"The New York Adequacy Study: Determining the Cost of Providing All Children in New York an Adequate Education," American Institutes for Research and Management Analysis and Planning (March 2004).
"Resource Adequacy Study for the New York State Commission on Education Reform," Standard & Poor's School Evaluation Service (March 2004).
"Report and Recommendations of the Judicial Referees," in Campaign for Fiscal Equity, Inc., et al., Plaintiffs, against The State of New York, et al., Defendants (November 2004).
Most people who read the headlines last February were stunned to learn that New York City schools were being short-changed by $5.6 billion per year, or more than $5,000 per student. The 43 percent court-ordered budget increase, from around $13 billion in operating expenditures to something approaching $19 billion (not including some $9 billion over five years for building improvements), is the largest school finance "adequacy" judgment ever awarded.
Of course, most people do not have a good grasp on either the economics or the performance of New York City schools. If they did, they would be even more stunned by the declared shortfall.
Figure 1 shows the recent history of spending in New York City, now nearly $13,000 per student per year, which is more than 50 percent above the national average and pulling away.
The city does, by any standard, face huge education problems. Indeed, despite a drastic restructuring of the school bureaucracy, implemented by Mayor Michael Bloomberg beginning in 2002 (see Forum, p. 11), and despite the heavy infusions of cash shown described in Figure 1, Gotham's academic outcomes remain poor. On the 2003 National Assessment of Educational Progress (NAEP) tests, 46 percent of the city's students scored "below basic" in mathematics, and 38 percent were below that low threshold in reading (compared with 33 and 28 percent for the nation, respectively). On the state exams that can be tracked over time, New York City has had mixed results--improvement in some areas but declines elsewhere.
But the discrepancy between years of budget increases and years of mediocre academic outcomes did not deter New York State Supreme Court Judge Leland DeGrasse from deciding that the problem could be solved by an annual addition of $5.6 billion.
The very process of budget determination implicit in such judicial appropriations gives the first indication that something is fundamentally haywire. Ordinarily, courts have nothing to do with expenditures. That is a matter for the political branches, not the courts, to decide--a constitutional arrangement that led that great New Yorker, Alexander Hamilton, to declare the judiciary the weakest branch. In New York, as in all other states, the normal appropriations process begins with the governor's creating the budget recommendations for education and other state services. The legislature, subject to gubernatorial veto, appropriates the funds. But such constitutional proprieties were set aside when Judge DeGrasse--with no previous education expertise and no relevant staff support and without considering the impact on other areas of expenditure--intervened to establish the level of education appropriations for New York City. Suddenly the weakest branch had declared itself the boss.
Given the fundamental constitutional conflict involved, this judicial decision will probably be in and out of the courts and legislature for some time. To get some hint of the future, one may look no farther than neighboring New Jersey, where the courts have retained control over the financing of several city school districts for decades.
Nonetheless, it is informative to investigate what is behind the DeGrasse appropriations, because New York is only the leading edge of a national movement. In more than two-thirds of the states, teacher unions, school districts, and other interested parties have filed similar lawsuits that seek judgments resembling the stunning result handed down in New York. …