As soon as they enter kindergarten, New York City
schoolchildren get a crash course in tight budgets.
They carry home notes asking their parents to chip in
to buy tissues and paper towels for classrooms and
hear teachers say, "Be careful with that. I paid for
it myself." In some schools, children remain inside at
recess because the school cannot pay lunchtime aides
to supervise their play.
By the time they are in high school, many youngsters
attend classes at odd hours to enable school buildings
to handle hundreds of extra students. They will share
some classrooms with 40 other students, with
textbooks, computers and lab equipment in short
"As we traveled across the city," a team from Inside
reported earlier this year, "we were struck by the
long-standing shortages of money and staff that
schools face. Clerical help is in short supply. . .
.Basics that suburban schools take for granted - like
a functioning photocopy machine -- are often
missing....Class size is typically far too large for
teachers to give kids the attention they need."
Last week, a court-appointed panel took a step that
supporters say could change all that. Three
distinguished lawyers found that city schools require
$5.6 billion a year more than the $12.6 billion they
now receive annually for operating expenses. That is what is
needed, the "special masters" said, to enable the city
to provide its 1.1 million students with the "sound
basic education" they are guaranteed in the state
"I'm ecstatic," said City Councilmember Robert
Jackson, who launched the lawsuit that led to the
But Jackson's jubilation may prove premature. The
judge still has to review the report and issue his
order. Governor George Pataki can make further legal
appeals. The state and the city must hash out how the
cost will be divided between then - and how to raise
the money to cover it. The school system will have to
decide how to spend the money. Only then will
students, parents, and teachers reap the benefits of
more than a decade of legal wrangling and find out
whether money can solve the problems facing the
nation's largest school system.
FIGHTING FOR A DECADE
The New York case had its origins in the early 1990s
when Jackson, then president of a community
school board in Washington Heights and the father of
three girls in public schools, became angry about the
poor quality of city schools. He and the community
school board's lawyer, Michael Rebell, then formed the
Campaign for Fiscal Equity and
launched the lawsuit challenging the state's funding
of education in the city. Rebell has worked on the
case ever since. Jackson went on to win election to
the City Council in 2001.
In January 2001, State Supreme Court Judge Leland
that the state's method of funding education illegally
deprived New York City students of their right to a
"sound basic education." The state appealed the
ruling, but the state's highest court upheld the decision in June 2003.
The court gave the state government about a year to
determine how much money the city schools would need
and how to ensure the city got those resources. But
the deadline came and went with no resolution as
Governor George Pataki, Senate Majority Leader Joe
Bruno, and Assembly Speaker Sheldon Silver failed to
Faced with apparent gridlock, DeGrasse in August
appointed the three legal experts -- former Judges E. Leo
Milones and William C. Thompson (father of City
Comptroller William Thompson) and John D. Feerick,
onetime dean of Fordham law school - to help him
determine how the state could comply with the court
WHAT THE REPORT SAYS
In their report issued November 30, the panel came
down squarely on the side of those who believe
city schools need a lot more money. "While money is surely
not all that matters," the judges wrote, "there is a
direct, and strong, correlation between adequate
funding and the ability of a local school district to
fulfill its educational mandate. Nowhere is that truer
than in New York City."
"It's a wonderful decision," said Rebell. "It confirms
the extent of resources the children of New York City
have been deprived ofâ€¦.The needs are astronomical."
But E.J. McMahon of the Manhattan
Institute told reporters the decision is based on "a
myth. The myth is you dump more money on the schools,
make no change in . . .the
teachers' contract, and it's going to produce great
results. That has never worked anywhere at any time."
The special masters called for city schools to receive
an additional $5.6 billion a year in operating
expenses - the exact figure that the Campaign for Fiscal Equity had calculated would be needed, a figure greater than either the city or the state government had calculated.
The increase would be phased in over the
next four years.
New York State already spends more per student than
almost any other state in the nation (some
calculations rank it number one). But school funding per
student in New York City, with its high percentage of students from low-income families, has lagged behind
other state districts, particularly wealthy suburban
ones. In the 1999-2000 school year, for instance, New
York City spent an average of $10,469 per student,
compared with the $13,760 in the richer suburbs.
The panel also called for a five-year $9.2 billion
capital funding plan for the schools. This money would
go toward building schools to eliminate overcrowding
and reduce class size, as well as maintaining existing
schools and buying computers and other technology.
Earlier this year, the city had proposed a five-year,
$13.1 billion program to improve schools facilities,
with half of the money coming from the state. Albany
never acted on that proposal.
The panel suggested that the state conduct studies
every four years to determine the cost of a sound
basic education. This would ensure that funding keeps
up with inflation, changes in student population and
Pataki had sought to keep an eye on the city by
creating a new state office that would determine how
the money is spent. Mayor Michael Bloomberg opposed
this, saying any new layer of bureaucracy would
threaten mayoral control of the schools. The
panel sided with the city. New York State, the lawyers
said, already "has one of the best education
accountability structures in the nation."
