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A New York appellate court Tuesday reversed a landmark ruling that found the state’s method of funding schools violated the law and denied New York City children the chance to receive an adequate education. The 4-1 ruling from the Appellate Division, 1st Department, said the state had not skirted its state constitutional obligation to provide a “sound basic education” to city students, as Manhattan Supreme Court Justice Leland DeGrasse had found in January 2001. The state’s obligation, the court wrote, would generally be fulfilled after the eighth or ninth grade. The ruling also dismissed a finding that the state’s school financing system had violated federal civil rights laws because it had a disparate impact on minorities. If upheld, DeGrasse’s ruling could have required the state to scrap its education financing system and pump more than $2 billion into New York City schools to buy better books, build better buildings and hire better qualified teachers for the city’s 1.1 million students. But Justice Alfred D. Lerner, writing for the majority in Campaign for Fiscal Equity v. State of New York, 5330, said DeGrasse “went too far in stating that a sound basic education must prepare students for employment somewhere between low-level service jobs and the most lucrative careers.” The proper measure of an adequate education, the court wrote, is whether a person can “function productively” as construed in the 1995 Court of Appeals ruling that allowed the lawsuit to proceed against the state. “The skills required to enable a person to obtain employment, vote, and serve on a jury, are imparted between grades 8 and 9, a level of skills which plaintiffs do not dispute is being provided,” Lerner wrote. “The [trial court] rejected this evidence solely on the ground that the State Constitution should require something more than a ninth-grade education.” The court stressed that the state only had to provide all children with “the opportunity of a sound basic education, not ensure that they actually receive it.” Justice Lerner added: “That is not to say that the State should not strive for higher goals.” Justice David B. Saxe rebuked the majority in a dissenting opinion, saying that its conclusion could be reached only by “ignoring” the evidence or the reality of the city’s public schools. “I do not accept the proposition that providing students with instruction by which they may achieve sixth-grade arithmetic skills and an eighth-grade reading level is sufficient to satisfy the constitutional requirement,” Saxe wrote. The majority’s ruling, the judge said, meant the state had “no meaningful obligation to provide any high school education at all.” In a statement issued Tuesday, Michael A. Rebell, the executive director and counsel at Campaign for Fiscal Equity, the public interest group that brought the suit, said: “We are outraged on behalf of hundreds of thousands of New York State students who struggle in overcrowded classrooms with underpaid teachers and empty libraries.” Rebell praised Saxe’s dissent and said his organization would appeal the ruling to the Court of Appeals. Several city and state officials issued statements reacting to the ruling, which came eight months after the issues were presented to the 1st Department. “To set a standard of being able to vote or serve on a jury as the goal of our educational system for its students is not adequate in the era in which we now live,” said Assembly Speaker Sheldon Silver in a statement Tuesday. New York City Mayor Michael R. Bloomberg also expressed his disappointment in the decision, saying in a statement: “The ruling impedes the city’s efforts to obtain its fair share of resources from the state so that we can provide our children with a sound and basic education.” Michael McKeon, a spokesman for Gov. George E. Pataki, said in a statement Tuesday that the lawsuit had been filed “because of the Cuomo administration’s complete failure to invest in New York City schools or fight for real reforms.” McKeon cited efforts by the governor to increase school funding and change how the board of education is run, adding, “we still have more to do.” Last October Deputy Solicitor General Mark Gimpel, representing the governor, told the appellate panel that DeGrasse’s ruling should be overturned because the state was meeting its constitutional obligations to schoolchildren. Tuesday the court essentially supported those arguments in a 69-page ruling that encompassed three separate opinions. At times, the opinions strongly contested the conclusions of opposing justices. STRONG DISSENT In his dissent, Saxe said that while some students are given an opportunity to receive a sound education, a large portion of students, whom he labeled “at-risk,” were being denied what they were entitled to. “The evidence amply supports the conclusion that the level of funding provided to the New York City public school system is at a level so low as to violate the Education Article of the New York State Constitution,” Saxe wrote. The judge said he would affirm the portion of DeGrasse’s ruling that ordered the state to determine the actual cost of giving all city students an opportunity to obtain an education. However, Saxe said, DeGrasse had gone too far in ordering the state to alter its funding method. Justice Lerner dismissed Saxe’s conclusion, writing, “A statement that the current system is inadequate and that more money is better is nothing more than an invitation for limitless litigation.” Lerner said that even if children were not being given an adequate opportunity to receive an education, Campaign for Fiscal Equity had failed to show that the state’s funding system was to blame. “More spending on education is not necessarily the answer,” Lerner wrote, citing myriad socio-economic conditions such as “poverty, high-crime neighborhoods and single-parent or dysfunctional homes” that contribute to lower test scores in New York City compared with the rest of the state. Lerner emphasized that Justice Saxe argued that “at risk” students alone were being denied an education, which meant the system of education was at fault, not the state’s funding system. “The dissent goes on to categorize almost the entire City student population as ‘at risk’,” Lerner wrote. Though the majority rejected the state’s contention that the city was at fault for any inadequacy in funding, it did point to inefficiency at the board of education, which the court said could save hundreds of millions of dollars by removing children from special education programs who have been improperly placed there. But Saxe countered that those projected savings were overly optimistic, writing: “This approach fails to recognize that re-directing the already allocated funds from one program to another would simply create other problems caused by underfunding to spring up elsewhere.” CONCURRING OPINION In a concurring opinion, Justice Peter Tom said he believed that state funding was “not a magic bullet,” but expressed concern about “disturbing trends” in the city’s school system. He said he would not “close the door” on a claim that the state’s funding decisions could constitute a Constitutional violation. Tom said he was especially concerned with the inability of city schools to attract and retain qualified teachers. “It may be an ironic result that, as the State and BOE, commendably, move to enforce higher standards on teacher hiring and retention, the numbers of qualified teachers in the system may shrink proportionately, unless some missing variable provides a solution,” Tom wrote. The judge added that Saxe had made a “persuasive argument on behalf of ‘at-risk’ students.” In January 2001, Justice DeGrasse ordered the state to develop a new system for funding schools after determining the cost of providing a sound education in each district. The judge gave the state until Sept. 15, 2001, to implement its reforms, and said he would not hesitate to intervene if the state was not up to the task. He suggested that New York City schools would need hundreds of millions of dollars in additional funding to comply with the Constitution. The schools, he said, needed more and better teachers, up-to-date books, appropriate class sizes and better school buildings. The state appealed, receiving a stay and arguing its case before the 1st Department in October 2001. Among the state’s claims were that the courts could not tell the executive branch and the Legislature how to implement school funding. Campaign for Fiscal Equity’s litigation has been in the courts for nearly nine years. The group was represented by Rebell and attorneys from Simpson Thacher & Bartlett led by Joseph Wayland. The firm has represented the group pro bono. Justices John T. Buckley and Joseph P. Sullivan concurred with Lerner’s majority opinion.

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