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Abbott v. Burke

Decided: May 11, 1984.

RAYMOND ARTHUR ABBOTT, A MINOR, BY HIS GUARDIAN AD LITEM, FRANCES ABBOTT; ARLENE FIGUEROA, FRANCES FIGUEROA, HECTOR FIGUEROA, ORLANDO FIGUEROA, AND VIVIAN FIGUEROA, MINORS, BY THEIR GUARDIAN AD LITEM, BLANCA FIGUEROA; MICHAEL HADLEY, A MINOR, BY HIS GUARDIAN AD LITEM, LOLA MOORE; HENRY STEVENS, JR., A MINOR, BY HIS GUARDIAN AD LITEM, HENRY STEVENS, SR.; CAROLINE JAMES AND JERMAINE JAMES, MINORS, BY THEIR GUARDIAN AD LITEM, MATTIE JAMES; DORIAN WAITERS AND KHUDAYJA WAITERS, MINORS, BY THEIR GUARDIAN AD LITEM, LYNN WAITERS; CRISTINA KNOWLES, DANIEL KNOWLES AND GUY KNOWLES, JR., MINORS, BY THEIR GUARDIAN AD LITEM, GUY KNOWLES, SR.; LIANA DIAZ, A MINOR, BY HER GUARDIAN AD LITEM, KYCUKA DIAZ; AISHA HARGROVE AND ZAKIA HARGROVE, MINORS, BY THEIR GUARDIAN AD LITEM, PATRICIA WATSON; AND LAMAR STEPHENS AND LESLIE STEPHENS, MINORS, BY THEIR GUARDIAN AD LITEM, EDDIE STEPHENS, PLAINTIFFS-APPELLANTS,
v.
FRED G. BURKE, COMMISSIONER OF EDUCATION; EDWARD G. HOFGESANG, NEW JERSEY DIRECTOR OF BUDGET AND ACCOUNTING; CLIFFORD A. GOLDMAN, NEW JERSEY STATE TREASURER; AND NEW JERSEY STATE BOARD OF EDUCATION, DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Chancery Division, Mercer County.

Antell, Joelson and McElroy. The Opinion of the Court was delivered by, Antell, P.J.A.D.

Antell

The complaint filed herein February 5, 1981 seeks judgment declaring that the finance provisions of the New Jersey statutory system of elementary and secondary school public education violate the Education Clause of the New Jersey Constitution and the Equal Protection Clauses of the New Jersey and United States Constitutions.

Plaintiffs are a number of children who assert that because they reside and attend schools in the school districts of Camden, East Orange, Irvington and Jersey City they do not enjoy the same educational opportunity as students in districts with greater tax revenues. They bring this action on their own behalf and on behalf of a class of all other children similarly situated. Defendants are New Jersey state officials responsible for administering the finance provisions of the public education laws and assuring that a thorough and efficient education is provided in all public school districts.

After extensive discovery a trial date was scheduled for December 12, 1983. Defendants moved for summary judgment September 30, 1983 and after argument on November 15, 1983 the complaint was dismissed by order dated November 28, 1983 for failure to exhaust administrative remedies. Plaintiffs appeal.

Although not recited in the order under review, the trial court noted that because the Supreme Court has determined the statute to be "in all respects constitutional on its face," Robinson v. Cahill, 69 N.J. 449, 467 (1976) ("Robinson V"), plaintiffs' challenge to the facial validity of the present school finance laws was barred. While plaintiffs may be correct in arguing that the determination by our highest court in Robinson V does not foreclose a litigant from raising the question of facial constitutionality anew, it is clear that neither the Chancery Division nor we, as an intermediate appellate court, can grant the requested relief.

