Title: Board of Education of City of Millville v. New Jersey Department of Education

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(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). 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. 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. Argued October 27, 2004 Decided May 19, 2005 On certification to the Superior Court, Appellate Division, whose opinion is reported at 367 N.J. Super. 417 (2004). Richard E. Shapiro and Jennifer R. Webb-McRae argued the cause for appellants (Mr. Shapiro, attorney for Board of Education of the Township of Pemberton, Board of Education of the Town of Phillipsburg and Board of Education of the Township of Neptune and Robinson & Andujar, attorneys for Board of Education of the City of Millville, attorneys; Mr. Shapiro and Arnold Robinson, on the briefs). Michelle L. Miller, Deputy Attorney General, argued the cause for respondent (Peter C. Harvey, Attorney General of New Jersey, attorney; Nancy Kaplen, Assistant Attorney General, of counsel; Allison Colsey Eck, Deputy Attorney General, on the briefs). David G. Sciarra, Executive Director, Educational Law Center, argued the cause for amicus curiae, Abbott v. Burke plaintiffs. CHIEF JUSTICE PORITZ delivered the opinion of the Court. [d]istrict budgetary requests must be developed and articulated with specificity, and, equally important, the DOE must respond with appropriate explanation. Formulaic decision-making neither assists the districts nor provides a basis for further review on appeal. Districts should work with [preschool] providers to ensure that costs are reasonable and appropriate and that sufficient justification for provider costs is incorporated into the district plan. Providers are asked to construct a zero-based budget reflecting the actual cost of delivering an early childhood education program meeting Abbott standards to Abbott children. There is no predetermined per pupil amount, as allocations shall be based on the unique needs of each provider and/or site. [Ibid. (internal quotations and citation omitted).] And, we ultimately concluded: Whatever nomenclature is used to describe the budget calculation, it must yield funding decisions based not on arbitrary, predetermined per-student amounts, but, rather, on a record containing funding allocations developed after a thorough assessment of actual needs. The amount appropriated hereinabove for Additional Abbott v. Burke State Aid will provide additional resources to Abbott districts to meet the State s obligation to fully fund parity and the approved early childhood operational plans. The remaining funds appropriated will be used for the award of discretionary funding to Abbott districts to maintain the programs, services and positions from the prior year that the commissioner determines are essential to the provision of a thorough and efficient education in those districts. [Id. at 6 (quoting Budget Message and adding emphasis).] to ensure, with additional aid if necessary, that sufficient funds are available to the district to fully fund its preschool program, that is, to ensure that any gap remaining after receipt of statutory formula aids will be addressed by the State to the extent that need exists because funds otherwise available to the district are insufficient to fully support the approved program. that the adoption of whole-school reform, with its inclusion of preschool education in the Abbott districts, was designed by the Court as a remedy for the past constitutional deprivation of a thorough and efficient education for children between the ages of five and eighteen in the Abbott districts. In so recognizing the nature of Abbott V s mandate, and in comparing that mandate with others rendered by the Court in this context, [the panel] also [found] that the Court did not intend to require exclusive state funding of preschool in the Abbott districts. Not only must sufficient funds be provided for whole-school reform and for the additional or modified supplemental programs that are constituent parts of such reform, there must also be in place a clear and effective funding protocol. Consistent with zero-based budgeting, the Commissioner may, before seeking new appropriations, first determine whether funds within an existing school budget are sufficient to meet a school s request for a demonstrably needed supplemental program. Implicit in any determination that existing appropriations are sufficient is the condition that funds may not be withdrawn from or reallocated within the whole-school budget if that will undermine or weaken either the school s foundational education program or already existing supplemental programs. Underlying the Commissioner s proposal for whole school reform, early childhood programs, and supplemental programs, is a clear commitment that if there is a need for additional funds, the needed funds will be provided or secured.[ See footnote 5 ] to ensure, with additional aid if necessary, that sufficient funds are available to the district to fully fund its preschool program, that is, to ensure that any gap remaining after receipt of statutory formula aids will be addressed by the State to the extent that need exists because funds otherwise available to the district are insufficient to fully support the approved program. [Phillipsburg, supra, OAL Dkt. No. EDU3423-03, slip op. at 17-18 (Commissioner).] At oral argument, counsel for the DOE reaffirmed the Commissioner s responsibility to restore any Abbott district shortfalls unless the Commissioner is able to demonstrate that additional funding is unnecessary because the district has sufficient resources to cover all of its programming needs. It matters little whether the monies initially reallocated by the districts are drawn from formula aids, local levies, or savings realized through efficiencies. Indeed, in the Court s discussion regarding sources of funding for supplemental programs in Abbott V, we determined that the Commissioner could look to the existing school budget in the first instance so long as reallocation would not undermine or weaken either the school s foundational education program or already existing supplemental programs. 153 N.J. at 518. The preschool funding mechanisms challenged by Phillipsburg, Millville, Pemberton, and Neptune essentially track that approach. BOARD OF EDUCATION OF THE CITY OF MILLVILLE, CUMBERLAND COUNTY, Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF EDUCATION, Respondent-Respondent. DECIDED May 19, 2005 Chief Justice Poritz PRESIDING OPINION BY Chief Justice Poritz CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY The 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.