To be Argued by:
MICHAEL A. REBELL
(Time Requested: 30 Minutes)
APL-2017-00002
New York County Clerk’s Index No. 100274/13 (Cons.)
Court of Appeals
of the
State of New York
NEW YORKERS FOR STUDENTS’ EDUCATIONAL RIGHTS
(“NYSER”), et al.,
Plaintiffs-Respondents,
– against –
THE STATE OF NEW YORK, et al.,
Defendants-Appellants.
––––––––––––––––––––––––––––––
MIRIAM ARISTY-FARER, et al.,
Plaintiffs-Respondents,
– against –
THE STATE OF NEW YORK, et al.,
Defendants-Appellants.
BRIEF FOR PLAINTIFFS-RESPONDENTS
MICHAEL A. REBELL
475 Riverside Drive, Suite 1373
New York, New York 10027
Tel.: (646) 745-8288
MORGAN, LEWIS & BOCKIUS LLP
101 Park Avenue
New York, New York 10178
Tel.: (212) 309-6000
Fax: (212) 309-6001
Attorneys for Plaintiffs-Respondents
Date Completed: April 27, 2017
TABLE OF CONTENTS
Page
-i-
PRELIMINARY STATEMENT .............................................................................. 1
COUNTERSTATEMENT OF THE ISSUES PRESENTED ................................. 10
COUNTERSTATEMENT OF THE CASE ............................................................ 12
I. Background of the CFE Litigation ..................................................... 12
A. CFE I ........................................................................................ 12
B. CFE II ....................................................................................... 13
C. CFE III ..................................................................................... 16
II. The State Responded to CFE with Statewide Efforts Toward
Constitutional Reform that Culminated in Adoption of the
Foundation Aid Formula. ................................................................... 18
III. Since the 2008 Recession, the State Has Abandoned Its
Constitutional Reform Efforts and Has Further Cut and Frozen
State Aid Without Responding to Actual Student Needs. ................. 21
IV. Supreme Court Properly Denied Defendants’ Motions to
Dismiss. .............................................................................................. 24
A. NYSER ...................................................................................... 24
B. Aristy-Farer ............................................................................. 26
V. The First Department Affirmed Denial of Defendants’ Motions
to Dismiss. .......................................................................................... 27
A. NYSER ...................................................................................... 27
B. Aristy-Farer ............................................................................. 29
ARGUMENT .......................................................................................................... 30
POINT I: THE STATE HAS A THRESHOLD DUTY TO DEVELOP AND
MAINTAIN A FUNDING PROCESS THAT COMPLIES WITH
CONSTITUTIONAL REQUIREMENTS. ................................................... 30
I. The State Cannot “Ensure” a Constitutionally-Compliant
System Without a Process That Fully Funds the “Actual Costs”
of a Sound Basic Education in a Manner Aligned with Student
Need. ................................................................................................... 30
TABLE OF CONTENTS
(continued)
Page
-ii-
A. The State Has a Threshold Duty to First Ascertain and
Then Fully Fund Actual Costs to Adequately Educate All
Students. ................................................................................... 30
B. The State’s Threshold Duty Ties to Its Process, Not to a
Per Se Sum-Certain. ................................................................. 32
C. The Threshold Calculation and Funding Duty is a Well-
Recognized First Principle in States Across the Country. ....... 35
POINT II: THE FOUNDATION AID FORMULA WAS THE STATE’S
ONLY ATTEMPT TO FOLLOW A NEEDS-BASED STATEWIDE
FUNDING PROCESS AND IS THE PROPER FOCUS OF
PLAINTIFFS’ COMPLAINTS. ................................................................... 37
A. The Foundation Aid Formula Was Not a Gratuitous
Undertaking. ............................................................................. 37
B. The Foundation Aid Formula Did, Properly, Go Beyond
the Amounts Proposed by Gov. Pataki. ................................... 42
C. If the Foundation Aid Formula Was Not a Constitutional
Response to CFE, the State Would Be Admitting It Has
Never Complied With Constitutional Requirements. .............. 45
POINT III: DEFENDANTS’ 700 DISTRICT INPUTS-OUTPUTS-
CAUSATION ARGUMENT IS IRRATIONAL, UNWORKABLE,
AND NOT LEGALLY REQUIRED. ........................................................... 45
A. The State’s Position Is Illogical. .............................................. 45
B. Defendants’ Position Is Neither Required Nor Supported
by the Law. ............................................................................... 47
C. The Court of Appeals Has Authorized, Not Foreclosed,
Plaintiffs’ Ability to Plead an Education Article Claim by
Challenging Structural Defects in the State’s System. ............ 49
POINT IV: SEPARATION-OF-POWERS PRINCIPLES SUPPORT
PLAINTIFFS’ CLAIMS AND SHOW THAT CFE III SIMPLY
ENDORSED A PARTICULAR ESTIMATE TO BE CONSIDERED
BY THE ELECTED BRANCHES. .............................................................. 52
TABLE OF CONTENTS
(continued)
Page
-iii-
POINT V: SUPPOSED FISCAL CONSTRAINTS CANNOT ABRIDGE
STUDENTS’ RIGHTS TO A CONSTITUTIONAL LEVEL OF
FUNDING. ................................................................................................... 55
POINT VI: THE FIRST DEPARTMENT’S ORDER SHOULD BE
AFFIRMED WITH APPROPRIATE MODIFICATIONS
CLARIFYING THE STATE’S THRESHOLD CONSTITUTIONAL
RESPONSIBILITIES. .................................................................................. 58
A. The First Department Correctly Understood That Fixing
the State’s Funding Formula Automatically Inures to the
Benefit of Students in All 700 School Districts. ...................... 58
B. The First Department’s Rulings on NYSER’s Third Cause
of Action and on the Aristy-Farer Allegations Should Be
Affirmed. .................................................................................. 60
CONCLUSION ....................................................................................................... 61
iv
TABLE OF AUTHORITIES
Page(s)
CASES
Board of Education, Levittown Union Free School District v. Nyquist,
57 N.Y.2d 27 (1982) ..................................................................................... 51, 53
Campaign for Fiscal Equity, Inc. v. State,
100 N.Y.2d 893 (2003) ................................................................................passim
Campaign for Fiscal Equity, Inc. v. State,
29 A.D.3d 175 (1st Dep’t 2006) ................................................................... 18, 43
Campaign for Fiscal Equity, Inc. v. State,
8 N.Y.3d 14 (2006) ......................................................................................passim
Campaign for Fiscal Equity, Inc. v. State,
86 N.Y.2d 307 (1995) ............................................................................... 2, 12, 13
Campaign for Fiscal Equity, Inc. v. State,
No. 0111070/1070, 2005 WL 5643844, slip op. (N.Y. Sup. Ct.,
N.Y. Cty. Feb. 14, 2005) ..................................................................................... 17
Campaign for Fiscal Equity v. State,
187 Misc. 2d 1 (Sup. Ct. N.Y. Cty. 2001) .......................................................... 14
Campbell Cty. Sch. Dist. v. State,
181 P.3d 43 (Wyo. 2008) .................................................................................... 36
Claremont Sch. Dist. v. Governor,
794 A.2d 744 (N.H. 2002) .................................................................................. 36
Conn. Coal. for Justice in Educ, Inc. v. Rell,
No. X07HHDCV145037565S, 2016 WL 4922730 (Conn. Super.
Ct. Sept. 7, 2016) ................................................................................................ 36
Hurrell-Harring v. State,
15 N.Y.3d 8 (2010) ............................................................................................. 57
TABLE OF AUTHORITIES
(continued)
Page(s)
v
Hussein v. State,
19 N.Y.3d 899 (2012) ......................................................................................... 53
Klostermann v. Cuomo,
61 N.Y.2d 525 (1984) ......................................................................................... 57
Lake View Sch. Dist. No. 25 v. Huckabee,
220 S.W.3d 645 (Ark. 2005) .............................................................................. 36
McCleary v. State,
269 P.3d 227 (Wash. 2012) ................................................................................ 36
New York City Parents Union v. Board of Education,
124 A.D.3d 451 (1st Dep’t 2015) ....................................................................... 49
New York Civil Liberties Union v. State,
4 N.Y.3d 175 (2005) ......................................................................... 30, 48, 50, 51
New York State Association of Small City School Districts, Inc. v.
State,
42 A.D.3d 648 (3d Dep’t 2007) .................................................................... 48, 49
Reform Educational Financing Inequities Today (R.E.F.I.T.) v.
Cuomo,
86 N.Y.2d 279 (1995) ......................................................................................... 51
Sgaglione v. Levitt,
37 N.Y.2d 507 (1975) ................................................................................... 56, 57
Sloat v. Bd. of Exam’rs of Bd. of Educ. of City of N.Y.,
274 N.Y. 367 (1937) ........................................................................................... 55
STATUTES
Educ. Law § 2023-a(2)(i) ......................................................................................... 24
Educ. Law § 3012.d.11 ............................................................................................ 24
TABLE OF AUTHORITIES
(continued)
Page(s)
vi
Educ. Law §§ 3602.1(dd), 3602.18 .......................................................................... 24
Educ. Law § 3602.4 ................................................................................................. 22
N.Y. Educ. Law § 3602............................................................................................ 20
State Financial Emergency Act ................................................................................ 56
OTHER AUTHORITIES
ALBANY TIMES-UNION, Feb. 15, 2017, available at
http://www.timesunion.com/tuplus-opinion/article/Fully-fund-
Foundation-Aid-for-New-York-s-public-10935315.php .................................... 40
Eliot Spitzer, Fully Fund Foundation Aid for New York’s Public
Schools ................................................................................................................ 40
http://www.budget.ny.gov/pubs/archive/fy0708archive/
fy0708littlebook/Education.html ........................................................................ 40
http://www.p12.nysed.gov/stateaidworkgroup/2007-08RSAP/
rsap0708.pdf .................................................................................................. 38, 39
http://assembly.state.ny.us/comm/Ed/2007Annual/report.pdf ................................ 41
N.Y. State Executive Budget: Education, Labor & Family Assistance
Article VII Legislation 35:26–36:2 (2017), available at
https://www.budget.ny.gov/pubs/executive/eBudget1718/
fy18artVIIbills/ELFA ArticleVII.pdf ................................................................ 22
1
PRELIMINARY STATEMENT
Plaintiffs ask this Court to expressly affirm that Defendant-Appellant New
York State (the “State”) has a self-executing, threshold duty to ascertain the “actual
costs” needed to provide students in all New York’s school districts with the
opportunity to obtain a sound basic education in a manner fully aligned with
student need, and then to fully fund its share of such costs. The State cannot
possibly “ensure” its education finance system is even capable of providing
constitutionally sufficient funding—let alone actually does so—until it adheres to
this threshold duty, and it apparently will not without this Court’s express
affirmation that it must.
