BOARD OF EDUCATION OF THE TOWNSHIP OF NEPTUNE, MONMOUTH COUNTY V. NEW JERSEY DEPARTMENT OF EDUCATION, 10/9/03 (#573-03)

573-03
BOARD OF EDUCATION OF THE 	:
TOWNSHIP OF NEPTUNE,
MONMOUTH COUNTY, 	:
PETITIONER, 	: 	COMMISSIONER OF EDUCATION
V. 	: 	DECISION
NEW JERSEY STATE DEPARTMENT 	:
OF EDUCATION,
:
RESPONDENT.
:
SYNOPSIS
Petitioning Abbott district claimed the Department erroneously calculated its presumptive
supplemental funding award for the 2002-03 school year and wrongfully reduced aid by the
amount of the districtís surplus in excess of 2%, which the Department prevented it from
expending for additional supplemental programs or services. 	District also sought aid above
presumptive level based on claims that loss of unfunded programs and services impaired core
elements and essential enhancements of whole school reform.
The ALJ found that, with one exception, the Department correctly calculated districtís
presumptive aid award in accordance with Court directives and that the district did not meet
the burden necessary to establish on appeal that further funding was necessary. ALJ sustained
the Departmentís actions with respect to excess surplus, but found that the Department erred
in not providing additional aid for the districtís actual and documented expenditures for the
second half-day of kindergarten. 	The ALJ directed the parties to calculate this amount and
ordered the Department to disburse the requisite aid.
The Commissioner adopted the ALJís decision, with clarification, in all respects except
funding for the second half-day of full-day kindergarten. 	Commissioner agreed with the
Department that aid was to be calculated on the basis of an underlying budget which must
provide for full-day kindergarten, not increased by the dollar amount of second half-day
kindergarten expenditures. Petition was dismissed.
This synopsis is not part of the Commissionerís decision. It has been prepared for the convenience of
the reader. It has been neither reviewed nor approved by the Commissioner.
October 9, 2003

33
OAL DKT. NOS. EDU 727-03 AND EDU 728-03 (CONSOLIDATED)
AGENCY DKT. NOS. 46-2/03 AND 122-4/02
BOARD OF EDUCATION OF THE 	:
TOWNSHIP OF NEPTUNE,
MONMOUTH COUNTY, 	:
PETITIONER, 	: 	COMMISSIONER OF EDUCATION
V. 	: 	DECISION
NEW JERSEY STATE DEPARTMENT 	:
OF EDUCATION,
:
RESPONDENT.
:
The 	record 	of 	this 	matter 	and 	the 	Initial 	Decision 	of 	the 	Office 	of
Administrative Law (OAL) have been reviewed. 	In accordance with N.J.A.C. 1:1-18.4 and
extensions duly requested and granted, exceptions were filed by both the Board of Education
(Board) and the Department of Education (Department), as were replies by each to the otherís
exceptions.1
In its exceptions, the Board first contends that the Administrative Law Judge
(ALJ) erred in failing to recognize that the Department was required to ìlevel fundî the
district, that is, to establish presumptive and preliminary supplemental funding for 2002-03 at
the amount of supplemental funding provided in 2001-02. 	Had the Department done so, the
Board observes, its presumptive aid amount would have been $6,518,318 rather than
$5,844,432. (Boardís Exceptions/Reply at 6-7)
The Board further argues that the ALJ erred in concluding that Abbott IX,
supra, did not establish a new legal standard for 2002-03 supplemental funding requests. The
ALJ should not, the Board contends, have applied the ìparticularized needî standards of
1 The Board, with the consent of the Department, incorporated its exceptions and reply into a single submission.

