Education Law Center 155 Washington Street, Suite 205 Newark, New Jersey 07102 (973) 624-1815 TTY (973) 624-4618 Fax (973) 624-7339 elc@edlawcenter.org      http://www.edlawcenter.org

To:       Abbott Superintendents and Other Stakeholders

From: David G. Sciarra, Executive Director

Re:      Court Application on Abbott Implementation for 2002-03

Date:   April 24, 2002

On April 18, the Department of Education filed an application with the Supreme Court seeking a one-year "time-out" on further implementation of the Abbott requirements for K-12 programs. ELC is supporting this application. This memorandum explains and clarifies the terms of the order presented to the Court.

1. Fixing the State Framework for K-12 Programs by 2003-04

The proposed Court order requires DOE to fix all of the problems with standards-based reform, whole school reform, school-based management and budgeting, and supplemental funding by September 2002, as well as preschool and facilities. New DOE guidelines for K-12 programs, school and district budgets and supplemental funding must be in place for SMTs, districts and the DOE to follow for planning and budgeting for the 2003-04 school year.

DOE will establish two groups of Abbott stakeholder representatives in the next few weeks to address these problems and make recommendations. The groups will focus on (1) K-12 educational improvement, including modification of the mandate for adopting whole school reform models; and (2) school governance, school management and relationships with parents and communities.

2. Preschool in 2002-03

The State will fully fund - with aid designated for pre-K - the DOE approved budgets for three- and four-year olds for 2002-03. These approved budgets, statewide, total $380 million. The State will supplement the $230 million in Early Childhood Program Aid with as much as $150 million in additional state aid to support these pre-K budgets. Districts will no longer have to reallocate funds from their K-12 programs or weaken those programs to support pre-K, as they have had to do in prior years.

3. Parity Funding

The State will adhere to the Supreme Court rulings on "parity" foundational funding for Abbott children. The State will provide Abbott districts with an additional $83 million to maintain a per-pupil expenditure level of $10,110, the projected per pupil expenditure in the successful suburban districts for 2002-03. As in prior years, whether a district receives a parity increase - and how much - depends on district enrollment.

4. The K-12 Expenditure Cap

The problems with the Abbott K-12 program, including standards-based reform, whole school reform, school management and supplemental funding, cannot be fixed in time (as described above) to correct implementation for 2002-03. Accordingly, the proposed Court order will "cap" Abbott district K-12 expenditures for 2002-03 at this year's (2001-02) level.

The cap is on K-12 expenditures, not on additional Abbott v. Burke State aid, or "supplemental funding." This means that the expenditure level on the K-12 budget, as approved by DOE, becomes the cap for next year, and that districts have the right to supplemental funding in an amount necessary to continue K-12 expenditures in the next school year.

The expenditure cap raises several important issues:

(a) Expenditures for the second half of kindergarten - previously included in the pre-K budgets - must be accounted for. Districts should include their expenditures for the second half of kindergarten in their K-12 budgets in order to ensure sufficient supplemental funding to support those expenditures in 2002-03.

(b) The use of carryover funds, "free balance" or surplus funds to fund current year expenditures must also be accounted for. Many districts were directed by DOE to use carryover to pay for 2001-02 expenditures. Carryover may or may not be available in 2002-03. If carryover is unavailable, districts should ask for supplemental funding to ensure sufficient funding to maintain level expenditures.

(c) The amount of supplemental funding in each district depends on several factors: the amount, if any, of the increase in parity; the expenditure level for 2001-02, including the second half of K; the availability of carryover; and any pre-K supplemental funding utilized in 2001-02 that is not needed in 2002-03. If a district needs more supplemental funding - or needs supplemental funding for the first time - to maintain current expenditures next year, the district must revise its budget to request that amount. If the district does not make a request, it will not automatically receive it. Districts retain the right to appeal a DOE denial of supplemental funding, if needed to maintain K-12 expenditures.

5. K-12 Reductions

The K-12 expenditure cap for 2002-03 means that districts will not receive state aid for increased costs, including required salary increments, insurance increases, or other fixed-cost growth. All Abbott districts, therefore, will have to make some reductions in their budgets. While the cap requires reductions, because the cap is now on expenditures - not supplemental funding - those reductions should be less than previously anticipated by districts.

6. Protected K-12 Expenditures

The proposed Court order establishes local flexibility to reduce central office expenditures, as well as previously mandated school expenditures. Such reductions, however, should protect, for next year, the "core of whole school reform," which must include, at a minimum, the WSR developer contract, the instructional facilitator, and class size requirements. The proposed Court order expressly prohibits classroom teacher layoffs that have the impact of increasing class size.

7. District Responsibilities

(a) Revising Budgets Based on the K-12 Expenditure Cap

Districts must revise their budgets to ensure the same level of expenditures K-12 in 2002-03 as approved in 2001-02. In addition, districts must identify any anticipated carry-over for 2002-03 that may be used to support the K-12 budget, and, therefore, reduce reliance on supplemental funding. Finally, the districts must request, if needed, an amount of supplemental funding which, when combined with any increase in parity, will fully fund the K-12 budget at 2001-02 levels, including the second half of kindergarten.

(b) Collaboration with Schools/Communities on Reductions

To seek buy-in and support during a very difficult period, districts must ensure: equity in central office and school reductions; seek the advice and input of SMT leadership; and, importantly, present such reductions at a public hearing of the board of education. The proposed budget reductions must be approved by the board of education, including state operated districts, following a public hearing to give parents, SMT members and others the opportunity to express their support or concerns. ELC recommends that a list of proposed central office and school reductions be published in the local newspaper when the public hearing is announced. The district should publicize: (a) the 2001-02 expenditure level for K-12; (b) the parity increase, if any; (c) the total amount of reductions proposed, and the specific line-item proposed reductions identified by school and central office, including staff positions by title and numbers; (d) the estimate of available carryover for 2002-03; (e) and the amount of supplemental funding requested to ensure level K-12 expenditures.

8. DOE Responsibilities

The DOE will review revised budgets collaboratively with districts to
ensure that the terms in the proposed Court order are met. Based on this
review, DOE will determine the amount of supplemental funding needed by
districts, and issue a decision on the district budget no later than June 30, 2002.

9. District Appeals of DOE Decisions

If a district disagrees with the DOE decision on its budget, and/or believes that the DOE is not providing sufficient supplemental funding to maintain its 2001-02 K-12 expenditures next year, the district can appeal such decisions to the Office of Administrative Law (OAL). The DOE has committed to expediting such appeals, and the proposed Court order will direct the OAL to also process such appeals expeditiously.

10. ELC's Role

ELC, as the representative of Abbott children, will carefully monitor the budget process to ensure compliance with the Court order by DOE and districts. We are prepared to assist SMTs, parents, teachers and others who have questions and concerns about the proposed order, including district-specific concerns. We will make every effort to post new information on our website: www.edlawcenter.org. As always, you can telephone 973-624-1815, ext. 27, or e-mail us at elc@edlawcenter.org

Most importantly, ELC will work to ensure the collaborative work groups are formed quickly; that those groups are representative of Abbott stakeholders; and that these groups work diligently on recommendations for new Abbott K-12 program, budgeting and funding protocols in time for implementation by September 2002.