Article XI, § 1 of the New York State Constitution (the “Education Article”)
mandates that “[t]he legislature shall provide for the maintenance and support of a
system of free common schools, wherein all the children of this state may be
educated.” In the Campaign for Fiscal Equity, Inc. litigation (“CFE Litigation” or
“CFE”), this Court concluded that “by mandating a school system ‘wherein all the
children of this state may be educated,’ the State has obligated itself
constitutionally to ensure the availability of a ‘sound basic education’ to all its
children.” Campaign for Fiscal Equity, Inc. v. State, 100 N.Y.2d 893, 902 (2003)
2
(emphasis added).1 That obligation requires the State to “ascertain the actual costs
of providing a sound basic education,” id. at 930, in a manner “calibrated to
student need,” id. at 929.
CFE thus made clear that the State, and no other entity, indisputably is
charged with the duty to ensure New York’s education finance system is
constitutionally compliant.
Put simply, Plaintiffs allege that the State has not operated a constitutionally
compliant education finance system for the last seven years. In 2007, the State
started to implement a process it believed would allocate the “actual costs” needed
to provide students in all districts with a constitutionally sufficient education—the
Foundation Aid Formula—but abandoned it without repeal in the 2009–2010
school year.
The State’s self-executing duty to fully fund education based on the
ascertained “actual costs” needed to attain the constitutional standard should be
axiomatic. Yet the State’s core opposition to Plaintiffs’ claims is that it has no
duty to even attempt to take the first steps toward compliance with the Education
Article. According to the State, before its duty to ascertain and fund the “actual
1 The three Court of Appeals decisions from the Campaign for Fiscal Equity, Inc.
litigation are hereinafter referred to as “CFE I” (Campaign for Fiscal Equity, Inc.
v. State, 86 N.Y.2d 307 (1995)); “CFE II” (Campaign for Fiscal Equity, Inc. v.
State, 100 N.Y.2d 893 (2003)); and “CFE III” (Campaign for Fiscal Equity, Inc. v.
State, 8 N.Y.3d 14 (2006)).
3
costs” of a sound basic education can attach, students must first prove the
insufficiency of State funding—at whatever level it happens to be at the time—on
a district-by-district basis for every one of the 700 districts in New York.
Defendants press their obverse position with a false-binary, all-or-nothing
view of New York’s Education Article precedent. Defendants’ incorrect logic
posits that because prior litigants have prosecuted Education Article claims
concerning one or several districts, and the existing case law thus reflects only that
approach, a district-centric focus must be the only way to plead an Education
Article claim. But Plaintiffs (who are the first to allege an Education Article claim
premised on the State’s breach of its threshold funding ascertainment and
allocation duty) are not precluded from challenging a constitutional defect existing
so plainly at the state, not the district, level.
Defendants’ incorrect argument harms the roughly three million children
who attend New York’s public schools.
New York law cannot be read to foreclose pleading an Education Article
claim by identifying a predicate structural defect in the State’s funding process, the
correction of which would inure to the benefit of students in all 700 districts in the
state. District-based claims of inadequate inputs and outputs are one, but, as this
case shows, cannot be the only, way to plead an Education Article violation.
Plaintiffs have stated another way.
4
Only after the State has fulfilled its threshold funding ascertainment and
allocation duty would it make sense to assess whether the fully funded amounts
meet the constitutional standard at the individual district level. Indeed, albeit
directed at New York City, this Court stated what can only be the universally
applicable order of operations, and it supports Plaintiffs’ approach: “Once the
necessary funding level is determined, the question will [then] be whether the
inputs and outputs improve to a constitutionally acceptable level.” CFE II,
100 N.Y.2d at 930 (emphasis added).
In addition to alleging the State’s breach of its threshold funding process
duty, Plaintiff NYSER’s Complaint alleges substantial deficiencies in the inputs
currently provided to students in New York City, Syracuse, and seven other
representative districts around the state. Despite the sufficiency of those
allegations, it would be senseless to compel plaintiffs to test funding at the district
level (let alone for every single district) when the State has concededly not yet
fully funded the ascertained “actual costs” directed by either its Foundation Aid
Formula or any alternative process designed to fully align funding with student
need.
The sound logic and sensibility supporting Plaintiffs’ Education Article
claim is manifest. Under Defendants’ incorrect view, students, not the State,
would bear the threshold burden to “maintain and support” (see N.Y. Const.
5
art. XI, § 1) New York’s education system. Students would first have to spend
years litigating the facts and circumstances specific to all 700 districts before a
court could require the State to take the very first steps needed to fulfill its
constitutional funding obligation. The cycle of non-compliance and litigation
could repeat ad infinitum because without an ongoing, self-executing duty to
ascertain how much funding it estimates is actually needed to meet the
constitutional standard and then fully allocate the amount, the State would always
be free to abandon any prior efforts, court-ordered or otherwise.
Those are the inequitable circumstances now before this Court.
Plaintiffs allege that the findings and holdings issued throughout CFE
elucidated constitutional reforms that were needed for the funding process at the
statewide level, not merely for additional funding for students educated in New
York City in the 1990s. The State understood (and the Court was aware) that the
same rationale guiding CFE II’s decision—specifically the fundamental duty to
ascertain and fully allocate the actual costs of providing a sound basic education
according to need—necessarily applied to the State’s funding process for all 700
districts, not just to the 38% of students in New York City. There is no room for a
contrary understanding—students in districts throughout the state are no less
constitutionally entitled to their full share of needs-based funding than those in the
New York City schools.
6
That is why, as would be expected from a rational government attempting to
attain constitutional compliance, the State responded to CFE by first undertaking a
cost analysis to ascertain the “actual costs” it estimated were needed to meet the
constitutional sound basic education standard in all districts. That ascertainment
was a cornerstone for developing the Foundation Aid Formula, a needs-based
funding process legislatively adopted and codified in N.Y. Educ. Law § 3204 in
2007. The Foundation Aid Formula represented the necessary agreement by the
executive and the legislature, after CFE III, on what efforts they concluded should
be taken over a four-year phase-in period to attain statewide compliance with the
Education Article. The Formula was under development at the time of CFE, and it
was understood that it would holistically address constitutional requirements for all
districts through a unitized methodology, not by piecemeal variation on a district-
by-district basis. It was thus no secret that the State’s process reforms would
necessarily apply to all school districts.
Plaintiffs allege the Foundation Aid Formula is the only mechanism the
State ever developed to implement a process that ascertains and then allocates the
actual costs of providing the opportunity to obtain a sound basic education. But
the State abandoned the Formula following the 2008 recession. It first froze and
then cut the State aid the Formula would have provided over four years.
7
Defendants contend the Foundation Aid Formula is constitutionally
insignificant. App. Br. at 1–2, 49–54.2 If this were true, it would mean the State
has never purported to fund school districts based on an ascertained estimate of
what is needed to provide the opportunity to obtain a sound basic education. Both
sides thus agree that for at least the last seven years, the State has not funded the
estimated actual costs needed to meet the constitutional standard.
Since abandoning the Foundation Aid Formula in 2009, the State has funded
education in the exact same way that this Court held to be unconstitutional in CFE:
by doling out “shares” determined not by a formula calibrated to ascertained costs
and needs, but to the dictates of a “malleable” arrangement, determined by “three
men in a room” and deal-making having no “perceptible relation,” CFE II,
100 N.Y.2d at 929–930, to what students actually need to obtain a sound basic
education.
These are the circumstances under which Plaintiffs ask this Court to
expressly affirm that the nature of the State’s constitutional duty under New
York’s Education Article includes a continuing and self-executing, threshold
obligation to employ a formula or other needs-based method to ascertain and then
fully fund the actual costs of providing students in all of New York’s schools with
the opportunity to obtain a sound basic education.
2 “App. Br.” Cited herein refers to the Brief for Appellants submitted in this action
and dated March 15, 2017.
8
The express affirmation now sought from the Court properly balances
separation-of-powers principles.
Plaintiffs do not ask the Court to wade into the details of many conceivable
ways in which Defendants could design a constitutionally compliant funding
process if they choose to conclusively reject the Foundation Aid Formula. The
Court is not being asked to approve any particular level of funding. Nor do
Plaintiffs seek an order that would bind future legislatures to any particular
permutation of a funding process that satisfies the State’s threshold duty to
ascertain and fully fund the costs needed to meet the constitutional standard. The
confirmation sought from the Court fits squarely in the realm of situations in which
it is proper for the judiciary to adjudicate the nature of the State’s Education
Article obligations.
Finally, we emphasize that Plaintiffs’ approach to pleading an Education
Article claim complements, not supplants, the district-level inputs-outputs-
causation approach. Nor would Plaintiffs’ Education Article claim here engender
an outpouring of similar claims from other plaintiffs in the state. Once the Court
expressly affirms the State has a threshold duty to ascertain and fully fund the
constitutionally required level of education for all three million students in New
York, the State presumably will adhere to that duty. If the State begins to operate a
funding system premised on a full, needs-based allocation of ascertained “actual
9
costs,” to which the judiciary’s deference on the standard of rationality would
apply, the bar to suing on alleged inadequacies in individual districts would likely
be even higher.
Accordingly, Plaintiffs request that this Court affirm the lower court’s
decision upholding their Complaints.
In doing so, Plaintiffs respectfully ask the Court to focus further proceedings
in this case by explicitly clarifying that the State cannot ensure its compliance with
the Education Article without first fulfilling its self-executing duty to finance
education using a process that ascertains and at all times fully allocates its portion
of the “actual costs” of providing students in all New York’s school districts with
the opportunity to obtain a sound basic education in a manner fully aligned with
student need.
Plaintiffs further ask the Court to confirm that an Education Article claim is
stated by properly alleging the State has failed to fulfill that threshold duty. On
remand, the trial court would then determine whether the State has, in fact,
(i) ascertained the “actual costs” needed to meet the constitutional standard in all
districts, and (ii) fully funded its portion of those costs in a manner calibrated to
student need. Plaintiffs would seek to demonstrate that in 2007 the State did
undertake a constitutionally valid process that produced the Foundation Aid
Formula, but since 2009, the State has failed to fully fund the amount of state aid
10
called for by that formula, nor has it undertaken any alternative process to ascertain
and fully allocate its share of the “actual costs.”
If these facts are established, Plaintiffs would then expect to request that the
lower court issue an order requiring the state to either (1) fully fund the Foundation
Aid Formula that is still on the statute books, or (2) promptly undertake a new
constitutionally valid process to ascertain the actual costs of providing all students
in the state the opportunity for a sound basic education under current conditions,
and then fully fund its share of those costs in a manner fully aligned with student
need.
COUNTERSTATEMENT OF THE ISSUES PRESENTED
(1) Does the State’s ongoing obligation to ensure a constitutionally
compliant education finance system under the Education Article include a
threshold, self-executing duty to first ascertain the “actual costs” of providing New
York’s three million public schoolchildren with the opportunity to obtain a sound
basic education and then to fully provide State funding needed to meet that actual
student need, to ensure that all school districts have the resources necessary for
providing the opportunity for a sound basic education?
