On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1456-98.
Before Judges Coburn, Lefelt and Axelrad.
The opinion of the court was delivered by: Lefelt, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Plaintiffs, seven individual homeowners and property taxpayers and forty-two middle income school districts, sued the Governor, President of the Senate, Speaker of the Assembly, Commissioner of the Department of Education and State Treasurer, challenging the public school funding system that was established by N.J.S.A. 18A:7F-1 to -36, the Comprehensive Education Improvement and Financing Act of 1996 ("CEIFA"). Plaintiffs alleged that the funding system caused disparate tax burdens constituting violations of New Jersey's equal protection, N.J. Const. art. I, ¶1, and thorough and efficient ("T&E"), N.J. Const. art. VIII, §4, ¶1, constitutional clauses.
Plaintiffs appeal from the trial judge's orders dismissing the complaint with prejudice. The judge found the school districts did not have standing to bring this lawsuit and plaintiffs' claim was not viable under either equal protection or T&E. We agree with the trial judge and affirm.
To resolve plaintiffs' contentions, some understanding of the funding system established by CEIFA is necessary. We, therefore, explain in simplified fashion the major concepts and procedures involved in establishing State T&E aid and each district's local share, which is the portion of the school budget each district must fund from local property tax levies.
School districts in New Jersey have been operating under CEIFA since 1997. CEIFA established core curriculum content standards. The core curriculum standards provide a substantive framework detailing what children need to know in order to participate as workers and citizens in contemporary society, which is the goal of a T&E public education system. Abbott v. Burke, 100 N.J. 269, 280-81 (1985)(Abbott I). CEIFA also established a model or prototypical school district that efficiently provides the programs and services necessary for students to achieve the core curriculum standards. Thus, CEIFA established a prototypical program that the Legislature believed would satisfy the T&E constitutional requirements. The per pupil cost to implement the prototypical model, combined with the local school district's ability to contribute to that cost, is the basis, under CEIFA, for distributing State educational aid.
To implement the financing provisions, the Commissioner of Education establishes a "T&E amount" that is based on the costs necessary to provide the programs and services that will enable an elementary school student to achieve the core curriculum standards. N.J.S.A. 18A:7F-3; N.J.S.A. 18A:7F-12. The T&E amount is then weighted for the additional cost of middle and high school students and a half-day kindergarten program. Ibid. The T&E weighted amount is then multiplied by the number of students in the district to arrive at the T&E budget. N.J.S.A. 18A:7F-3; N.J.S.A. 18A:7F-13.
The Commissioner also calculates a flexible range ("T&E range") above and below the T&E amount to address numerous variables that may affect district spending, such as existing teacher contracts, teacher seniority and regional costs. N.J.S.A. 18A:7F-3; N.J.S.A. 18A:7F-12. The T&E range is applied to the T&E budget to create a maximum and minimum T&E budget. However, Abbott districts, those property poor districts under the protections established in Abbott v. Burke, 119 N.J. 287 (1990)(Abbott II), have only a maximum budget. See N.J.S.A. 18A:7F-5(b); N.J.S.A. 18A:7F-13(c).
School districts have some limited discretion in their spending and may choose to go beyond the T&E maximum budget by increasing local tax levies or if the district was previously spending below the T&E minimum budget, remaining below the T&E minimum budget so local tax levies are not increased. N.J.S.A. 18A:7F-5d(1)-(3). However, if a school district proposes a budget exceeding the maximum T&E budget, the district must publish a special notice advising the public that the district "has proposed programs and services in addition to the core curriculum content standards adopted by the State Board of Education." Id. at 5d(10). A district which submits a budget at less than its minimum T&E budget may be compelled to increase spending if the district fails to meet the core curriculum standards. N.J.S.A. 18A:7F-6a.
Notwithstanding any discretionary action taken by the district to spend above or below the T&E maximum and minimum budgets, the T&E budget is also used for calculating each district's State aid. The complex formula, to establish the local share that each district must pay toward the T&E budget, reflects the relative wealth of the school district based on aggregate property values and income. See e.g., N.J.S.A. 18A:7F- 14a & c. Once the local share percentage is established, the percentage is multiplied by the T&E budget to determine the local share of the budget that must be paid by the district. N.J.S.A. 18A:7F-14. Thus, wealthier districts pay a greater share of the T&E budget than do poorer districts. Each district's core curriculum standard aid is the T&E budget figure less the local share. N.J.S.A. 18A:7F-15.
