The Campaign for Fiscal Equity Lawsuit Was the Best Hope for City Schools. It Failed.

In December 2004, it seemed that New York City schools' pocketbook woes might finally be at an end. For a decade, a coalition of city parents and education advocates had been battling Albany in state court over long-standing inequities in funding that had left New York City schools with only about $10,469 per student, as opposed to $13,760 per student in the neighboring suburbs.

In 2001, a judge had ruled that the state had a constitutional obligation to provide a "sound basic education," and ordered the legislature to boost funding to city schools, but the legislature didn't act. Now, the courts were promising to do what state senators and assembly members would not: In a ruling that cited Brown v. Board of Education, State Supreme Court Justice Leland DeGrasse declared that to fix the "systemic failure" of New York City's schools, he was ordering the state and city to pump an additional $5.6 billion a year into the city school system, effective immediately.

"We're ecstatic," Michael Rebell, then executive director of the Campaign for Fiscal Equity, which had filed the suit way back in 1993, told reporters. "Now we need to roll up our sleeves and make sure the legislature enacts this reform so that the children can get what they need."

Four years later, getting city schoolkids what they need is the least of educators' problems: Keeping what they already have, even, seems out of reach. After two rounds of mid-year cuts by Mayor Bloomberg and a doomsday budget from Governor Paterson, the city schools are looking at 2009 funding levels more than a billion dollars shy of what they had expected. The laundry lists of planned cuts from principals, presented on blogs like GothamSchools and InsideSchools, have become litany: "We are very scared as we will have to eliminate all after school programs and raise class sizes as we will have to eliminate about 5 positions." "Theatre, arts, and dance programs will have to be cut." The picture gets grimmer when you look ahead to next year; forward-thinking principals are realizing they'll have to cut full teaching positions, meaning entire classes will disappear into thin air.

This is not the post-victory landscape the people who waged the lawsuit imagined. The settlement was supposed to eliminate the money wars and instead, as Rebell put it, allow educators to roll up their sleeves and make those schools better. The final agreement carefully listed five proven methods to help inner-city kids do better in school, to ensure that the extra money was well spent. After 14 years of work, they weren't taking any chances.

And yet, here we are, about to spend the rest of the school year in another fight over not what programs the money should pay for (What kind of pre-K really works? How should we improve our standardized tests? Can we make the school day longer?), but where to get the money at all. How did this happen?

Wall Street's collapse and the city's generally horrific financial situation played a starring role, of course, but the Campaign for Fiscal Equity settlement had been ailing long before Lehman Brothers closed. Following DeGrasse's ruling, it took another two years of back-and-forth between the state and the courts before the funding would finally flow. Finally, in January 2007, newly elected Governor Eliot Spitzer proposed boosting state education funds to the city by $5.4 billion by 2011, building in the kind of programmatic specificity the lawsuit's filers had suggested. School districts would have to sign "Contracts for Excellence," vowing to use the windfall to improve one of five educational areas: teacher quality, length of school days, smaller class sizes, restructured middle and high schools, and full-day pre-K and kindergarten. (A sixth area, aiding students for whom English was not their first language, was later added.) Education Week glowingly called Spitzer's contracts "a test case" in holding school districts accountable in how they allocate new funds.

The first reports from the field were less rosy. First, it turned out that of the $700 million in extra funding the first year (under Spitzer's plan, spending increases would be slowly phased in over five years), only $228 million would be subject to Contract for Excellence restrictions. The rest trickled out through various loopholes—$60 million for charter schools, $38 million for "experimental" programs—and into other pots of money the school system was free to spend however it wanted.

While the city dutifully issued statements breaking down the remaining $228 million into the five contractual categories, there were numerous complaints of insufficient oversight over how the money was actually being spent. Rather than pouring the dollars into consolidated citywide programs targeted at improving teacher quality or lengthening the school day, the city left it up to principals to decide how to spend their tiny portion of the funds. The result was no comprehensive strategy for using the funds, and a paper trail that is, at best, patchwork and, at worst, unreliable: Principals only have to report their intentions, not how the money is ultimately spent.

"It's all over the place," says Rebell, now director of the Campaign for Educational Equity at Columbia Teachers College. "There's no way anybody can keep track of what's going on with that money, whether it's made any difference, whether it's being used well."

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