(2) Post-CFE, can Plaintiffs plead an Education Article claim for the
State’s failure to follow a funding process that ascertains and fully allocates the
11
State’s portion of education aid needed to provide all students, not just those in
New York City, with the constitutional opportunity for a sound basic education?
(3) In CFE III, to resolve the impasse between the legislature and
executive on the constitutionally sufficient funding increase needed for New York
City schools, did this Court intend to fix $1.93 billion (with inflation and cost-of-
living adjustments) as a definitive constitutional funding level, or did it intend to
establish that amount as the lower-end of a range of figures that the evidence had
indicated would be rational and appropriate for meeting constitutional needs, and
direct the legislature and executive to choose a final amount from within that
range?
(4) Can fiscal constraints like the “gap elimination adjustment” (“GEA”),
adopted in times of recession or otherwise, constitute proper grounds for the State
to fund less than its portion of the aid needed to meet the ascertained “actual costs”
of providing all students the opportunity for a sound basic education?
(5) In enacting education funding appropriations or other legislation
having a direct nexus to State education aid, must the State account for how the
legislation will impact schools’ abilities to provide all students with the
opportunity for a sound basic education?
12
COUNTERSTATEMENT OF THE CASE
I. Background of the CFE Litigation
The CFE plaintiffs brought a case seeking an additional amount of State
education aid needed to provide New York City schools with a constitutionally
sufficient level of funding. See CFE I, 86 N.Y.2d at 315. It took them 14 years,
including three trips to this Court, to compel the State to ascertain how much
additional funding was at that time needed for only the City’s schools. While the
State dutifully did so for the City and the state in 2007, two years later, it
abandoned the Foundation Aid Formula and reverted to the unconstitutional
method of funding education by “three men in a room” and deal-making politics.
A. CFE I
CFE I upheld the plaintiffs’ complaint and outlined the elements of an
Education Article claim challenging the amount of funding the State provided to
the New York City schools. The Court first explained that a “sound basic
education” “should consist of the basic literacy, calculating, and verbal skills
necessary to enable children to eventually function productively as civic
participants capable of voting and serving on a jury.” Id. at 317. The Court
provided a “template” for the elements of a district-focused cause of action under
the Education Article, which later CFE courts, including this Court in CFE II,
further characterized as a required showing that deficient “inputs” from the State
caused deficient “outputs” at the student level in a given district. Id. at 317-18.
13
CFE I suggested that its inputs-outputs-causation template was designed for the
district-level funding challenge made in that case:
In order to succeed in the specific context of this case, plaintiffs will
have to establish a causal link between the present funding system and
any proven failure to provide a sound basic education to New York
City school children.
Id. at 318 (emphasis added).
B. CFE II
CFE II reaffirmed that the State holds the ultimate obligation to “ensure” a
constitutionally compliant education finance system under the Education Article.
“[B]y mandating a school system ‘wherein all the children of this state may be
educated,’ the State has obligated itself constitutionally to ensure the availability of
a ‘sound basic education’ to all its children.” CFE II, 100 N.Y.2d at 902 (emphasis
added) (quoting CFE I, 86 N.Y.2d at 314); see also CFE II, 100 N.Y.2d at 924
(rejecting the State’s “Local Funding” arguments and affirming “that the ultimate
responsibility to address th[e] problem still lay[s] with the State.”).
CFE II further held that while the legislature has discretion in shuffling its
“spending priorities,” the Court has “a duty to determine whether the State is
providing students with the opportunity to obtain a sound basic education,” CFE II,
100 N.Y.2d at 920, the only inference being the legislature cannot fund less than
required to attain the constitutional standard. The Court also rejected the State’s
“Comparative Spending” argument because neither comparison to other states nor
14
a high spending level generally, without being tethered “to student need,” would
demonstrate “students are receiving a sound basic education.” Id. at 921.
Critically, CFE II admonished the State to correct what the lower courts had
concluded were constitutional defects in the State’s lack of a needs-based funding
process for ascertaining and allocating its portion of education aid to all districts
statewide. Those constitutional defects had been clearly elucidated throughout the
CFE Litigation.
At trial, the evidence proved statewide distribution of education funds was
not calibrated to the actual costs of providing a sound basic education, and to
student need in districts throughout the state. Campaign for Fiscal Equity v. State,
187 Misc. 2d 1, 83, 88 (Sup. Ct. N.Y. Cty. 2001). “[R]esources [we]re not aligned
with need. Those schools with the greatest need frequently ha[d] the fewest fiscal
resources . . . .” Id. at 83.
The court found it was “an open secret in Albany” that, statewide, funding
was calibrated to the dictates of “three men in a room.” Id. at 88. The hodgepodge
of funding formulas existing at the time was a sham, and the amounts of State aid
different districts received were based on implicit “shares” negotiated behind
closed doors to serve political considerations, unrelated to student need, during the
annual budget negotiations process.3
3 The court found that:
15
Accordingly, the CFE II Court agreed with “the trial court’s description of
the existing education funding scheme” and expressly directed the State to consider
how it should fix the “education funding scheme . . . to align funding with need.”
CFE II, 100 N.Y.2d at 929.
The Court held that State education funding (as enabling the needed
“inputs”) should “be calibrated to student need.” Id. It also found the “political
process”—which manipulated statewide distribution of education funds—
“allocat[ed] to City schools a share of state aid that d[id] not bear a perceptible
relation to the needs of City students.” Id. at 930.
The record in CFE II concerned only New York City, and given the nature
of the case before it, the Court determined that it was ultimately constrained to
order the State to “only ascertain the actual cost of providing a sound basic
education in New York City.” Id. at 930. Thus, CFE II fashioned an express
remedy targeting only New York City’s schools. Record on Appeal (“R.”) 141-42
State aid has historically been divided without reference to the
formulas. . . . [A]nnual increases in State education aid are allocated
pursuant to an agreement struck by the Governor and the leaders of
the State Assembly and the State Senate as part of the overall annual
budget negotiations. These negotiations produce a general agreement
on the overall amount to be spent on education and how it is to be
distributed across the State which is then ratified by the Legislature.
This phenomenon is commonly referred to as “three men in a room.”
Id. (emphasis added).
16
(¶¶ 32-35). CFE II’s remedial order required the State to do the following within
thirteen months:
(1) “ascertain the actual cost of providing a sound basic education in
New York City”; (2) adopt “[r]eforms to the current system of
financing school funding and managing schools [to ensure] . . . that
every school in New York City would have the resources necessary
for providing the opportunity for a sound basic education”; and
(3) “ensure a system of accountability to measure whether the reforms
actually provide the opportunity for a sound basic education.”
R. 141 (¶ 33).
But the Court in CFE II was aware that the “political process” allocated
arbitrary “shares” of State education aid to all districts, and that the “existing
education funding scheme” was “needlessly complex, malleable and not designed
to align funding with need.” CFE II, 100 N.Y. 2d at 929. The Court’s message to
the State regarding its defective process overall was clear. As a practical matter,
the Court’s remedial order meant the State would need to broadly reform its
funding process for statewide application. Determining how much additional
funding was required for New York City would be accomplished through a process
that would necessarily determine how much more was likewise needed for students
in the rest of New York’s approximately 700 school districts.
C. CFE III
Responding to CFE II, Defendants attempted to reform the State’s education
finance system as applied to all districts statewide. As CFE III noted, “[w]ithin a
17
matter of weeks [of CFE II], Governor Pataki [had] issued an executive order
creating the New York State Commission on Education Reform, charged with
recommending, to the Executive and the Legislature, education financing and other
reforms that would ensure that all children in New York State have an opportunity
to obtain a sound basic education.” CFE III, 8 N.Y.2d at 21–22 (emphasis added).
Governor Pataki proposed a funding plan to the legislature, but it refused to
adopt it and that impasse precluded the state from adopting legislation needed to
fulfill the constitutional obligations. The CFE plaintiffs, therefore, began another
round of litigation.
The trial court appointed a panel of referees to consider costing-out studies
submitted by the parties and the state education department (“SED”). That panel
recommended an increase in operational funding that would provide students in the
New York City public schools an increase of $5.63 billion in annual funding by the
end of a four-year phase-in period. Campaign for Fiscal Equity, Inc. v. State,
No. 0111070/1070, 2005 WL 5643844, slip op. at 2 (N.Y. Sup. Ct., N.Y. Cty.
Feb. 14, 2005). The trial court accepted that recommendation and issued a
compliance order based upon it.
The Appellate Division modified the trial court’s order to allow the governor
and legislature to break their impasse by considering a range of figures from
$4.7 billion to $5.63 billion, which it considered reasonable estimates of the
18
“actual cost” of a sound basic education for New York City. Campaign for Fiscal
Equity, Inc. v. State, 29 A.D.3d 175, 189 (1st Dep’t 2006). This Court further
modified that order to include $1.93 billion at the lower end of the permissible
range of figures. CFE III, 8 N.Y.3d at 27. That was the number that Governor
Pataki had advocated, and it represented the minimum amount in a range of figures
that had been recommended by consideration by Standard and Poor’s, the expert
consultants who had been retained by his Commission on Education Reform. Id. at
24.
II. The State Responded to CFE with Statewide Efforts Toward
Constitutional Reform that Culminated in Adoption of the Foundation
Aid Formula.
Defendants holistically responded to the CFE Litigation. They
acknowledged inherent constitutional defects in the education finance system and
undertook efforts to reform the system on a statewide basis—including
implementing a process to calibrate all funding with “actual needs”—as CFE II
directed they should do. R. 132, 143–46, 175, 177-78, 185–86, 188 (¶¶ 2, 38–44,
134, 142, 145, 146, 170–73, 179). CFE’s holdings and findings clarified efforts
the State would need to take to attain constitutional compliance, and the executive
and legislative branches acted rationally in attempting to do what they understood
was needed to comply with the Education Article.
19
Accordingly, Defendants implemented major initiatives to (1) ascertain the
estimated actual cost of providing a sound basic education based on student need
within the permissible ranges for New York City set forth in CFE III, also
considering actual cost needs on a statewide basis, and (2) establish a new funding
allocation methodology—the Foundation Aid Formula—to calibrate distribution of
funds with need, and ensure the opportunity for a sound basic education would be
offered to all students statewide by the end of a four-year phase-in. R. 143–46,
185–86 (¶¶ 38–44, 170–73); see also App. Br. at 14–15 (the Formula “altered the
State’s method of apportioning general operating aid among school districts” and
would have phased in additional “total state and city funding . . . by $5.4 billion
over the course of four years”).
