The Court That Broke Jersey: The state’s activist judiciary has forced taxpayers to finance unprecedented educational and housing regimes

February 16, 2012

City Journal:

Squelching rumors this past fall of a presidential run, New Jersey governor Chris Christie observed that he had lots more to do to fix a “broken” state. He wasn’t kidding: though already the nation’s most heavily taxed state, New Jersey can balance its budget only by ignoring billions of dollars in employee pension liabilities and by slashing aid to struggling local governments. Christie has pushed through reforms that cut spending and cap property-tax increases. But he has only begun to grapple with an institution that bears much of the responsibility for the state’s fiscal woes: the New Jersey Supreme Court.

For half a century now, New Jersey has been home to the most activist state appellate court in America. Lauded by proponents of “living” constitutions who urge courts to make policy instead of interpret the law as written, the New Jersey Supreme Court has profoundly transformed the Garden State by seizing control of school funding, hijacking zoning powers from towns and cities to increase subsidized housing, and nullifying taxpayer protections in the state constitution. Its undemocratic actions have blown apart the state’s finances and led to ill-conceived and ineffective policies. If you want to understand what rule by liberal judges looks like on the state level, you need only look at New Jersey, which is teetering on bankruptcy though it remains one of America’s wealthiest states.

In January, Christie nominated two new members to the court, appointments that have the capacity to reshape the seven-member panel. But taming the court won’t be easy, even for the pugnacious Christie, whose initial efforts to reform it met ferocious resistance. “I don’t think the supreme court has any business being involved in setting the budget of the state government,” Christie complained last year. Yet it is involved, extensively—and that must change if Jersey taxpayers are ever to find relief.

New Jersey’s supreme court, charged with hearing cases brought to it from lower judicial levels, is the product of the state’s 1947 constitution, which replaced an unwieldy 16-member Court of Errors and Appeals with today’s seven-member body, appointed by the governor and confirmed by the state senate. A dean of New York University’s law school, Arthur Vanderbilt, served as the new court’s first chief justice. Vanderbilt is best remembered today for persuading President Dwight Eisenhower to appoint William Brennan, at the time also a Jersey justice, to the U.S. Supreme Court, whose liberal activist wing he led for more than three decades.

As chief justice for nine years, Vanderbilt helped forge the New Jersey Supreme Court’s expansive understanding of its role. For instance, he wrote the majority opinion in Winberry v. Salisbury, a decision that gave the court itself, not the legislature, the power to make rules for the state judiciary. That ruling set New Jersey’s judiciary apart from the court systems in most other states—as well as from the federal judiciary, which ultimately derives its authority from Congress. Some critics have even argued that Winberry violates the U.S. Constitution’s guarantee that every state must have a republican form of government. “Under the doctrine ofWinberry v. Salisbury,” wrote New Jersey lawyer Anthony Kearns in a 1955 ABA Journal article, “we can only conclude that laws of practice and procedure are exclusively in the hands of men who are not elected.”

Since Winberry, the court has usurped the roles of the governor and the state legislature in many other areas, relying on questionable readings of the New Jersey Constitution to pursue its own views of justice. But nowhere has the court’s ambition had a bigger or more disastrous impact than in education policy, particularly with a series of decisions, collectively known as Abbott v. Burke, that have massively extended judicial control over the Jersey schools.

The Abbott cases initially resembled dozens of “fiscal-equity” lawsuits filed around the country beginning in the late 1960s. These suits challenged education funding levels for urban school districts, arguing that because schools were financed through local property taxes, wealthy districts received far more funding than less affluent ones did—especially as migration from troubled cities dragged down property values. This, the lawsuits contended, violated various provisions in state constitutions.

