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Sloan v. Klagholtz

June 28, 2001

ANDREW SLOAN, A MINOR BY HIS GUARDIAN DUANE SLOAN; HEATHER HATHAWAY, A MINOR BY HER GUARDIAN, ROBERT STUART; HOPE HATHAWAY, A MINOR BY HER GUARDIAN, ROBERT STUART; CHRISTINA HARSHAW, A MINOR BY HER GUARDIAN, EDWARD HARSHAW; GLADYS SEPULVEDA, A MINOR BY HER GUARDIAN, GLORIA GUTIERREZ; ERIC MOREY, A MINOR BY HIS GUARDIAN, WILLIAM MOREY; AND THE BOARD OF EDUCATION OF THE CITY OF WILDWOOD, PETITIONERS-APPELLANTS,
v.
LEO F. KLAGHOLTZ, COMMISSIONER OF EDUCATION, AND NEW JERSEY DEPARTMENT OF EDUCATION, RESPONDENTS-RESPONDENTS.



On appeal from State Board of Education, Docket No. 100-4/98.

Judges Skillman, Conley and Lesemann.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

As amended September 18, 2001

Argued May 30, 2001

The Wildwood Board of Education and six students who attend schools in Wildwood appeal from a final decision of the State Board of Education which rejected their challenge to the Department of Education's determinations of the amount of state school aid Wildwood was entitled to receive for the 1997-98 and 1998-99 school years. Appellants' primary argument is that the stabilization provisions of the Comprehensive Educational Improvement and Financing Act of 1996 (CEIFA), N.J.S.A. 18A:7F-1 to -36, under which certain school districts received less than the full amount of state school aid to which they would have been entitled under the basic CEIFA funding formula, are unconstitutional. We conclude that the stabilization provisions of CEIFA are constitutional, and affirm the State Board's final decision.

The Legislature enacted CEIFA after the Supreme Court held in Abbott v. Burke, 136 N.J. 444 (1994) that the provisions of the Quality Education Act (QEA), N.J.S.A. 18A:7D-1 to -37, governing state aid for public education were unconstitutional as applied to "special needs districts," sometimes referred to as "Abbott districts." As described by the Court:

[CEIFA] determines that the educational opportunity . . . can and should be provided at a fixed per-pupil cost. The prescribed amount, referred to as the "T & E amount," purports to be the cost that is sufficient to ensure that a thorough and efficient education may be achieved in all districts. . . .

The T & E amount is neither the minimum nor the maximum amount that a school district is permitted to spend per-pupil. Like all of the predecessor statutes, CEIFA requires each school district to raise locally a portion of the per-pupil expenditure. Similar to QEA, the required local share under CEIFA is dependent on local property taxes . . . . State aid makes up the difference between the required local share and the T & E amount. . . . [Abbott v. Burke, 149 N.J. 145, 161-64 (1997) (citations omitted).]

Appellants' constitutional challenge is directed solely at the stabilization provisions of CEIFA, which were designed to temporarily moderate any decrease or increase in state school aid resulting from the transition from the QEA to the CEIFA funding formula. N.J.S.A. 18A:7F-10a provides that "the total stabilized aid for each district shall not be increased by more than the district's stabilization aid growth limit," and N.J.S.A. 18A:7F-3 sets forth a formula for calculating this limit on any increase in state aid over the amount paid in the prior year.

For the 1997-98 school year, the Department of Education determined that the amount of state aid to which Wildwood would have been entitled under the basic CEIFA funding formula was $2,445,907. However, the application of the stabilization aid growth limit reduced the actual amount of state aid to $645,851. For the 1998-99 school year, the Department calculated state aid under the basic CEIFA funding formula to be $2,955,107. However, applying the stabilization aid growth limit, the actual amount of state school aid to which Wildwood was entitled was $710,439.

In April 1998, the Wildwood Board of Education (the Board) brought an action in the Law Division seeking to compel the Department of Education to disburse the full amount of state school aid to which Wildwood would have been entitled under the basic CEIFA formula for both the 1997-98 and 1998-99 school years, without application of the stabilization aid growth limit. The trial court dismissed the complaint on the ground that the Board had failed to exhaust administrative remedies.

The Board responded by filing a petition with the Commissioner of Education, which contended that students in Wildwood were being denied a thorough and efficient education by application of the stabilization aid growth limit and sought essentially the same relief the Board had earlier sought in the Law Division. By an amended petition, six students in the district were added as parties. The Department of Education moved to dismiss the petition.

The Board then filed a complaint in the Chancery Division, seeking an order enjoining the Commissioner from taking any adjudicative action in the pending administrative matter and directing him to transfer the matter to the Office of Administrative Law (OAL) for a hearing before an Administrative Law Judge ...


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