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In re Matter of the Petition for Authorization to Conduct a Referendum on the Withdrawal of North Haledon School District from the Passaic County Manchester Regional High School District

August 11, 2004

IN THE MATTER OF THE PETITION FOR AUTHORIZATION TO CONDUCT A REFERENDUM ON THE WITHDRAWAL OF NORTH HALEDON SCHOOL DISTRICT FROM THE PASSAIC COUNTY MANCHESTER REGIONAL HIGH SCHOOL DISTRICT
NORTH HALEDON BOARD OF EDUCATION AND BOROUGH OF NORTH HALEDON, PLAINTIFFS-APPELLANTS,
v.
PASSAIC COUNTY MANCHESTER REGIONAL HIGH SCHOOL DISTRICT, DEFENDANT-RESPONDENT, AND RONNI NOCHIMSON, PASSAIC COUNTY CLERK; WILLIAM LIBRERA, COMMISSIONER OF EDUCATION; AND MARIA NUCCETELLI, PASSAIC COUNTY SUPERINTENDENT OF SCHOOLS, DEFENDANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 363 N.J. Super. 130 (2003).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

This appeal involves issues emanating from the desire of the Borough of North Haledon to withdraw from the Passaic County Manchester Regional High School District. The other members of the District are the Boroughs of Haledon and Prospect Park. In 1957, the three boroughs formed the Regional High School District. The high school opened its doors in 1960.

From 1957 to 1975, the costs of operating the Regional District were apportioned among the three boroughs on a"per pupil" basis. In 1975, the statute prescribing the method of apportioning costs among constituent districts was amended. With the amendment, costs began to be allocated based on the equalized valuation of the property in each district. Because North Haledon has a higher property tax base than either Haledon or Prospect Park, its share of the operating costs increased dramatically and disproportionately.

In 1993, the statute was amended again to allow the costs of a regional district to be apportioned on a per pupil basis, an equalized valuation basis, or some combination of both if all participating districts agreed. In 1995, a majority of North Haledon's voters approved a return to the"per pupil" basis. The question failed to receive a majority vote in either Haledon or Prospect Park, so no change was made to the allocation mechanism.

In 1998, North Haledon decided to pursue"withdrawal" from the Regional District. On November 8, 2001, North Haledon presented the Commissioner of Education with a formal petition for withdrawal. Both Haledon and Prospect Park opposed the petition. The Commissioner referred the petition to a statutory Board of Review, which consists of the Commissioner, a member of the State Board of Education, the State Treasurer, and the Director of the Division of Local Government Services in the Department of Community Affairs.

The financial data demonstrated that over time, the per pupil burden on North Haledon had increased significantly, to $18,400 in 2001. For that year the per pupil figures for Haledon and Prospect Park, respectively, were $5,300 and $3,400. The authors of a feasibility study commissioned by North Haledon concluded that the Borough could realize significant cost savings by withdrawing from the Regional District and entering into a new sending-and-receiving agreement with a different district. (North Haledon's new partner was to be Midland Park.)

At the same time the financial data were changing, significant alterations were occurring in the demographics of the Regional District. In 1991-1992, the overall Regional District student body was 81% white. By 2001-2002, that figure had dropped to 51%. Further, minority enrollment had increased substantially over the same period. In 2001-2002, Hispanics accounted for over 36% of the student body, up from approximately 13% in 1991-1992. The enrollment of Black students increased from 3.18% to 7.59% during the same period.

The student population changes in the Regional District reflected the demographic shifts in the three boroughs. As part of the analysis of the demographics, it was estimated that the 51% figure for white students would decrease to 38% by 2005 if North Haledon were allowed to begin a three-year phase-out of students in 2001-2002.

The Board of Review unanimously granted North Haledon's petition. The district superintendent was directed to fix a date and time for a special school election on the question of withdrawal. North Haledon objected to the language proposed by the superintendent's for the ballot question and the"interpretive statement" and sought redress before the Commissioner of Education and in the Law Division. The latter concluded that the Commissioner had the power to revise the language, and he exercised that power. Subsequently, the North Haledon voters approved the withdrawal question. The Commissioner established July 1, 2003, as the effective withdrawal date.

The Regional Board, Haledon, and Prospect Park appealed the Board of Review's decision and the Regional Board appealed the Law Division's decision. The Appellate Division consolidated the appeals and reversed the Board of Review's decision. That action rendered the appeal from the Law Division moot.

