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February 15, 2005

CFE judge orders spending another $7.4 billion a year on NYC schools; stage set for more court action

State Supreme Court Justice Leland DeGrasse of Manhattan has ordered the state to ensure that within four years the New York City school system has another $7.4 billion a year to spend — on top of the $12.9 billion a year the system already consumes.

But the Pataki administration immediately said the state will appeal the decision. That sets the stage for months or even a year of more court action, as the case works its way back up to the Court of Appeals, the state's highest.

The Court of Appeals ruled in July of 2003 that the state must ensure that the city's schools get more money, but it didn't put a dollar figure on its ruling. Justice DeGrasse's ruling, issued after 18 months of Albany gridlock on the issue, represents the first judicial attempt to tie a specific amount of money to the case.

Justice DeGrasse rejected New York City Mayor Michael Bloomberg's rhetorical attempt to get him to rule that the state itself must pay the entire extra amount. The judge noted that the Court of Appeals had already explicitly stated that it was for the Legislature to decide how much of the new money for the schools must come from the state, and how much from the city.

Governor Pataki has suggested that the state might pay 40 percent of any new aid to the city's schools; Assembly Democrats have said the figure should be more like 75 percent. Either way, if upheld the ruling would probably mean a minimum of another $1 billion of state spending in the state fiscal year that begins April 1 — ballooning to at least $3 billion a year more by 2009.

Reviewing proposals from various parties to the case, Justice DeGrasse picked the highest dollar amount on the table — slightly higher even than the plaintiffs, the Campaign for Fiscal Equity, had recommended. He also stood with a three-judge panel that had reviewed the case for him and rejected any new accountability measures, even a proposal from CFE itself that the city have a detailed plan on how it will spend the money.

Like the Court of Appeals ruling before it, Justice DeGrasse's ruling applies only to New York City schools. CFE and various allies, including the New York State School Boards Association, want the Legislature to extend the principles used to calculate the extra New York City spending to schools statewide, at an additional cost of about $3.2 billion a year.

The judge said the state should ensure that the city's schools get $5.6 billion a year in additional operating spending, phased in over the next four school years. This would raise per-pupil spending in the city's schools to $16,800 a year — which is double the national average, and works out to $336,000 for each hypothetical 20-student classroom. In addition, he said, the schools need $9.2 billion over the next five years, or $1.84 billion a year, in capital spending to add new classrooms and otherwise upgrade facilities.

Under the Court of Appeals ruling, the Legislature could decide that the state will pay the entire extra amount itself — or it could require that the city contribute some of it. One way or the other, however, the high court said it is the state's responsibility to see that the new money arrives.

Although the lawsuit is often described as being about "fair" or "equitable" funding for the New York City schools, it is not. The Court of Appeals has ruled three times that there is no constitutional right to an equitable school-aid formula.

What the high court did say, however, is that the state constitution entitles students to "an opportunity for a sound basic education." In other words, the issue is how much spending is adequate, not what is "fair." In its defense the state had contended that New York City itself was underfunding its schools. But the high court held that the city is a creature of the state and the state is ultimately responsible for the condition of the city's schools: if the city has underfunded its schools, then the state should not have allowed that to happen.

In its July 2003 ruling, the Court of Appeals ordered the state to determine objectively just what is the cost of providing a sound basic education in New York City — and gave the state until July of last year to come up with a plan for putting the money in place.

Governor Pataki appointed a special commission to work on the cost-determination issue, among others, and CFE itself conducted its own "costing out" student.

But when the Legislature gridlocked over the issue and the deadline passed without action, CFE went back to Judge DeGrasse seeking a new order demanding a specific amount of money and a specific timetable. Unless the state and CFE reach an out-of-court settlement in the meantime, that order will now go back up the chain of appeals.