N.J. Supreme Court Grants States’ Motion to End Abbott Remedies; Holds that State Must Maintain Funding Levels Despite Recession and Must Reconsider Cost Analysis After Three Years

Issuing its 20th decision in the two-decade old Abbott v. Burke litigation, the New Jersey Supreme Court ruled unanimously on May 28, 2009 that the state’s new education funding system, the School Funding Reform Act of 2008, 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 32 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. Data compiled by Margaret E. Goertz, a University of Pennsylvania researcher, illustrate these gains. Goertz has found, for example, that from 1999 to 2007 student scale scores in New Jersey increased dramatically on the statewide fourth grade mathematics assessment. Mean scale scores shot up by 26 points over these eight years, with the greatest increases in the Abbott districts. As a result, during this time period there was significant closure in the achievement gap between the Abbott districts and the rest of the state. In 1999 the gap between the Abbott districts and all other districts in the state was over 30 points. By 2007 the gap was down to 19 points, a reduction of 11 points or 0.39 standard deviation units. The gap between the Abbott districts and the high wealth districts fell from 35 to 22 points.

The court’s ruling ends 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 will receive 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. David Sciarra, executive director of the Education Law Center, attorneys for plaintiffs, said that he is deeply concerned that the new funding “will quickly return New Jersey to the unequal school system we had in the past, and undo a decade of measurable educational improvements for our poorest school children.”

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 this and the next two years at the levels required under the new formula. This requirement presumably means that despite fiscal constraints caused by the recession, the state may not cut promised levels of aid to the Abbott districts over the next few years.

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. This mandate for continued updating of the finance system’s operating premises provides an important mechanism to ensure that funding levels are constantly reconsidered to take into account changing student needs and new educational approaches.

In asking the court to approve its new formula, the state’s attorneys emphasized the significant demographic changes that have occurred in New Jersey since the court’s initial Abbott ruling in 1990, noting in particular that 49% of the minority students in the state now live in districts other than the 32 poor urban districts covered by the Abbott decree. Under the new formula, many of the districts in which these students live would enjoy significant funding increases. David Sciarra states, however, that Governor Corzine’s proposed FY10 state budget fails to fund the expansion of the highly effective Abbott preschool program to 84 additional high poverty districts across the state, and that it would cap increases under the new formula at 5%. This would mean, according to Sciarra, that children in over 100 moderate- and middle-income districts -- districts that educate many of the minority students not covered by the Abbott decree – would lose over $300 million in state aid increases they were slated to receive.

The court accepted the factual findings and most of the recommendations of the special master it had appointed last November 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. The court held that “This funding formula was designed to operate as a unitary whole and, in order to achieve its beneficial results, it must be allowed to work as it was intended.” In issuing this part of its ruling, the court “took comfort” from knowing that the Abbott districts will receive, cumulatively over the next two years, approximately $630 million in additional funding under the American Recovery and Reinvestment Act (the federal stimulus bill).