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Finance System For N.J. Schools Is Struck Down

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Trenton, N.J.--Ending one of the longest and most prominent school-finance suits in the nation, the New Jersey Supreme Court last week ordered the state to bring spending in its poorest city school systems up to the level of its wealthiest districts.

Writing for a unanimous court in Abbott v. Burke, Chief Justice Robert N. Wilentz declared the state's school-funding system "unconstitutional as applied to poorer urban school districts." Students in such districts do not receive the "thorough and efficient" education required by the state constitution, the court said.

It ordered the state to implement a new funding mechanism by the beginning of the 1991-92 school year, at a cost that could total hundreds of millions of dollars.

By requiring the state to fund the poorest urban districts at the same level as the richest suburban ones, the court set an important precedent, several school-finance experts said last week.

The decision is "sort of a Magna Carta for urban schoolchildren," said Paul L. Tractenberg, a professor of law at Rutgers University.

Marilyn J. Morheuser, chief lawyer for the plaintiffs in the case and director of the Education Law Center in Newark, said "the court has ordered a remedy heretofore never ordered in a school-finance case."

But Commissioner of Education Saul Cooperman--who fought against the suit during his eight-year tenure, which ends this month--restated his view that money was not the solution to educational problems.

"Leadership is and will be the critical factor in effecting substantial, far-reaching educational improvement," he said in a statement.

Mr. Cooperman noted that the court also had declared that "without educational reform, the money may accomplish nothing."

And John E. Coons, a professor of law at the University of California at Berkeley, questioned whether the decision would help the legislature settle the state's decades-old school-funding dispute. "It's the same old New Jersey confusion, as far as I can see," he said, while adding that he had not yet read the decision.

The complex, 156-page decision also is expected to have a major impact on the school-finance plan released by Gov. James J. Florio last month. Both proponents and opponents of the plan last week cited the ruling as providing support for their views.

The June 5 ruling came eight months after the Texas Supreme Court declared that state's school-funding formula unconstitutional, and almost exactly a year after the Kentucky Supreme Court struck down its entire state educational system.

Some observers said the New Jersey case could spur further litigation in the school-finance arena. Such suits are under consideration or have been filed in at least 17 other states. (See Education Week, May 2, 1990.)

A 'Disintegrating' Society

In a ruling praised for its eloquence, Chief Justice Wilentz wrote that students in poor school districts "have the right to the same educational opportunity that money buys for others."

Because it does not provide these districts with enough money for even a basic education, the state's current system denies them that right, the court said.

"The constitution is being violated," he wrote. "These students in poorer urban districts have not been able to participate fully as citizens and workers in our society.... We find the constitutional failure clear, severe, extensive, and of long duration."

The decision adds that improving the educational opportunity of such students is "not just a New Jersey problem."

"The fact is that a large part of our society is disintegrating, so large a part that it cannot help but affect the rest," the ruling continues. "Everyone's future is at stake, and not just the poor's. Certainly the urban poor need more than education, but it is hard to believe that their isolation and society's division can be reversed without it."

'Money Makes a Difference'

In the opinion, Chief Justice Wilentz rejected the argument--offered by the state under the administration of former Gov. Thomas H. Kean--that better management, not more money, is needed to improve urban schools.

Evidence in the case "shows beyond doubt that money alone has not worked," the decision acknowledges. But it "does not show that money makes no difference."

Indeed, the opinion notes, "the entire state aid program itself is based on the assumption that money makes a difference in the quality of education."

The decision points out that New Jersey already spends more money per pupil than any other state, but that, as the second-richest state, it can afford further increases.

"... [W]hile the relatively high level of our present expenditures must give us pause," the ruling says, "it must also be viewed in the light of our needs and our wealth."

Students in the poorer urban districts, it says, "have already waited too long for a remedy, one that will give them the same level of opportunity, the same chance, as their colleagues who are lucky enough to be born in a richer suburban district."

According to the ruling, the state's new finance formula must provide enough funding so that per-pupil expenditures in poorer urban districts "are substantially equal to those of the more affluent suburban districts" and the "special disadvantages" of the urban students are addressed.

