On appeal from The State Board of Education.
Seidman, Michels and Devine.
This appeal challenges the decisions of the Commissioner of Education and the State Board of Education reducing the amount by which the Board of Education of the East Windsor Regional School District (board) sought to increase its 1979-80 budget above the permissible rate of increase imposed by N.J.S.A. 18A:7A-25. The board contends that its request should have been granted in full in order to enable it to carry out the constitutional mandate of a thorough and efficient system of education; that it was deprived of a judicial-type hearing; that the administrative action was arbitrary, and that the requested cap waiver should have been permitted so as to "let the people decide whether or not the local board is right in its assessments of what is needed to provide a thorough and efficient system."
On January 15, 1979 the board submitted its request to the Commissioner, pursuant to N.J.S.A. 18A:7A-25, for a budget cap override in the amount of $575,779. The annexed Cap Review Fact Sheet, prepared in conformity to the procedural guide promulgated by the State Department of Education, listed 18 programs or projects that would have to be eliminated or reduced if the override was not granted, and set forth the goal or objective of the program or project, the cost allocated to each, the estimated number of students affected, the reason for selecting the program for elimination, and the order of priority. Also appended to the request was a Cap Review Summary made by the county superintendent, in which 12 of the enumerated projects, totalling $400,444, were recommended for cap waiver approval. The others, totalling $176,723, were not recommended for approval. In all but one instance ($10,000 allocated to the position of assistant principal), the county superintendent gave a concise explanation for the recommendation.
The Commissioner of Education, by letter dated February 27, 1979, informed the board that a cap increase of $321,109 had been approved. He reached this amount by eliminating one of the programs approved by the county superintendent and reducing the amounts allocated to two others. No change was made with respect to the programs not recommended for approval. The board appealed the Commissioner's determination to the State Board on March 6, 1979. The State Board issued its decision on March 15, 1979. It restored the two amounts that had been reduced by the Commissioner, but otherwise left unchanged the action taken by the Commissioner. Thus, by way of summary, of the total requested amount of $577,168, $176,723 was disapproved as recommended by the county superintendent, and, of the $400,444 recommended for approval by the county superintendent, only $6,597 was rejected. Following the action taken by the State Board, the local board requested "an amplification of any prior statement, opinion, or memorandum made in writing or orally and recorded," or "a written opinion stating findings of fact and conclusions of law." The State Board denied the request.
We address first the board's contention that its cap waiver application constituted a "contested case" within the meaning of the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. , and that it was therefore entitled to an agency hearing. The board points to the wording of N.J.S.A. 18A:17A-25, which empowers the Commissioner to approve the request of a local board for a greater increase, "having adjudged" that a reallocation of resources or other action taken within the permissible level of spending would be insufficient or that an increased enrollment may reasonably be anticipated in the district. We find the argument unpersuasive. The type of proceeding here involved is plainly legislative in nature, and not quasi -judicial. The proceedings here were not a contested case or one of an adversary nature. The agency was not under a duty to consider evidence and apply the law to the facts as
found, thereby exercising a discretion or judgment judicial in nature on evidentiary facts. See Handlon v. Belleville , 4 N.J. 99, 104 (1950). The Commissioner was not called upon to evaluate evidence. There was no formal testimony to be taken, no witnesses to be heard and no credibility to be judged. Cf. In re Modern Indus. Waste Service Appeal , 153 N.J. Super. 232, 240 (App.Div.1977). Instead, he was simply required to apply his expertise to a set of facts and figures and determine whether the cap waiver requested by the board was necessary, in whole or in part, to enable the school district to provide a thorough and efficient education to its students. The board was afforded full opportunity to submit its request accompanied by supporting data.
The final decision of an administrative agency will not be upset in the absence of a showing that it was arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence, or that it violated legislative policies express or implied in the relevant statute. Campbell v. Civil Service Dept. , 39 N.J. 556, 562 (1963). However, a determination of whether the agency's decision was arbitrary, or not in accord with legislative policy, cannot be made in the absence of a statement of reasons for the decision. This is so because courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review. In re Plainfield-Union Water Co. , 11 N.J. 382, 396 (1953). But this does not require detailed findings of fact; such findings are required only in contested cases where the matter is of an inherently judicial or quasi-judicial nature, or where otherwise required by statute. See In re Modern Indus. Waste Services Appeal, supra; In re Matter of Public Hearings , 142 N.J. Super. 136, 142 (App.Div.1976).
In this case neither the Commissioner nor the State Board gave specific reasons for the action taken. Nevertheless, it is our view that a remand to remedy that deficiency is not
required for a proper review by us of the decisions rendered. The Cap Review Procedures Guide issued by the State Department of Education requires the county superintendent initially to review the local board's budget cap work sheet and cap review fact sheet for accuracy and completeness and "make specific written recommendations to the Commissioner concerning the district's cap waiver request." The Commissioner thereafter reviews the material ...