in the light most favorable to the non-moving party, Plaintiffs have alleged sufficient facts to state a claim upon which relief may be granted. Colo. Ethics Watch, ¶16, 269 P.3d at 1253. Accordingly, I would discharge the rule to show cause and allow Plaintiffs to prove their claims at trial.
III. Conclusion
151 Although the State faced extraordinarily difficult fiscal choices during the recent recession, Plaintiffs contend that enacting cuts to education funding that cireamvent a constitutional amendment was not one of the legislature's options. 'They have pleaded sufficient facts to support a claim that the *198negative factor violates Amendment 28. Accordingly, I would discharge the rule to show cause. I respectfully dissent.
/I am authorized 'to state that Justice HOOD and Justice GABRIEL join in this dissent.
APPENDIX A
This appendix, derived from the briefing and submissions from Plaintiffs and amici, describes the calculation of a school district's state-provided funding pursuant to section 22-54-104, C.R.S. (2014). It shows that the "negative factor" effectively eliminates base per pupil funding from the Public School Finance Act formula.
[[Image here]]
Section 22-54-104 sets forth the formula for calculating a school district's "total program,". which is the annual financial base of support for public education in that district. § 22-54-104(1)(a). In general, each district has discretion as to how it will allocate its total program. Id.
For the 2009-2010 budget year and all years thereafter, a district's total program is initially calculated as follows (provided that the total program is not lower than a statutory floor):
district total program
= «district per pupil funding
x ( district funded pupil count - district online pupil enrollment ~- district ASCENT program pupil enrollment )
+ district at-risk funding + district online funding
+ district ASCENT program funding
§ 22-54-104(2)(a)(IX). Because online funding and ASCENT funding do not affect the
analysis here, those terms can be removed from the formula:
district total program
= district per pupil funding x district funded pupﬂ count
+ district at-risk funding
Each of the terms on the right-hand side of the formula can be broken down further, as described below.
First,
district per pupil funding
= statewide base per pupil funding x . (district personnel costs factor
x district cost of living factor + statewide base per pupil funding
x districtnonpersonnel costs factor} x district size factor
See § 22-54-104(8). The terms to the right of statewide base per pupil funding ("BPPF") together represent the d1stmct’s enr ollment factors ("EF"). Using this shorthand, the equation becomes:
district per pupil funding = BPPF x EF
Second, district funded pupil count is typically the district's pupil enrollment for the applicable budget year, plus certain special *199types of enrollment not relevant here (online pupil enrollment, ASCENT program enrollment, and preschool and supplemental kindergarten enrollment). § 22-54-108(7)(e)(D).
Third,
district at-risk funding = district per pupil funding x 12% x district at-risk pupils
§ 22-54-104(4)(a)(I).5 Substituting for district per pupil funding, as described above, district at-risk funding can also be expressed as follows:
district at-risk funding = BPPF x EF x 12% x district at-risk pupils
Inserting these three expansions, the total program formula becomes:
district total program
= BPPF x EF x districtfunded pupil count + BPPF x EF x 12%
x district at-risk pupils
Pulling BPPF and EF out of the two added terms on the right side of the equation yields:
district total program
= BPPF x EF x (district funded pupil count + 12%
x district at-risk pupils)
Finally, if one treats the enrollment factors multiplied by pupil counts as the district's weighted enrollment ("WE"), the formula is simply:
district total program = BPPF x WE
Thus, one arrives at a simplified form of the formula that produces a district's total program before the negative factor has been applied.
#0 wo
Paragraph (g) requires the Department of Education to reduce total program funding through the application of a negative factor. § 22-54-104(5)(g)(I). For each budget year, the General Assembly establishes a budgetary cap-the sum of the total program funding for all distriects-which is met by reducing each district's total program by an amount determined by the negative factor. § 2-54-104(5b)(g)(I)(A)-(E). The statute defines a district's reduction amount as follows:
district reduction amount = district total program x negative factor
§ 22-54-104(5)(g)(II)(B). It further defines the negative factor as:
*200statewide reduction amount negative factor = 8 statewide total program
§ 22-54-104(5)(g)(II)(A). Inserting this expansion into the previous equation, each diss triet's total program is reduced by the following amount:
district reduction amount = district total program x statewide reduction amount statewide total program
. Bubtracting the district reduction amount from the district total program derived above gives the following: ,
reduced district total program = district total program - district reduction amount
reduced district total program
= district total program
[[Image here]]
Realizing that the statewide reduction amount is the initial statewide total program minus the budgetary cap,
reduced district total program
= district total program
[[Image here]]
simplifying within the brackets,
reduced district total program
= district total program
[[Image here]]
applying the district total program inside the parentheses,
reduced district total program
= district total program
[[Image here]]
and canceling out the first two instances of district total program, one ends up with:
*201reduced district total program = district total program x budgetary cap statewide total program
As noted above, a district's total program equals base per pupil funding times the dis-triet's weighted enrollment, and statewide total program is the sum of all districts' total programs, § 22-54-104(5)(g)(VII)(A). Thus:
BPPF x WE x budgetary cap reduced district total program = (BPPF x WE,) + (BPPF x WE;) + (BPPF x WE ...
Pulling base per pupil funding out of the denominator and designating the sum of all districts' weighted enrollments as statewide weighted enrollment ("SWE"),
reduced district total program = BPPF x WE x budgetary cap BPPF x SWE
one can see that base per pupil funding cancels out of the formula, leaving the dis-triet's final, reduced total program as its weighted enrollment divided by statewide weighted enrollment, multiplied by the budgetary cap:
reduced district total program = BEPE x WE x budgetary cap BPPE x SWE
reduced district total program = wE x budget ams udgetary cap
This result demonstrates that a district's total program, as reduced using the negative factor, does not depend on base per pupil funding.