In 20 states, judges largely dismissed the suits as outside the scope of those constitutions. In 16 others, courts ordered states to come up with more equitable ways to finance the schools. This generally meant spending more money, often raised through sales and income taxes, in lower-income districts. New Jersey was one of the 16; in its case, the key constitutional phrase guaranteed state residents a “thorough and efficient system of free public schools.” At first, the New Jersey Supreme Court followed the path of other state courts and simply ordered extra spending in poor districts. But in 1976, when the state legislature didn’t comply, the court ordered the schools shut down until the legislature agreed to institute a tax to fund the new spending. The chief justice at the time was Richard Hughes, who had previously spent eight years as governor trying fruitlessly to get the state legislature to enact an income tax to boost education spending. “They didn’t want the income tax then? Well, they’ll want one now,” Hughes told the press. Years later, he admitted that he had wielded as much power as chief justice as he had in the governor’s seat.

But an advocacy group called the Education Law Center challenged the new spending. Merely giving urban schools new funding wasn’t enough to satisfy the “thorough and efficient” clause, the group argued; the state had to fund education in urban districts at a level that would enable them to compete with plush suburban districts. In 1985, the New Jersey Supremes agreed, and when James Florio took the governor’s office five years later, he complied by passing $2.8 billion in sales- and income-tax increases—the largest such hike in state history—to bring the city schools up to par. The court, still unsatisfied, quickly ruled that the state had to add yet more “supplemental” spending to poor districts to help offset the “additional disadvantages” that students in those areas faced. After the tax increase cost Florio reelection in 1993, his successor, Christine Todd Whitman, passed her own education financing formula, which sought to increase spending in urban districts to within $1,200 per pupil of what Jersey’s richest districts spent.

That was still not enough for the supreme court. In what became known as Abbott IV, the judges declared Whitman’s plan unconstitutional and ordered the state to fund poor districts generously enough that their per-pupil spending would be the same as in the state’s wealthiest districts—which were among the richest in the nation. The court also ruled that the state had to pay for a menu of new social programs for kids in poor districts (now called “Abbott districts”).

Over the next decade, as the plaintiffs returned to the New Jersey Supreme Court nearly a dozen times, the judges steadily transformed the nature of the case. No longer was it simply a matter of “fiscal equity”; rather, it morphed into what judicial analysts call an “adequacy” case, in which the court determines what constitutes an adequate education. Judges don’t merely determine levels of spending; they also initiate and monitor specific programs—policy details that, in most states, are left to elected officials. In short, the supreme court seized power in education policy.

It used that power in unthinking and expensive ways. For example, it ordered pre-K classes to be offered to all three- and four-year-olds in Abbottdistricts, even though the state constitution guarantees public education only for children “between the ages of five and eighteen.” Some studies have found no educational gain from such programs, while others suggest that only students in extremely expensive versions, with small student-to-teacher ratios, can make tiny gains, hard to replicate across entire school systems. “The evidence does not support instituting broad, full-scale programs,” conclude education scholars Eric Hanushek and Alfred Lindseth in their 2009 book Schoolhouses, Courthouses and Statehouses. The pre-K program would grow to cost New Jersey $500 million annually.

Meanwhile, the court ignored numerous examples of how some urban school districts were failing because they were run by corrupt, wasteful political machines whose main goals were patronage and power, not educational success. In 1986, the state described the Jersey City school system as “adrift, having a managerial structure which is a product of politics and patronage.” In 1994, after a long investigation, the state issued a damning report on the Newark school system, accusing it of being “at best flagrantly delinquent and at worst deceptive in discharging its obligations to the children.” At the time, the Newark system, thanks to theAbbott-mandated state aid, was spending $10,700 per pupil, significantly higher than the Jersey average of $8,571. In 2002, a similar state investigation into Camden schools found, as the Courier-Post of Cherry Hill summarized it, “a lack of planning, a chaotic budget process, too many employees in virtually every department and lack of spending controls.” At the same time, a state arbitrator working in another Abbott district, Asbury Park, wrote that “a crisis exists” because of “a pervasive feeling of educational corruption.”…

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