When New York City's public schools reopened this month, hundreds of thousands of its nearly 1.1 million students returned to overcrowded, poorly equipped schools with inexperienced teachers and outdated textbooks. Because the state legislature and Governor George Pataki failed to act on a court order to overhaul the state's school funding system, many schools will face another year without necessary resources like libraries, laboratories, and gymnasiums, to meet their students' basic needs. In violation of their students' constitutional rights, the city's strapped-for-cash schools will have to make due without billions of dollars in additional funding to which they are entitled.

Last summer, the state's highest court ruled in the case of Campaign for Fiscal Equity v. State of New York that the governor and the legislature must fix the state's flawed school-funding system. The court held that Albany's funding system shortchanged New York City schools to the point of creating system-wide failure, and it ordered the state's political leaders to change it. The governor and the legislature were given a year to ensure the city's schools sufficient funding for quality teachers, reasonable class sizes, and adequate facilities and classrooms.

But elected officials chose to disobey the law and let the court's July 30, 2004, deadline pass without agreeing on a solution; they will now let the court find a remedy for the city's school children.

Justice Leland DeGrasse of the State Supreme Court in Manhattan, who has jurisdiction over the case, said last year he would "hit the ground running" if the July deadline passed without acceptable action on the part of the state. Just four days after the deadline, the judge made good on his word. He appointed a panel of three "special masters" -- referees who will make recommendations to the court about how best to fix the state aid system so that all schools get the funds they need. The distinguished jurists include two former appellate judges and a former Fordham University Law School dean. They will have until November 30, 2004, to submit their report to the judge, who will then rule on what is to be done.

The referees' charge is to determine whether the state has complied with the court mandate -- though lawyers for the state have already admitted it did not -- and then help Justice DeGrasse shape a suitable plan. If the actions of referees in other states are any indication of what lies ahead, the panel may: *recommend a specific dollar amount owed to New York City; *mandate new accountability measures or changes to the funding formula; *or even, although unlikely, shut down schools until legislative action occurs.

Justice DeGrasse indicated that, although the court does not make policy, it does have a duty to protect students' constitutional rights. Demonstrating his commitment to enforcing reform, he specifically asked the panel to pay special heed to issues of class-size reduction and teacher quality.

THREE HEARINGS SO FAR

So far, the referees have held three hearings with both sides in the case - Governor George Pataki, and the Campaign for Fiscal Equity, the coalition (where we both work) that brought the lawsuit over 11 years ago.

Pressed for time, the panel quickly asked each side to present their proposals for providing schools the funding to which they are entitled. In written briefs and later oral presentations, the parties specified dollar amounts, based on analyses from outside experts, and outlined accountability reforms. The referees also received three additional proposals, one each from the state assembly, the state senate, and the city.

All five proposals agree that about $4.3 billion to $5.6 billion more is needed each year for the city's schools but spending should be ramped up over a four- to seven-year period. Eighteen other organizations, including the Board of Regents of the State of New York and the United Federation of Teachers, will participate as amici curiae, or friends of the court, and will submit their own briefs this month.

At the latest hearing on September 15, each side had the chance to air any grievances they had with the other's approaches. The city of New York, although not a party in the case, was also allowed to participate. They asked the referees for more of a say in deciding the kind of reforms that may result from the panel's proceedings, since at the end of the day they are responsible for running the city's school system.

During the hearing, lawyers for the city asked for about $5 billion more in new money, highlighted the importance of tying accountability reform to any funding recommendations, and stressed the mismatch between qualified teachers and needy schools. They asked the panel to take up this last issue but encountered a less than eager reaction. Judge William C. Thompson, one of the special masters, advised, "if we give you the money, [it's your job] to fix it."

To each side's credit, the issue of how much additional money is needed is probably the most resolvable at this stage. The three sides revealed similar figures, and negotiations on accountability reform are also well under way. If settled, these agreements could help yield actual reform.

WHAT IS THE POWER OF THE SPECIAL MASTERS?

A major sticking point persists: What sort of recommendations can the special masters make and what influence can they have?

The state believes the special masters should simply grade the governor's attempts at compliance, like a teacher would a term paper, and should he flunk, "go back to the drawing board." The panel should not, said the state's lawyers, act as another legislature and direct the state to make specific repairs.

But the Campaign for Fiscal Equity argued that the panel must do more than give Governor Pataki a failing grade for noncompliance. They cited precedents in other states and asked the special masters to recommend a specific plan that averts even more delinquency from the governor and the legislature.

In a related dispute, the sides differed on how (or even if) the panel should address the question of who funds the increase; is it the state, the city, or the federal government? To tackle this question, the Campaign for Fiscal Equity proposed a detailed formula that would provide a transparent and simplified way for determining at what level of government the money should come from. The formula addresses the difficult and highly political question of what percentage of the increase should be borne by the state and what percentage should be borne by the city. But the state maintains that it is the job of the legislature to decide who should foot the bill, not the governor, and certainly not the court.

However, as the Campaign sees it, the failure of the assembly, the senate, and the governor to reach any consensus in their summer deliberations on school funding is a clear indication of what is likely to happen if the governor passes the buck, literally, on this issue. It is feared that putting this important issue in the legislature's hands may trigger another logjam in Albany-and it is the city's kids who will, in the end, pay the price. As Justice Leo Milonas, one of the special masters, forewarned during this discussion, "The governor and legislature don't bother to do their job."

Jessica Wolff is a public school parent and the director of policy development at the Campaign for Fiscal Equity, where Stacy Feldman also works, as a public engagement associate.