Campaign for Fiscal Equity, Inc. v. State

• Decision Date: 20 November 2006
• Parties: CAMPAIGN FOR FISCAL EQUITY, INC., et al., Appellants-Respondents, v. STATE of New York et al., Respondents-Appellants.
• Court: New York Court of Appeals Court of Appeals

861 N.E.2d 50

8 N.Y.3d 14

CAMPAIGN FOR FISCAL EQUITY, INC., et al., Appellants-Respondents, v. STATE of New York et al., Respondents-Appellants.

Court of Appeals of New York.

November 20, 2006.

Simpson Thacher & Bartlett LLP, New York City (Joseph F. Wayland, Daniel H. Tabak, Jason S. Stone, Chad M. Leicht and Lisa H. Rubin of counsel), and Michael A. Rebell Associates (Michael A. Rebell and Molly A. Hunter of counsel) for appellants-respondents.

Eliot Spitzer, Attorney General, Albany (Denise A. Hartman, Caitlin J. Halligan and Daniel Smirlock of counsel), for respondents-appellants.

Jay Worona, Latham, and Pilar Sokol for New York State School Boards Association, Inc., amicus curiae.

Stroock & Stroock & Lavan LLP, New York City (Charles G. Moerdler, Alan M. Klinger, Adam S. Ross and Beth A. Norton of counsel), and Carol L. Gerstl for United Federation of Teachers, amicus curiae.

Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York City (Sidney S. Rosdeitcher, Carmen K. Cheung and Evan Norris of counsel), and Jonathan Rosenberg for Association of the Bar of the City of New York, amicus curiae.

Davis Polk & Wardwell, New York City (Sharon Katz, Monica Lamb, Christina C. Lindberg, David B. Toscano and Margaret

A. Vining of counsel), for Alliance for Quality Education and others, amici curiae.

Elizabeth R. Fine, New York City, Alvin Bragg, James Caras, Laura Popa and Scheherazade Salimi for Council of the City of New York, amicus curiae.

Community Service Society, New York City (Juan Cartagena and Craig Acorn of counsel), for Adriano Espaillat and others, amici curiae.

Suzanne Novak, New York City, for Brennan Center for Justice at New York University School of Law, amicus curiae.

Michael A. Cardozo, Corporation Counsel, New York City (Leonard Koerner, Alan H. Kleinman, Brad M. Snyder and Elizabeth S. Natrella of counsel), for City of New York, amicus curiae.

OPINION OF THE COURT

PIGOTT, J.

In this third appeal by plaintiffs Campaign for Fiscal Equity, Inc. (CFE), et al., we address the cost of providing children in New York City's public schools with a sound basic education. The State estimated this cost to include a minimum of $1.93 billion, in 2004 dollars, in additional annual operating funds. We conclude that this estimate was a reasonable one and that the courts should defer to this estimate, appropriately updated.

I.

More than a decade ago, we held that the Education Article of the New York State Constitution requires the State "to offer all children the opportunity of a sound basic education" (Campaign for Fiscal Equity v. State of New York, 86 N.Y.2d 307, 316, 631 N.Y.S.2d 565, 655 N.E.2d 661 [1995] [CFE I]). Plaintiffs had sought a declaratory judgment against the State, claiming that students in New York City public schools were not receiving a basic education and that the State's public school financing system was unconstitutional.¹

Mindful of the fundamental value of education in our democratic society, we agreed with plaintiffs' interpretation of the Education Article. The State must ensure that New York's public schools are able to teach "the basic literacy, calculating, and verbal skills necessary to enable children to eventually function productively as civic participants capable of voting and serving on a jury" (86 N.Y.2d at 316, 631 N.Y.S.2d 565, 655 N.E.2d 661). In assessing adequacy of education, this standard is the constitutional minimum or floor that we had acknowledged earlier, in Board of Educ., Levittown Union Free School Dist. v. Nyquist, 57 N.Y.2d 27, 47-48, 453 N.Y.S.2d 643, 439 N.E.2d 359 (1982). Accordingly, we held that plaintiffs' cause of action under the Education Article survived a motion to dismiss (86 N.Y.2d at 318-319, 631 N.Y.S.2d 565, 655 N.E.2d 661), reminding plaintiffs that they would "have to establish a causal link between the present funding system and any proven failure to provide a sound basic education to New York City school children" (86 N.Y.2d at 318, 631 N.Y.S.2d 565, 655 N.E.2d 661).

