Board of Education of the City of Millville v. New Jersey Department of Education, etc.

On the same day of the decision in Phillipsburg, the commissioner also decided the Millville, Pemberton and Neptune appeals, ruling similarly in all three cases: that the state is not required fully to fund early childhood education in the Abbott districts; rather, the DOE may ask the districts to reallocate monies designated for other approved district programs but not needed to support those programs.

The Appellate Division agreed with the commissioner’s determination “that the Supreme Court has only directed [him to] ‘ensure’ that there be adequate funding for these programs, thus permitting the utilization of local district funds.” Millville Bd. of Educ. v. New Jersey Dep’t of Educ., 367 N.J. Super. 417, 424 (App. Div. 2004).

Having concluded that neither the Supreme Court nor the Legislature had mandated exclusive state funding of preschool programs in the Abbott districts, the Appellate Division affirmed the commissioner and held that “local resources, if available, may be allocated for such purposes.” Id. at 427.

III. A. In respect of the FY04 Appropriations Act it is clear from the enacted language that the Legislature intended PSEA awards to fund approved preschool expansion only. Nothing more can be added on this subject. In respect of the Court’s preschool mandates, the following is added.

As the Appellate Division recognized, Abbott V accepted in substantial part the commissioner’s proposal for whole school reform, including preschool programming recommended by the education experts and endorsed by the commissioner. Although the implementation of whole school reform was the core constitutional remedy mandated by the Court, early childhood education was incorporated into that remedy in recognition of its critical importance and its statutory underpinnings. As to funding, in Abbott II, and then in Abbott IV, the state had been required to provide the Abbott districts with state aid (above the amount generated by the local tax levy) for the per-pupil costs of kindergarten through 12th grade at a level commensurate with the average per-pupil expenditures in the state’s wealthiest districts (the parity remedy). Yet, in Abbott V, the Court also recognized that additional monies might be needed for supplemental programs, including social services, security, technology education, and other school-specific programs.

On the question of funding for half-day preschool for 3- and 4-year-olds, the Court explained that “the Commissioner must ensure that such programs are adequately funded and assist the schools in meeting the need for transportation and other services, support, and resources related to such programs.” 153 N.J. at 508.

A requirement that the commissioner ensure adequate funding is not the same as a requirement that the commissioner provide that funding. The question, then, is whether the commissioner’s approach to funding Abbott district preschool programs ensures that the districts have what they need to provide a quality early childhood education for 3- and 4-year-olds. The districts point out that the funding formulas used to calculate both ECPA and PSEA awards result in amounts that are not aligned with the district’s actual approved budgets. As a consequence, some districts receive more than the approved budget amounts and other districts, such as Phillipsburg, Millville, Pemberton and Neptune, receive less than the approved amounts. On its face, that approach appears to make no sense � those districts that have received state aid in excess of their needs will be required to return that excess to the state, whereas districts with shortfalls will have to reallocate monies from other approved district programs to fund preschools.

Yet, in his final decision in these cases, the commissioner expressly and clearly accepted the responsibility:

to ensure, with additional aid if necessary, that sufficient funds are available to the district to fully fund its preschool program, that is, to ensure that any gap remaining after receipt of statutory formula aids will be addressed by the State to the extent that need exists because funds otherwise available to the district are insufficient to fully support the approved program.

At oral argument, counsel for the DOE reaffirmed the commissioner’s responsibility to restore any Abbott district shortfalls unless the commissioner is able to demonstrate that additional funding is unnecessary because the district has sufficient resources to cover all of its programming needs.

Held: Based on the commissioner’s representation that any monies reallocated from other district resources to make up the preschool program shortfalls will be replaced by the DOE through supplemental funding unless the DOE can demonstrate that those monies are not needed by the districts, the Court upholds the state’s funding scheme. However, this scheme is both cumbersome and time-consuming and the DOE is urged to implement a method of allocation aligned in the first instance with the districts’ approved budgets.

It matters little whether the monies initially reallocated by the districts are drawn from formula aids, local levies, or savings realized through efficiencies. Indeed, in the Court’s discussion regarding sources of funding for supplemental programs in Abbott V, it was determined that the commissioner could look to the existing school budget in the first instance so long as reallocation would not “undermine or weaken either the school’s foundational education program or already existing supplemental programs.” 153 N.J. at 518. The preschool funding mechanisms challenged by Phillipsburg, Millville, Pemberton and Neptune essentially track that approach.

B. Abbott VIII required the commissioner to implement protocols for developing budgets “based not on arbitrary, predetermined per-student amounts, but, rather, on a record containing funding allocations developed after a thorough assessment of actual needs.” Id. at 559.

The issue here is simply whether Abbott district approved preschool budgets can be formula-funded up front with any shortfalls addressed during the school year through additional funding unless the commissioner can demonstrate that monies not needed for other programs are available to the districts. Certainly, if the DOE by audit finds that a district has over-projected its preschool enrollment such that its DOE-approved early childhood funding exceeds the district’s actual need, it may be the case that the preschool program, in fact, is not underfunded. In respect of any reallocation of resources by the district to cover the cost of shortfalls created by formula-driven funding, the burden is on the commissioner to prove that the reallocation will not compromise any of the district’s educational programs.

IV. Because this matter was decided below on the global issue, that is, whether the commissioner is required to provide full funding for preschool programs in the first instance, the record does not contain any information about the provision of additional aid to the districts with shortfalls. Nonetheless, the Court upholds the state’s funding scheme based on the commissioner’s commitment to address any shortfalls during the school year unless he can demonstrate that district funds not needed for other programs are available.

Affirmed.

Justices Long, LaVecchia, Albin, Wallace and Rivera-Soto and Appellate Division Judge Stern (t/a) join in this opinion. Justice Zazzali did not participate.

� Digested by Steven P. Bann

[The slip opinion is 28 pages long.]

For appellants � Richard E. Shapiro and Jennifer R. Webb-McRae (Shapiro, attorney for Board of Education of the Township of Pemberton, Board of Education of the Town of Phillipsburg and Board of Education of the Township of Neptune, and Robinson & Andujar, attorneys for Board of Education of the City of Millville; Shapiro and Arnold Robinson on the briefs). For respondent � Michelle L. Miller, Deputy Attorney General (Peter C. Harvey, Attorney General; Nancy Kaplen, Assistant Attorney General, of counsel; Allison Colsey Eck, Deputy Attorney General, on the briefs). For amicus curiae Abbott v. Burke plaintiffs � David G. Sciarra, Executive Director, Educational Law Center.