An aide to Pataki said this decision
disappointed the governor. "We are particularly
concerned that the recommendations appear to reject
any type of real reform and fail to overhaul the
current accountability system," Kevin Quinn told
WHAT THE REPORT DID NOT SAY
The panel left the thorniest issue
unresolved. It did not say how much of the additional
cost should be borne by Albany and how much by the
city. The panel apparently saw this as a way of not
overstepping its bounds. "The State Legislature has
the constitutional authority to make that state/city
allocation," they said.
Joe Wayland, a lawyer with Simpson, Bartlett and
Thatcher who served as lead counsel for the Campaign
for Fiscal Equity, said the three lawyers' refusal to
rule on the matter showed "how deferential" they were
"to the political process."
But the state has some obligations. For one, the
state -- not the city --- is the defendant in the
lawsuit, so the state can be brought back into court
if it violates any court ruling in the case.
The panel cautioned the legislature not to try to
wriggle out of its obligations by "being
arbitrary or unreasonable." If it is, the court could
levy fines against the state. The report notes that,
when the city of Yonkers flaunted a court order, the
court fined it $1 million a day.
Some observers say the panel did not go far
enough. "My fear is it's going to take increasingly stronger
orders from the courts" for the state to meet the
requirement of school funding, said Robert Berne, a senior vice
president at New York University speaking at a conference on
school finance last week.
DIVIDING THE BURDEN
Last month, as the Campaign for Fiscal Equity, the
city and the state struggled to reach an out-of-court
settlement, the city's share of funding presented the
major sticking point. Leaving aside the small
percentage of education expenses paid by the federal
government, the state covered 55 percent of the
city school's budget in 2001.
Pataki reportedly wants the city to assume 40 percent
of any additional costs. "We have to turn to the city
and say, 'pony up,'" State Senator Dean Skelos told
the New York Times after the 2001 ruling. "The city
has not maintained its responsibility to the schools."
But, the city says it should not pay more than it
already does. In a written statement
praising the report, Bloomberg noted that the city
faces a $3 billion budget deficit next year. Any
increase in education spending, he said, would require
cuts in other areas that "would harm the very children
this lawsuit is designed to help."
But budgets are tight in Albany, too. The Pataki
administration estimates the state faces a deficit of
$6 billion in its $103 billion budget for next year.
"The city is in dramatically better shape than the
state is," said State Comptroller Alan Hevesi, who
said he supports the court decision.
Hevesi predicted the city would have to bear about 30
percent of the cost -- then cautioned against taking
that prediction too seriously.
"The state can't do it alone. A zero number for the
city is not going to be the end point," said Berne of NYU,
before calculating a reasonable split would be 80-20.
Complicating the issue is the way education is funded
in New York City. Most school districts get their
funding from a property tax that goes to the school system, and citizens vote on how much
they want to spend. But city residents cannot do that.
The mayor and City Council determine how much the
Department of Education gets and must weigh spending
for schools against
spending for other city services.
HOW TO RAISE THE MONEY
As soon as the report was made public, critics
began cautioning that the proposed settlement would
mean higher taxes. "The predominant message is $5.6
billion is going to bankrupt the state. How are we
ever going to pay for this?" Rebell said. Once the state decided to set uniform
requirements -- such as the passing of Regent exams by
all high school students -- it had no choice
but to ensure that students get the tools to enable
them to meet those requirements.
"This is an obligation just like every other
obligation the state has," Eileen Larrabe, from the office of Assembly Speaker Silver, told the
Sun. "We have to find a way to pay for it."
But others say the money simply does not exist. "There
is no $14 billion there to spend," former Parks
Commissioner Henry Stern wrote in his blog (citing a figure that represents the the
total additional money for the first four years). "You
cannot spend money you do not have, nor have any
reasonable prospect of getting."
"The question is: Will the governor appeal or
surrender?" E.J. McMahon of the Manhattan Institute
has said. "Surrender will demand an immediate,
significant tax increase. There is simply no two ways
Most would agree. Earlier this year, Pataki sought to
bring in extra money for education through video
gambling terminals. The courts and the legislature
have been skeptical, however, and no one foresees
electronic gambling bringing in $5.6 billion a year
In a recent report (in pdf format), the Citizens Budget Commission, a
group that usually opposes tax hikes, called for a
combination of measures to finance the increase in
school funding. These include making schools more
efficient by operating year round and freeing teachers
of some administrative tasks. The group also
recommends expanding gambling. Together, those two
suggestions could bring in about $3.2 billion a year,
But the rest would have to come from expanded and
higher taxes. The commission recommends trying to collect sales
taxes on Internet purchases, broadening the sales tax to
includes some purchases, such as home improvements,
that are now exempt. The commission also said that
the state should raise the income tax.
THE FUNDING FORMULA
The court panel did not attempt to revise the state
funding formula for education -- a series of
calculations so complicated and arcane that even
Pataki once denounced it as a dinosaur.
Many experts believe that only redoing the way Albany
figures how much money each district gets can solve
the school funding problems across the state. The
panel wrote that it supported "formula reform" but did
not address it because its job was limited to the
funding of New York City schools.
But some observers disagree. "The referees blew it by
not agreeing to a formula that could be used in the
absence of one by the legislature," said Berne.
