Opinion ID: 2294246
Heading Depth: 1
Heading Rank: 47

Heading: Supplemental Funding

Text: One of the pivotal disputes during the course of the trial was whether the provision for supplemental funding for Abbott districts should continue. This issue was broached with counsel in the court's initial comments immediately prior to the start of the trial. 1 T 6:14-25. Understandably, the positions of the parties are diametrically opposed. Plaintiffs assert if the court is to consider SFRA constitutional it is imperative supplemental funding remain available to the Abbott districts as a safety net. The State contends permitting supplemental funding to continue under SFRA is an anathema to the formula developed and eviscerates the goal of a uniform funding system with the requisite needed discipline. N.J.A.C. 6A:10-1.1 provides as follows: These rules are adopted to implement the Abbott v. Burke decisions and are promulgated pursuant to the May 9th, 2006 New Jersey Supreme Court Order (187 N.J. 191 [901 A. 2d 299]) to ensure that budgets are prepared and approved in a manner that ensures all students in poor urban school districts receive the educational opportunities and resources guaranteed them by the New Jersey Constitution. The rules apply to Ábbott districts as defined in Abbott v. Burke, 119 N.J. 287 [575 A. 2d 359] (1990, Abbott II ) and N.J.A.C. 6A:10-1.2, and are adopted to ensure the provision of adequate funding to ensure a thorough and efficient system of education as guaranteed by the New Jersey Constitution (T & E), and defined by the Supreme Court in the Abbott decisions and by P.L. 1996, c. 136, as the Core Curriculum Content Standards. Supplemental funding, which has been restricted solely to the Abbott districts, allowed those districts to make application for supplemental or additional monies beyond those set forth in the districts' budget requests which were to be submitted on or before February 1st. N.J.A.C. 6A:10-2.4, 2.5. The application for additional funds was controlled by N.J.A.C. 6A:10-2.8 and addressed funding that could not be included in the standard budget application. The separate application solely addressed the request for supplemental or additional funds. Requirements for what needed to be provided were set forth in N.J.A.C. 6A:10-2.8(b). Although the requirements set forth are mandatory, and may be considered onerous, practice has suggested exacting compliance with the rules has been absent. The same is not to suggest a laxity or a lack of compelling effort but, rather, the inherent problems in applications for supplemental funding which required, to be properly analyzed, a full and exacting review of the complete budget in an effort to determine whether all monies approved were needed to ensure a thorough and efficient education to meet the CCCS standards. N.J.A.C. 6A:10-2.1. It is, again, important to note supplemental funding was only available to the Abbott districts. Defendants urge, somewhat urgently, it has been abused historically as a means to increase spending, to avoid needed fiscal discipline, and as a disincentive to determine and eliminate inefficiencies. The State suggests the program has allowed Abbott districts to appreciate they need not operate within defined limits and the program has historically been used as a budget filler used to address shortfalls rather than to implement innovative programs as structured. The State urges supplemental funding requests are often grossly inflated. As such, SFRA was formulated to eliminate supplemental funding premised upon the theory the formula was constructed so that more than adequate resources would be available to the Abbott districts to meet the requirements for a thorough and efficient education. This is particularly so when it is considered SFRA was constructed without consideration of receipt of federal funds which are used to supplement, rather than supplant State aid. [33] Although the State agrees this court cannot consider federal aid when evaluating the constitutionality of SFRA, it urges the court it should and can consider federal aid as it addresses the question of supplemental funding. The Abbott districts received a total of in excess of $150 million in federal Title I funding in the fiscal year 2008-2009. D-131. The Abbott districts have also received, and will continue to receive, federal IDEA funding. Atwood, 29 T 100:24-110:15; D-132. The total amount of IDEA funding the Abbott districts received in the fiscal year 2008-2009 was in excess of $74 million. D-132. In addition, the Federal American Recovery & Reinvestment Act of 2009 (ARRA), the federal Stimulus Package, will provide additional funds to the Abbott districts in the form of increased Title I and IDEA funding. Atwood, 29 T 100:24-110:15; D-131; D-132. Under current estimates, the Abbott districts will receive in the fiscal year 2009-2010 an additional approximately $66 million in Title I funds, and an additional $48 million in IDEA funds under the Stimulus Package. D-131; D-132. These amounts are in addition to the Title I and IDEA funds the Abbott districts would otherwise receive. As such, the total amount of federal funding available to the Abbott districts under Title I and the IDEA, including the estimated augmentation under the Stimulus Package, is approximately $339 million. D-131; D-132. These monies cannot be blithely ignored. The State urges the current