To calculate the estimated actual costs of a sound basic education, in the
wake of CFE II, the State Education Department (“SED”) first developed a
“successful schools” cost analysis methodology, and further refined that
methodology following CFE III. R. 143–44 (¶ 38). Post-CFE III, SED updated
the definition of “successful schools,” gathered new data, and, among other
reforms, added to the analysis an extra cost weighting for students living in
sparsely populated rural districts. R. 143–44 (¶ 38), 186 (¶ 173). The Foundation
Aid Formula responded directly to CFE’s call for a simplified, needs-based
funding process. R. 144–146. It has four basic components: (1) a base amount per
20
pupil reflecting the cost to educate students, based on the amount spent by
“successful school” districts; (2) a regional cost index to ensure State aid could buy
a comparable level of goods and services in districts around the state; (3) an
expected minimum contribution by the local community; and (4) a pupil-need
index recognizing added costs for providing extra time and help for students with
special circumstances. R. 145–46 (¶ 43); App. Br. at 14-15.
In January 2007, then-governor Elliot Spitzer proposed a four-year
“Educational Investment Plan” to implement these constitutional reforms. R. 144–
45 (¶¶ 39, 41). The legislature overwhelmingly adopted the reforms, with a slight
increase in the total funding level and other minor changes, by a vote of 60-1 in the
Senate and 126-16 in the Assembly, as the Budget and Reform Act of 2007 (the
“2007 Reform Act”), which is codified in N.Y. Educ. Law § 3602. R. 145 (¶¶ 41–
42); see App. Br. at 14. (stating the 2007 Reform Act enacted the Foundation Aid
Formula).
The 2007 Reform Act called for the State to increase Foundation Aid, which
covers sound basic education costs, including teacher and principal salaries, and
schools’ basic operating costs. Specifically, the Act called for a $5.49 billion
statewide increase in Foundation Aid, according to the following four-year phase-
in:
21
School Year Percentage of Total Funding Amount
2007-2008 20% $1.1 billion
2008-2009 22.5% $1.24 billion
2009-2010 27.5% $1.5 billion
2010-2011 30% $1.65 billion
R. 146 (¶ 45).
III. Since the 2008 Recession, the State Has Abandoned Its Constitutional
Reform Efforts and Has Further Cut and Frozen State Aid Without
Responding to Actual Student Needs.
The State adhered to its constitutional reform efforts only for the 2007–2008
and 2008–2009 school years. App. Br. at 13, 16 (noting planned increases were
implemented only in the 2007–2008 and 2008–2009 budgets). With the onset of
the 2008 recession, however, faced with a “budget gap,” the State reverted to an
openly noncompliant system starting in 2009–2010. R. 132 (¶ 2); App. Br. at 16.
First, Foundation Aid was frozen at the level attained from the first two
years of implementing the 2007 Reform Act. As Defendants concede, “[t]he
Legislature eliminated a planned Foundation Aid increase for the 2009–2010
school year and extended the phase-in period for Foundation Aid from four years
to seven years—thus delaying the time at which school districts would receive
their maximum per-pupil allocation of Foundation Aid.” App. Br. at 16.
22
The phase-in remains delayed to this day, a decade after the Foundation Aid
Formula was enacted to calibrate funding with actual needs. For the upcoming
2017–2018 school years, the State-aid portion of school funding is approximately
$3.7 billion less than the needs-based amounts called for by the Foundation Aid
Formula’s calculations. See Educ. Law § 3602.4; R. 147–49 (¶¶ 46–51), 151
(¶ 58).
In fact, this year, the governor recommended eliminating the Foundation Aid
Formula, effective for the 2018–2019 fiscal year.4 This recommendation was
rejected by the legislature in the final budget bills for 2017–2018 enacted in early
April 2017. The fact that the governor has proposed eliminating the Foundation
Aid Formula, which has been statutorily retained but not honored for the past
seven years, and that the legislature might in the near future eliminate it with no
constitutionally-valid alternative system being put in its place, glaringly illustrates
why it is essential that this Court expressly affirm the State must at all times follow
a constitutionally-prescribed process in its school funding decisions.
4 See N.Y. State Div. of Budget, FY 2018 N.Y. State Executive Budget: Education,
Labor & Family Assistance Article VII Legislation 35:26–36:2 (2017), available at
https://www.budget.ny.gov/pubs/executive/eBudget1718/fy18artVIIbills/
ELFA_ArticleVII.pdf. According to the proposal, as of 2018–2019, further phase-
in of the Foundation Aid Formula would be eliminated, and school districts would
receive the Foundation Aid amount they received in 2017–2018 plus any additional
amounts that political negotiations may deign to provide in future years.
23
Critically, before enacting any of its appropriation bills between 2009–2010
and the present, the State failed to account for whether new funding levels, billion-
dollar reductions from what the Foundation Aid Formula called for, comport with
the actual costs of providing a sound basic education. R. 132 (¶ 3), 149 (¶ 52),
177–79 (¶¶ 143–49), 180 (¶ 153). Nor did the State account for whether the
legislation would undermine the education finance system by misaligning funding
and actual student needs. Id.
What the State did do was adopt various statutory caps and mechanisms that
purported to allow the hamstrung Foundation Aid Formula to exist in a state of
suspended animation while appropriations were instead doled out by the “three
men in a room.”
The State enacted the Gap Elimination Adjustment (“GEA”), which is a
euphemism for legislation that cut State education aid far below the levels directed
by the 2007 Reform Act. Educ. Law § 3602.17. The “gap” is the difference
between the money the State had estimated is constitutionally required and the
money the State in a given year is willing to allocate from its total annual budget.
R. 149 (¶¶ 52–53). The State also enacted a growth cap preventing State aid from
annually increasing by more than the increase in personal income in the state for
the previous year, regardless of constitutionally required funding levels. Educ.
Law §§ 3602.1(dd), 3602.18; R. 150 (¶ 54). The State further enacted a
24
“supermajority” (60%) vote requirement that must be garnered before a local
district can increase funding in excess of two percent of the prior year’s levy or the
increase in the national Consumer Price Index, whichever is less, regardless of the
“actual costs” needed to provide students the expected local funding share for a
constitutionally sufficient education. Educ. Law § 2023-a(2)(i); R. 150 (¶ 55).
Finally, the State adopted school-aid penalty provisions tied to Annual Professional
Performance Review plans (“APPR penalties”) with no consideration for how
reduced funding would impact a district’s ability to cover the actual costs of a
sound basic education. See Educ. Law § 3012.d.11; see also Aristy-Farer Compl.
¶ 44 (R. 17–18). A $290 million APPR penalty was imposed on top of the other
reductions that had been made from the constitutional Foundation Aid amounts) on
New York City in 2013–2014 without any consideration of the impact on student
need. See id; NYSER Compl. ¶ 131 (R. 174–75).
IV. Supreme Court Properly Denied Defendants’ Motions to Dismiss.
A. NYSER
NYSER’s first cause of action (R. 190–91) alleges, inter alia, that in
violation of this Court’s orders in CFE, New York City schoolchildren cannot
receive the opportunity to obtain a sound basic education because the State has
abandoned a needs-based funding methodology, and has enacted statutes that cut
State aid, disregarding funding levels the State, through a constitutional process,
25
had determined to be necessary to ensure a constitutionally compliant system. It
also alleges that New York City students have not received even the minimum
$1.93 billion discussed in CFE III.
The second cause of action (R. 191–93) alleges, inter alia, students in
districts statewide are harmed by the State’s aforementioned conduct because the
education finance system’s defective design—its failure to adhere to a needs-based
funding process—intrinsically prevents the State from “ensuring” the system is
even capable of providing all students with the constitutionally required
opportunity. It also alleges that the State has not, in fact, provided students
throughout the state a minimum constitutional level of funding necessary to ensure
them the opportunity for a sound basic education.
The third cause of action (R. 193–94) alleges, inter alia, Defendants have
failed in their self-executing duty to maintain a constitutionally compliant
education finance system that appropriately accounts for changing educational and
economic circumstances, including an appropriate accountability system.
The fourth cause of action (R. 194) alleges, generally, that Defendants’
conduct following CFE III violates the right of all students in New York to be
provided the opportunity to obtain a sound basic education.
26
Supreme Court denied Defendants’ motions to dismiss the NYSER
Complaint, accepting Plaintiffs’ theories concerning statewide violation of the
Education Article. R. 126–30.
B. Aristy-Farer
The first cause of action in Aristy-Farer (R. 28) alleges, inter alia, that the
underfunding of New York City public schools—namely, the $290 million APPR
penalty improperly based on the City’s and its unions’ inability to timely agree on
a personnel evaluation system—violates the Education Article.
The second cause of action (R. 28–29) alleges, inter alia, that imposition of
the $290 million APPR penalty while alternative mechanisms were available
constitutes a violation of Plaintiffs’ due process rights under the state Constitution.
The third cause of action (R. 30) alleges, inter alia, that imposition of the
penalty on students in New York City but not on similarly-situated students in
other school districts violates the plaintiffs’ right to equal protection under the state
Constitution.
Supreme Court denied Defendants’ motion to dismiss the Aristy-Farer
Complaint. R. 4–7.
27
V. The First Department Affirmed Denial of Defendants’ Motions to
Dismiss.
A. NYSER
The First Department consolidated decision on the State’s appeals into a
single order issued September 8, 2016, affirming denial of the State’s motions to
dismiss Plaintiffs’ Complaints nearly in full.
The lower court correctly observed that through the 2007 Reform Act and its
Foundation Aid Formula, “the State promulgated a four-year plan to implement the
constitutional reforms” directed by CFE. R. 366. The court further correctly
observed that thereafter, “[t]he State froze Foundation Aid levels, eliminating the
planned increases for 2009–10,” and then “went further” by suppressing or
reducing the Foundation Aid’s calculated funding through various legislative acts.
R. 367.
The court fully upheld the NYSER Plaintiffs’ first, second, and fourth causes
of action, effectively concluding they each independently stated Education Article
claims.
Concerning New York City schools, the First Department correctly noted
that CFE III found those schools would require at least $1.93 billion in additional
spending to meet the constitutional standard. R. 378. However, the court
incorrectly found that CFE III had fixed—before the executive and legislature
28
reached agreement through the 2007 Reform Act—$1.93 billion as a constitutional
“floor.” R. 377.
Concerning the second and fourth causes of action, the Court notably
rejected Defendants’ argument that an Education Article claim seeking correction
of a straightforward funding process defect would require proof of educational
deficiencies in each of New York’s 700 school districts. R. 383. Responding to
Plaintiff NYSER’s allegations that funding inadequacies have impacted students in
New York City, Syracuse, and the other school districts, the court held “it is
enough that the plaintiffs have adequately alleged systemic deficiencies in at least
one or two districts—New York City and Syracuse,” R. 384, because, “[a]s a
practical matter, actionable deficits identified in one district will require
modification of the formula, necessarily affecting calculation of funding for all
districts.” R. 383. That is because “[t]he State educational funding system is an
interconnected web in which a complex formula is used to calculate funding for all
districts.” Id.
The Appellate Division did not discuss Plaintiff NYSER’s primary
Education Article theory, that the State must first fulfill its self-executing
ascertainment and allocation duty aligned with what students actually need to
obtain the constitutional standard of education. The court did, however, fully
29
uphold the second and fourth causes of action, which encompass that theory. R.
