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Campaign for Fiscal Equity

A Brief History of the Lawsuit

The long path to school finance justice in New York began in 1978 when a group of property-poor Long Island school districts, joined by New York City and the other four large urban New York districts, filed Levittown v. Nyquist, a lawsuit challenging the state’s education finance system. In its 1982 decision, the Court of Appeals ruled that while substantial inequities in funding did exist, the New York State constitution does not require equal funding for education. The court did note, however, that the state constitution entitles students to a "sound basic education," even though no one in the Levittown case had alleged that students were being denied this right.

This right to a sound basic education was at the center of CFE v. State of New York. While this lawsuit again sought to reform the state funding system, it was based on different legal arguments than those used in Levittown fifteen years earlier. In this case, CFE asserted that New York State was failing in its constitutional obligation to provide a sound basic education to thousands of its schoolchildren.

In a landmark June 1995 decision, the Court of Appeals -- New York State's highest court -- distinguished its Levittown ruling and upheld CFE's right to pursue a constitutional challenge to the state's education finance system. Writing for a four-person majority, Judge Carmen B. Ciparick concluded that CFE had grounds for a legal claim under Article XI, the Education Article of the New York State Constitution. Judge Howard Levine concurred with the majority but wrote a separate opinion, arguing for a narrow definition of a sound basic education. Judge Richard Simons dissented, and Chief Judge Judith Kaye took no part in the decision.

The Court indicated that if CFE were able to prove that a substantial number of New York City students were being denied the opportunity to obtain a sound basic education, it would act to remedy the situation. Together with Simpson Thacher & Bartlett, the law firm serving as co-counsel in the case on a pro-bono basis, CFE engaged in the extensive research, analysis, and other legal "discovery" necessary to prepare the case for trial.

The trial of CFE v. State of New York began on October 12, 1999 in New York Supreme Court and concluded on July 27, 2000. On January 10, 2001, Judge Leland DeGrasse, the presiding judge, rendered a ruling favoring CFE on both of its Adequacy and Title VI claims. [Full text of decision] The judge also gave a remedial order, setting guiding parameters to help the state reform the current school funding system by September 15, 2001. The State of New York appealed the decision leading to a June 25, 2002 decision by the State Supreme Court's Appellate Division, First Department which rejected the trial court's ruling that found the funding system "inequitable and unconstitutional. The Appellate Court held that the state constitution only guarantees that schools provide the opportunity to learn at an 8th or 9th grade skill level and found that the current funding system sufficiently allowed for this. Now it was CFE's turn to appeal.

On May 8, 2003, the case reached the Court of Appeals. On June 26, 2003, the Court of Appeals reversed the Appellate Division and ruled in favor of CFE. The Court of Appeals gave the State of New York until July 30, 2004 to comply with its ruling.

The State failed to meet the deadline at which point three court-appointed referees were given until November 30, 2004 to submit a compliance plan to Justice Leland DeGrasse of the State Supreme Court. Justice DeGrasse agreed with the referee's recommendations and on February 14, 2005, ruled that New York City schools need an additional $5.6 billion in operating aid and $9.2 billion in capital funding to provide students with their constitutional right to the opportunity to receive a sound basic education. (Justice DeGrasse's ruling.) The State immediately appealed the decision to the Apellate Division, 1st Department.

On March 23, 2006, CFE scored scored another major court victory: In its ruling, the Appellate Division denied the governor's appeal and directed the State to provide the city's schools with $4.7 billion to $5.63 billion in operating aid and $9.2 billion in capital funding by the budget deadline of April 1, 2006. Though this court has historically ruled in the governor's favor in past decisions in the CFE, all five judges made clear in the March 23 ruling that the State had failed to appropriate the amount of funding needed to meet the CFE mandate.

On April 18, 2006, CFE appealed to the Court of Appeals, the state's highest court, asking the Court to affirm the decision from the Appellate Division that requires the state (governor and legislature) to add $4.7 to $5.63 billion in operating aid to be phased in over four years for New York City's schools. In addition, CFE called on the court to issue a clear and enforceable order directing lawmakers to abide by previous rulings to provide New York's children with a "sound basic education" and to require major accountability reforms to ensure that additional funds are not wasted. (June 6, 2006, Full CFE Brief)

During July and August, 2006, CFE and the state briefed and counter briefed the Court of Appeals. Groups filing amicus briefs in support of the CFE position included: The Alliance for Quality Education; the City of New York; the United Federation of Teachers; the New York State Black, Puerto Rican, Hispanic, and Asian Caucus; the Association of the Bar of the City of New York; the New York City Council; the New York State School Boards Association; and the Brennan Center for Justice.

On October 10, 2006, CFE's counsel presented oral arguments before the Court of Appeals.

On November 20, 2006, the Court of Appeals handed down its decision. The Court affirmed that the state's constitution requires that every public school child in the State of New York has a right to a "sound basic education" defined as "a meaningful high school education" and that the state has the responsibility to increase funding for New York City's public schools. In a 4-2 split, the ruling deferred to the state to determine the appropriate figure, and, based on the state's argument, established a minimum funding figure of $1.93 billion, "adjusted with reference to the latest version of the [Geographic Cost of Education Index (GCEI)] and inflation since 2004" as "reasonable".

The November 20, 2006, decision is a final enforceable order by the state's highest court on a state constitutional matter and is not subject to appeal as long as the state meets its minimum funding obligation by the 2010-11 school year.

The State Education Budget and Reform Act of 2007 was enacted on April 1, 2007 to address the Court of Appeals ruling. The legislation laid out a historic $7 billion school funding increase to be phased-in over the next four years, a new foundation aid formula based on need, and unprecedented accountability and transparency measures, including the Contract for Excellence.

Parents from across the state march on the Capitol in Albany to show support for CFE.
CFE Litigation CFE v. State of New York
In 2006, after 13 years in the Courts, the New York State Court of Appeals affirmed the right of every public school student in New York to the opportunity for a sound basic education and the state’s responsibility to adequately fund this right, but deferred to the Governor and the Legislature to determine the appropriate amount. more >