Recent Events | Costing
Judicial involvement in education finance reform in
New Jersey began over three decades ago and deepened
more recently because the state was slow to implement
reforms. In 1973, the New Jersey Supreme Court declared,
in Robinson v. Cahill, 303 A.2d 273, that New Jersey's
school funding statute was unconstitutional because
it violated the "thorough and efficient education"
requirement of the state constitution. Since that decision,
the supreme court has issued over a dozen school finance
opinions, the latest in February, 2008. The
Education Law Center (ELC) serves as counsel for
plaintiff students, who comprise over 20 percent of
the state's students and attend school in 30 low-wealth
school districts (now known as the "Abbott districts").
“Parity,” Preschool and Other Entitlements
In its 1994 and 1997 Abbott v. Burke decisions, the
New Jersey Supreme Court ordered “parity”
funding, that is, state aid to bring per-pupil revenues
in the Abbott districts up to the per-pupil expenditures
in the state’s 110 successful, suburban districts.
The court allowed the state a phase-in period, reaching
parity for the first time in the 1997-1998 school year.
The court, in its 1998 decision, 710
A.2d 450, ordered an unprecedented series of entitlements
for disadvantaged children, including full-day kindergarten,
high quality preschool for 3- and 4-year-olds, a comprehensive
facilities effort, after-school programs, and summer
After the State failed to comply with its own 1998 representations
to the court regarding preschool, plaintiffs challenged
the remedy. In Abbott v. Burke, 748
A.2d 82 (2000) (Abbott VI), the court spelled out
the preschool requirements in more detail, including
substantive educational standards, certified staff,
and a maximum student/teacher ratio of 15:1.
In 2002, New Jersey
announced a $10 - $12 billion school construction program,
of which $6 billion was designated to build and renovate
school buildings in the Abbott districts. While the
School Construction Corporation provided financing for
projects in suburban districts in a timely manner, it
failed to finance most of the projects in the Abbott
districts and was shut down when corruption came to
light. Overcrowded classrooms and dilapidated facilities
continue to hamper progress in the school districts
educating most of the state’s most disadvantaged
A new school funding plan was approved by the legislature on January 7, 2008. Under the new formula, the state allocated approximately $7.8 billion to K-12 education for fiscal year 2009, a 7% increase from 2008. All districts saw a boost in school funding ranging from 2 to 20% during the first two years of its implementation.
The Abbott plaintiffs challenged the new formula, claiming that under the base funding proposed in the new formula Abbott districts would get funding amounts closer to the state average and not to the levels of the wealthiest districts, as mandated by the Supreme Court. Though Abbott districts would still receive more than half of all state aid under the new plan, 22 out of these 32 districts will receive only the minimum 2% increase. The state countered that the new formula would better address the needs of the 49 percent of low-income students who live outside the Abbott districts, and have not been covered by the Abbott litigation. It claimed that the new formula addresses the constitutional deficiencies previously identified by the Court and asked the Court to terminate the case and eliminate the parity funding system it had ordered in the Abbott decisions.
On May 28, 2009, in its 20th decision in the two-decade
old Abbott v. Burke litigation, the New Jersey Supreme
Court ruled unanimously that the state’s new education
funding system meets the constitutional requirement
to provide all students a “thorough and efficient
education.” The court’s order permits the
funding system to go into effect statewide, including
in the 31 poor urban school districts previously covered
by the Abbott orders.
Repeating its prior finding, the court held that the
Abbott case has led to “measurable educational
improvement” for students in the Abbott districts.
The court’s ruling ended the special remedies the
court had ordered for the Abbott districts, including
parity funding and funding for supplemental programs.
Under “hold harmless” provisions in the
new funding system, however, no district received
less aid in the 2008-2009 school year than it received
the previous year plus a 2% increase, and, absent a
significant decrease in enrollment, no district will
receive less than this amount in the future. For the
Abbott districts, this means that their past levels
of extra funding will form a guaranteed minimum base
level for the future. However, as the plaintiffs argued,
since districts face unavoidable cost increases, the
flat funding provided under the new formula will force
some districts to scale back their current programs.
The court’s finding of constitutionality for the
new state funding system was explicitly premised on
two major conditions. First, the state must continue
to provide school funding aid during 2009-10 and the next
two years at the levels required under the new formula.
Second, the court’s holding further requires the
state to conduct a review of the formula weights and
other operative parts of the cost analysis upon which
the new system is based after three years of implementation.
The court accepted the factual findings and most of
the recommendations of the special master it had appointed
to hear evidence about the new formula and the cost
studies upon which it was based. However, the court
rejected the special master’s additional recommendation
that the Abbott districts be permitted to continue to
apply for extra funding for important supplemental programs
during a three-year transitional period.