389.
The lower court validated NYSER’s third cause of action almost in its
entirety. The court found “the parties dispute the adequacy of accountability
mechanisms in light of the significant funding adjustments over the 10 years since
CFE III was handed down,” and “[t]hus it would be premature to foreclose
plaintiffs from exploring the adequacy of accountability mechanisms.” R. 385.
The court further noted that, “[i]ndeed, the adequacy of the State’s education
funding accountability mechanisms is directly related to the State’s funding duty.”
Id. However, the court rejected the “information and guidance” component of the
third cause of action, finding it is “not sufficiently related to the State’s funding
duty.” Id. Plaintiffs do not cross-appeal dismissal of that aspect of the third cause
of action.
B. Aristy-Farer
The court fully upheld the Aristy-Farer Complaint’s first cause of action,
concluding it stated a valid Education Article claim for the same reasons that
support the NYSER Plaintiffs’ second and fourth causes of action. R. 379. The
court rejected Defendants’ argument that an Education Article claim requires a
plaintiff to plead deficiencies in every New York School district. R. 383–84.
30
The court dismissed the Aristy-Farer Plaintiffs’ second and third causes of
action, a decision Plaintiffs do not cross-appeal. R. 386–88.
ARGUMENT
POINT I
THE STATE HAS A THRESHOLD DUTY TO DEVELOP AND MAINTAIN
A FUNDING PROCESS THAT COMPLIES WITH CONSTITUTIONAL
REQUIREMENTS.
I. The State Cannot “Ensure” a Constitutionally-Compliant System
Without a Process That Fully Funds the “Actual Costs” of a Sound
Basic Education in a Manner Aligned with Student Need.
A. The State Has a Threshold Duty to First Ascertain and Then
Fully Fund Actual Costs to Adequately Educate All Students.
This Court has repeatedly confirmed that the Education Article makes it the
State’s responsibility to “ensure” a constitutionally compliant education system for
all schoolchildren. See supra pp. 13 & 17, quoting CFE I, II, & III; see also New
York Civil Liberties Union v. State (“NYCLU”), 4 N.Y.3d 175, 182 (2005)
(“education is ultimately a responsibility of the State” notwithstanding any
‘sabotage’ by local school districts”).
To satisfy its obligation, the State must first ascertain and fully fund its share
of the estimated “actual costs” of providing all students with the opportunity to
obtain a sound basic education based on student need. If this threshold duty is not
fulfilled, the State cannot represent its system as being capable of meeting the
31
constitutional standard. It certainly cannot “ensure” the standard is actually
satisfied without first properly calculating and then fully funding its share of the
costs needed to meet the standard.
Plaintiffs therefore ask the Court to expressly affirm that the State has this
threshold ascertainment and allocation duty concerning all students in New York,
not just for schoolchildren in New York City. Such a judicial affirmation is needed
to ensure that Defendants will always adhere to an actual-cost, needs-based
funding process, whether it is the Foundation Aid Formula or some other
constitutionally sufficient equivalent.
New York’s education finance framework has three interdependent points:
(1) the starting point—the State’s funding process that calculates and allocates
what the State has estimated to be constitutionally sufficient funding based on
“actual costs” needed to meet the standard; (2) the middle point, which is the
school district “vehicle” responsible for receiving and using State funding; and
(3) the end point, which is the students for whom the State must provide the
opportunity to obtain a sound basic education.
The State at the starting point is the lynchpin of the system. If local districts
are the vehicle, then the State is the driver who must determine how much fuel
(funding) is needed to reach the target destination—the opportunity to obtain a
sound basic education. The State cannot “ensure” that destination can be reached
32
without first estimating how much fuel the vehicle needs, and ensuring it is
available.
This is common sense, and it is why Plaintiffs have not, contrary to
Defendants’ mischaracterization, taken the approach of piecemeal litigating
“Education Article claims against every school district in the state.” App. Br. at
37. Education Article claims are brought to rectify unconstitutional conduct by the
State, not school districts, and here the remedy will at least entail first compelling
the State to correct the threshold defect evident in its funding process. Proceeding
with a case to prove current educational deficiencies in 700 school districts would,
among other things, at this stage put the cart before the horse, because the State has
openly declined to fully fund its previous estimate of “actual costs” needed to meet
the constitutional standard. See supra pp. 21–24. This Court has already
confirmed the logical order of operations, which applies broadly and beyond the
limited context of CFE II: “Once the necessary funding level is determined, the
question will [then] be whether the inputs and outputs improve to a constitutionally
acceptable level.” CFE II, 100 N.Y.2d at 930 (emphasis added).
B. The State’s Threshold Duty Ties to Its Process, Not to a Per Se
Sum-Certain.
Defendants argue “allegations that the State has not provided funding in a
given amount cannot establish a per se failure to provide the educational
opportunities the Constitution requires, without consideration of (a) whether the
33
level of funding has caused a deficiency in educational services, and (b) whether
funding from other sources may combine with state funding to satisfy the
constitutional requirement.” App. Br. at 54. Their argument is wrong and misses
the mark for at least two reasons.
First, Plaintiffs allege that the State has failed to follow a constitutionally-
compliant funding process that provides State aid based on what the State
determines is actually needed to meet the constitutional standard. The claims are
not for any absolute amount of money that is required per se. If the State believed
that changed circumstances in 2009—or now—justified undertaking a new process
for determining “actual costs,” which might have been different from the amounts
called for in the Foundation Aid Formula, it would have been entitled to do so, and
to then fully allocate those ascertained amounts. But here the State had previously
calculated the “actual costs” but refused to fully fund them, and has made no effort
to undertake any process to ascertain the current actual costs. Thus, the State is
failing to ensure “the educational opportunities the Constitution requires.” Id. The
State’s duty is to ascertain the “actual costs” needed “to provide the educational
opportunities the Constitution requires.” App. Br. at 54. If it does not fulfill the
duty to calculate that particular “given amount,” id., the State does fail to “ensure”
its provision of the constitutional opportunities.
34
Plaintiffs acknowledge that the Foundation Aid Formula’s funding levels
may not reflect what is actually needed now, a decade after it was adopted. The
State’s constitutional duty, however, is to adhere to the Foundation Aid Formula it
enacted in 2007 until it has undertaken a valid deliberative analysis of current
“actual costs,” and established an alternative method for fairly and fully
distributing its share of that amount to all school districts. Failure to do so violates
the Education Article.
Second, “whether funding from other sources may combine with state
funding to satisfy the constitutional requirement,” App. Br. at 54 (emphasis added),
does not measure whether the State has fulfilled its own duties. Variable and
indiscriminate monies that might be received from other sources in any given year,
of course, “may”—or may not—be applied to fund school districts in an amount
that could theoretically provide the opportunity to which students are entitled. But
mere hope by the State that happenstance funding from other sources might
substitute for its own share of State education aid does not “ensure” the education
finance system is constitutionally compliant.
Significantly, the constitutional command is that “The legislature shall
provide for the maintenance and support of a system of free common schools,
wherein all the children of this state may be educated.” N.Y. Const. art. XI § 1
(emphasis added). Following this mandate, the legislature enacted the Foundation
35
Aid Formula to ensure the amounts needed to provide all students in the state the
opportunity for a sound basic education based on specific amounts of state and
local funding; the Formula nowhere factors or even mentions any possible federal
funding.
Defendant Regents have conceded the State cannot rely on funds that may,
or may not, be received from the federal government to fulfill its duty. This was
made clear during CFE:
[F]unding education is a State responsibility, [and] . . . [m]ost federal
funds can be used only to supplement, not supplant, a state’s
commitment to education.5
Reliance on the vagaries of funding received from non-State sources in any given
year, which is what Defendants advocate, falls far short of the State’s
constitutional obligation to “ensure a system” designed to comply with the
Education Article.
C. The Threshold Calculation and Funding Duty is a Well-
Recognized First Principle in States Across the Country.
New York will be far from the first state to expressly affirm that the
threshold step toward providing a constitutionally sufficient education for all
students is first ascertaining the estimated actual costs needed to do so, and fully
funding those costs.
5 Memorandum of Law on Behalf of Amicus Curiae New York State Board of
Regents at 18 (Sup. Ct. N.Y. County Index No. 111070/93) (emphasis added).
36
By expressly recognizing this threshold self-executing duty, the Court would
align New York with many other states. See Lake View Sch. Dist. No. 25 v.
Huckabee, 220 S.W.3d 645, 654–55 (Ark. 2005) (“Without a continual assessment
of what constitutes an adequate education . . . the General Assembly is ‘flying
blind’ with respect to determining what is an adequate foundation-funding level.”);
McCleary v. State, 269 P.3d 227, 254 (Wash. 2012) (rejecting as backwards the
state legislature’s characterization of adequate education as whatever their funding
formula provided, stating that “[i]f the State’s funding formulas provide only a
portion of what [basic education] actually costs . . . then the legislature cannot
maintain that it is fully funding basic education”); Campbell Cty. Sch. Dist. v.
State, 181 P.3d 43, 49–50 (Wyo. 2008) (noting the court’s mandate that the state
revise its cost-based model every five years); Conn. Coal. for Justice in Educ, Inc.
v. Rell, No. X07HHDCV145037565S, 2016 WL 4922730, at *5–6, 17 (Conn.
Super. Ct. Sept. 7, 2016) (unpublished) (“The important thing is that whatever
rational formula the state proposes”—like the Foundation Aid Formula—“must be
approved and followed. If the legislature can skip around changing formulas every
year, it invites a new lawsuit every year.”) (applying Conn. Coal. for Justice in
Educ., Inc. v. Rell, 990 A.2d 206 (Conn. 2010)); Claremont Sch. Dist. v. Governor,
794 A.2d 744, 749 (N.H. 2002) (acknowledging the state’s characterization of
“four mandates” for its education-funding process: “define an adequate education,
37
determine the cost, fund it with constitutional taxes, and ensure its delivery through
accountability”) (internal citation and quotation omitted).
POINT II
THE FOUNDATION AID FORMULA WAS THE STATE’S ONLY
ATTEMPT TO FOLLOW A NEEDS-BASED STATEWIDE FUNDING
PROCESS AND IS THE PROPER FOCUS OF PLAINTIFFS’
COMPLAINTS.
A. The Foundation Aid Formula Was Not a Gratuitous Undertaking.
Plaintiffs’ allegations depict an unmistakable course of events flowing
directly from the findings and holdings of CFE. At bottom, CFE for the first time
guided the State on efforts needed to meet its statewide Education Article
obligations, and the State rationally attempted to comply by enacting the
Foundation Aid Formula.
