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Campaign for Fiscal Equity

CFE, State, and City Present Closing Arguments Before Referees

On Monday, November 1, attorneys for CFE, the State of New York, and the City of New York presented their closing arguments before the panel of special referees appointed by Justice DeGrasse to make recommendations about how best to bring the state's education funding system into constitutional compliance. The proceeding provided the parties and the City of NewYork a last opportunity to address remaining issues before the panel releases its final report on November 30, 2004. The closing arguments culminated an intensive, two-month hearing process that involved extensive witness testimony on issues of costing-out, accountability, and formula reform.

In its closing argument, the State maintained its line that the panel's charge is limited. Richard Rifkin, the State's Deputy Attorney General, called on the panel to limit its directive to a "declaration" that would first determine whether or not the State met the CFE mandate and would then outline any areas still in need of compliance. All three referees reacted to this position with skepticism. Citing Justice DeGrasse's August 3 order, Dean John Feerick told Mr. Rifkin that it is clear that the panel was ordered to do more than simply point out the existing constitutional deficiencies in the funding system. Judge Milonas followed up, telling the State's lawyers to accept the fact that the panel has a larger mandate than simply recognizing the constitutionally deficient areas. Judge Thompson agreed: "If I follow your argument logically," he told Mr. Rifkin, "nothing will happen." The issue resurfaced during the State's rebuttal when the referees again repeated their conviction on this point. Judge Milonas told Mr. Rifkin that the court can't allow the governor and the legislature to defy the constitution. "We're not afraid to do what we have to do," Judge Thompson ultimately declared.

Rejecting the State's position, Michael Rebell, co-counsel for the plaintiffs, called on the panel to issue a clear and specific mandate that provides (1) a specific dollar amount to ensure New York City students receive their opportunity for a sound basic education; (2) a foundation formula that fairly determines what percentage of the funding should be borne by the state and what percentage should be borne by the city; and (3) an accountability mechanism that ensures these funds are wisely spent. Mr. Rebell also urged the panel to recommend in its final report that the State be given 90 days to adopt legislation consistent with the court's order. In the event that the State again fails to do its job, he argued, the court should order the legislature to enact the specific reforms that the plaintiffs set forth in the final report of CFE's Sound Basic Education Task Force -- the end result of an objective, six-month process that brought together educational stakeholders statewide and a number of key education finance experts to address reforms of operating aid, building aid, and accountability. Mr. Rebell emphasized to the panel that the plans laid out in the task force report have been highly touted by leading finance experts and were not criticized by any of the State's expert witnesses during the panel's proceedings.

Furthermore, as part of plaintiffs' proposed "fallback" mechanism, the court should impose on the State a multi-million dollar fine for each day that the students of New York City continue to be deprived of their constitutional right to the opportunity for a sound basic education. With this coercive mechanism written into an order, the court would propel the State to finally do their duty and provide all of our students with the educational opportunity to which they are entitled, Mr. Rebell argued.

The State continued its defense of the successful schools methodology used in the S&P costing-out study and its controversial use of an arbitrary "efficiency" factor that discounts the top fifty percent of highest spending schools from among the successful schools cohort. Dean Feerick was quick to remind the State's lawyers, however, that New Hampshire is the only state that has applied such an approach and the rationale for its use was to drive the cost of education funding down, not to ensure educational opportunity for its students. When asked by the referees if this efficiency factor was used by any other legislative body or individual conducting such studies, lawyers for the State said "yes" and cited Dr. Palaich, an expert witness for the State, as an example. But Judge Thompson reminded the State's lawyers that in his testimony, Dr. Palaich recommended removing the five percent highest spending districts and the five percent lowest spending districts from the sample, not the 50 percent used in the S&P study. During plaintiffs' argument, Joseph Wayland, co-counsel for the plaintiffs, argued that the State failed to provide an expert witness to fully explain the reasons for using this efficiency factor, or any of the other judgments made in its analysis. "If the state is going to sponsor a costing-out method," he said, "someone needs to be able to explain it."

When discussing the reform of the education funding formulas, the State's lawyers argued that although it would be "desirable" for reform to be statewide, the panel's charge is confined to New York City. However, Mr. Wayland told the panel that even if the court were to order a specific dollar amount for New York City and not any substantive reform to the formulas, these funds would have to be delivered through the state's current "formula-driven system," which does not meet constitutional requirements. This necessary reform of the formulas would therefore yield both constitutional compliance for New York City and a fair and predictable funding system for districts statewide, Mr. Wayland said.

In regard to building aid reform, Judge Feerick said he was "disappointed" at the State's silence on this issue. When pushed by Judge Milonas as to why the panel should not recommend a specific dollar amount for capital funding even though the State never put forth a plan, defendants conceded that "nothing precludes you from doing this."

During its closing arguments, the City of New York called on the panel to issue a clear, unequivocal order and stressed two issues. First, they called on the panel to ensure the new funds come solely from the State, and second, they urged the panel not to recommend adding any more layers of bureaucracy to the city's current accountability system. Agreeing with the plaintiffs and echoing the testimony of Mayor Bloomberg and Schools Chancellor Joel Klein, the city argued that the State's proposed independent office of educational accountability was unnecessary.

Although there are no more hearings presently scheduled before the referees issue their final recommendations to the court on November 30, plaintiffs suggested that both sides be allowed to present one expert before the panel to help them deal with any lingering technical details.

November 2, 2004

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 >