34
regulations expressly suspended for 2002-03 school year, since it is impossible both ìto have
a time-out from the Abbott K-12 regulatory requirements for one year and to assume that
those very same requirements are still in place.î 	Moreover, the Board continues, the ALJ
failed to recognize that the Court imposed a more rigorous burden on Abbott districts for the
2002-03 school year, not less; under the Courtís order, districts were not permitted to show
student need for an unlimited breadth of supplemental programs and services, but were
instead restricted to showing an educational need related to impairment of essential aspects of
a districtís whole school reform model. 	There is no basis, the Board avers, for the ALJ to
have substituted the suspended regulatory framework of ìparticularized needî for the Courtís
clearly expressed standard, and the Commissioner should, with the exception of the Boardís
claim for grade 7-8 replacement science books and a new K-5 spelling program, which should
be granted directly on the present record, remand this matter to the ALJ for findings under the
correct standard. (Id. at 7-10, quotation at 7-8)2
For its part, the Department agrees with most of the ALJís findings and
conclusions, but takes exception to that portion of the Initial Decision holding that the
Department is required to provide supplemental funding to the Board in an amount reflecting
actual and documented 2001-02 expenditures for the second half of full-day kindergarten. As
it did before the ALJ, the Department argues that it based its preliminary supplemental aid
calculation on a budget which included full-day kindergarten expenditures, so that it would
amount to ìdouble-countingî to give the Board additional aid based on such expenditures.
The Department further notes that it modified its preliminary calculation based on the annual
audit of the districtís K-12 budget, so that actual and documented 2001-02 kindergarten
expenses have, in fact, already been taken into account in the districtís aid entitlement.
2 The Board did not take exception to the conclusions of the Initial Decision with respect to the excess surplus
question. (Issue 4, Initial Decision at 26-28)

35
Finally, the Department cites to Sloan v. Klagholz, 342 N.J. Super. 385, 395-96 (App. Div.
2001) for the proposition that retroactive monetary relief should not be granted where such
relief would have no impact on the school year in question. (Departmentís Exceptions at 1-6)
In reply to the Boardís exceptions, the Department first posits that the Supreme
Court in Abbott IX, supra, explicitly authorized supplemental funding for 2002-03 at the level
of expenditures contained in the 2001-02 approved K-12 district budget, not at the level of
2001-02 aid; therefore, ìlevel fundingî is not required in the sense claimed by the Board, and
the Departmentís calculation was accurate. 	(Departmentís Reply at 1-2)
The Department next addresses the Boardís contention that the ALJ used the
wrong standard of proof in assessing the Boardís claims for increased aid. 	While agreeing
that the regulations incorporating ìparticularized needî requests were, in fact, suspended for
the 2002-03 school year, the Department contends that the burden of proof set forth in those
rules is nonetheless relevant to the instant appeal because the more rigorous standard
established by the Court requires at least as great a showing as was required in prior years.
Specifically, under applicable Court and legislative directives, programs and positions to be
funded in 2002-03 must be demonstrated effective and efficient in addressing studentsí
educational needs, a showing which requires at a minimum that the requested elements not
duplicate or overlap with existing programs and services, N.J.A.C. 6A:24-5.2(a) (6) and (7),
and that they be shown to have been successful based on documented prior experience,
N.J.A.C. 6A:24-5.2(a)(4). 	As found by the ALJ, the Department continues, the Board
submitted no documentary evidence meeting this standard, offering instead anecdotal and
conclusory testimony relying essentially on a belief that positions and programs should
continue in 2002-03 because they existed in 2001-02. (Id. at 2-4)

36
The Department finally objects to the Boardís request that this matter be
remanded to the OAL, contending that such a remand would be a waste of time and resources
because a complete factual record has already been developed. The Department then analyzes
in turn, under the standard proposed by the Board, four major areas of claimed need--
paraprofessionals, social workers, grade 7-8 science and K-5 spelling programs, and a lease
purchase payment for computer hardware--and concludes in each case that the evidence
presented fails to demonstrate impairment of core components and essential enhancements of
whole school reform. 	Thus, the Department urges, even if the Commissioner were to adopt
the Boardís suggested standard, the Board cannot meet its burden of proof. (Id. at 4-11)
In reply to the Departmentís exceptions, the Board counters that the Court did
not state that expenditures for the second half-day of kindergarten were merely to be included
in a districtís supplemental funding calculation; rather, it stated that the supplemental funding
amount 	must 	be 	increased 	by 	actual 	and 	documented 	expenditures 	for 	this 	purpose.
Additionally, the Board proffers, Sloan, supra, is inapposite in the present matter because the
Court has established specific appeal processes for Abbott disputes, which nowhere restrict
districtsí entitlement to retroactive relief once disputes have been resolved; indeed, accepting
the 	Departmentís 	argument 	would 	mean 	that 	an 	Abbott 	districtís 	attempt 	to 	secure
supplemental funding could be thwarted simply by the Departmentís extension of the appeal
process into the following school year, thereby undermining the entire Abbott appeal
framework. (Boardís Exceptions/Reply at 10-12)
Upon his own review and consideration, the Commissioner first concurs with
the ALJ that the Department correctly calculated the Boardís level of presumptive aid. Like
the ALJ, the Commissioner finds that the Court in Abbott IX, supra, specifically authorized
preliminary supplemental funding for 2002-03 at the level of expenditures contained in the