By their reluctance, the referees virtually guaranteed
that, unless the state government acts, lawsuits from
other cities and poor rural districts will further
challenge education funding in the state.
WHAT HAPPENS NEXT
In the coming weeks, Judge DeGrasse will review the
report and then issue a court order that most
observers expect will adhere pretty closely to the
panel's recommendations. The state will then have 90
days to figure out how to comply with that order.
Meanwhile, participants in the case continue to
Pataki could appeal the judge's ruling, further delaying any
resolution of the case.
SPENDING THE BILLIONS
If and when all this is settled, where will the money
go? In its presentation to the panel, the city set out
four "major initiatives":
- recruitment, retention, training and development
of teachers and other staff
- focus on early childhood education, including
- overhauling middle schools and high school by
breaking them into smaller schools
- support for special education students and English
All are vague enough to spur conflicting proposals.
Already, Bloomberg has cautioned the schools not to
rush "willy nilly" with ideas for this program or
that. The teachers union has made clear that it
expects a piece of the new pie, and the City Council
is drawing up its own plan on how to spend
DOES MONEY MATTER?
Over the last few years, some education advocates have
seen billions from the lawsuit as a kind of holy grail
that would bring smaller classes, clean,
well-maintained buildings, well-equipped labs, and
happier teachers to New York City.
Money matters, the lawsuit's proponents say. If
not, why do people spend $20,000 a year to send their
kids to private school?
Nationally, activists seeking more fairness in schools
have moved from seeking to end racial segregation to challenging the funding of education, particularly
in poor and minority districts.
The lawsuits spring partly from the writings of
Jonathan Kozol. In his 1992 book "Savage
Kozol found huge disparities between funding for
schools in poor cities and those in wealthier areas.
Such differences arose, he said, because school
districts relied increasingly on property tax revenues
to fund education. As a result, Kozol concluded,
America's schools had become more separate and unequal
than they were during the days of segregation.
"There's something fundamentally wrong with providing
education to a child based on the town the child
happened to come from," said former New Jersey
Governor James Florio, who lost his re-election
campaign after seeking to change education funding in
Advocates of increased spending found their argument strengthened when
various states instituted uniform requirements for
students. How could students packed into large
classes and working with outmoded textbooks and
equipment stand the same chance of meeting those
standards as their counterparts blessed with small
classrooms, state of the art science labs, and lavish
About 25 states have faced lawsuits over how they
fund education, according to a report
by the National Council of State Legislatures. In most
cases the courts ruled again the states.
But a large gap persists between spending in America's
poor and affluent school districts. The Education
Trust, a group that
works to promote academic achievement, determined
(in pdf format) that nationally, high poverty
districts had $868 less per pupil to spend in 2001
than more affluent districts in the same state. Even
though the gap in New York State has declined in
recent years, it, along with Illinois, still had the
But critics argue that a shortage of money is not the main problem. "The real problems with Gotham's schools is the
city's dysfunctional and unaccountable school system,"
Sol Stern wrote in an article
about the court decision in City Journal last spring.
providing that system with more money . . . won't
improve things but will only entrench the problems
Nationally, since 1960, school funding in the United
States has tripled, but "student performance has
hardly budged," said Martin West, an education
researcher at Harvard University.
In some states, though, money apparently has helped.
Because of a lawsuit, "Kentucky's education system had
to be brought into the 20th century as most of the
rest of the country was leaving it," said Norman
Fruchter executive director of the Institute for
Education and Social Policy at NYU. And, he said, it
worked: "In every education indicator you can look at,
Kentucky has made enormous progress."
Florio was more cautious about the results in New
Jersey. "We've had some good experiences," he said.
But, he added, "Not all the problems are in the
schools. We should not be oblivious to the fact that
the school setting also is important. . . .If we're
trying to teach middle-class values, you have to be
sure you have a middle class."
Clearly, even when the long-running legal battle over school funding ends, there is no guarantee that the problems of educating New York public school students will be solved.
Alliance for Quality Education
A statewide coalition working to improve education
Campaign for Fiscal Equity
The group that filed the suit
Class Size Matters
Provides information on class size and advocates
Reports and Articles on New York
The full report of the court-appointed panel (in pdf
Can New York Get an A School Finance Reform
(report, in pdf format, by the Citizens Budget
Ensuring Children an Opportunity for a Sound Basic Education
The report of a state commission appointed by Governor George Pataki to issue recommendations on education reform, including finance
Go Figure: How a Bigger Education Budget Became Less Money for Schools
Independent Budget Office
New York’s Fiscal Equity Follies
A critical look at the school funding lawsuit
"The New York Adequacy Study: Determining the Cost of Providing All Children in New York an Adequate Education (in pdf format)
Articles and Reports on School Funding Nationally
Poor Schools Sue for Funding: Higher Standards Are Basis for Seeking 'Educational Adequacy'
Standards Push Helps Lawsuits
Why Adequacy Lawsuits Matter
Adequacy Lawsuits: The Wrong Answer for Our Kids
The Funding Gap 2004: Many States Still Short Changes Low-Income and Minority Students
The Education Trust (in pdf format)
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