A SHORT HISTORY OF SCHOOL FINANCE LITIGATION IN NEW JERSEY, 1970-2008

The 1970s: Robinson v. Cahill

New Jersey’s school finance battles began in 1970, when Jersey City sued the state on behalf of Kenneth Robinson, an 11-year-old African-American growing up in a housing project.  That suit, Robinson v. Cahill, asserted that the state’s heavy reliance on local property taxes to pay for schooling ensured that poor school districts could never spend as much as rich ones, even while taxing far more heavily.  Such inequities, the state Supreme Court eventually found, violated the state constitution’s guarantee of a “thorough and efficient” (T&E) educational system.

For two and a half years, Democratic Governor Brendan Byrne fought to pass a statewide income tax, the obvious way to equalize funding burdens.  In the summer of 1976, he succeeded, but only after the state Supreme Court, declaring that it would no longer tolerate an unconstitutional funding system, closed the public schools for eight days.


The 1980s: Abbott v. Burke

Although property taxes fell at first, the spending gap between rich and poor districts persisted as legislators cut school aid to cope with fiscal crises.  By 1981, when the non-profit Education Law Center filed the state’s second school finance lawsuit, Abbott v. Burke, poor districts were spending about $2,400 per pupil while taxing at $1.65 per $100 assessed valuation, and rich districts were spending $3,000 per pupil while taxing at 97 cents per $100.

The Abbott plaintiffs were a mixed group: 20 children – 10 African-American, nine Hispanic, and one white – from 10 families in Camden, East Orange, Irvington and Jersey City.  Some, like Raymond Abbott, the sole white plaintiff, came from middle-class families committed to staying in the inner city; others were growing up poor.
           
For nine years, the Abbott case wound its tortuous way through the courts, as the Education Law Center presented voluminous evidence of the failings of urban education: the peeling chalkboards, the bare-bones music and art programs, the elementary schools without libraries, the barely literate high school graduates.  Poor children were given educational crumbs, the lawyers argued, while just a few miles away, affluent children feasted on banquets.
           
In its defense, the state asserted that local mismanagement, not funding shortages, accounted for the cities’ problems.  Leadership mattered; money didn’t.  In any case, the lawyers argued, many poor children were so damaged by their troubled home lives that no school could save them.


1990-1993: Governor Florio and QEA
           
In 1990, the state Supreme Court ruled for the plaintiffs, ordering New Jersey to ensure that its poorest urban districts spent as much on the average pupil as the wealthiest suburbs did.  The court further ordered the state to determine how much more money poor districts needed to meet disadvantaged students’ special needs.
           
The court’s mandate – extra help for the disadvantaged, on top of parity spending for regular education – would soon earn its own shorthand: parity plus.  Extrapolating from demographic charts based on soon-to-be-outdated census figures, the court cobbled together a list of 28 urban districts covered by the new entitlement and left it up to the Legislature to add to, or subtract from, that list.
           
In the wake of the court ruling, Governor Jim Florio’s Democratic administration pushed through a modestly redistributive new funding law, the Quality Education Act, which ended automatic payments to wealthy districts and increased aid to the poor and middle class, paying for the new spending with an income tax increase.  Most controversially, QEA required every school district to pay a portion of teacher pension costs, ending a 35-year tradition of full state payment.
           
What happened next has become political folklore.  In the 18 months after QEA’s passage, the combined fury of an anti-tax citizens’ movement and a galvanized teachers union won suspension of the pension shift, forced the Legislature to return a third of the redistributed school funding to the suburbs as tax relief, and handed the Republicans veto-proof majorities in the Assembly and Senate.  The Abbott plaintiffs won another court ruling invalidating the amended QEA, and in 1993, Florio narrowly lost re-election.


1993-1998: Governor Christie Whitman and CEIFA
           
By the time Florio’s successor, Republican Governor Christie Whitman, took office, most states had begun to reorient their public education systems around academic standards laying out the skills and knowledge students were expected to acquire in 13 years of public schooling.  As New Jersey joined this national movement, Whitman’s administration also sought to reorient the state’s 20-year debate over school aid.
           
The administration’s school funding proposal, the Comprehensive Educational Improvement and Financing Act, or CEIFA, defined a “thorough” education as one that delivered the newly adopted Core Curriculum Content Standards and an “efficient” education as one that cost what a hypothetical model school district might spend – which, it turned out, was far less than many New Jersey districts were already spending.  Although no district would have been required to cut its budget to the model-district level, initial versions of CEIFA would have required districts to label the extra spending “not constitutionally required,” right there on the school-budget ballot – a tempting target for tax-weary voters.
           
CEIFA had a plausible logic: decide what students should learn, figure out what it costs to teach them, enable every district to spend that much, and discourage districts from spending more.  But suburban fury over the spending-discouragement provisions had a predictable political effect, and legislators quickly abandoned them.  The state would fund poor urban districts up to the T&E level; the suburbs would be free to spend far more, undiscouraged.
           
The new approach openly flouted the Abbott parity requirement, and in May 1997, the state Supreme Court found CEIFA’s funding formula unconstitutional for poor urban districts, though acceptable for all others.  The court gave the state three months to close the remaining 11 percent spending gap between rich and poor districts, at a cost of over $200 million.
           
Then the justices turned to the “plus” part of the “parity plus” mandate.  Despite the court’s 1990 order, the state had never identified and priced out necessary programs for disadvantaged students.  Instead, whatever money was available had been allocated through the usual legislative bargaining.
           
Now, the justices ordered the state to present a programmatic study to a lower-court judge, and in the May 1998 Abbott V ruling, the Supreme Court ratified an ambitious reform agenda. The state was required to institute half-day preschool for Abbott 3- and 4-year-olds; to restructure every Abbott elementary school around then-popular  “whole school reform” models, preferably the well-researched Success for All; to provide needed health and social service programs; and to pay the full cost of repairing or replacing dilapidated inner-city schools.


1998-2007: The era of implementation
           
The nine years after Abbott V saw nearly non-stop wrangling over implementation details: litigation over preschool class size and teacher credentials, legislative combat over how generously to subsidize school construction in non-Abbott districts, academic reports on the shortcomings of whole school reform, efforts by cash-strapped governors to dial back expensive social supports.

For a while, the CEIFA formula continued to give non-Abbott districts state aid for growing enrollments, new special education costs, and the like. But as the 21st century ushered in huge, intractable budget deficits, the Legislature froze most school aid, and newly squeezed districts made up the difference with service cuts and property tax increases. The squeeze was less severe for the Abbott districts, protected by the court’s “parity plus” mandate, and by 2006, they were getting 57.6 percent of the state’s school aid while enrolling 23 percent of the state’s students.

The existence of that politically uncomfortable dichotomy encouraged Democratic Governor Jon Corzine and the state Legislature, for the first time since the Robinson era, to consider revising the school funding formula funding formula even without a court order to do so.

2008: A new era begins?

In the closing hours of the 2006-08 legislative session, a slim majority of lawmakers voted to enact the Corzine administration’s School Funding Reform Act. The new school aid law eliminates the Abbott parity requirement, reorients school funding around a newly established adequacy funding level, and steers extra money and programs to disadvantaged children living outside the cities.