37
prior yearís approved K-12 district budget, expressing neither a promise nor an expectation
that districts would necessarily receive the same dollar amount of aid as in the preceding year.
The Commissioner further concurs that nothing in Abbott IX suggests that the
Court intended, as part of its one-year suspension of the overall Abbott regulatory framework,
to invalidate the established standard of proof for supplemental funding requests. 	Rather, as
found by the ALJ, the Court agreed to allow a period of maintenance and re-assessment in
light of State fiscal exigencies and questions about the efficacy of certain remedial measures
embodied in the regulations, but was unwilling completely to foreclose Abbott districts from
seeking to demonstrate a need for State funding above presumptive levels:
And the DOE having further requested the ability to preserve the ìcore
elementsî of whole school reform as well as certain enhancements of the
Success-for-All 	(SFA) 	model 	of 	whole 	school 	reform 	ìtied 	directly 	to
improving curriculum and instruction under the [Core Curriculum Content
Standards] CCCS,î***but to afford districts flexibility to reduce, eliminate or
limit growth of other whole school reform enhancements such as technology
coordinators and security coordinators,***to authorize districts to eliminate
positions 	and 	make 	staffing 	modifications 	in 	various 	programs 	such 	as
technology programs, alternative schools, accountability programs, school-to-
work and college transition, and to authorize districts to make educational
judgments 	about 	retaining 	certain 	specified 	positions 	such 	as 	media/
technology 	coordinator, 	technology 	coordinator 	and 	drop-out 	prevention
specialist***;
And the Court, although acknowledging the Stateís fiscal crisis and the
motivation 	underlying 	defendantsí 	proposal 	to 	strictly 	limit 	2002-2003
supplemental funding to 2001-2002 adjusted levels, and although accepting for
2002-2003 	budgetary 	purposes 	the 	discretion 	of 	the 	Commissioner 	of
Education preliminarily to set Abbott Districts supplemental funding at such
levels but being unwilling to prejudge the merits of an Abbott district's need-
based appeal seeking a higher level of supplemental funding;
It 	is***ORDERED 	that 	DOEís 	request 	for 	one 	year 	to 	afford 	districts
flexibility to eliminate, reduce, or limit growth of certain whole school reform
enhancements 	as 	specified, 	to 	eliminate 	positions 	and 	make 	staffing
modifications in various needs-based programs as specified, and to make
educationally appropriate decisions about retention of certain positions as
specified be and the same hereby is granted subject to the districtsí right of
appeal based on educational need related to impairment of the core elements of
whole school reform and essential enhancements thereof;

