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N.J. Finance System Ruled Unconstitutional for Third Time

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The New Jersey Supreme Court has ruled that lawmakers have not done enough to alleviate inequities in the state's system for financing public schools.

Last month's decision marks the third time since 1973 that the justices have deemed the system unconstitutional. Many New Jersey educators question whether lawmakers possess the political will to insure an equitable education for rich and poor students alike.

Indeed, two generations of children have passed through the public schools since the state's top court first ruled that the finance system, which relies heavily on property taxes, discriminated against poor districts and violated the state constitution's requirement that students be provided a "thorough and efficient education.''

In its most recent decision, the court gave the state until the 1997-98 school year to achieve "substantial equivalence, approximating 100 percent,'' in per-pupil spending by wealthy and poor districts.

Currently, there is a 16 percent disparity between average per-pupil spending in wealthy districts and average spending in the 30 poorest, or "special needs,'' districts.

If the state does not show substantial progress each year, the court said it would consider applications for relief.

"It is the state and only the state that is responsible for this educational disparity, and only the state can correct it,'' the justices said in their unanimous ruling.

New Jersey is one of a dozen states in which the high courts have declared school-finance systems unconstitutional. Unlike lawmakers in most of those states, however, New Jersey's governors and legislators have repeatedly failed to satisfy court dictates.

Political Whims

"We find that states that lead with major education reform and add school-finance equity to pay for it get political support,'' said John E. Myers, a Denver-based consultant on school finance.

"Where the lead is the taxes or where the lead is just simply equity for the few rather than statewide, it is very difficult to get state support,'' he added.

The New Jersey court's latest decision focused on the Quality Education Act, the 1990 law that was intended to close the spending gap between wealthy and poor districts.

The law had been pushed through the Democratic-controlled legislature by Gov. James J. Florio, along with the highest tax hike in state history. A storm of voter protest followed, and Republicans took control of the legislature.

Mr. Florio retreated, signing a 1991 bill that diverted $360 million to relieve property taxes. He still lost his bid for re-election in 1993.

The high court noted that the historical record shows that poor districts cannot rely on the state's politicians to provide equal funding.

"Because the Q.E.A.'s design for achieving parity depends fundamentally on the discretionary action of the executive and legislative branches,'' the court wrote, "the statute fails to guarantee adequate funding for those districts.''

In addition to equalizing basic funding, the court ordered the state to provide sufficient funding for categorical programs that target disadvantgaged students.

"We assume no reminder is needed of the plight of these students, whose education and lives are at stake,'' wrote the court. "We repeat the reminder, however, that also at stake is the future of the state and the rest of its citizens.''

The Court Is Watching

Although the court's ruling in large measure reaffirmed its 1990 decision in Abbott v. Burke, there were a few notable differences in the latest decision, such as the requirement that progress be made before the deadline.

Marilyn J. Morheuser, the lead lawyer and the director of the Education Law Center, which has been working on behalf of the special-needs districts for more than a decade, said the most important difference is that the court has retained jurisdiction. The plaintiffs, therefore, can seek further relief directly through the high court rather than starting anew in the lower courts.

"The court has said, 'We're watching,''' said Ms. Morheuser. "That should afford strong impetus to the state to comply.''

Where the money will come from, though, is anyone's guess.

Gov. Christine Todd Whitman, a Republican, was elected on a platform that promised a 30 percent cut in income taxes during her first term. She is halfway there.

But political analysts doubt that the Governor and lawmakers can find the estimated $450 million to $625 million that would be needed to close the funding gap without raising taxes.

William Firestone, the director of the Center for Educational Policy Analysis in New Jersey, noted the defeat of Mr. Florio, "who took the biggest steps to equalize funding between rich and poor districts.''

"A bill that probably would have done the job was radically unpopular,'' Mr. Firestone said.

"It appears to me that the political will is not there in the state,'' he said, "and it's not just the Governor.''

Pushing for a Broad Remedy

One solution was offered last month by a commission appointed by Mr. Florio and the legislature in 1993. It unveiled details of a plan, adopted by the panel in April, to raise per-pupil spending in the poorest districts to the average level of the wealthiest districts within three years. (See Education Week, April 20, 1994.)

That plan would raise the state's share of total education spending by 13 percent, to nearly 55 percent.

Although Mrs. Whitman will await a report from a committee of cabinet officers before proposing a funding scheme, she has said that she might recommend shifting money from middle-income and wealthier districts to poorer ones.

School advocates, however, note that the state has been cutting support from its better-off districts for the past few years.

If they are asked to make further sacrifices, "there will be a rebellion in those communities,'' predicted James H. Murphy, the executive director of the New Jersey Association of School Administrators.

Roy J. Dawson Jr., the superintendent of schools in Camden, a special-needs district, said that while he welcomed the court decision, he would not be satisfied until sufficient resources were available for all the state's schoolchildren.

The urban superintendents are part of a broad coalition of education groups seeking an overhaul of the entire school-finance system.

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