New Jersey Appeals Court Orders New Trial in School-Finance Case

By Susan G. Foster — May 23, 1984 6 min read

A New Jersey state appellate panel has ruled, in a unanimous decision, that a lower-court judge erred in his dismissal of a class action challenging the state’s school-finance law and has ordered a new trial on the constitutional issues raised by the plaintiffs in the case.

In a 19-page opinion, the three-judge panel of the Appellate Division of New Jersey Superior Court found that the lower court’s dismissal of the suit was based on “a fundamental misconception of the plaintiff’s claim to relief.”

The case, Abbott v. Burke, is the latest of a series of legal challenges to the state’s system of funding the schools that began with the New Jersey Supreme Court’s landmark 1973 ruling in Robinson v. Cahill. In that ruling, the state high court held that the state’s funding scheme was unconstitutional.

The current suit, Abbott v. Burke, alleges that funding inequities among school districts have worsened despite the enactment of a revised school-finance law in 1975.

The school-finance law established a complex equalization-aid formula for distributing state funds to local school districts based on the wealth of each school district.

But the plaintiffs in Abbott v. Burke contend that the children in the four poorest districts--most of whom are from low-income minority families--remain deprived of equal educational opportunity because the state’s funding system still does not distribute resources equitably.

The suit, filed in 1981 by the parents of 20 children in four property-poor school districts, was dismissed last year in the Chancery Division of the state Superior Court on the grounds that the plaintiffs had not exhausted all administrative remedies available to them under state law.

New Trial Ordered

The appeals court’s ruling now clears the way for a full review of the state’s school-finance law and the question of whether it assures all students of a “thorough and efficient education” as required by the state constitution.

In its 1973 decision, the state Supreme Court had held that New Jersey’s reliance on property taxes resulted in “gross disparities” among school districts and ordered the state to devise a more equitable funding formula, to establish specific curriculum objectives, and to monitor the schools’ implementation of those objectives.

“One thing the [appeals] court clearly did was reaffirm the holding of Robinson I that the state is required to provide equal educational opportunity in terms of input [funding],” said David C. Long of Long & Silverstein, a Washington-based law firm, and the co-counsel for the plaintiffs. “The fact that different children may profit in different ways from educational resources is no defense to a finance system that provides substantial inequalities in education resources.”

The plaintiffs’ suit, which seeks to enforce the legal obligations set out in Robinson v. Cahill, also charges that the state’s system of financing education violates the equal protection clauses of both the state and U.S. constitutions.

The case represents the second time in eight years that the courts have been asked to invalidate the state’s system of funding the public schools. In a suit filed in 1975, known as Robinson V, the state Supreme Court upheld the validity of the school-finance law, citing a lack of evidence to support the plaintiffs’ allegations that the newly devised funding system did not guarantee equal educational opportunity.

Funding Scheme Challenged

In its May 11 opinion overturning the lower court’s ruling, the appeals-court panel noted that, in documents submitted for review, the plaintiffs’ suit “appears to present a factual basis for the conclusion urged that in application, the act has magnified the very evils it was enacted to correct.”

“The trial court either mistakenly believed the complaint was addressed to the correction of inadequacies in the programs, services, and facilities for education in the four districts or mistakenly conceived that the inquiry must be limited to those grounds alone ... ,” the appeals panel said in its opinion.

"[T]he attack is upon the entire state system of financing public education on the grounds that it has produced gross disparities in the financial resources for education. Thus cast, the issue may only be addressed in constitutional terms on the basis of factual and economic issues which lie outside the expertise of the commissioner [of education],” the appeals court asserted.

Marilyn J. Morheuser, executive director of the Education Law Center, the nonprofit corporation representing the plaintiffs, said last week that the ruling “means that in the not-too-distant future, New Jersey, the third-largest state in the nation in terms of per-capita income, will fairly fund public-school education for all its children, including poor and minority children.”

Currently, according to Ms. Morheuser, the state provides about 40 percent of the total cost of education. However, “the formula targets funding at property wealth rather than at the education needs of children in districts,” she explained, adding that 70 percent of all minority children in the state live in the poorest districts.

“The issue of race is here [in this case] the way it’s been in no other case,” Ms. Morheuser said.

Disparities Cited

The plaintiffs in the case either live in or attend schools in Camden, East Orange, Irvington, and Jersey City, which, according to Ms. Morheuser, do not have a level of property wealth that can be taxed sufficiently to support good educational programs. To illustrate the disparities in property wealth among school districts, she pointed to the “equalized valuation per student” part of the formula used to determine aid to local schools.

Last year, the value of taxable property in East Orange was $37,428 per student, she said; in Millburn, a suburban town located in the same geographical area, the per-pupil value of taxable property was $472,054.

Because the state’s current funding scheme relies on local property values, Ms. Morheuser said, such local disparities “are inevitable.”

In East Orange, for example, the average per-pupil expenditure during the 1982-83 school year was $2,644, compared with an average of $4,100 per pupil in Millburn, she said.

In the Camden school district, the average per-pupil expenditure during that same year was about $2,805, compared with the wealthier Cherry Hill district’s $3,874 per pupil.

State Sees Other Factors

The state has argued that money is not the sole factor in determining educational quality and that the plaintiffs’ complaints should have been heard by State Commissioner of Education Saul Cooperman, who under law may investigate disputes involving the schools and monitor their activities.

But Ms. Morheuser said, “We were not seeking what the commissioner can do; the commissioner can do nothing to change the funding formula, and [the appeals court] has made clear that what we presented is a clear constitutional question which only the courts” can address.

‘Financial Equality’ Disputed

In an interview last week, Bertram P. Golz Jr., deputy state attorney general, maintained that the education clause of the state’s constitution calls for “a thorough and efficient free public education,” which does not necessarily mean “financial equality,” he said.

"[The appeals court panel] seems to accept the plaintiff’s theory that a cause should be linked immediately to the financial formula, when the constitution does not address financial equality but quality education,” Mr. Golz said, adding that quality in education can involve many other factors.

Mr. Golz said his office is “in the process of deciding whether to seek a review by the state supreme court.” The state has 20 days from the date of the appeals court’s ruling to make a decision.

A version of this article appeared in the May 23, 1984 edition of Education Week as New Jersey Appeals Court Orders New Trial in School-Finance Case