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New York
Recent Events | Costing
Out | Useful Resources
The Campaign for
Fiscal Equity (CFE) website offers summaries and
periodic updates on the New York school funding litigation
and implementation of the remedy, including brief
analyses of the state high court's landmark CFE
decision in favor of plaintiffs.
Historical Background
In 1978, a group of property-poor school
districts, joined by the five large urban New York districts,
filed Levittown v. Nyquist , to challenge the
state's education finance system. In its 1982 decision,
439 N.E.2d 359, the Court of Appeals– New York State
's highest court–ruled that while substantial inequities
in funding did exist, the state constitution does not
require equal funding for education. However, the court
also held that the state constitution guarantees students
the right to the opportunity for a "sound basic
education."
This right was at the center of the CFE v. State
complaint filed in 1993 which asserted that New York
State was failing in its constitutional duty to provide
the opportunity for a sound basic education to hundreds
of thousands of its schoolchildren. In a landmark 1995
decision, the Court of Appeals distinguished its Levittown
ruling and remanded the case for trial. After a seven-month
trial, Justice Leland DeGrasse rendered his decision,
719
N.Y.S.2d 475, on January 10, 2001 in favor of plaintiffs
and ordered the State to ensure that all public schools
provide the opportunity for a sound basic education
to their students. This decision also ordered a costing-out
study as the threshold task in developing a new school
funding system.
In June 2002, the intermediate-level appeals court overturned the trial-court ruling and claimed that an eighth-grade education was all the New York State Constitution required. Plaintiffs appealed, and the Court of Appeals issued its decision (CFE II) in favor of plaintiffs on June 26, 2003. The court considered school funding court rulings in other states during oral argument and its court order in favor of plaintiffs gave the State until July 30, 2004 to:
 determine the cost of providing a sound basic education
fund those costs in each school, and
establish an “accountability” system to ensure that the reforms actually provide the opportunity for a sound basic education.
When the July 30, 2004 deadline passed without state
action, the case went back to Justice DeGrasse who appointed
a panel of three special masters to hold hearings on
the matter and make recommendations to the court. On
November 30, 2004, the panel issued its Report
and Recommendations and, in sum, urged the court
to order the state to enact legislation within 90 days
that would:
provide
an additional $5.63 billion for annual operating aid,
phased in over a four-year period;
undertake
a new cost study every four years to determine the cost
of a sound basic education;
provide
an additional $9.2 billion, phased in over a five-year
period, for building, renovating, and leasing facilities,
in accordance with plaintiffs’ BRICKS
Plan.
These recommendations were limited by the CFE II decision
to New York City, but the panel concurred with all parties
in their agreement that the legislature would be well-advised
to extent similar benefits to high need districts throughout
the state.
In March 2005, the trial court confirmed the special
masters' report and recommendations and ordered the
state to comply within 90 days. The state appealed.
In March 2006, the intermediate appeals court ordered
the state to increase New York City schools' annual
operating funds by at least $4.7 billion per year, to
be phased in over four years, and provide an infusion
of at least $9.2 billion in facilities funding, to be
accomplished within five years. The court set an April
1 deadline, and on April 1 the legislature enacted facilities
funding that met the court's requirement and will increase
such funding for other school districts across the state.
The state did not comply with the operational funding
order.
In November 2006, the Court of Appeals reaffirmed its
2003 landmark decision but held that $1.93 billion was
the “constitutional floor” for additional
operating funds, although the legislature could provide
the full amount recommended by the Special Masters and
the lower courts. In January 2007, the newly-elected
Governor, Eliot Spitzer, recommended an increase in
funding for New York City public schools of $5.4 billion
(of which the City would be responsible for $2.2 billion)
and $4 billion for the rest of the state. He also proposed
a range of education finance and accountability reforms.
The legislature largely accepted the Governor’s
proposals.
The new accountability requirements direct school districts
receiving increases of 10% or $15 million in state aid
( including New York City) to develop “Contracts
for Excellence,” detailing their plans for using
the additional funding. Under the legislation, the new
funding must be devoted to programs related to “class
size reduction, programs that increase student time
on task, teacher and principal quality initiatives,
middle school and high school restructuring, and full-day
kindergarten or prekindergarten.” Districts are
required to direct the new funding and these programs
to students with the greatest educational needs. New
York City is also required to develop a five-year plan
for reducing class sizes.
Costing
Out
Before the Court of Appeals issued its June 2003 order
requiring a costing-out study, CFE and the New York
State School Boards Association announced Costing Out:
A New York Adequacy Study, which was undertaken by leading
national experts and included public engagement across
the state. The research team used both the professional
judgment and successful schools methodologies and also
performed certain economic analyses. In early September
2003 the governor announced formation of the "Commission
on Education Reform," which retained Standard and
Poors to conduct a separate cost study. Both of these
studies were released in the spring of 2004. In early
2004, the New York State Board of Regents also released
a cost study as part of its annual school funding proposal.
We provide summaries of all three studies in New
York Fact Sheets.
The three cost studies recommended increases
in annual funding between $2.5 billion and $9.0 billion
in pre-K–12 education spending–as much as
a 26.5 percent increase. All three developed similar
recommendations for changes in the policies and practices
of the state's school funding system and urged the state
to:
match
school resources to student needs;
adopt
a foundation-based approach;
provide
"state aid" based on enrollment, instead
of attendance;
apply
regional-cost adjustments;
direct
most of the increased funding, between 62% and 88%,
to the New York City School District and most of the
remainder to other districts educating high-need students;
and
simplify
the funding system by combining many of the almost
50 separate state aid formulas into one "operating
aid" foundation formula.
As most cost studies do, all three studies
excluded the capital costs of school facilities.
Recent Events
In its first Contract for Excellence, New York
City chose to spend $152 million on class size reduction,
$48 million on programs to increase students’
time on task, $39 million on teacher and principal quality
initiatives, $16 million on middle and high school restructuring,
and $182,000 on full-day kindergarten and prekindergarten
programs. The City was one of 55 districts around the
state to develop Contracts for Excellence relating to
the expenditure of a total of $428 million in new funding.
Other Litigations
Two additional cases, Paynter v. State and
NYCLU v. State, were filed in 1998 and 2001,
respectively, and alleged denial of the opportunity
for a sound basic education. In 1998, the NYCLU
also filed a case in federal court, Ceasar v. Pataki,
alleging violation of students' rights under Title VI.
In 2002, the federal district court for the Southern
District of New York dismissed Ceaser v. Pataki;
and the state court dismissed the NYCLU v. State
case. On June 26, 2003, the New York Court of Appeals
dismissed the Paynter case.
Useful Resources
Campaign for Fiscal Equity Website
New York Cost Study Fact Sheets
Judge Smith's dissent
in Paynter, which interprets the state Constitution's
Education Article (PDF).
Last updated: January, 2008
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