In September 2016, the New Jersey Commissioner of Education applied for an order modifying the New Jersey Supreme Court’s prior decisions in Abbott v. Burke, 199 N.J. 140 (2009) (“Abbott XX”) and Abbott v. Burke, 206 N.J. 332 (2011) (“Abbott XXI”). These cases represent a series of decisions that led to a drastic change in the manner that state aid is provided to local school districts. Generally, the poorer the district, the more aid it receives as a result of a new funding formula aimed at eliminating disparity amongst districts across the state.

In its motion, the state argued that since 1985 nearly $100 billion has been provided to former Abbott districts, (now referred to as School Development Authority (“SDA”) districts), yet, there has been insufficient improvement in student performance to conclude that the state formula works, as evidenced by those students’ low standardized test results and graduation rates.

Correlating the effectiveness of teachers to the improvement of educational outcomes, the state contended that statutory and contractual limitations have impeded the effectiveness of SDA districts by limiting teacher contact time, and by denying districts the flexibility needed to ensure teacher effectiveness. To that end, the state specifically cited the need for reform of the provisions of the Tenure Act, N.J.S.A. 18A:28-1 et. al., also known as the “LIFO Statute.” The state further alleged that these statutory and contractual provisions are unconstitutional in some SDA districts, as the result of same has limited student access to a thorough and efficient education

In support of its allegations, the state characterized the 30 years since the Abbott decisions as an “expensive lesson” that “more money does not equal more achievement for the students in SDA Districts.” The state called on the court to find that increases in funding have reached a point of “inutility” and to shift to “court-ordered remedies” to enable the commissioner to make the necessary changes to bolster academic results. The necessary changes, the state argued, included granting the education commissioner the express authority to waive statutory requirements and provisions of collective bargaining agreements in SDA districts; vacating the School Funding Reform Act (SFRA) of 2008; and freezing funding for SDA districts at current levels while the legislative and executive branches develop a new system for students for the 2017-2018 school year. 

The History As you may recall, in the landmark decision Robinson v. Cahill, 62 N.J. 423 (N.J. 1973), the New Jersey Supreme Court held that the state’s system of funding public education through local taxation was inherently unconstitutional as it deprived students from poverty-stricken districts of a through and efficient education as required by law. Thus, the state was required to develop a funding formula that did not “dilute the state’s mandated responsibility.” If a school district was not able to fund its educational program, the state was required to guarantee that an adequate educational program, as defined by the state constitution, be provided. The court recognized a “significant connection between the sums expended and the quality of educational opportunity.” The state’s legislative response was the Public School Education Act of 1973, commonly known as Chapter 212, or the “T & E” (for thorough and efficient) law.

The first decision in the series of Abbott v. Burke litigation decisions occurred in 1985. In Abbott v. Burke, (N.J. 1985) (“Abbott I”), the court determined that the Public School Education Act of 1975 was unconstitutionally funded as the act may “fail to provide equal educational opportunity by allowing equivalently-qualified students to attend schools providing significantly disparate program offerings.” Since that 1985 holding, there have been twenty-one (21) subsequent Abbott decisions. In Abbott v. Burke, (N.J. 1990) (“Abbott II”) the court determined that the act must be amended to “assure that poorer urban districts’ educational funding is substantially equal to that of property-rich districts.” Most importantly, the court identified 28 “poorer urban districts” affected by extreme disadvantages in funding: Asbury Park; Bridgeton; Burlington; Camden; East Orange; Elizabeth; Garfield; Gloucester City; Harrison; Hoboken; Irvington; Jersey City; Keansburg Borough; Long Branch; Millville; New Brunswick; Newark; Orange; Passaic; Paterson; Pemberton; Perth Amboy; Phillipsburg; Pleasantville; Union City; Trenton; Vineland; and West New York. The Legislature, through the Comprehensive Educational Improvement and Financing Act of 1996 (CEIFA), added Neptune and Plainfield to the Abbott district definition. In 2004 the Legislature added Salem City, making it the 31st Abbott district. Those 31 districts are now referred to as “SDA” districts because capital projects are funded by the New Jersey School Development Authority.

