New Jersey’s foundation formula is based on the “thorough and efficient,” or T&E, budget amount, which is revisited every biennium through the “Governor’s Report on the Cost of Providing a Thorough and Efficient Education.” For the second year in the biennium, the figure is adjusted for inflation by the consumer price index for New York City and Philadelphia. New Jersey distributes state aid by taking each district’s T&E budget amount and deducting a required local effort. If a district’s local effort is greater than the T&E budget, the district does not receive state foundation aid. The T&E budget is adjusted only for grade level; other aid for specific needs is provided through categorical programs. New Jersey spent $2.8 billion for 18 different categorical programs in fiscal 2004. Funds from those programs include support for transportation, special education, early-childhood education, and other programs. New Jersey’s second-largest categorical program is Parity Remedy Aid, a court-ordered program that targets additional funds to the so-called Abbott districts—the plaintiffs in the Abbott v. Burke school finance lawsuit—to create more equity between them and the state’s wealthier and academically more successful districts.