In the Spring of 2010, newly elected governor Chris
Christie and the state legislature adopted an austerity
budget that cut education funding $1.08 billion, or
13.6%. In June 2010, the Education Law Center (ELC),
on behalf of the Abbott v. Burke litigants, filed
a motion requesting the state’s high court
to block implementation of the 2010-2011 budget, because
it failed to fund schools at the levels required by the
2008 School Funding Reform Act (SFRA). Oral arguments were held before the New Jersey Supreme Court on January 5, 2011 on plaintiffs' motion. Plaintiffs' main claim was State had violated the condition the court had laid down in its decision approving the new formula, i.e. that the new formula be fully funded.
On January 13, 2011, the New Jersey Supreme Court appointed Hon. Peter E. Doyne, a Bergen County Court judge, a special master to determine whether the current levels of funding are sufficient to provide New Jersey school children a thorough and efficient education. The report will be issued to the Supreme Court by March 31, 2011, and the parties are required to file their briefs by April 21, 2011.
On February 1, 2011, the Court issued a further order denying the state’s request for clarification of the remand order to include consideration of the state’s fiscal condition. The Court also denied the state’s motion for an extension of time.
On March 22, 2011, special master Hon. Peter E. Doyne, issued an opinion that held that the state is not meeting the constitutional mandate to provide New Jersey school children a “thorough and efficient education.” Judge Doyne heard extensive evidence on the actual impact of the cuts in six districts in various parts of the state. Although he acknowledged that a number of efficiencies had been effectuated in these districts, he held that “without quantification of the savings achieved or to be achieved by all districts for the FY 11 fiscal year, it is impossible to find, based on anecdotal evidence alone, [sic] these efficiencies would significantly impact the effectuated reductions.”
Subsequently, the New Jersey Supreme Court invalidated the state's budget cuts to the Abbott districts, ruling in May, 2011 that funding for the 31 Abbott districts in FY 2012 must be provided at the full level called for by the SFRA. This would provide an estimated $500 million increase over current funding levels for these districts. [Click HERE for decision.] The Court stated in no uncertain terms that "Like anyone else, the State is not free to walk away from judicial orders enforcing constitutional obligations."
The court, by a narrow 3-2 majority, agreed with the plaintiffs that the state had breached the key premises underlying the Court's 2009 Order, which had approved the new SFRA with the express provision that the formula be fully funded. The Court held that "When we granted the State the relief it requested, this Court did not authorize the State to replace the parity remedy with some underfunded version of the SFRA."
One of the members of the majority would have required the State to fully fund the formula for all districts in the state, based on the special master's express finding that children throughout the state, and not just in the Abbott districts, were being denied a thorough and efficient education. The other two members of the majority held, however, that the Court's jurisdiction was limited to the 31 Abbott districts and that its order, therefore, would extend only to them. The Education Law Center, attorneys for the plaintiffs, had requested state-wide relief and indicated that they would continue to press the legislature to fully fund the SFRA for all districts and not just the Abbott districts.
In 2006, a class action complaint was filed against
state officials and local boards of education, asking
the court to order vouchers for students attending schools
with low pass rates on state standardized tests. The
suit was dismissed by the lower courts.
Several rural school districts tried to qualify for
additional state funding as Abbott districts, in Keaveney
v. New Jersey Department of Education, 2000 N.J. AGEN
LEXIS 814 (Dec. 26, 2000). One was approved. Also, the
Superior Court, Appellate Division, in Stabaus v. Whitman,
770 A.2d 1222 (2001), dismissed a suit by taxpayers
alleging unconstitutionally disparate tax burdens.
In 1996, the New Jersey Department of Education developed
a "costing out model" described as determining
the cost of a constitutional "thorough and efficient
education," based on a hypothetical school district.
The model concluded that the state's 30 poor "Abbott
districts" had sufficient funding and that high-performing
suburban school districts were spending wastefully. In
response, numerous suburban superintendents testified
before the legislature about the impact funding cuts would
have on their programs and students.
Later that year, the legislature grandfathered the suburban
spending into a new education funding statute but, effectively,
held the Abbott districts to the lower spending levels
in the model. In Abbott IV, 693 A.2d 417 (1997), the New
Jersey Supreme Court rejected the funding statute as it
applied to the Abbott districts and, instead, ordered
the State to provide funding parity with the average expenditures
of the state's 110 higher wealth districts.
The state conducted a cost study as part of the process
of developing the 2008 School Funding Reform Act and retained
a number of national experts to review its methodology
and its findings. Plaintiffs challenged the validity of
these studies in the evidentiary hearings that were held
as part of their challenge to the constitutionality of
the 2008 act. The special master and the court largely
accepted the cost study and the testimony of the state’s
expert witnesses in its Abbott XX ruling.
Last updated: March 2011