The Court granted the petition for certification filed by the Borough of North Haledon and its Board of Education.

HELD In this case, withdrawal from the Manchester Regional School District by North Haledon will deny to both the students remaining at the Regional District and the students from North Haledon the benefits of the educational opportunity offered by a diverse student body. The Board of Review's decision permitting a referendum on the question was erroneous as a matter of law. Further, because North Haledon is being compelled to remain in the Regional District, the Commissioner of Education, in consultation with the constituent municipalities, is to develop an equitable cost apportionment scheme among and between Haledon, Prospect Park, and North Haledon.

1. Based on established case law, the Appellate Division properly concluded that the Commissioner and the State Board of Education must exercise their powers to prevent racial imbalance in the schools of this State and to refrain from actions that exacerbate racial imbalance. (pp. 15-19)

2. Although decisions of the Board of Review are entitled to broad deference by the courts, the judiciary may intervene in those rare instances -- such as this case -- in which an agency action is clearly inconsistent with its statutory mission or another State policy. (pp. 19-21)

3. Long before Brown v. Board of Education of Topeka, New Jersey had rejected segregation in the public schools of this State, by statute and by case law. (An 1881 statute prohibited the exclusion of any child from a public school based on his"religion, nationality or color." That policy became part of the 1947 Constitution.) Students that attend racially imbalanced schools are denied the benefits that come from learning and associating with students of different backgrounds, races, and cultures. Although we have achieved some understanding of the importance of diversity, we are losing ground in the real world. Currently, New Jersey ranks fifth in the nation in the percentage of black students attending 90-100% minority schools, and fourth in the nation in respect of Hispanic students. (pp. 21-25)

4. In reviewing the Board's decision to permit a referendum on North Haledon's petition for withdrawal, the Court finds that the constitutional imperative to prevent segregation in our public schools applies as well to the Board acting within the scope of its authority under the statute that delineates the reasons why the Board may reject a petition. The demographic trends at work in this case leave little room for doubt as to the unfortunate future if suitable action is not taken in a timely fashion. The Board, in effect, decided that North Haledon's withdrawal did not really matter because the shifting demographics in Haledon and Prospect Park made the decline in the percentage of white students in the Regional District inevitable. That decision is difficult to comprehend. (pp. 25-30)

5. Not every action that reduces the percentage of white students in a school district necessarily implicates the State's policy against segregation in the public schools. In this case, however, North Haledon's withdrawal will accelerate the demographic trend. The Board of Review should have considered the ameliorative effect of denying North Haledon's petition on the racial balance at the Regional District. The Board also failed to consider the multiracial and multi-cultural opportunities that would have been lost to the students from North Haledon on its withdrawal. (pp. 30-33)

6. There is no suggestion in the record that North Haledon was racially motivated in petitioning for withdrawal; rather the Borough was justifiably concerned about the disproportional tax burden (over $2.5 million in the 2001-2002 school year) carried by its citizens in relation to the other constituent municipalities. In this case, the constitutional imperative to address racial segregation requires the Board to compel North Haledon to remain in the Regional District despite the tax burden on its citizens. However, when a constituent municipality is compelled to participate in a Regional District, the Commissioner may determine cost allocations among and between the members of the district. The Court therefore remands the matter to the Commissioner to develop, in consultation with the three Boroughs, an equitable cost apportionment scheme for the Regional District.

The judgment of the Appellate Division is AFFIRMED, as MODIFIED, and the matter is REMANDED to the Commissioner of Education for further proceedings.

JUSTICES VERNIERO, LaVECCHIA, ZAZZALI, ALBIN, and WALLACE join in CHIEF JUSTICE PORITZ's opinion. JUSTICE LONG did not participate.

The opinion of the court was delivered by: Chief Justice Poritz

Argued January 5, 2004

In this consolidated action, appellants below*fn1 challenged a decision of a Board of Review, duly constituted pursuant to N.J.S.A. 18A:13-56, that authorized a referendum to determine whether the Borough of North Haledon should be allowed to withdraw from the Passaic County Manchester Regional High School District. The crux of their argument was that the Board failed properly to assess the impact of withdrawal on the racial makeup of the student body at the high school operated by the Regional District. The Appellate Division held that a nine percent decrease in the white student population was not a "negligible impact" and reversed the Board of Review. In the Matter of the Petition for Authorization to Conduct a Referendum on the Withdrawal of N. Haledon Sch. Dist. from the Passaic County Manchester Reg'l High Sch. Dist. (North Haledon II), 363 N.J. Super. 130, 139 (2003). We granted certification, 177 N.J. 573 (2003), and now affirm and modify the judgment of the Appellate Division.