In Robinson, et al. v. Cahill, et al., 62 N.J. 473, cert. den sub. nom Dickey v. Robinson, 414 U.S. 976, 945 S. Ct. 292, 38 L. Ed. 2d 219 (1973) ("Robinson I"), it was held that the New Jersey statutes then governing the financing of public elementary and secondary schools failed to carry out the State's obligation to provide a thorough and efficient education, N.J.S.A. Const. 1947, Art. VIII, ยง 4, par. 1. This determination was grounded in the finding that the system's substantial reliance on local property tax revenues produced gross disparities in the financial resources available for education among the different school districts within the state. On September 29, 1975 the legislature responded by enacting the Public School Education Act of 1975, c. 212, L. 1975, N.J.S.A. 18A:7A-1 et seq. (hereinafter "the Act"). After oral argument on November 24, 1975 addressed to the facial validity of the law, Robinson V was decided, rejecting the facial constitutional challenges.

It is important to this controversy to note that Robinson V was decided without any prior lower court determination and without the benefit of an evidential record.

In substance, Robinson V held that the new statute corrected the constitutional infirmities found in Robinson I, noting in particular that it provided state financial aid for categorical programs, transportation costs and equalization support for current expenses, and also vested in the Commissioner of Education administrative powers and the duty to monitor and correct deficiencies in education, including those resulting from inadequate funding. Observing that the new financial supports reflected legislative recognition that the educational needs of the school districts could not be met by exclusive reliance upon local taxation, the Court stated that "[w]e cannot say that under these circumstances the dollar input per pupil . . . will not be sufficient to offer each pupil an equal educational opportunity as required by the Constitution." 69 N.J. at 464. It added the following:

We do foresee a pattern of perhaps quite considerable change coming about as the procedures of this new legislation are brought to bear upon the system as a whole. How much state aid will be needed in any particular district at any particular time to supplement the local levy is something we cannot forecast. We must assume, as we do, that the state aid provisions in the Act before us represent the Legislature's best effort to prophesy as to what this need will be. [ Id. at 464-465].

We are satisfied that in deciding Robinson V the Supreme Court intended nothing beyond an adjudication that the legislation was facially valid. As it said, "[o]nly actual experience with the Act will demonstrate whether there is further need for adjustment or modification." Id. at 467.

By holding that the complaint herein was appropriate for administrative action the trial judge envisioned the following progression of issues:

We discern from the foregoing remarks a fundamental misconception of the plaintiffs' claim to relief. The trial court either mistakenly believed that the complaint was addressed to the correction of inadequacies in the programs, services and facilities for education in the four districts or mistakenly conceived that the inquiry must be limited to those grounds alone, considering financial constrictions only to the extent that they were correlated to specific educational inadequacies. On this basis it was concluded that plaintiffs would first have to seek the administrative remedy which the trial court deemed available under N.J.S.A. 18A:7A-14 and 15, vesting broad investigative and supervisory authority in the Commissioner of Education, and under N.J.S.A. 18A:6-9, through which the Commissioner exercises jurisdiction over all controversies and disputes under the school laws. This holding, as we say, rested on the court's faulty premise that deficiencies in services, facilities and programs of education were the subject of the complaint. The complaint does not address those deficiencies as a basis for relief; it focuses solely and relentlessly upon the state aid provisions of the Act, alleging that these have produced disparities in financial resources available to the various school districts and consequential inequalities of educational opportunity even greater than those found in Robinson I. Moreover, the remedy sought, under the same principles and methodology as those applied in Robinson I, is an adjudication that the provisions aforesaid are unconstitutional in operation.

Only the Superior Court, not the Commissioner, can consider plaintiffs' claim or grant their requested remedy. While many considerations other than financial are relevant to a thorough and efficient education,

Thus, although defendants are free to demonstrate that equality of opportunity for a thorough and efficient education is nevertheless afforded because "of such other factors," Robinson V, 69 N.J. at 462, N.J.S.A. 18A:7A-5, it is clear that gross disparity in financial resources alone of the kind delineated in Robinson I could render the Act constitutionally infirm.

The complaint is a lengthy, complex document which, although sometimes obscure, appears to present a factual basis for the conclusion urged that in application the Act has actually magnified the very evils it was enacted to correct. Its central theme is that gross disparities in education resources continue and, indeed, have broadened during the years between 1975-76 and 1980-81. The asserted reason for this is that the law still depends heavily upon local tax revenues for school financing. While the complaint incidentally cites consequential effects in poorer districts such as high pupil-teacher ratios, dilapidated physical plants, lower basic skills test scores, less experienced teachers, etc., these are not posited as the subject of relief. What plaintiffs ask is the opportunity to provide the factually operative foundation notably lacking in Robinson V for a constitutional analysis of the finance provisions of the statute.