CFE III expressly acknowledged that the State had then already responded
to CFE II by initiating efforts to attain constitutional compliance through a
statewide funding process. CFE III, 8 N.Y.2d at 21–22. The State proceeded in
this manner because, although CFE II explicitly ordered the State to ascertain the
“actual costs” only for New York City, the Court implicitly made clear that
funding for all other districts could be constitutionally compliant only if “actual
costs” were ascertained for those as well. No other interpretation of CFE II is
plausible—if funding based on “actual costs” was required for New York City
schools, the same fundamental principle must be true for all schools statewide.
38
Governor Pataki, the legislature and the Regents all assumed in their
immediate responses to CFE II that that the entire statewide funding system, and
not just the manner in which New York City had been funded, did not meet
constitutional requirements. See supra pp. 17–18. The governor appointed a
commission to consider actual costs statewide, the Regents undertook a statewide
cost analysis, and the legislature considered adoption of major statewide funding
costs.
Following this Court’s CFE III decision, the State re-considered the issue of
“ascertain[ing] the actual cost of providing a sound basic education,” CFE II,
100 N.Y.2d at 930, not only for New York City, but also for the state at large. The
Regents recommended an updated funding allocation methodology—the
Foundation Aid Formula—that calibrated funds distribution with need, as the
Court of Appeals had mandated. The “Regents Proposal on State Aid to School
Districts for 2007–08,” incorporated into NYSER’s Complaint,6 explains in detail
the process and methodology the SED followed for its costing-out work. The
robust explanation, detailed in a section entitled “Estimating the Additional Cost of
Providing an Adequate Education,”7 leaves no doubt what the State intended to
6 R. 143-144, ¶ 38, available at http://www.p12.nysed.gov/stateaidworkgroup/
2007-08RSAP/rsap0708.pdf.
7 See id. at 44 (“The purpose of this report is to describe the methodology that was
used to estimate the likely additional expenditures needed by districts with lower
39
accomplish. The SED explained it was calculating its estimate of the additional
funds needed to provide a “sound basic education” under the conditions existing at
that time, and not the costs of an aspirational education in excess of a “sound basic
education.”8 The State Education Department revisited its cost analysis, updated
the definition of “successful schools,” and rejected the very low weightings for
children from poverty backgrounds and for English language learners that had been
the major determinants of the low $1.93 billion and $2.45 billion figures that Gov.
Pataki had recommended.
Accordingly, the Foundation Aid Formula and the 2007 Reform Act were
not merely “state support for public education in New York” (App. Br. at 13); they
were the culmination of a major deliberative process that had been explicitly
undertaken to achieve constitutional compliance. The State wisely did not shun the
academic performance to achieve educational outcomes that demonstrate that an
adequate education is being provided.”).
8 See id. at 52:
The notion of an adequate education implies one that provides all
students with the opportunity for a sound basic education, not one that
goes beyond this particular standard. As Justice DeGrasse explains in
his [CFE] decision, ‘the Education Article requires a sound basic
education, not one that is state of the art.’ He further explains that ‘the
Court repeatedly used the terms ‘adequate,’ ‘basic,’ and ‘minimally
adequate’ to describe the education to be provided to the State’s
public school students (State Supreme Court Decision,[ ]719 N.Y.S.2d
475, January 9, 2001, p.15).
40
needed statewide reform efforts simply because CFE II’s express remedy was
limited to New York City.
In January 2007, “to provide a statewide solution to the school funding
needs highlighted by the Campaign for Fiscal Equity Law Suit,” Governor Spitzer
issued an Executive Budget that proposed a four-year “Educational Investment
Plan” that adopted the Regents’ Foundation Aid Formula and proposed substantial
funding increases not only for New York City, but for school districts throughout
the state.9 As Governor Spitzer acknowledged, “[t]he Foundation Aid formula was
proposed and enacted as a direct result of the CFE litigation. As contentious as
school funding debates had often been, there was agreement that Foundation Aid
was a principled and constitutionally mandated step forward.” Eliot Spitzer, Fully
Fund Foundation Aid for New York’s Public Schools, ALBANY TIMES-UNION, Feb.
15, 2017, available at http://www.timesunion.com/tuplus-opinion/article/Fully-
fund-Foundation-Aid-for-New-York-s-public-10935315.php.
The Legislature also clearly understood that it was designing state-wide
reforms to ensure the entire state-wide education finance system complied with the
constitutional requirements the Court of Appeals had delineated in the CFE
litigation:
9 Paragraph 39 of the Amended Complaint incorporates the “Educational
Investment Plan,” contained in the 2007–2008 Executive Budget, Investing in
Education, which is electronically available at http://www.budget.ny.gov/pubs/
archive/fy0708archive/fy0708littlebook/Education.html.
41
The State Budget adopted for the 2007-08 school year provided a . . .
State response to the Campaign for Fiscal Equity (CFE) court
decision. Along with satisfying the court’s decision, this settlement
. . . adequately fund[s] our public school system so that all public
school students have access to a sound basic education . . . .[A] new
Foundation Aid formula . . . satisf[ies] the requirements of the CFE
court decision.
Assembly Committee on Education’s 2007 Annual Report, introductory letter at
p. 1, report at p. 2, available at http://assembly.state.ny.us/comm/Ed/2007Annual/
report.pdf.
The Regents also specifically reiterated that the primary purpose of the new
Foundation Aid Formula was to provide “adequate funding for a sound basic
education in response to the Campaign for Fiscal Equity decision.” New York
State Board of Regents, Proposal on State Aid to School Districts For School Year
2012–13, 7.10
The NYSER Complaint thus properly pleads a straightforward violation of
the Education Article, in part by alleging the State’s open abandonment of its only
10 The State’s only response to these unanimous contemporaneous statements of all
the state’s policymakers is to cite a 2007 press release for the proposition that the
2007 Budget and Reform Act included “more than sufficient funds to address the
school funding needs highlighted by the Campaign for Fiscal Equity law suit.”
(App Br. at 51). The press release itself belies that interpretation because it lists
over $400 million in funding on top of the foundation aid that the governor was
proposing for Year one of the phase-in.
42
attempt to implement a process-based funding methodology of statewide
application.
B. The Foundation Aid Formula Did, Properly, Go Beyond the
Amounts Proposed by Gov. Pataki.
Defendants’ argument that the Foundation Aid Formula, if fully funded,
would have provided more funding than had been advocated by Governor Pataki is
misplaced and has no bearing on the Foundation Aid Formula’s constitutional
significance. See App. Br. at 15, 51 (characterizing the Foundation Aid Formula as
“more generous” than what was considered at the time of CFE III). Post-CFE III,
Governor Spitzer and the legislature simply concluded after a thorough
ascertainment of actual needs-based costs that a funding level closer to the higher
end of the permissible range of figures endorsed by the Court would be
appropriate. Responding to this Court’s decision in CFE III, Governor Pataki had
proposed a funding plan to the legislature, but it refused to adopt it, and the
impasse precluded the state from adopting legislation needed to fulfill the
constitutional obligations. See CFE III, 8 N.Y.3d at 35 (Kaye, C.J., dissenting)
(“The enactment of an appropriation bill that ensures adequate education funding
requires agreement among the Governor and both houses of the Legislature, and
plainly that has not occurred.”). That impasse precipitated another round of
litigation.
43
The Appellate Division considered and modified the trial court’s order that
had accepted the recommendation of a panel of judicial referees for a $5.63 billion
increase for New York City schools, phased in over four years. Its modification
allowed the governor and legislature to break their impasse by considering a range
of reasonable estimates of the “actual cost” of a sound basic education for New
York City students. Directing the parties to overcome their impasse, the Appellate
Division made clear that the operative effort to attain constitutional compliance
would only arrive through eventual agreement by the governor and the legislature
in the form of legislation. The order provided as follows:
[W]hile the Legislature should consider the Governor’s proposal to
increase annual funding by $4.7 billion, together with the Referees’
recommendation that $5.6 billion per year is the preferable amount to
expend, in the final analysis, it is for the Governor and the Legislature
to make the determination as to the constitutionally mandated amount
of funding . . . .
[T]his directive does not merely urge the Governor and the
Legislature to consider taking action. They are directed to take action.
The matter for them to consider is whether $4.7 billion or
$5.63 billion or some amount in between is the minimum additional
funding to be appropriated for the city schools.
CFE v. State, 29 A.D.3d 175, 189 (1st Dep’t 2006) (emphasis added).
This Court accepted the Appellate Division’s call for a range of permissible
figures, but modified the number at the lower end of the range because it
determined that the $4.7 billion figure adopted by the Appellate Division included
projected federal aid, local matching funds, and other items that exceeded the
44
minimum figure that the governor had actually advocated. CFE III, 8 N.Y.3d at
24. This Court found that the governor had actually called for only a $1.93 billion
sound basic education increase for New York City. Id. This was the lowest figure
in a range that Standard and Poor’s had found to be reasonable, the difference
largely being explained by the extent of the extra weightings given for poverty,
English language learning, and other factors, and methods for calculating cost of
living factors. Id. at 24, 31.
As modified, CFE III’s final directive was that in the process of reaching an
agreement by legislation, the governor and legislature should consider at least
$1.93 billion, and at most $5.63 billion, in additional funding for New York City
schools, but “in the final analysis it was for the Governor and the Legislature to
make the determination as to the constitutionally required amount of funding. See
supra p. 43. Accordingly, CFE III did not set forth an immutable constitutional
“magic number” of $1.93 billion.
Following CFE III, with further refinement and consideration of the SED’s
cost analysis recommendations, the Regents and then-Governor Spitzer were able
to convince the legislature that the Regents’ Foundation Aid Formula and its
greater calculations of the needs of at-risk students, rural students, and others,
approximated what the legislators rationally considered to be constitutionally
required both for New York City and districts in the rest of the state. As part of
45
this statewide process, the executive and legislature considered the Court’s
$1.93 billion figure for New York City, but they decided more would be
constitutionally appropriate for the city given the Regents’ Foundation Aid
Formula.
C. If the Foundation Aid Formula Was Not a Constitutional
Response to CFE, the State Would Be Admitting It Has Never
Complied With Constitutional Requirements.
Defendants argue the Foundation Aid Formula has no constitutional
significance to the extent it directed provision of statewide funding beyond the
$1.93 billion CFE III endorsed for New York City schools.11 If that were true, it
would signify that the State has never even attempted to design and implement a
needs-based funding process for statewide application. This appeal provides the
opportunity for the Court to confirm that the State is required to do so.
POINT III
DEFENDANTS’ 700 DISTRICT INPUTS-OUTPUTS-CAUSATION
ARGUMENT IS IRRATIONAL, UNWORKABLE, AND NOT LEGALLY
REQUIRED.
A. The State’s Position Is Illogical.
For all the reasons explained above, supra at pp. 30–36, the State must first
satisfy its threshold duty to fully fund the estimated “actual costs” needed to
11 Plaintiffs allege students in New York City have not even received this minimal
funding level, calculated in accordance with appropriate cost of living and regional
cost adjustments since 2006. R. 152, (¶ 62), R. 190, (¶ 191(a)). The lower court
found this to be a question of fact.