I.

In 1955, the Boroughs of North Haledon, Haledon, and Prospect Park commissioned a study to examine the feasibility of building a limited purpose regional high school. Two years later in 1957, the voters approved formation of the Passaic County Manchester Regional High School District (Regional District) to provide secondary education for students from the three boroughs. As a result, Manchester Regional High School (Manchester Regional) opened its doors in July 1960 on a campus located in Haledon Borough. North Haledon, Haledon, and Prospect Park (collectively, the constituent districts) continued to maintain their own pre-kindergarten through eighth grade school systems.

Tension among the constituent districts has been building for some time. In fact, the impetus for North Haledon's effort to withdraw from the Regional District can be traced to a 1975 amendment to N.J.S.A. 18A:13-23, the statute prescribing the method of apportioning regional school district costs among constituent districts. L. 1975, c. 67, § 29. From the time of the formation in 1957 until 1975, the operating costs were apportioned on a per pupil basis. The 1975 amendment, however, required regional districts to apportion all school costs based on the equalized valuation of the property situated in each district, with the consequence that a larger percentage of a regional district's costs was shifted to municipalities with higher property values. In the Regional District, the constituent municipality most affected by that shift was North Haledon. Because North Haledon has a higher property tax base than either Haledon or Prospect Park, its share of the operating costs increased dramatically and disproportionately compared to the other two districts.

The Legislature amended N.J.S.A. 18A:13-23 again in 1993 to allow the operating costs of a regional district to be apportioned on a per pupil basis, equalized valuation basis, or some combination of the two. L. 1993, c. 67, § 1. In response, North Haledon pursued a referendum that would, if passed, return the Regional District to a per pupil apportionment scheme. Subsequently, on April 18, 1995, a majority of the voters in the Regional District approved a return to the per pupil method; the statute, however, requires approval both by an overall majority district-wide, and "by the voters of each municipality." N.J.S.A. 18A:13-23 (emphasis added). The question failed to garner majorities in Haledon and Prospect Park and was therefore deemed rejected. Although North Haledon's subsequent challenge to the referendum result was unsuccessful, the litigation revealed that there had been a substantial impact on North Haledon because of the 1975 shift to an equalized valuation scheme. Borough of N. Haledon v. Bd. of Educ. of Manchester Reg'l High Sch. Dist. (North Haledon I), 305 N.J. Super. 19, 24 (App. Div. 1997), certif. denied, 152 N.J. 363 (1998). By 1994, North Haledon was responsible for over half the district's operating costs, or just over $12,700 per pupil, even though the Borough provided only slightly more than twenty-eight percent of the student body at Manchester Regional. Id. at 24 n.2. By contrast, Haledon and Prospect Park were paying only $5,708 and $3,875 per pupil respectively. Ibid.

An ad hoc committee was formed in 1998 by the North Haledon Borough Council to assess what action could be taken to remedy that growing disparity. After examining the possibilities of withdrawing from or dissolving the Regional District, the committee ultimately recommended that North Haledon pursue withdrawal. Because a petition to dissolve a regional district can only be approved when a majority of the constituent districts join in that effort, N.J.S.A. 18A:13-51, and because Haledon and Prospect Park had no interest in dissolution, withdrawal appeared the only feasible remedy.

On the committee's recommendation, the North Haledon Borough Council and North Haledon Board of Education initiated the withdrawal process by passing resolutions requesting Passaic County Superintendent of Schools, Dr. Maria Nuccetelli, to investigate the advisability of the withdrawal of North Haledon from the Regional District. N.J.S.A. 18A:13-51 to -52; see In re Distribution of Liquid Assets Upon Dissolution of the Union County Reg'l High Sch. Dist. No. 1 (Union County II), 168 N.J. 1, 4 (2001) (discussing purpose of superintendent's advisability report). An advisability report is intended to give the constituent municipalities and the local and regional boards "financial, educational and other information... to form an intelligent judgment as to the advisability of the proposed withdrawal... and the effect thereof upon the educational and financial condition of the withdrawing district and the regional ...


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