Campaign for Fiscal Equity, Inc. v. State

Rule of Law:

When reviewing a state's plan to remedy a constitutional violation in education funding, a court's role is not to determine the optimal funding level, but to assess whether the state's chosen methodology and resulting calculation are rational. If the state's plan is not irrational, courts must defer to the policy and budgetary determinations of the executive and legislative branches.

Facts:

• Campaign for Fiscal Equity, Inc. (CFE) alleged that New York City public school students were being denied a "sound basic education" as guaranteed by the New York State Constitution.
• CFE claimed this denial was a direct result of the State's school financing system, which provided inadequate funding to New York City schools.
• The alleged underfunding led to specific deficiencies, including an inability to attract and retain qualified teachers, insufficient libraries and computers, and excessively large class sizes.
• In response to a prior court order, Governor Pataki established the New York State Commission on Education Reform (the Zarb Commission) to recommend financing reforms.
• The Zarb Commission retained Standard & Poor's (S&P), which used a "Successful Schools" model to analyze the costs of a sound basic education.
• The Governor and the State Senate endorsed a specific S&P methodology that included a "cost-effectiveness filter" (analyzing only the lower-spending half of successful districts) and certain weightings for students with special needs.
• This endorsed methodology produced a minimum figure of $1.93 billion in additional annual operating funds needed for New York City.
• The Governor and the Legislature failed to agree on and enact a unified legislative plan to implement this or any other funding level by the court's deadline.

Procedural Posture:

• Campaign for Fiscal Equity, Inc. (CFE) sued the State of New York in the Supreme Court of New York (the state's trial court of general jurisdiction).
• In CFE I (1995), the New York Court of Appeals (the state's highest court) ruled that CFE had a valid cause of action under the State Constitution's Education Article.
• After a trial on the merits, the Supreme Court found in favor of CFE.
• In CFE II (2003), the Court of Appeals affirmed, holding that New York City children were being denied their constitutional right to the opportunity for a sound basic education and ordered the State to implement reforms by July 30, 2004.
• When the State failed to enact a compliance plan by the deadline, the case returned to the Supreme Court.
• The Supreme Court appointed a panel of referees to hear and report on the State's compliance efforts.
• The referees recommended $5.63 billion in additional annual operating funds, rejecting the State's proposed $1.93 billion.
• The Supreme Court issued an order confirming the referees' report.
• The State, as appellant, appealed to the Appellate Division (the state's intermediate appellate court).
• The Appellate Division vacated the Supreme Court's order but directed the Governor and Legislature to appropriate funding within a range of $4.7 billion to $5.63 billion.
• CFE, as appellant, and the State, as cross-appellant, both appealed to the New York Court of Appeals.