. The Legislative Council of the Colorado General Assembly publishes and distributes to the public an analysis of statewide ballot proposals informally known as the "Blue Book." Contrary to the majority's suggestion, see maj. op. ¶¶ 19, 26, we have routinely relied on Blue Book descriptions and analyses in interpreting voter-initiated measures and referenda-even absent a determination that the plain language of the measure is ambignous. See, e.g., Dallman v. Ritter, 225 P.3d 610, 623 & n. 16, 626 & n. 25 (Colo.2010) (relying on the Blue Book to interpret voter-initiated Amendment 54); Washington Cnty. Bd. of Equalization v. Petron Dev. Co., 109 P.3d 146, 151 (Colo.2005) (relying on the Blue Book to interpret state constitutional amendment adopted by referendum).

. The Blue Book explained that, assuming inflation remained at 3.7% over the ten years following enactment of the Amendment, base per pupil funding would increase from $4,002 to $6,335- and that, under the proposed amendment, average (total) per pupil funding would increase from $5,175 to $8,192. Blue Book at 10.

. - At oral argument before this court, counsel for the State expressed no disagreement with Plaintiffs' and amici's algebraic expression of the negative factor's impact on base per pupil funding.

. The State's argument that the negative factor only decreases funding attributable to a district's enrollment factors is wholly unpersuasive. The negative factor does not lower any particular term in the formula, but rather applies to reduce a district's total funding by a blanket percentage. § 22-54-104(5)(g). Moreover, there would be no need for a provision ensuring that a district's total program does not fall below base per pupil funding, see § 22-54-104(5)(g)(III), if the negative factor drew exclusively from "factors funding." Indeed, as demonstrated in Appendix A, the magnitude of the negative factor depends on the level of base per pupil funding.

. If a district's percentage of at-risk pupils is higher than the statewide average and its funded pupil count is greater than 459, the statute amplifies the number of at-risk pupils in that district over the number it would have if its percentage of at-risk pupils were the same as the statewide average. See § 22-54-104(4)(b)(I). The present analysis assumes that the district does not have an above-average percentage of at-risk pupils.