The case arose after the NJ Supreme Court issued its July 23, 2003 order granting a request by NJDOE to suspend, for one year, the districts’ right to demonstrate need for new supplemental or "at-risk" K-12 programs under the Abbott V (1998) ruling. The order relieved the NJDOE from funding any new supplemental programs such as dropout prevention, remedial reading and math, after-school, health services, and alternative education.

The NJDOE, however, was also ordered to maintain in 2003-04 all programs, services and positions in the districts’ approved 2002-03 budgets, adjusted for non-discretionary increases such as contracted raises for teachers. Only those "non-instructional" budget items proven by NJDOE to be "ineffective or inefficient" could be removed from the "maintenance budget."

On appeal, the districts claim NJDOE violated this order by:

• Calculating the maintenance budget by actual spending as of the end of the school year, not by the approved budget amount for the entire year. This calculation resulted in cuts of over $120 million -- largely due to staff vacancies and use of substitutes in 2002-03 -- even though the positions continue to be needed in 2003-04.

• Cutting another $27 million in alleged "inefficiencies" based solely on comparative district spending data, with no proof concerning the specific programs or positions in dispute.

The appeal involves only K-12 supplemental funds. As mandated by the Abbott rulings, the Legislature has increased foundation funding to keep pace with suburban district spending of $10,700 per pupil, and has provided over $400 million, or nearly $10,000 per child, to fund Abbott preschool programs for an estimated 42,000 three- and four-year olds.

NJ Commissioner of Education William Librera has conceded that the Legislature, in providing only $200 million for K-12 supplemental programs, has under-funded this Abbott remedy by $100 million. If the districts' appeal is successful, the shortfall could rise to $250 million.