May 9, 2006

NJ court denies Abbott schools extra cash

By Joan Gralla

NEW YORK (Reuters) - New Jersey's top court on Tuesday said
Gov. Jon Corzine did not have to give so-called Abbott schools
an extra $450 million or so in the new budget, saying the
Democrat could first complete needed audits.

The term Abbott stems from a court case that found the
state had underfunded schools in poor areas, often in aging
cities. Abbott schools cannot raise enough property tax revenue
to give pupils a satisfactory education.

New Jersey needs the cash. Only last week, Treasurer
Bradley Abelow said tax revenues could fall short by as much as
$800 million in the current and next fiscal years.

That could imperil Corzine's plan for the new budget, which
starts on July 1, by spawning an even bigger gap. In March, the
Democrat proposed closing a $4.5 billion gap by increasing
taxes and cutting spending.

Runaway spending and poor controls have been one of the
biggest problems of the Abbott program, which sought to
equalize opportunities for pupils in rich and poor areas.

A spokesman for the Education Law Center, which won the
landmark Abbott decision, was not immediately available.

Corzine did not promise extra dollars for the Abbotts,
saying only: "We have a great deal of work ahead of us to
ensure that all children across New Jersey receive a thorough
and efficient education and that public, local and school
officials are accountable for the public funds they receive."

A few weeks ago, Attorney General Zulima Farber asked the
court to delay the funding increase, saying in her brief:

"The State's dire financial situation requires that the
Governor maintain the Abbott school funding at slightly higher
than fiscal 2006 levels, while implementing accountability
measures and working toward the creation of a new funding

Adding that neither the court nor the state could have
anticipated that the Abbott districts would get an extra $1
billion in the past four years, she added:

"Nor could the Court have anticipated that this funding
would have been distributed without the State fully knowing
either what programs were being funded or whether the programs
were effective."

The Supreme Court on Tuesday did give the Abbott districts
the right to appeal any inadequate funding. But the court set a
high standard, saying the schools must "prove that an
identified demonstrably needed program, position, or service
will be substantially impaired due to insufficient funding."

The court also ordered the state to finish auditing the
Abbott schools in time for the fiscal 2008 budget.