46
provide the opportunity for a sound basic education. Only then would it be
appropriate for plaintiffs from any particular district to use the inputs-outputs-
causation approach to test whether the State’s funding estimates satisfy the
constitutional standard. It would be patently irrational to make students assess the
sufficiency of funding in any district, let alone in all 700, before the State has even
purported to ascertain and fully fund its portion of the costs needed to attain the
constitutional standard in all districts statewide.12 Doing so would needlessly tax
the capacity of New York’s court system, as well as both Plaintiffs’ and
Defendants’ resources, when all the State must do at the present stage is fulfill its
self-executing threshold funding duty.
Accepting Defendants’ position would give judicial imprimatur to an
education finance system in which the State would be required to take the
prerequisite first steps toward constitutional compliance only after litigation and
proof that whatever level of funding the State happened to have provided at the
time was insufficient. And surely the State is not authorized to undertake efforts
toward constitutional compliance for a brief moment in time only to shortly
thereafter abandon those efforts and revert to business as usual until schoolchildren
again seek relief from the courts. That result would improperly make it plaintiffs’
12 Plaintiffs are aware of no state, and Defendants cite none, that has ever required
plaintiffs to provide evidence of inputs and outputs for every district in the state to
fix a structural defect in its education finance system.
47
and the courts’ obligations in both the first and the last instance to “ensure” New
York’s education finance system complies with the Education Article.
Most importantly, that result would infringe the constitutional rights of
generations of children.
B. Defendants’ Position Is Neither Required Nor Supported by the
Law.
New York law should not be read to preclude an Education Article claim
challenging the State’s failure to fulfill its threshold funding ascertainment and
appropriation duty. Plaintiffs’ allegations may appear novel compared to the
district-focused approach taken by prior Education Article plaintiffs, and thus
reflected in the case law, but Plaintiffs’ claims fit comfortably within existing
Education Article precedent.
Indeed, none of the Court’s past Education Article cases addressed the
State’s unabashed refusal to in the first instance fully fund its own ascertained
estimate of funding needed to provide a constitutionally sufficient education.
Plaintiffs’ Education Article claim is thus not at all inconsistent with those cases,
and is an equally viable action under the Education Article.
In Paynter v. State, African-American students in the Rochester Central
School District (“RCSD”) sued the State seeking relief concerning only their
district. 100 N.Y.2d 434 (2003). They alleged the Education Law’s resident and
non-resident tuition requirements caused poverty concentration and racial isolation
48
that decreased student performance in their district. Id. at 438-39. The RCSD
students claimed it was the “State’s responsibility to change the school population
until the results improved.” Id. at 441. The claim failed because, unlike here, it in
no way concerned the State’s funding system. Id. at 438-39. Paynter in no way
precludes Plaintiffs’ claims here.
In NYCLU, plaintiffs brought claims concerning alleged educational
deficiencies in 27 schools. 4 N.Y.3d 175, 179 (2005). The plaintiffs wanted the
State to work directly with those schools, not with the school districts, to remedy
the purported failings. Id. at 178-79. The claim was dismissed because plaintiffs
had not “articulate[d] . . . the asserted failings of the State,” and because working
directly with individual schools would bypass local districts and “subvert local
control.” Id. at 180, 181–82. In the present case, Plaintiffs clearly articulate the
“failings of the State,” and do not ask the State to bypass local school districts.
Just the opposite, Plaintiffs ask the Court to hold the State directly accountable for
its glaring abdication of its constitutional duty.
In New York State Association of Small City School Districts, Inc. v. State,
42 A.D.3d 648 (3d Dep’t 2007), a standing case, plaintiffs challenged the amount
of funding the State’s education finance system had allocated to 18 small city
school districts. The complaint did not challenge the nature of the State’s funding
process or its impact on the other approximately 682 districts in the state. Indeed,
49
the Third Department explicitly emphasized that plaintiffs’ “complaint . . . does not
address any specific defects or illegalities in the State’s methodology in allocating
funds.” Id. at 650.
Nor does the First Department’s decision in New York City Parents Union v.
Board of Education, 124 A.D.3d 451 (1st Dep’t 2015), support Defendants’
position that an Education Article challenge cannot focus on conduct at the
structural, statewide level. There, plaintiff failed to state an Education Article
claim because it did not allege a districtwide, let alone statewide, failure in simply
alleging “traditional public school students” received an education “inferior to that
provided to co-located charter school students.” Id. at 451.
****
In sum, Plaintiffs’ right to challenge the State’s conduct here is not
foreclosed by the case law. As explained below, not only has this Court left the
door open to variations on how an Education Article claim may be pleaded, it has
explicitly anticipated challenges to the State’s education finance system at the
structural level.
C. The Court of Appeals Has Authorized, Not Foreclosed, Plaintiffs’
Ability to Plead an Education Article Claim by Challenging
Structural Defects in the State’s System.
This Court has not dictated CFE’s inputs-outputs-causation model as the
only way to plead an Education Article claim. Nor has it circumscribed the limits
50
of how plaintiffs can conceivably challenge the State’s conduct in relation to the
Education Article. On at least two occasions, this Court indicated New York
courts have yet to flesh out the full contours of such claims. And on a third
occasion, it acknowledged plaintiffs may plead a claim based on the Education
Article by challenging structural defects in the State’s education finance system.
1. Paynter. Defendants contend Paynter holds that the only conceivable
way to state an Education Article claim is with the district-centric inputs-outputs-
causation analysis used in CFE. See First Dep’t Appellants’ Br. at 19, 20, 21, 27.
But Paynter stands for the opposite notion:
[A]s a logical and jurisprudential matter, we recognize that in CFE I
we addressed the sufficiency of the pleadings then before us and had
no occasion to delineate the contours of all possible Education Article
claims.
Paynter, 100 N.Y.2d at 441 (emphasis added); see CFE I, cited supra p. 13.
Paynter expressly framed the inputs-outputs-causation test as simply “the elements
of the CFE plaintiffs’ viable Education Article claim” in that particular case.
Paynter, 100 N.Y.2d at 440.
2. NYCLU. Defendants likewise assert NYCLU holds an Education
Article claim must focus only on districts. First Dep’t Appellants’ Br. at 21, 23,
25, 26. But again, that is not NYCLU’s rule. The NYCLU court plainly
acknowledged the boundaries of an Education Article claim had not yet been
formed. 4 N.Y.3d 175. The Court there declined to “explore those contours” only
51
because, as discussed supra p. 48, the NYCLU plaintiffs did not even allege defects
in the State’s funding system, could not identify specific failings of the State, and
wanted the State to work directly with individual schools to fix them. Id. at 180 &
n.2, 182.
3. Reform Educational Financing Inequities Today (R.E.F.I.T.) v.
Cuomo, 86 N.Y.2d 279 (1995). Plaintiffs in R.E.F.I.T. sought a declaration that
“New York’s system for financing its public elementary and secondary schools
[wa]s unconstitutional.” 86 N.Y.2d at 283 (emphasis added). Plaintiffs alleged
“the statutory scheme by which New York finances its public schools violates the
Education Article.” Id. (emphasis added). They further alleged the Court of
Appeals’ decision in Board of Education, Levittown Union Free School District v.
Nyquist, 57 N.Y.2d 27 (1982), had “left the door open for a challenge to the
constitutionality of the educational financing structure.” R.E.F.I.T. at 284.
Although the Court affirmed dismissal of the claim which updated
allegations of equal protection violations that had been rejected in Levittown, it
pointedly modified the Appellate Division’s affirmance to indicate future plaintiffs
could plead an Education Article claim by directly challenging defects in the
State’s funding scheme. The Court “modif[ied] to declare that the school financing
scheme of the State of New York has not been shown in this case to be
unconstitutional.” Id. at 285 (emphasis added).
52
****
For these reasons, this Court’s precedents support, not foreclose, the
structural, statewide claims alleged in the Amended Complaint.
POINT IV
SEPARATION-OF-POWERS PRINCIPLES SUPPORT PLAINTIFFS’
CLAIMS AND SHOW THAT CFE III SIMPLY ENDORSED A
PARTICULAR ESTIMATE TO BE CONSIDERED BY THE ELECTED
BRANCHES.
Separation-of-powers principles align with Plaintiffs’ claims. They also
demonstrate why, before the executive and legislature had even agreed on an
appropriate estimate, it would have been improper for CFE III to cement
$1.93 billion as a fixed level of constitutional funding for New York City schools.
Plaintiffs and Defendants agree that “[t]he primary responsibility for implementing
the Education Article lies with the executive and legislative branches, especially
with respect to public school financing.” App. Br. at 45 (emphasis added).
Here, the State currently funds education with shares doled out by “three
men in a room.” That method violates the Education Article because it is not a
process calibrated to the ascertained “actual costs” needed to provide all students
with a constitutionally adequate education.
Accordingly, Plaintiffs’ funding claims sit plumb in the realm of
constitutional claims for which judicial intervention is most appropriate. See App.
Br. at 46 (involvement by the judiciary “is justified only where deficiencies are so
53
acute, and the State’s responsibility so clear, that it is appropriate for a court to
intrude”). “Courts are, of course, well suited to . . . extrapolate legislative
intent . . . [and are] also well suited to interpret and safeguard constitutional rights
and review challenged acts of [thei]r co-equal branches of government—not in
order to make policy but in order to assure the protection of constitutional rights.”
CFE II, 100 N.Y.2d at 931 (citation omitted). “That is what . . . [courts] have been
called upon to do by litigants seeking to enforce the State Constitution’s Education
Article.” Id.; see also Levittown, 57 N.Y.2d at 39; Hussein v. State, 19 N.Y.3d
899, 901 (2012) (Ciparick, J., concurring) (quoting CFE II and Levittown).
The judicial “safeguard” here is straightforward: Affirmation that the State
must ascertain the “actual costs” to give all students the opportunity to obtain a
sound basic education and then fully fund its portion based on what students
actually need. Plaintiffs do not ask this Court to wade into the weeds of what
particular needs-based funding process could be most appropriate for New York,
whether it be the Foundation Aid Formula, some rational variation of the Formula,
or some other methodology that Defendants through deliberative process might
expeditiously implement.
And Plaintiffs’ claims do not require the judiciary to order sum-certain
appropriations over the heads of its coordinate branches. Defendants first must
rationally design and fully implement a constitutionally-compliant funding process,
54
and whatever aid is directed by it will, naturally and without further court mandate,
be distributed to the benefit of all districts. Once such a process is designed and
implemented, it would then properly be in the judiciary’s purview in a proper case
to review whether the amount of funding designated by that process is rational.
CFE III, 8 N.Y.3d at 27 (“The role of the courts is not . . . to determine the best
way to calculate the cost of a sound basic education . . . , but to determine whether
the State’s proposed calculation of that cost is rational.”); see also CFE III,
8 N.Y.3d at 35 (Kaye, C.J., dissenting) (“When the Executive and Legislature have
acted together on matters within their particular province, the courts should indeed
tread lightly.”).
