The legal cash machine: a New York adequacy case tests the limits of fiscal coherence

Education Next, Summer, 2005 by Joe Williams

Such "costing-out" analysis was done in two basic ways: the "professional judgment" method and the "successful schools" method. The former asks educators (the "professionals") to construct an adequate school budget, from the bottom up; the latter applies the observed spending levels in high-performing districts to low-performing districts. Though neither method offers much in the way of credibility from a causal relationship perspective, there are plenty of numbers that can be fed into many different calculations. And so the plaintiffs and defendants did.

Using the successful schools model, the state's analysts determined that it would cost $14.55 billion to deliver a sound basic education to New York City's students--$1.93 billion more than was currently being spent.

The referees disagreed. They accepted the analysis of the plaintiffs' consultants, who used a combination of approaches, and on November 30, 2004, issued a 57-page report concluding that it would take $5.63 billion more state aid each year to make New York City schools "adequate." They also determined that the city required an additional one-time infusion of $9.2 billion to build and repair school facilities. As mentioned, even setting aside the money for facilities, these numbers would drive the city's per-pupil spending to over $18,000 per student per year. And they formed the basis of Justice DeGrasse's Valentine Day's ruling. (Also staggering was the $353,000 bill submitted by the referees--public service that amounted to $500 per billable hour for each referee.)

To some, the CFE case had become an irrelevancy, the original complaints swept aside by 12 years of massive education-reform efforts in New York and the nation. For the plaintiffs, it was quite the opposite. And the Campaign for Fiscal Equity expressed its intention to secure adequate funding for students throughout the state. Michael Rebell, now executive director of CFE, was quick to reaffirm that mission. "We are committed to a statewide remedy," he said right after DeGrasse's ruling. Was this hubris? Or politics? Or both?

A New Rift

A settlement between the state and New York City would be difficult enough by itself, sources in the state capital have said, but the lingering possibility that most other school districts outside the city would be able to use the case as a precedent for their own adequacy lawsuits made it impossible for the legislature to cough up the money without a fight.

Even some of its allies in the city complained that CFE's insistence on a statewide solution--while noble on its face--lessened the odds that the city would ever see the billions of dollars that were being dangled in front of its face by friendly courts, because tax money that could be coming to the city would have to be shared with other "underfunded" districts statewide. CFE leaders have countered that this is one way to build support for the cause among upstate legislators, who would otherwise not be inclined to support dumping more cash in the city.