The decision also says that "such funding cannot be allowed to depend on the ability of local districts to tax," but "must be guaranteed and mandated by the state."

The court's remedy "is limited to those [poorer urban] districts."

"We leave unaffected the disparity in substantive education found in other districts throughout the state," the court said, "although that disparity too may some day become a matter of constitutional dimension."

The ruling also flatly declares unconstitutional the state's minimum-aid program, which all districts receive regardless of wealth. Such aid is "counter-equalizing," it says.

The Florio plan would eliminate minimum aid.

Fate of Governor's Plan

At a press conference here, Governor Florio welcomed the ruling as "a clear victory for the children of New Jersey." He predicted that his school-finance proposal "will be more than adequate to meet the court's mandate."

Ms. Morheuser disagreed. "I don't think he asks for enough funding in poor districts," she told a separate press briefing in Newark.

Mr. Florio's plan calls for almost $1 billion in additional school aid. That money would be distributed to about 350 of the state's 600-plus districts.

In its ruling, the court noted that about $440 million in new aid would have been necessary this year to provide a "thorough and efficient" education in the state's 28 poorest districts.

The court ordered more funding only for the state's poorest urban districts, which it suggested were the 28 districts that had the least property wealth and whose students were of the lowest socioeconomic status.

"This judicially imposed remedy draws a sharp line and leaves dis8tricts of some similarity ... on different sides of that line," the ruling concedes.

"We do not claim this is the ideal solution," the court said, noting that final authority to determine the state's poorest districts lies with the commissioner, the state board of education, and the legislature.

Jeremiah F. Regan, president of the New Jersey School Boards Association, said the decision could hurt some districts in middle- or lower-middle-class areas.

"We are surprised that it is so narrowly structured," he said.

"Other school systems--only slightly less poor--have educational-finance needs that are being unmet under the present system," he added.

Pension Funding Debated

Betty Kraemer, president of the New Jersey Education Association, called the ruling "a giant step forward" for urban students.

She also praised the court for ruling that the state should not use teachers'-pension funds to equalize spending.

The decision does note that state pension payments are "in effect counter-equalizing" because wealthier districts receive larger payments. In a previous ruling, however, the court had upheld the payments, finding them justified "for administrative considerations."

"We will at this time abide by that judgment," the court said, "without foreclosing the possibility that such aid may be constitutionally infirm."

Governor Florio said he took that statement as a sign he was "headed in the right direction" with his proposal, which would shift state pension contributions into the equalization formula.

"Over all, I think our proposal gets an A from the supreme court," he said.

The Governor's bill, which is currently before the legislature's joint education committee, has been criticized by many educators.

But Matthew Feldman, chairman of the Senate education committee, said the proposal "is going in the direction the court mandated."

Senator Feldman said he would push for passage of Mr. Florio's bill by July 1. He predicted, however, that lawmakers might try to attach some amendments regarding pension payments.

"I think the decision shows that Florio was sort of clairvoyant," he added.

A Tangled Past

Several observers said last week that the case had significance beyond its substance because of its tangled legal history.

"We're finally getting someplace," said Mr. Tractenberg of Rutgers, who founded the Education Law Center. "We've had over 20 years of school-finance litigation in New Jersey."

The state's school-finance saga actually began in 1970, with the filing of Robinson v. Cahill. That case, which eventually led to the school-funding system's being declared unconstitutional last week, was not resolved until 1976.

The Abbott case was originally filed in February 1981 by 20 urban students.

Raymond Abbott, the first-named plaintiff, was then a Camden elementary student; he eventually dropped out of school. Fred G. Burke, the first-named defendant, was then the state's commissioner of education.

Abbott was dismissed by a state court in November 1983, but reinstated in state appeals court in May 1984.

Later that year, the case reached the state supreme court, which in July 1985 sent it to an administrative-law judge.

In August 1988, the administrative-law judge ruled the state's school-funding formula was unconstitutional because it discriminated against students in poor urban districts.

His ruling, however, was rejected in February 1989 by Mr. Cooperman, who had the authority to accept, reject, or modify the judge's decision.

The plaintiffs then appealed Mr. Cooperman's decision directly to the supreme court, which heard arguments last September.

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