This proper order of events and judicial deference to decisions that must first
be made by the executive and legislature shows why CFE III could not have
cemented a minimal level of constitutional funding for New York City before the
executive and legislature had agreed on an appropriate amount. In their
determination, the executive and legislative branches could not go below
$1.93 billion for New York City, but that does not mean they could not rationally
decide more was constitutionally required.
Moreover, Defendants misstate Plaintiffs’ allegations as construing the
Foundation Aid Formula and 2007 Reform Act to “set a constitutional norm
binding on future lawmakers.” App. Br. at 52. Plaintiffs do not contend the
55
Foundation Aid Formula is the only possible mechanism through which the State
can fulfill its constitutional funding process obligations, and thus also do not
contend subsequent legislatures have no power to deviate from the Foundation Aid
Formula—so long as their deviation is determined through a process that is
consistent with what the Education Article requires.
POINT V
SUPPOSED FISCAL CONSTRAINTS CANNOT ABRIDGE STUDENTS’
RIGHTS TO A CONSTITUTIONAL LEVEL OF FUNDING.
Plaintiffs pled that the State’s education finance system violates the
Education Article because the State has enacted various obstacles to prevent
districts from receiving, or generating, the full amount of needs-based education
funding the State had identified. See supra pp. 21–24. All education funding
legislation must comply with the constitutional requirement that funding be
established and fully allocated based on the amount the State determines is actually
needed in districts statewide. The GEA and the other statutory contrivances cited
supra pp. 21–24 do not meet that requirement. They reduce or suppress education
funding solely on the basis of fiscal constraints.
Settled New York law forecloses Defendants’ rationale that “revenue
constraints caused by ongoing economic difficulties” could ever justify abandoning
a constitutionally compliant education finance system. See First Dep’t Appellants’
Br. at 11–13; see also, e.g., Sloat v. Bd. of Exam’rs of Bd. of Educ. of City of N.Y.,
56
274 N.Y. 367, 370 (1937) (“Disobedience or evasion of a constitutional mandate
may not be tolerated even though such disobedience might, perhaps, at least
temporarily, promote in some respects the best interests of the public.”). No matter
how real or dire, fiscal considerations never justify curtailment or delay of
constitutional rights.
In Sgaglione v. Levitt, 37 N.Y.2d 507, 511 (1975), which pitted “the
obviously compelling and urgent stringency with which the city and State [we]re
faced” against the state constitution’s non-impairment clause, (emphasis added),
this Court concluded the New York State Financial Emergency Act was
unconstitutional and the legislature was “powerless” to abridge public employees’
constitutional rights notwithstanding the dire straits faced by the city and the State.
The Court “was not at liberty to hold otherwise,” even if the “system will be
plunged into bankruptcy.” Id. at 512, 514.
In Flushing National Bank v. Municipal Assistance Corporation for the City
of N.Y., the Court again rejected the fiscal hard-times defense where the
Emergency Moratorium Act delayed creditors’ rights under the “faith and credit”
clause of the state constitution. 40 N.Y.2d 731, 741, (1976). As in Sgaglione, the
court easily rejected the “insufficient funds” defense, even at the risk of potential
57
national disaster. Id. at 736, 739 (“The portrait [of dire straits] is a correct one, but
the duty of this court is to determine constitutional issues . . . .”).13
Sgaglione and Flushing National Bank, which resoundingly rejected the
“fiscal hard times” defense to constitutional violations, compel rejection of that
same infirm rationale here.
Plaintiffs are not insensitive or naïve regarding difficulties faced by the State
in balancing a complex budget. But students’ constitutional rights cannot be
violated on that basis. Balancing a budget and ensuring constitutional rights are
not mutually exclusive outcomes, even in difficult economic times. The State
could, for example, reassess certain of its mandates imposed on school districts, or
work with districts to develop cost-effective methods to accomplish more with less
funding from the State. The relevant end result under the Education Article is
attaining the constitutional standard of education, not providing any given sum-
certain amount of education aid to districts. What the State cannot do, however, is
cut or suppress education aid by arbitrary legislative acts that fail to consider the
ascertained actual costs of providing students with the opportunity to obtain a
sound basic education.
13 The Court has consistently reaffirmed that resource constraints provide no basis
to excuse constitutional violations. See Hurrell-Harring v. State, 15 N.Y.3d 8, 11
(2010); Klostermann v. Cuomo, 61 N.Y.2d 525, 537 (1984).
58
POINT VI
THE FIRST DEPARTMENT’S ORDER SHOULD BE AFFIRMED WITH
APPROPRIATE MODIFICATIONS CLARIFYING THE STATE’S
THRESHOLD CONSTITUTIONAL RESPONSIBILITIES.
A. The First Department Correctly Understood That Fixing the
State’s Funding Formula Automatically Inures to the Benefit of
Students in All 700 School Districts.
The First Department acknowledged that New York has implemented a
formula-based process to holistically ascertain funding for all districts, not one that
determines funding piecemeal on an individualized district basis. See supra p. 28.
The lower court correctly described “[t]he State’s educational funding system [a]s
an interconnected web in which a complex formula is used to calculate funding for
all districts.” R. 383. According to the court, any “modification of the [funding]
formula” will “necessarily affect[] calculation of funding for all districts.” Id.
But Defendants have declined to acknowledge practical application of the
State’s funding process, which is designed to rely primarily on a single, albeit
complex, formula. As discussed above, Plaintiffs ask this Court to recognize that
the State is not even purporting to fund its portion of ascertained “actual costs”
needed to provide students with the constitutional level of education should be
deemed sufficient to plead a violation of the Education Article. If the State is not
fulfilling that threshold duty—whether by failing to first ascertain the actual costs
calibrated with need, or to fully allocate them, or both—it cannot possibly be
59
operating a funding system even capable of ensuring the standard is actually being
satisfied.
Perhaps because this Court has not yet expressly affirmed the State has a
threshold constitutional duty to first ascertain and allocate the “actual costs,” the
Appellate Division seemingly overlooked that Plaintiffs have stated an Education
Article claim with allegations pleading the State has failed to fulfill that duty. The
Appellate Division instead focused on the NYSER Complaint’s allegations that
failure to implement the Foundation Aid Formula has harmed students in districts
statewide. The court did correctly conclude that the NYSER Complaint
“adequately alleged systemic deficiencies in at least one or two districts – New
York City and Syracuse.” R. 384 (emphasis added).14
If given no choice, Plaintiffs would not reject the relatively less irrational
approach of assessing deficiencies in one or a small sample of districts to compel
the State to fulfill what should be a self-executing duty of constitutional
compliance. But proceeding with a trial based on district-centric evidence would
be logical only if the State had first ascertained and fully funded its estimate of the
needed “actual costs” directed by the Foundation Aid Formula or some other
14 To the extent this Court or the lower courts need to consider the adequacy of the
NYSER Complaint’s allegations concerning statewide educational deficiencies, a
fulsome discussion showing why the Complaint’s allegations support a district-
centric claim is set forth in pages 36–39 of Plaintiffs’ brief below.
60
viable formula-based process. It would be improper to assess whether
modifications to any formula are needed before the formula is even given a chance
to work without restraint and to fully distribute its ascertained funding.15
B. The First Department’s Rulings on NYSER’s Third Cause of
Action and on the Aristy-Farer Allegations Should Be Affirmed.
Plaintiffs allege the State’s current system of accountability is insufficient,
and the lower court correctly sustained those allegations in the third cause of
action16 In a single sentence, Defendants half-heartedly assert that a claim
concerning adequacy of the State’s current system of accountability is somehow
predicated on the success of a “funding claim.” R. 287. That is wrong, as CFE
made clear the accountability and funding process obligations are stand-alone
duties. See CFE II, 100 N.Y.2d at 930. In any event, even if Defendants were
right, Plaintiffs have pled viable claims challenging the State’s inadequate funding
process.
15 For the same reason, Defendants’ hypothetical that tailored funding remedies
could be targeted to individualized districts is misplaced on the facts of our case.
See App. Br. at 47. Plaintiffs would not be in a position to allege a need for fine-
tuning of a formula, or supplemental aid above and beyond what a formula
provides for a particular district, until the State allows a needs-based
methodology—the Foundation Aid Formula or otherwise—to freely operate and
fully fund all districts.
16 The Appellate Division did dismiss the “information and guidance” provisions
of ¶ 195(c) of the Complaint, R. 193, but Plaintiffs are not appealing that ruling.
61
The Aristy-Farer Complaint alleges essentially the same substantive
Education Article violations pled in the NYSER Complaint concerning the State’s
failure to follow a needs-based education funding system. See NYSER Compl.
¶¶ 131, 191(g) (R. 174–75, 191). The only material difference is Aristy-Farer’s
focus on the APPR penalty issues. Accordingly, the lower court correctly upheld
the Aristy-Farer Complaint on the grounds it represents a subset of the main issues
raised by the NYSER Complaint, and permitting one to proceed without the other
would be inappropriate.
CONCLUSION
For the foregoing reasons, Plaintiffs respectfully request that this Court
affirm the decision below, modified to confirm that the State has an ongoing, self-
executing duty to ascertain the “actual costs” of providing all students in the state
with the opportunity to obtain a sound basic education and to fully appropriate
State funding needed to meet that actual student need, and that this Court clarify
the intent of the Court’s CFE rulings on the other major constitutional issues raised
by this appeal.
Dated: 7/ ---------------------- By: ______________ _
Michael A. Rebell
62
Attorney at Law
475 Riverside Drive
Suite 1373
New York, NY 1 0027
Tel: (646) 745-8288
rebellattorney@gmail.com
Attorney for PlaintiffS-Respondents
Douglas T. Schwarz
John A. Vassallo, III
Peter Shadzik
Michael E. Tracht
Morgan, Lewis & Bockius LLP
1 0 1 Park A venue
New York, NY 10178
Tel.: (212) 309-6000
Fax: (212) 309-6273
douglas.schwarz(q;morganlewis.com
jvassallo@morganlewis.com
Attorneys for Plaintiff-Respondent
NYSER
63
NEW YORK STATE COURT OF APPEALS
CERTIFICATE OF COMPLIANCE
I hereby certify pursuant to 22 N.Y.C.R.R. Part 500.1(j) that the foregoing brief
was prepared on a computer using Microsoft Word 2010.
Type. A proportionally spaced typeface was used, as follows:
Name of typeface: Times New Roman
Point size: 14
Line spacing: Double
Word Count. The total number of words in this brief, inclusive of point headings
and footnotes and exclusive of pages containing the table of contents, table of
authorities, proof of service, certificate of compliance, questions presented,
statement of related cases, or any authorized addendum containing statutes, rules,
regulations, etc., is 13,602 words.
Dated: New York, New York
April 27, 2017
Morgan, Lewis & Bockius LLP
Attorneys for Plaintiff-Respondent NYSER
101 Park Avenue
New York, NY 10178
Tel.: (212) 309-6000