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Settelment talks underway in city school funding case

With an election looming, lawyers from Gov. George Pataki’s office have quietly begun settlement talks in the legal dispute over equal state funding of the city’s public schools.

Last week the nonprofit Campaign for Fiscal Equity, a Manhattan coalition of parent and advocacy groups, announced that the earliest stages of preliminary discussions for a settlement in the nearly 10-year-old case had gotten underway.

In an online announcement on the group’s Web site,, the CFE said “both sides have exchanged proposals outlining general concepts that might provide a foundation for serious negotiations.”

The CFE has charged the state with underfunding the city’s public schools even though, according to the nonprofit, the city has a higher concentration of poor and/or bilingual students as well as students with greater educational needs than other municipalities in the state. The heart of the case, which began in 1993, rests on whether or not city public school students have received a “sound, basic education.”

Though the CFE won a landmark 2001 decision in State Supreme Court ordering the restructuring of the education funding formulas, Pataki appealed and the CFE decision was overturned in June. Political pressure on the governor, who is facing Democratic state Comptroller Carl McCall in November’s gubernatorial election, has spurred the settlement talks.

McCall turned the CFE case into a campaign issue after the State Appellate Division’s First District threw out the case, saying “for eight years Gov. Pataki has sat back and let the most inequitable school aid distribution in America be just another part of the political spoils system in Albany,” McCall said in a news release on his Web site,

Despite widespread criticism from city and state elected officials as well as education groups, Pataki has picked up endorsements from the United Federation of Teachers, the city teachers’ union, and the Council for Supervisors and Administrators, the union representing principals and other administrators in city schools.

The CFE has said the city public schools teach 38 percent of the state’s students with just 35 percent of the state’s funding, a claim Pataki, who has approved record-level increases in education funding in recent years, said is no longer true.

Since the governor took office, according to Pataki’s campaign Web site,, aid to schools has jumped 51 percent, or by about $4.9 billion. For the first time, the governor said, the amount of aid given to city schools, 37.1 percent, slightly exceeds its 36.8 percent share of students.

Throughout most of the state, school districts raise most of their revenue through property taxes. In New York’s five biggest cities — New York, Rochester, Syracuse, Buffalo and Yonkers — the state determines how much money is given to run each city’s public schools. Educational needs, such as services required to help students learn to speak English or to meet the state’s newly raised academic standards, are not considered in funding decisions.

In 2001 state Supreme Court Judge Leland DeGrasse ruled that the state underfunded its five largest school districts, including New York City, and ordered the state Legislature to reform the formula by Sept. 15, 2001.

DeGrasse’s complicated, 191-page ruling said the education that city students now get is “so deficient it falls beneath” the state constitutional standard of providing a “sound basic education.”

Reach reporter Kathianne Boniello by e-mail at or call 229-0300, Ext. 146.

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