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Board of Education of the City of Millville v. New Jersey Dep't of Education

May 19, 2005

BOARD OF EDUCATION OF THE CITY OF MILLVILLE, CUMBERLAND COUNTY, PETITIONER-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF EDUCATION, RESPONDENT-RESPONDENT.
BOARD OF EDUCATION OF THE TOWNSHIP OF PEMBERTON, BURLINGTON COUNTY, PETITIONER-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF EDUCATION, RESPONDENT-RESPONDENT.
BOARD OF EDUCATION OF THE TOWN OF PHILLIPSBURG, WARREN COUNTY, PETITIONER-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF EDUCATION, RESPONDENT-RESPONDENT.
BOARD OF EDUCATION OF THE TOWNSHIP OF NEPTUNE, MONMOUTH COUNTY, PETITIONER-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF EDUCATION, RESPONDENT-RESPONDENT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 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).

Prior decisions of the Supreme Court in the Abbott v. Burke litigation identified the State's obligation in respect of funding for quality full-day preschools for three- and four-year-old children in Abbott districts. This consolidated appeal revisits that obligation in the context of funding decisions relating to preschool programs in the Abbott districts of Millville, Neptune, Pemberton, and Phillipsburg (Districts).

State funding for preschools comes from Early Childhood Program Aid (ECPA) and Preschool Expansion Aid (PSEA). For Fiscal Year 2004, the existing formula for ECPA funding remained in place. PSEA awards, however, were calculated for the first time by subtracting the 2001-2002 approved budget cost from the 2003-2004 approved costs. After the Department of Education (DOE) had approved the early childhood budgets submitted by the respective Districts for the 2003-2004 school year, the Districts were advised by DOE that they would receive less than the entire approved amount from the State. The differences were $835,034 for Phillipsburg, $424,569 for Pemberton, $1,763,866 for Millville, and $3,768,176 for Neptune.

The Districts appealed the DOE's 2003-2004 preschool funding to the Commissioner, who referred the matters to the Office of Administrative Law. The Administrative Law Judge (ALJ) disagreed with the State's contention that it was not obligated to provide full funding for preschool programs, which in the DOE's view could come from a combination of sources, including a local tax share. The ALJ relied, in part, on language in the Governor's annual Budget Message to support a finding that the State had committed to full funding of all preschool costs.

On September 25, 2003, the Commissioner issued his decision in the Phillipsburg appeal. He rejected the ALJ's conclusions and noted that the funding was consistent with the Appropriations Act for Fiscal Year 2004, which did not contain the same language as the Governor's Budget Message. On the same day, the Commissioner decided the Millville, Pemberton, and Neptune appeals in the same manner; that is, that the DOE may ask Districts to reallocate monies designated for other approved District programs but not needed to support those programs.

The four Districts appealed to the Appellate Division, which consolidated the matters and filed its decision on March 12, 2004. That court agreed with the Commissioner that the Supreme Court had directed him only to "ensure" that there be adequate funding for preschool programs and that local district funds could be used. By its analysis of prior Abbott decisions, the Appellate Division concluded that the Supreme Court had "chosen quite emphatic language when exclusive State funding was intended" and that in respect of preschool programs, the Court simply imposed an obligation on the Commissioner to "ensure" that such funding is provided.

The Appellate Division also agreed with the Commissioner that the Fiscal Year 2004 Appropriations Act eliminated any promise in the Governor's Budget Message regarding the funding of preschool programs. The Court granted the Districts' consolidated petition for certification.

HELD: The State must ensure that full funding is available for approved preschool programs; however, the DOE may require the Abbott districts to reallocate monies from other district budget accounts to make up preschool program shortfalls. The reallocated monies will be replaced by the DOE through supplemental funding unless the

DOE can demonstrate that the monies are not needed by the Districts.

1. Prior Court decisions in the Abbott litigation have distinguished between the State's obligations for parity and preschool funding. A requirement that the Commissioner ensure adequate preschool funding is not the same as a requirement that the Commissioner provide that funding. The Commissioner has clearly and expressly accepted the responsibility to restore any district shortfalls unless he is able to demonstrate that additional funding is unnecessary because the district has sufficient resources to cover all its program needs. It matters little whether the monies initially reallocated by the districts are drawn from formula aids, local levies, or savings realized through efficiencies. The key is that the reallocation would not undermine or weaken either the school's foundational education program or already existing supplemental programs. (pp. 17-22)

2. In an audit of the Abbott district preschool programs covering July 1, 2001, to February 28, 2003, the State Auditor reported that because of inadequate reporting the actual costs of preschool programs could not be determined and that enrollment projections used by the Districts were overstated. The DOE's response to the audit indicated that a procedure for reporting actual preschool program costs for comparison to budgeted amounts had been established. In the absence of any statement from the parties to the contrary, the Court assumes that the Auditor's recommended controls are in place. (See the Court's companion decision in Board of Education of City of Passaic v. New Jersey Department of Education (A-3-04).) (pp. 22-24)

3. The Court emphasizes that in respect of any reallocation of resources by a district to cover the cost of shortfalls created by formula-driven funding, the burden is on the Commissioner to prove that the reallocation will not compromise any of the district's educational programs. (p. 24)

4. Although the DOE argued below that these matters were not ripe for adjudication because decisions about additional aid had not yet been made, the cases proceeded on the "global" issue of the State's funding scheme. Based on the Commissioner's representation regarding supplemental funding, the Court upholds the State's funding scheme. It cautions, however, that the scheme is both cumbersome and time-consuming, and it urges the DOE to implement a method of allocation aligned in the first instance with the districts' approved budgets. (pp. 24-25; 3-4)

The judgment of the Appellate Division is AFFIRMED.

JUSTICES LONG, LaVECCHIA, ALBIN, WALLACE, and RIVERA-SOTO and Appellate Division JUDGE STERN (t/a) join in CHIEF JUSTICE PORITZ's opinion. JUSTICE ZAZZALI did not participate.

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

Argued October 27, 2004

In these consolidated cases certain Abbott districts*fn1 raise the question whether the State is legally obligated to fund with state appropriations the Districts' preschool programs for the 2003-2004 school year. More specifically, after the Department of Education (DOE or Department) had approved the early childhood budgets submitted by the Boards of Education of Phillipsburg, Millville, Pemberton, and Neptune (the Districts) for 2003-2004, the Districts were advised that they would receive less than the entire approved amount from the State. During the course of these proceedings, however, the Commissioner of the DOE (Commissioner) has represented to the Court that any monies reallocated from other District resources to make up the preschool program shortfalls will be replaced by the DOE through supplemental funding unless the DOE can demonstrate that those monies are not needed by the Districts. Based on that representation, we uphold the State's funding scheme. We caution, however, that this scheme is both cumbersome and time-consuming and urge the DOE to implement a method of allocation aligned in the first instance with the Districts' approved budgets.

I.

A.

In Abbott v. Burke, 153 N.J. 480, 508 (1998) (Abbott V), this Court required Abbott districts to provide half-day preschool programs for three- and four-year-old children, and directed the Commissioner to "ensure that such programs are adequately funded." Not long after Abbott V issued, however, plaintiffs returned to the Court complaining "that the Commissioner ha[d] repudiated his promise to provide [a] quality preschool education . . . in the Abbott districts." 163 N.J. 95, 100 (2000) (Abbott VI). We sought in Abbott VI to clarify our intent in respect of quality preschool programming, including among other things, certain funding issues raised by plaintiffs. Id. at 104, 117-18. In response to plaintiffs' concerns vis-à-vis adequate funding for preschool facilities, we reaffirmed the approach taken in ...


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