In order to understand the standing issue, which we discuss next, we detail the precise claims plaintiffs have advanced. Plaintiffs challenge the constitutionality of CEIFA solely because they contend that the law has resulted in "wildly differing property tax burdens" for each school district. Thus, plaintiffs argue exclusively that middle income school districts are irrationally burdened by CEIFA's calculation of local share and state aid, and to be constitutional, the funding system must trend toward equalization of taxpayer burdens. Plaintiffs do not argue that the funding system results in program inadequacy or educational inequity in any district, nor do they argue that the district tax bases cannot support a T&E education.
The plaintiff school districts contend they have standing to mount this constitutional challenge "as advocates of their respective taxpaying constituencies . . . [and] as administrative bodies who make due with limited resources." Plaintiffs further assert that a "litigant who is forced to participate in an activity it believes to be unlawful surely has standing to seek relief."
To deal with plaintiffs' contentions, we first summarize the well established principles governing standing for litigants in New Jersey. "Standing refers to the plaintiff's ability or entitlement to maintain an action before the court. Courts will not entertain matters in which plaintiffs do not have sufficient legal standing." New Jersey Citizen Action v. Rivera Motel Corp., 296 N.J. Super. 402, 409 (App. Div.), appeal dismissed, 152 N.J. 361 (1997). To determine whether a party has standing, the court must determine "whether the party has a sufficient stake in and real adverseness with respect to the subject matter, and whether the party will be harmed by an unfavorable decision." In re Charter School Application of Englewood, 320 N.J. Super. 174, 222 (App. Div. 1999), aff'd, 164 N.J. 316 (2000). Further, litigants, generally, do not have standing to assert the rights of third parties. State Dep't of Environmental Protection and Energy v. Dopp, 268 N.J. Super. 165, 173 (App. Div. 1993).
We interpret the issue of standing broadly and will not limit the doctrine to the "case or controversy" requirement of the United States Constitution. Loigman v. Township Committee of the Township of Middletown, 297 N.J. Super. 287, 294-95 (App. Div. 1997). However, courts "will not render advisory opinions or function in the abstract nor will [they] entertain proceedings by plaintiffs who are 'mere intermeddlers' or are merely interlopers or strangers to the dispute." Crescent Pk. Tenants Ass'n v. Realty Eq. Corp., 58 N.J. 98, 107 (1971)(citations omitted). Rather, there must be a substantial likelihood the party will suffer some harm by an unfavorable decision. N.J. State Chamber of Commerce v. N.J. Election Law Enforcement Comm'n, 82 N.J. 57, 67 (1980).
With respect to plaintiffs' equal protection claims, courts generally recognize that political subdivisions of the State, including municipalities and local boards of education, lack the legal capacity to challenge State action based on equal protection grounds. Newark v. New Jersey, 262 U.S. 192, 196, 43 S. Ct. 539, 540, 67 L.Ed. 943, 946 (1923); McKenney v. Byrne, 82 N.J. 304, 315 n.4 (1980); In re Charter School Application of Englewood, supra, 320 N.J. Super. at 238. A local school board is accorded only those rights provided by statute. See Durgin v. Brown, 37 N.J. 189, 199 (1962). Because school districts are "creatures of the State," no school district can be the "subject of discriminatory practice by the State." Cf. Borough of Glassboro v. Byrne, 141 N.J. Super. 19, 23 (App. Div.), certif. denied, 71 N.J. 518-19 (1976).
In In re Charter School Application of Englewood, relied on by plaintiffs, several school districts challenged the Charter School Program Act of 1995, N.J.S.A. 18A:36A-1 to -18, based upon equal protection grounds. We decided the case on the merits only "because of the public interest and continuing controversy over the validity of the Act . . . ." In re Charter School Application of Englewood, supra, 320 N.J. Super. at 238. However, we noted that we "could decline to reach appellants' equal protection theories" based on the premise that "[w]hile a political subdivision may be able to challenge the validity of a statute on some other constitutional grounds, it may not claim a denial of equal protection as to itself." Ibid. Similarly, in this case, the plaintiff school districts, as creatures of the State, do not have standing to challenge CEIFA on equal protection grounds.
The school districts also claim CEIFA is unconstitutional under T&E. Plaintiffs admit "that a government agency's parens patriae interest in protecting the general public, standing alone, is generally insufficient to support standing to challenge an exercise of power by another agency of the government." Plaintiffs argue, however, that there is standing when "a ...