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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. 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."
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.
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."
The looming state and city budget deficits only threaten to make matters worse. Bloomberg, anticipating rough fiscal waters ahead, slashed $180 million from the city schools budget last February, and has proposed $385 million in cuts for the next school year. Paterson's 2009 budget promises to eviscerate schools funding, with $360 million in "deficit reduction assessment" cuts to basic city schools funding; the court-mandated CFE funds, meanwhile, scheduled to be $645 million this year, would be entirely "deferred" to as late as the year 2014, with no guarantees the money would rematerialize even then. "That's as good as being unconstitutional," says Rebell.
For now, everyone seems to be hoping that a deus ex machina will turn up to prevent the cuts from going through—a federal bailout of state education budgets, a "millionaire's tax" to raise revenue, gold doubloons discovered under the governor's desk. "I don't know how serious the governor is in the way he put forward this proposal," says Rebell. "He knows it's going to the legislative hopper. There's going to be a balance of increased taxes and cuts, and where exactly that balance is going to come out is the critical question."
One widely circulated proposal, pushed by the Working Families Party among others, is for a temporary state income tax surcharge on people earning over $250,000 a year, who currently pay the same 6.85 percent rate as New Yorkers with incomes of just $20,000. Rebell says a "full-court press" is needed for increased state funding, as well as "educational maintenance grants" from Washington to bail out state education budgets—a plan first floated by Ohio governor Ted Strickland early last year, and which has since gathered the support of Paterson and several other Democratic governors.
There's some hope this could work. The executive director of the Campaign for Fiscal Equity, Geri Palast, is serving as an adviser to Obama's transition team. But if federal help fails, Palast's deputies have said the Campaign could return to court. It's something that critics of the settlement say would not have been necessary if the court had retained more oversight of the increased schools funding. Rebell himself now says, "We had asked the court to retain jurisdiction for exactly this kind of reason, and they chose not to."
Haimson, for her part, wishes that Rebell and his cohorts had pushed harder. "Originally, the attorneys, in their wisdom, decided that there would be no controls over that money in any real sense—they had an idea that accountability meant meetings with the chancellor and public hearings, and all the rest. But public hearings alone don't have much force with these guys—they just ignore them." She argued, in an amicus brief, that the court should have made it a stipulation of the settlement that conditions in the schools actually change—not just that a certain amount of money be thrown at them.
When prison systems have been found to be illegally overcrowded, Haimson notes, courts have retained oversight until conditions are found to have improved. "The exact same argument could have been used" for city schools, she says. "It should not have been bait and switch, which is what it ended up being.
The article: "The Campaign for Fiscal Equity Lawsuit Was the Best Hope for City Schools. It Failed" was published on January 20th, 2009 in the "The New York Village News" 
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