Moreover, in “Abbott V,” (May 1998), the court recognized the need for early childhood programs for 3- and 4-year olds in SDA districts. The court also ordered the commissioner to implement whole school reform, technology programs, work-study and college-transition programs, and alternative schools and comparative education programs, and to secure funds to remediate buildings in the Abbott schools. The state was required to fund all costs of remediation for Abbott facilities in “Abbott VII,” (May 2000). The School Funding Reform Act (“SFRA”) was passed in 2008. The state established a new funding structure whereby districts were funded based on a weighted formula. A base per-pupil amount was established and the amount was multiplied by each district’s weighted enrollment. The SFRA was to be funded by local property taxes and the state. However, it is widespread opinion that the SFRA has been underfunded by the state nearly since its inception.

The Arguments In its brief asking for the court’s reconsideration of Abbott, the state argued that, despite the reforms instituted, the SDA districts still continue to perform comparatively lower than their more affluent counterparts. The state cited large disparities in standardized math and English scores; graduation rates; and ratings based on the website “” Using the SDA district of Asbury Park as an example, the state asserted that in 2015 Asbury Park spent $30,997 per pupil and had a graduation rate of 66 percent. In contrast, the town of Haddonfield spent only $15,292 and had a graduation rate of 98.9 percent.

Furthermore, the state argued that state funding for SDA districts has dramatically increased, which has enabled SDA districts to spend more per pupil than the non-SDA district averages. The state projects that in fiscal year 2017, the SDA districts will be receiving nearly 59 percent of all preschool-12 state aid while their student enrollment remains unchanged at 22.8 percent of the state’s student population. Moreover, the state posited that while state funding has increased to SDA districts, many of them pay less than their local tax fair share for education costs by using tax abatements for their residents and business owners and relying on state aid to fill the gap. In exchange for the abatements, businesses make payments to municipalities in lieu of taxes (“PILOT”), and in the case of a long-term abatement, the municipality retains 95 percent of the payments. This system provides the municipality with an excess of funds, however, the school districts generally do not receive any of the PILOT funds, and the state continues to fund the district based on “artificially low community wealth” as the PILOT payments are not included in the “ratable base.”

The state further cited the lack of highly effective teachers in SDA districts as a hindrance on student performance. Under N.J.S.A. 18A:6-117, the 2012 Teacher Effectiveness and Accountability for the Children of New Jersey Act (“TEACHNJ”), teachers are rated in four categories: highly effective, effective, partially effective, and ineffective. For the 2013-2014 school year, the state indicated that while 97.5 percent of teachers statewide were rated as highly effective or effective, Camden, Newark and Paterson employed 60 percent of the state’s ineffective teachers and only 9 percent of teachers within those three districts were rated “highly effective.”

The state argued that the last in, first out (“LIFO”) provision of the Tenure Act and its implementing regulations have impeded progress within SDA districts because new talent is discouraged from applying for teaching positions, which has led to the retention of less effective teachers. LIFO provides that in the event of a reduction in force (“RIF”), non-tenured teachers are let go first, then tenured teachers are cut in order of reverse seniority, regardless of their effectiveness rating. The state indicated that for the 2015-2016 school year, the Newark school district was unable to fire many of its ineffective teachers based on tenure protections. Additionally, since Newark has a policy whereby a teacher may not be placed without the mutual consent of the principal and teacher, hundreds of ineffective teachers were denied placement by principals. As such, Newark has been forced to pay these teachers’ salary and benefits while under-employing them. Moreover, in the event of a RIF, Newark may be forced to terminate less senior, better-performing teachers and replace them with these less effective teachers. There was a similar concern in Paterson.

