Published Online: November 21, 2006
Published in Print: November 29, 2006, as Aid Award Cut in Suit Over N.Y.C.

Aid Award Cut in Suit Over N.Y.C.

$2 Billion More for Schools Is Less Than in Prior Rulings

In one of the most closely watched school finance cases in the country, New York’s highest court has put a minimum price tag on a basic public education while at the same time saying judges shouldn’t be determining how much to spend on schools.

By ordering the state to spend nearly $2 billion more a year on New York City’s public schools—billions less than in prior rulings by lower courts—the judges’ 4-2 decision sent a mixed message to state policymakers. Legislators and Gov.-elect Eliot Spitzer now face pressure to fix a funding system that the court declared unconstitutional in 2003.

From the Bench

New York state’s highest court ruled Nov. 20 that the New York City public schools need some $2 billion more per year, less than lower courts had found.

Read a complete transcript of the court's decision in the Campaign for Fiscal Equity, Inc. v. The State of New York case. Requires Adobe Acrobat Reader

*Click image to see the full chart.

The Nov. 20 decision by the New York Court of Appeals rejected arguments from the New York City-based Campaign for Fiscal Equity, or CFE, which sued the state in 1993, that the city schools need at least $4.7 billion more per year to ensure that students have the opportunity for a “sound basic education.”

Instead, a majority of the judges concluded that a $1.93 billion figure drawn from a state-commissioned study was enough to remedy the constitutional violations found during the 13-year legal battle over funding for the nation’s largest school system. Advocates of more money contended that the sum is a “bargain-basement price” that falls billions short of what is needed to prepare students for college and the workforce.

The decision most likely ends the legal struggle to secure more money for New York City’s 1.1 million-student public schools and puts pressure on state policymakers to come up with a funding solution. The court deferred to the legislature and the governor to determine exactly how much money is needed.

In that sense, some analysts saw the ruling as the latest in a string of decisions in which judges declined to take a heavy-handed approach to school finance. Last year, high courts in Texas and Massachusetts refused to order significant funding remedies.

Still, a court order of nearly $2 billion is significant, said Molly A. Hunter, the managing director for the New York City-based National Access Network, a group of advocates in 40 states that pushes for adequate public school funding.

“That’s huge,” she said of the amount cited in the ruling. “Ordinarily, courts don’t order a specific amount.”

While state courts operate independently of one another, last week’s decision in New York could help shape future school finance rulings in other states, said Eric A. Hanushek, who tracks school finance legislation as a senior fellow at the Hoover Institution, a think tank based at Stanford University. He pointed to court decisions in Kansas and Wyoming, in which judges cited the CFE case in ordering those states to spend millions of dollars more on public education.

For New York, Mr. Hanushek said, the decision is significant because it means that the legal issues in the lengthy court battle are resolved, and that policymakers can move on. “Now it’s time for the state and the city to figure out how to help students in a struggling, urban district,” he said.

How Much Enough?

In 2003, the Court of Appeals found that New York City’s public school students did not have access to a “sound basic education” as guaranteed by the state constitution and ordered the governor and the legislature to come up with a funding plan.

Since then, lower courts, with the help of court-appointed referees, have ruled that meeting that obligation would require between $4.7 billion and $5.63 billion.

The CFE returned to the high court in October, arguing that the state hadn’t complied with the 2003 ruling and asking the judges to force the state to come up with at least $4.7 billion more for schools’ operating budgets. ("Finance Issues Stir Emotions in N.Y. Case," Oct. 18, 2006.)

The state argued that a lower amount would be sufficient and pointed to a $1.93 billion figure from a report on school funding adequacy done for the state by Standard & Poor’s, a New York City-based financial-research company. In addition, the state’s lawyers contended, budgetary decisions should be left up to the governor and state legislators.

Gov.-elect Spitzer, a Democrat who was elected this month, pledged during his campaign to devote from $4 billion to $6 billion more to New York City schools, phased in over four to five years.

In a statement after last week’s decision was handed down, Mr. Spitzer said his proposed state budget, which he’ll submit to the legislature in February, would call for significant funding increases for the New York City schools. He didn’t cite a specific dollar figure, however.

“We must provide more statewide funding than this constitutional minimum, so that all of New York’s schoolchildren have the opportunity to thrive in the 21st-century workplace,” said Mr. Spitzer, who as New York’s attorney general had to defend the state in the CFE lawsuit.

To comply with rulings addressing another part of the lawsuit, the state has already invested $11 billion in school construction in New York City and statewide. But the state has not devoted significant additional money to the city schools’ operating budget.

Advocates maintained that the school system needs a bigger operating budget to help pay for universal prekindergarten, additional highly qualified teachers, and smaller class sizes. But the court-ordered minimum is better than nothing, said Geri D. Palast, the executive director of the Campaign for Fiscal Equity, which sued the state on behalf of parents, students, and others.

“Thirteen years ago, the number was zero,” she said. “Now it can’t go below $2 billion.”

‘Permanent Obligation’

Although the dollar amount pertains to the New York City schools only, the ruling establishes a constitutional right for all students, regardless of where they live in the state, to a sound, basic education, said Michael A. Rebell, who argued the case before the Court of Appeals last month on behalf of the CFE.

“Whatever the exact dollars, there’s a constitutional obligation, and it’s going to be a permanent obligation for future governors,” he said.

The high court’s decision hinged on the constitutional separation of powers. A majority of the judges did not want to overstep the boundaries of the judicial branch by interfering with the budget-making duties of the legislative and executive branches.

“The judiciary should not usurp this power,” Judge Eugene F. Pigott Jr. wrote for the majority. “The legislative and executive branches of government are in a far better position than the judiciary to determine funding needs.”

But the court was conflicted in its ruling. Judge Albert M. Rosenblatt, who agreed with the majority decision, nevertheless wrote that he didn’t know whether the $1.93 billion figure was proper or not, and that it should be construed only as a minimum.

Chief Judge Judith S. Kaye, who wrote the original 2003 decision declaring the current school funding for New York City unconstitutional, issued a sharp dissent. She wrote that the state had failed to craft a budget plan to bring schools into constitutional compliance. In addition, she said, the court majority, in its ruling, rejected the findings of the court system’s own referees.

Judge Kaye wrote: “I remain hopeful that, despite the court’s ruling today, the policymakers will continue to strive to make the schools not merely adequate, but excellent, and to implement a statewide solution.”

Vol. 26, Issue 13, Pages 1,22

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