Appellants, parents of children enrolled in the Lakewood Public School District (District or Lakewood), filed a petition alleging the District was not providing its public-school students a thorough and efficient education as required by our State's Constitution. N.J. Const. art. VIII, § 4, ¶ 1. They contend this is due to the failure of the New Jersey Department of Education (DOE) to adequately fund the District. To that end, they assert the School Funding Reform Act (SFRA), N.J.S.A. 18A:7F-43 to -70, which sets certain standards for the DOE, is unconstitutional as applied to Lakewood. The record demonstrates Lakewood's school district is in a unique and precarious position. Due, in large part, to demographic trends in the area. Lakewood Township has seen a population rise in recent decades, primarily resulting from a thriving Orthodox Jewish community. As a result of this demographic shift, the township has approximately 37,000 school-aged children, however, only about 6,000 are enrolled in the secular public schools. The majority—eighty-four percent—are enrolled in private religious schools. Testimony before the Administrative Law Judge (ALJ) established this demographic trend is likely to continue and accelerate.
Like other districts, Lakewood's state-issued school aid is calculated based upon its 6,000 enrolled public-school students. The total budget for the most recent school year at the time of that decision was $143.45 million. Of that, over half—$78 million—went to transportation and special education tuition for non-public students. This is an abnormal and unsustainable imbalance. The court concluded the record generated before the ALJ cannot fairly be said to support a finding Lakewood's students are receiving a constitutionally sound education.
The court held the Commissioner utilized an incorrect standard in rejecting the ALJ's finding, and further held the Commissioner owed appellants a thorough review of their substantive argument: the funding structure of the SFRA was unconstitutional as applied to Lakewood's unique demographic situation. The court reversed and remanded for the agency to consider the substantive arguments pertaining to SFRA in light of our Supreme Court's previous directive in Abbott ex rel. Abbott v. Burke (Abbott XX), 199 N.J. 140, 146 (2009): the State has a continuing obligation to "keep SFRA operating at its optimal level" and "[t]here should be no doubt that we would require remediation of any deficiencies of a constitutional dimension, if such problems do emerge."
