On appeal from the State Board of Education, OAL Docket Nos. EDU 2637-00, EDU 2638-00, EDU 2639-00, EDU 2640-00, EDU 2641-00, EDU 2642-00, EDU 2643-00, EDU 2644-00, EDU 2645-00, EDU 2646-00, EDU 2649-00, EDU 2650-00, EDU 2651-00, EDU 2652-00, EDU 2654-00, EDU 2655-00, and EDU 2656-00.
The opinion of the court was delivered by: Parrillo, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo, Graves and Alvarez.
Eight rural and poor school districts appeal from a final decision of the New Jersey State Board of Education (Board) which found their circumstances mirrored those of numerous poor, urban school districts presently receiving remedial relief in accordance with a series of Supreme Court decisions, commonly known as the Abbott decisions, yet failed to require that same remedial relief for appellants. Instead, the Board instituted a process to systematically remedy the deficiencies it found existed in the implementation of the current school funding statute, the Comprehensive Educational Improvement and Financing Act of 1996, N.J.S.A. 18A:7F-1 to -42 (CEIFA). On appeal, appellants claim that CEIFA is unconstitutional as applied to them, and that they are entitled to immediate, remedial relief.
Some background is in order. Our constitution requires that "[t]he Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all the children in the State between the ages of five and eighteen years." N.J. Const. art. VIII, § 4, ¶ 1. New Jersey's system of financing public education was first challenged in 1970 in a lawsuit initiated on behalf of children residing in property-poor urban school districts. See Robinson v. Cahill, 118 N.J. Super. 223 (Law Div. 1972), aff'd in part, modified in part, 62 N.J. 473, cert. denied, 414 U.S. 976, 94 S.Ct. 292, 38 L.Ed. 2d 219 (1973). Since then, there have been a series of Supreme Court decisions identifying those school districts meeting the dual criteria of educational failure over (1) an extended period of time and (2) poverty, Abbott v. Burke, 119 N.J. 287, 385-86 (1990) (Abbott II); Abbott v. Burke, 149 N.J. 145, 155 n.3 (1997) (Abbott IV); Abbott v. Burke, 153 N.J. 480 (1998) (Abbott V), and four major legislative efforts to establish a funding system that fulfills the constitutional mandate of a "thorough and efficient" education for these districts.
To this end, in 1974, the New Jersey Department of Education (Department) classified the State's school districts by socio-economic status. Abbott IV, supra, 149 N.J. at 155 n. 3 (citing Abbott II, supra, 119 N.J. at 384-85). Ten groups, known as District Factor Groups (DFGs), were established, designated as DFG A through J. Ibid. (citing Abbott II, supra, 119 N.J. at 385). "A" districts had the lowest socio-economic status, while "J" districts had the highest. Ibid. The Department also identified "urban districts;" in 1990, there were fifty-six such districts. Ibid. (citing Abbott II, supra, 119 N.J. at 386). Following the Supreme Court's decision in Abbott II, thirty urban districts with the strongest characteristics of poverty and need, and located in DFGs A and B, were denominated as "special needs districts" (SNDs) in the Quality Education Act of 1990, N.J.S.A. 18A:7D-1 to -37 (repealed 1996) (QEA), Abbott IV, supra, 149 N.J. at 155 n.3, 157, and later categorized as "Abbott districts" under CEIFA, N.J.S.A. 18A:7F-3, which replaced the QEA.*fn1
The QEA had itself replaced the guaranteed tax base approach of the Public School Education Act of 1975, N.J.S.A. 18A:7A-1 to -60 (partially repealed 1990), held unconstitutional in Abbott II as applied to the poorer, urban districts, with a foundation plan intended to reduce disparities in per pupil spending between poor and wealthy districts by generating state aid based on both the property wealth of a district and the personal income of its residents. Abbott II, supra, 119 N.J. at 385-89. Under the QEA, as noted, thirty urban school districts were identified as having "special needs" and were afforded a higher foundation amount by virtue of that status. Abbott IV, supra, 149 N.J. at 157. The ability of the district to support its "foundation budget" from local property taxes was based on its property wealth and the income of its residents, and the State paid foundation "aid" based on the difference. Id. at 164. Equalization in per pupil expenditures would be achieved under this system by increasing state aid to the "special needs districts" while restricting aid to the wealthiest DFGs I and J. Ibid.
Finding there was no guarantee this would occur, the Court held that the QEA was unconstitutional as applied to the "special needs districts" because it failed to ensure parity in regular education expenditures between the thirty "special needs districts" and the wealthiest districts and because it failed to adequately address the unique needs of students in the "special needs districts." Abbott v. Burke, 136 N.J. 444, 446-51, 453-54 (1994) (Abbott III). The Court, however, withheld direct affirmative remedial relief on the condition that appropriate legislation be enacted for school year 1997-98. Id. at 447.
The Legislature's response was CEIFA. This latest effort to meet the Court's requirements in Abbott II created substantive educational standards by which to measure a "thorough and efficient . . . education," N.J.S.A. 18A:7F-2(b)(1),(2); established a fixed "cost per elementary pupil" of providing the educational opportunity necessary for students to achieve those standards, N.J.S.A. 18A:7F-3; and set forth a funding mechanism both to provide a sufficient level of financial support to meet these goals and to ensure that the State's poorest school districts receive aid in parity with the spending of the richest districts. N.J.S.A. 18A:7F-2(b)(3), (4). Under CEIFA, Abbott districts receive a combination of state aid pursuant to statutory provisions designed to address the educational needs resulting from poverty of students in all school districts with concentrations of such students, and additional aid, known as "parity aid" or "equal opportunity aid," appropriated annually by the Legislature, intended to support the per pupil expenditure level of the Abbott Districts at the level of the districts in DFG I and J, the highest DFG. Abbott V, supra, 153 N.J. at 567. These districts also received additional aid to support both specific programs and preschool programs. Id. at 504-05. According to the Board,
[b]y virtue of the aid that has been afforded them since CEIFA's enactment, Abbott Districts have been able to maintain their per pupil expenditures at the level of New Jersey's wealthiest school districts and also to provide programs designed to redress the educational disadvantages resulting from the socioeconomic conditions shown by the litigation in Abbott II. At the same time, under CEIFA, the state's wealthiest districts have continued to meet their educational needs largely by reliance on the financial resources generated by their property values.
In Abbott IV, the Court declared CEIFA unconstitutional as applied to the Abbott "special needs districts," 149 N.J. at 153, 168-77, in part because its supplementary programs were not based on actual student need, and because it did not address the facilities issues confronting the Abbott districts. Id. at 181- 88. In addition to ordering parity funding as an interim remedy, the Court remanded the matter to the Commissioner to determine the judicial and legislative relief required to address the need for supplemental programs and facilities improvement. Id. at 198-202. A Special Master conducted the remand proceedings and pursuant to his recommendation, the Court in Abbott V ordered remedial relief in three areas in addition to parity funding: whole school reforms, supplemental programs like kindergarten and pre-school, and facilities improvements. 153 N.J. at 527.
All this is by way of background. In December 1997, twenty rural and property-poor school districts (the Bacon Districts) -- as distinguished from the poor urban Abbott school districts -- filed a complaint*fn2 in the Chancery Division against the Department, the Commissioner of the Department (Commissioner), and several state officials, seeking both a declaratory judgment that CEIFA was unconstitutional because it resulted in inadequate funding for their needs and therefore failed to meet the State's obligation to provide a thorough and ...