process for supplemental funding in the Abbott districts is labor intensive and puts a considerable strain upon the DOE to timely and comprehensively consider the requests for supplemental funding. The State suggests there is often insufficient time to review applications even if the necessary information is timely provided, which it is often not, in light of the May 31st yearly deadline. Further, to properly review the request necessarily implicates a complete review of a district's budget application and approvals. Given the time constraints the State urges it is often compelled to engage in a negotiation process. Further, the wish to avoid contentious litigation often leads to an award of monies which are not necessary for a thorough and efficient education but, rather, simply reflects the recognition of existing constraints and circumstances. The plaintiffs urge this position need be reviewed in light of the rules and regulations as promulgated by the DOE. N.J.A.C. 6A:10-1.1 to -3.8. The rules set forth supplemental funding is to be used for a specific purpose, whether it relates to programs, positions or services, N.J.A.C. 6A:10-2.8(a), and the rules are quite specific as it concerns the detailed narrative districts are compelled to provide in their application for additional funding. N.J.A.C. 6A:10-2.8(b)1-7. Plaintiff urges the history of prior approvals does not reflect an adversarial relationship as urged by the State and, further, should serve as evidence the DOE has historically found the monies for the supplemental programs were needed for a thorough and efficient education. See N.J.A.C. 6A:10-1.1(a). Although facially correct, such an argument is rejected as facile. The realities demonstrate, despite the language of the rules, funding is often provided for reasons other than to meet the CCCS. See, e.g., D-161. That said, the Commissioner was compelled to agree the DOE had the authority to reject a request if not properly filed or if it was submitted without sufficient information. Further, if the monies were not spent as specified the DOE could seek return of the same. Again, although technically correct, the same does not reflect the realities that exist. While recognizing the defendants' arguments concerning supplemental funding are not without appeal, this court is satisfied, given the burden imposed, it cannot find SFRA constitutional as applied if supplemental funding is not recognized, if only for the first three year review period. The potential harm to the students in the Abbott districts outweighs the defendants' assertion there shall be no need for supplemental funding, at least until the realities of implementation are known. This is particularly so when it is recognized in years two and three of SFRA's implementation there is no increase in aid to the Abbott districts and at the same time municipal overburden is not expected to significantly improve. The same also recognizes during this same period certain increased costs will exist which may be beyond the district's ability to control, such as increases in utility bills, insurance premiums, teachers' salaries, etc. Further, there are certain concerns as it relates to the cap imposed for the at-risk population at sixty percent. Recognizing there are no studies which establish conclusively costs will not escalate when concentrations of poverty exceed sixty percent, and twenty-four of the thirty-one Abbott districts have such poverty concentration, concerns arise. See D-12. The State's theory during these periods inefficiencies will be identified may be correct, but has not been demonstrated sufficiently to allow the court to accept the same, again, given the burden imposed upon the State. During the trial the court requested the defense, particularly Davy and Atwood, propose various protocol as it relates to supplemental funding, without prejudice to the State's position the court should not consider the same. Both refused the court's invitation. This position, while understandable, was and is disappointing as it deprived the court of the State's position as to how to implement appropriate protocol. Atwood testified the rules and regulations as it relates to supplemental funding have been evolving and improving. Atwood, 29 T 45:19-48:25. The court can discern no reason why the same should not continue. As such, this court recommends to the Court the Commissioner be obligated to promulgate new rules and regulations concerning applications for supplemental funding which should address timeliness of submissions, documents and information necessary, proper protocol for review and determinations, and a consideration whether the Commissioner's decisions concerning supplemental funding should be detailed and published for the guidance of the other districts. Further, the court or the Commissioner may wish to consider pre-school guidance and protocol as a model for any revised protocol given the successes achieved in that field. Although appreciative of the commendable and considerable efforts made by the State in the enactment of the new funding formula, this court is not satisfied elimination of this provision adequately serves the needs of the Abbott district students, at least during the transitional period when empirical evidence can be established. At that point, funding will have made the transition from anticipation to reality and analysis can be empirically based.