The state also cited the exorbitant cost of bringing tenure charges against ineffective teachers as a barrier to removing ineffective staff. In addition, a district is only allowed to withhold salary and benefits for 120 days while tenure charges are pending. The state further cited the collectively negotiated length of the school year; the length of school days; and teacher assignments as impediments to success within SDA districts. For example, in Camden the collective negotiations agreement limits the school day to 4 hours and 45 minutes (not counting preparation, group planning time, lunch or duty time), and the school year to 185 days, which has hindered the district from increasing student learning time. The state cited the alleged success of charter schools within SDA districts as an argument against collective negotiations agreements.

Approximately 14 different New Jersey agencies submitted certifications in support of the state’s motion, including the New Jersey Division of Taxation; the New Jersey Office of Charter and Renaissance Schools; and the New Jersey Department of Community Affairs; as well as Stanford University.

The Other Side On Nov. 3, 2016, the Education Law Center, on behalf of the Abbott plaintiffs, filed its opposition to the state’s motion. The plaintiffs argued that the SDA districts continue to show measurable educational improvement in achievement levels, graduation rates, and other outcomes. The report by the National Institute for Early Education Research found that fourth- and fifth-graders attending Abbott preschool programs are approximately three-fourths of an academic year ahead of their peers. The report also found that between 2001 and 2010, the graduation rate in Abbott districts has increased by 12 percent as compared to only 4 percent in non-Abbott districts. Additionally, in 2014, three Abbott districts had graduation rates equal to or higher than the state rate, which “is the third highest in the nation and the highest rate for states with diverse student populations.”

The Abbott plaintiffs alleged that the state sought to be relieved of its obligations for continuing to fund the SFRA without proposing a formula to replace it. The state also requested that the court act as a “super-legislature” by providing the commissioner with “unlimited discretion to override statutes and collective negotiation agreements not because they are unconstitutional, but because they are ‘impediments’ to the state’s current set of preferred education policy objectives.” The plaintiffs argued that the Legislature is the most appropriate forum for policy reforms concerning collective bargaining agreements and teacher layoff rules, and not the court.

Further, the Abbott plaintiffs argued the state offered no evidence that would warrant the discontinuation of the SFRA. The plaintiffs reasoned that the SFRA was enacted in exchange for relief from prior remedial orders for parity, therefore, the abolishment of the SFRA “is a direct repudiation of the ‘quid pro quo’” offered by the state in Abbott XX. On Jan. 14, 2012, the Legislature rejected the state’s report finding it lacked empirical evidence.

After a $1.1 billion reduction in the SFRA’s funding in the fiscal year 2011 Appropriations Act, the court, in Abbott XXI (2011) directed the state to provide funding to the SDAs according to the SFRA; and perform a three-year reexamination and adjustment to keep the “optimal” formula. In a 2012 Education Adequacy Report, the commissioner recommended “sharp reductions in SFRA’s education cost for low income (‘at-risk’) pupils and Limited English Proficiency (‘LEP’) pupils.” In March 2016, the commissioner released a second Education Adequacy Report, again recommending reductions. The Legislature again found that the commissioner failed to present evidence to support the reductions and directed that the current high levels of the SFRA weights for at-risk and LEP students remain. The Abbott plaintiffs contended if the SFRA is ended, the plaintiffs would be left with “no measure to provide constitutionally adequate funding in their districts.”

Decision On Jan. 31, 2017, the New Jersey Supreme Court denied the state’s motion for reconsideration of Abbott. In denying the motion, the court noted that state’s request to revise aspects of collective bargaining agreements and state law “have not been the subject of prior litigation in the Abbott line of cases.” Although the state’s motion was denied, the court did “not opine on the merits of the issues or arguments” and the matter was “denied without prejudice to defendants’ right to file an action for relief in the trial court.” This means that the state is not prohibited from raising the same issue in the future.

Since 2017 is an election year, it is unclear when succeeding administrations will revisit this matter. Either way, it’s clear that more Abbott v. Burke litigation is inevitable in the future.