Plaintiffs succeeded in establishing that causal link, in a 1999-2000 trial concerning the 1997-1998 school year. In 2003, we decided that this trial record supports the conclusion that, because of inadequate funding for their public schools, children in New York City "are not receiving the constitutionally-mandated opportunity for a sound basic education" (Campaign for Fiscal Equity v. State of New York, 100 N.Y.2d 893, 919, 769 N.Y.S.2d 106, 801 N.E.2d 326 [2003] [CFE II]). In CFE I, we had understood a sound basic education as teaching skills that enable students to undertake civil responsibilities meaningfully. In CFE II, we defined "sound basic education" more exactly, as the "opportunity for a meaningful high school education, one which prepares [children] to function productively as civic participants" (100 N.Y.2d at 908, 769 N.Y.S.2d 106, 801 N.E.2d 326 [emphasis added] ).

We determined that New York City public schools provided inadequate teaching, because they were unable to attract and retain qualified teachers (100 N.Y.2d at 909-911, 769 N.Y.S.2d 106, 801 N.E.2d 326). They were deficient in at least two instrumentalities of learning: libraries and computers (100 N.Y.2d at 913, 769 N.Y.S.2d 106, 801 N.E.2d 326). Moreover, although plaintiffs had not proven "a measurable correlation between building disrepair and student performance, in general" (100 N.Y.2d at 911, 769 N.Y.S.2d 106, 801 N.E.2d 326), they sufficiently demonstrated "that large class sizes negatively affect student performance in New York City public schools" (100 N.Y.2d at 912, 769 N.Y.S.2d 106, 801 N.E.2d 326).

Whether measured by "inputs" or by "outputs," i.e. school completion rates and test results (100 N.Y.2d at 914-919, 769 N.Y.S.2d 106, 801 N.E.2d 326), New York City schoolchildren, we determined, were not receiving the opportunity for a sound basic education. Finally, we concluded that plaintiffs had established the causation element of their claim by showing that increased funding can provide better teachers, facilities and instrumentalities of learning, and that such improved inputs in turn yield better student performance (100 N.Y.2d at 919-925, 769 N.Y.S.2d 106, 801 N.E.2d 326).

Accordingly we directed the State to ensure, by means of "[r]eforms to the current system of financing school funding and managing schools . . . that every school in New York City would have the resources necessary for providing the opportunity for a sound basic education" (100 N.Y.2d at 930, 769 N.Y.S.2d 106, 801 N.E.2d 326). Noting that "the political process allocates to City schools a share of state aid that does not bear a perceptible relation to the needs of City students" (id.), we instructed the State to ascertain the actual cost of providing a sound basic education in New York City, rather than the state as a whole (id.). We also held that "the new scheme should ensure a system of accountability to measure whether the reforms actually provide the opportunity for a sound basic education" (id.). We gave the State a deadline of July 30, 2004 by which to implement the necessary measures (id.) and remitted to Supreme Court for further proceedings in accordance with our opinion (100 N.Y.2d at 932, 769 N.Y.S.2d 106, 801 N.E.2d 326).

Within a matter of weeks, Governor Pataki issued an executive order creating the New York State Commission on Education Reform, charged with recommending, to the Executive and the Legislature, education financing and other reforms that would ensure that all children in New York State have an opportunity to obtain a sound basic education. The Commission, chaired by Frank G. Zarb, published its final report on March 29, 2004.

The Zarb Commission retained Standard and Poor's (S & P) School Evaluation Services to calculate the additional spending required to provide a sound basic education directing S & P to use a "Successful Schools" model that studies the expenditures of school districts with a proven track record of high student performance. The method had been used by the New York State Board of Regents in its Proposal on State Aid to School Districts for 2004-05.

The Zarb Commission developed three alternative criteria for identifying successful school districts. One option was based on New York's 2007-2008 performance standard set in accordance with the federal No Child Left Behind Act of 2001. Another was similar to the first but substituted the 2006-2007 performance standard. The third criterion was the same approach to identifying successful schools that the Board of Regents had used; it picked out school districts—281 of 699—in which at least 80% of the students performed at or above a proficient level, over a three-year period, in seven tests required by the Board of Regents: two fourth-grade examinations and five examinations required for high school graduation.²

Reasoning that not all successful schools operate in a manner that is economical, the Zarb Commission instructed S & P to apply a cost-effectiveness filter: once successful school districts were identified by the methods just described, they were to be ranked according to expenditures and those in the lower-spending half were to be used to create an average. The Board of Regents had noted the necessity for applying such an efficiency filter, because "districts that perform at high levels often enjoy a very substantial wealth base, and therefore also spend at very high per pupil[] levels" (Regents Proposal on State Aid to School Districts for 2004-05, at 48, available on the Internet at 2004-05RSAP/RSAP0405.htm>,₂₃ cached at )

Drawing on an extensive review of pertinent research literature, S & P applied three weightings to the resulting base expenditures, in order to take into account the greater spending required for students with special needs. The coefficients by which the base expenditures were multiplied were 2.1 for students with disabilities, 1.35 for economically disadvantaged...