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And it is FURTHER ORDERED that the DOE is authorized to impose
educationally-appropriate 	limits 	on 	the 	categories 	for 	which 	needs-based
funding requests may be submitted;
And it is FURTHER ORDERED that the DOE may suspend for one year the
regulatory requirement for middle schools and high schools to implement
whole school reform models, may permit voluntary implementation of models
in such schools, and may suspend for one year formal evaluation of whole
school reform.
(Abbott IX at 296-98, citations omitted)
As the above passage demonstrates, contrary to the Boardís contention, the Court did not
disavow the principles embodied in the rules governing requests for supplemental funding,
but, instead, acted to limit the context within which such requests could be made and granted.
Within the framework constructed by the Court, then, the ALJ was correct in applying
established standards of demonstrated need, effectiveness and efficiency in judging the proofs
presented by the Board. For the reasons stated in the Initial Decision, and for the additional
reasons stated in the Departmentís exceptions and post-hearing brief, the Commissioner finds
those proofs insufficient to meet the Boardís requisite burden, whether expressed specifically
in terms of ìparticularized needî or recognized as inherent in the Courtís requirement for
ìeducational need related to impairment of the core elements of whole school reform and
essential enhancements thereof.î
The Commissioner also agrees with, and adopts in its entirety, the ALJís
discussion on allocation of surplus in excess of 2%. 	Like the ALJ, the Commissioner finds it
entirely proper and appropriate for the Department to have directed reallocation of such funds
to support core purposes, rather than permit the Board to seek additional aid for such purposes
while using excess surplus for supplemental services not meeting requisite standards of
demonstrated need, efficacy and efficiency.

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In one area, however, the Commissioner does differ with the analysis and
conclusion of the ALJ. On the question of additional State aid for the second-half of full-day
kindergarten, so as to cover its entire cost, the Commissioner reads the controlling language
of the Court to require not that a districtís presumptive amount of aid will be increased by the
dollar amount of prior-year expenditures, but that these expenditures must be included in the
base budget on which aid is reckoned. The Court directed:
[T]he DOE's request for authorization to preclude any district appeals seeking
supplemental 	funding***is 	denied 	subject 	to 	the 	DOE's 	authority
presumptively and preliminarily to establish districtsí supplemental funding for
2002-2003 at the level of expenditures contained in the 2001-2002 K-12 DOE
approved district budget, as increased by actual and documented 2001-2002
expenditures for the second half of kindergarten, as modified by DOE to take
into account 2001-2002 actual expenditures and available revenues based on
the district annual audits***. 	(Abbott IX at 297)
To read this language in the manner suggested by the Board and the ALJ would, as claimed
by the Department, result in ìdouble-countingî full-day kindergarten costs for aid purposes, a
result surely not intended by the Court. As the Commissioner has found elsewhere, the Court
has not held that required Abbott programs must be funded exclusively by the State, but rather
that the State must ensure that sufficient monies are available to fully fund required programs;
thus, in the present context, the Stateís clear obligation is to provide additional funds so as to
bring district revenues to the level necessary to support expenditures, including expenditures
for 	full-day 	kindergarten, 	at 	2001-02 	levels 	as 	required 	by 	the 	Court. 	While 	the
Commissioner, like the Court, recognizes adequate funding as critical to achievement of a
thorough and efficient system of public education in Abbott districts, he also recognizes, as
did the Court, that such funding is a shared responsibility between the State and the local
district, and that he has an obligation to ensure that State and local resources are allocated as
efficiently and effectively as possible in meeting that responsibility. 	Board of Education of
the Town of Phillipsburg, Warren County v. New Jersey State Department of Education,

40
decided September 25, 2003; Board of Education of the Township of Pemberton, Burlington
County v. New Jersey State Department of Education, decided September 25, 2003; Board of
Education of the Township of Neptune, Monmouth County v. New Jersey State Department of
Education, decided September 25, 2003; Board of Education of the City of Millville,
Cumberland 	County, 	v. 	New 	Jersey 	State 	Department 	of 	Education, 	decided
September 25, 2003; and Board of Education of the City of Passaic, Passaic County v. New
Jersey State Department of Education, decided September 25, 2003.
Accordingly, for the reasons expressed herein, the Initial Decision of the
Office of Administrative Law is adopted except insofar as it finds that additional aid is
required to fund the second half-day of kindergarten. 	The Petition of Appeal, therefore, is
dismissed in its entirety.
IT IS SO ORDERED. 3
COMMISSIONER OF EDUCATION
Date of Decision: 	October 9, 2003
Date of Mailing: 	October 10, 2003
3 Pursuant to P.L. 2002, c. 38, ìAbbottî determinations are final agency actions appealable directly to the
Appellate Division of the New Jersey Superior Court.