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Campaign for Fiscal Equity: A Project of ELC

ELC has undertaken the core mission of the Campaign for Fiscal Equity (CFE) to advance the legal rights of all New York schoolchildren to a sound basic and quality education under state and federal law. ELC’s CFE Project advocates for prompt implementation of adequate and equitable school funding to comply with New York’s constitutional mandate. The CFE Project also advocates for high quality early childhood education and researches other key issues affecting educational opportunity.


CFE was founded in 1993 by a coalition of concerned parents seeking to reform New York State's school finance system. That year, CFE filed a lawsuit claiming that the State underfunded New York City's public schools and thus denied its students their constitutional right to the opportunity for a sound basic education.

In 1995, New York’s highest court, the Court of Appeals, ruled that CFE made a constitutionally valid claim and remanded the case for trial. In 2003, the Court of Appeals upheld the trial court’s ruling that the State’s school funding system violated New York City schoolchildren’s constitutional right to a sound basic education, which it defined as the "opportunity for a meaningful high school education, one which prepares them to function productively as civic participants." The Court set a deadline in 2004 for the State to enact a remedy, but the State missed that deadline.

In 2006, after a compliance hearing, the Court of Appeals delivered the case’s final ruling, confirming that the state must provide its children with the opportunity for a sound basic education. In this landmark case, CFE v. State of New York, the court explicated the State’s constitutional obligation to provide essential resources to all public school children.

Although the CFE decision focused on New York City, the Governor and Legislature recognized their constitutional obligation to all children in the state with the passage of statewide funding reform in April 2007 (Education Budget and Reform Act of 2007).The law enacted a Foundation Aid Formula designed to ensure adequacy and equity in state school funding by establishing a relationship between state aid, the needs of students and a district’s ability to raise revenue. It provided for a four-year phase-in of state aid to reach full funding of the formula. The legislation also introduced accountability provisions in its “contracts for excellence,” in order to ensure that the money provided was well spent.

Recent Developments

In the first two years, the NY Legislature provided installments of the Foundation Aid Formula totaling $2.3 billion. However, in 2009, aid was frozen at 37.5% of the four-year target, and aid was cut by $2.7 billion in 2010 and 2011. The cut was achieved through a mechanism called the Gap Elimination Adjustment (GEA), which seeks to balance the state’s overall budget by reducing state school aid.

In addition to the GEA, Governor Cuomo and the Legislature adopted a budget maneuver that prevents full funding of the 2007 Foundation Aid Formula: the Personal Income Growth Index (PIGI) Cap, commonly referred to as the cap on state school aid. This cap has the effect of relegating moderate and high need districts to long-term underfunding, thereby ensuring that compliance with the state’s constitutional obligations for students in those districts will never be fulfilled. Furthermore, it locks existing inequities in place and exacerbates those inequities.

Current Issues

The 2012-13 budget widened the gap between the 2007 formula and actual state funding for New York’s schools. The shortfall now tops $5.5 billion dollars. As the Board of Regents noted in its November 2012 State Aid Conceptual Proposal, this shortfall, together with the accumulated GEA cuts, brings the total funding gap to over $7.7 billion. Current school funding is below 2008-09 levels. As a result of these reductions and restrictions, essential school resources are disappearing from classrooms in New York City and throughout the state. Districts are being forced to dramatically increase class sizes, eliminate courses and reduce or cut services for at-risk students, along with other vital programs and resources.

In 2008, plaintiff schoolchildren, parents, and small city school districts filed Hussein v. State and asked the court to apply the state constitutional principles as applied in CFE v. State to their school districts. They allege that their districts, which serve high percentages of disadvantaged students, have inadequate funding to provide the opportunity for a sound basic education. In their amended complaint, plaintiffs also complain of the state’s failure to fund their school districts even to the level of the 2007 CFE remedy. In 2012, the Court of Appeals allowed the case to proceed. The parties are preparing for trial.

Significant Cases

C.F.E. v. State (1995)           Read More

In 1995, New York’s Court of Appeals held that the state constitutional right to a sound basic education means an education that enables students to function productively as civic participants capable of  voting and serving on a jury. The Court also ruled that the CFE plaintiffs made a valid constitutional claim and could proceed to trial. [86 N.Y.2d 307 (NY 1995)]


C.F.E. v. State (2001)           Read More

In 2001, the NY Supreme Court decision after trial found that the State violated the constitutional rights of New York City schoolchildren because it denied them the opportunity to obtain a sound basic education. [187 Misc.2d 1 (Sup. Ct. New York County, 2001)]


C.F.E. v. State (2002)           Read More

In 2002, the Appellate Division, First Department, reversed the NY Supreme Court decision, holding that all that is required for a sound basic education are eighth or ninth-grade skills. [295 A.D.2d 1 (1st Dep't, 2002)]


C.F.E. v. State (2003)           Read More

In 2003, the Court of Appeals reversed the Appellate Division and upheld the trial court’s order, finding that a sound basic education means a “meaningful high school education.” The Court clarified that civic participation means the ability to vote and serve on a jury “capably and knowledgeably,” and that a sound basic education must also prepare students to compete for jobs that would enable them to support themselves. The Court ordered the state to: (1) ascertain the actual cost of providing a sound basic education; (2) reform the funding system so that every school in New York has the resources to provide the opportunity for a sound basic education; and (3) establish an accountability system that ensures reforms actually provide this opportunity. The Court gave the State a 2004 deadline to implement the measures. [100 N.Y.2d 893 (NY 2003)]


C.F.E. v. State (2006)           Read More

After additional proceedings in the courts below, in 2006, the Court of Appeals reiterated its position that the State has a constitutional obligation to provide New York’s students with a sound basic education, understood as a meaningful high school education, and that the State must increase funding for New York City public schools. The Court upheld the State’s position that an additional $1.93 billion in state operating aid is an appropriate constitutional minimum for New York City. [8 N.Y.3d 14 (NY 2006)]


ELC News Stories on CFE

For a complete list of stories, visit the CFE section of the News Archives page.