The nature of the complaint and its inappropriateness for administrative attention is best understood in terms of its challenge to the state aid equalization formula, N.J.S.A. 18A:7A-18. It is here, plaintiffs say, that the mischief resides. To appreciate their contention it is first necessary to examine how the formula works.

In determining the amount of equalization aid to be received by school districts the district's equalized assessed property valuation as determined by the State Division of Taxation is

divided by the resident pupil population to establish the district per pupil valuation. This figure is then used to compare each district's affluence against the statutory "guaranteed valuation per pupil." To arrive at the guaranteed valuation per pupil the total equalized property valuations in the state divided by the total number of pupils in the state (the state average valuation per pupil) is multiplied by 1.344. Thus, the guaranteed valuation per pupil is slightly more than 1/3 greater than the state average valuation per pupil. The "State support ratio" is then calculated by determining the percent by which the district equalized valuation per pupil falls short of the guaranteed valuation per pupil.

Up to this point the formula seems designed to provide greater aid to those school districts whose per pupil valuations compare least favorably to the guaranteed valuation per pupil and less aid to districts with per pupil valuations closest to the guaranteed valuation. Plaintiffs' attack, however, closes in on the next step in the calculation. The State support ratio is now translated into dollar support by applying it to the district's net current expense budget for the previous year.*fn1 Thus, if the district's equalized valuation per pupil is 20% less than the guaranteed valuation per pupil, the state equalization support

would consist of 20% of the net current expense budget for the previous year. If we correctly understand the theory of the complaint, supported by its factual allegations, it is that the larger the net current expense budget the greater the state aid, and its underlying proposition is that a significant correlation exists between high net current expense budgets and high per pupil property values. Its necessary converse is that low net current expense budgets and low per pupil valuations also go hand in hand. Broadly stated, therefore, the net current expense budget is perceived as the link between taxable property values and financial resources for education with the result, plaintiffs contend, that the equalization formula favors the wealthier districts over the poorer.*fn2

Two factors, plaintiffs maintain, operate to assure a steadily widening financial gulf between wealthy and poor districts. The first is that the State's support ratio is applied only to the net current expense budget of the previous, not the current, year. This, they claim, discourages poorer districts from increasing their budgets since they must first finance the increases for a full year out of local revenues before they become eligible for added equalization support. The other factor is that equalization support is included in the net current expense budget, thus providing a mechanism to enlarge the base for calculating equalization aid to wealthier districts more rapidly than for poorer districts. For example, wealthier districts receiving high equalization support in 1982 because of a high

net current expense budget in 1981 which was financed by local tax revenues are able to accelerate their budget growth for purposes of 1983 assistance faster than poor districts because of the greater equalization support received in 1982. With the budgets being increased at this greater rate due to larger equalization support payments the wealthier districts enjoy a built-in assurance of disproportionally greater increases in their support eligibility. The poorer districts, on the other hand, which receive less in the way of equalization support because of their already lower budget base, increase their support entitlements at a proportionally slower rate. Thus, plaintiffs would argue on the basis of facts which they propose to prove, under the equalization formula a continued and accelerated widening of the gap between wealthy and poor school districts is unavoidable.*fn3

Plaintiffs include among their allegations claims that during the base period measured between 1975-76 and 1980-81 further disequalization of property valuation per pupil between the wealthier and poorer districts has taken place which they say is demonstrated by the following chart:

Equalized Property

Valuation per Pupil

Districts 1975-76 1979-80 Percent Change

Camden $20,401 $23,759 %

Ocean City 287,260 522,928

East Orange 35,999 35,170 - 2

Livingston 88,073 154,681

Irvington 50,813 55,24 8 9

Millburn 144,851 252,444

Jersey City 33,661 39,514

Paramus Boro 129,889 233,279

They claim that the following chart of average equalized property valuation per pupil demonstrates ...


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