Campaign for Fiscal Equity, Inc. v. State

— 177 — OPINION OF THE COURT Buckley, P.J. This is the third appeal to this Court arising from plaintiffs’ challenge to the State’s funding of the New York City school system under the Education Article of the New York Constitution (art XI, § 1). We hold that the State, in enacting a budget for the fiscal year commencing April 1, 2006, must appropriate the constitutionally required funding for the New York City schools. Our disagreement with the dissent lies only in our adherence to well-established constitutional doctrine that it is for the Governor and the Legislature, not the courts, to adopt a dollar-specific budget. The record establishes a range of between $4.7 billion and $5.63 billion, a difference of $930 million, in additional annual operating funds, that would satisfy the State’s constitutional education funding obligations. We disagree with the dissent that the courts can usurp the budgetary and educational powers of the Governor and the Legislature and preclude them from making that determination.1 In calling for periodic, judicially supervised reviews of the amount of education funding, the dissent implicitly acknowledges that ascertaining the cost of the constitutionally mandated education is not susceptible to mathematical certitude, but rather depends, to a significant extent, on estimates.2 The dissent does not reconcile that basic fact of educational budgeting with its proposed directive that there is one and only one scientifically precise amount of funding and that the State cannot consider any evidence to the contrary. As a unanimous Court of Appeals has stated: — 178 — “Assuming it were feasible to convert a courtroom into a super-auditing office to receive and criticize the budget estimates of a State with an $11 billion budget, the idea is not only a practical monstrosity but would duplicate exactly what the Legislature and the Governor do together, in harmony or in conflict, most often in conflict, for several months of each year” (Wein v Carey, 41 NY2d 498, 504-505 [1977]). History of the Case The Education Article of the New York Constitution (art XI, § 1) states, in full: “The legislature shall provide for the maintenance and support of a system of free common schools, wherein all the children of this state may be educated.” At the conclusion of the first appellate round, the Court of Appeals declared that the Education Article “requires the State to offer all children the opportunity of a sound basic education,” consisting of “the basic literacy, calculating, and verbal skills necessary to enable children to eventually function productively as civic participants capable of voting and serving on a jury,” as well as “minimally adequate physical facilities and classrooms which provide enough light, space, heat, and air to permit children to learn,” “minimally adequate instrumentalities of learning such as desks, chairs, pencils, and reasonably current textbooks,” and “minimally adequate teaching of reasonably up-to-date basic curricula such as reading, writing, mathematics, science, and social studies, by sufficient personnel adequately trained to teach those subject areas” (Campaign for Fiscal Equity v State of New York, 86 NY2d 307, 316, 317 [1995] [CFE I]). On the second appeal, the Court of Appeals held that “the opportunity of a sound basic education” means “the opportunity for a meaningful high school education,” though not pegged to any particular grade level, Board of Regents standard, or high school diploma eligibility requirement (Campaign for Fiscal Equity v State of New York, 100 NY2d 893, 906, 908 [2003] [CFE II]). The Court of Appeals upheld the trial court’s findings that various “inputs” (teaching, school facilities, classrooms, and instrumentalities of learning) and “outputs” (school graduation rates and test results) demonstrated that New York City schoolchildren were not receiving the opportunity for the constitutional sound basic education, and that there was a causal link — 179 — between the State’s current funding system and such failure (see id. at 909-925). With respect to the remedy, the Court of Appeals acknowledged that the judiciary should “defer to the Legislature in matters of policymaking, particularly in a matter so vital as education financing,” and that the courts “have neither the authority, nor the ability, nor the will, to micromanage education financing” (id. at 925). The Court of Appeals also noted various federal, state, and city education reforms initiated after the close of trial that might provide the opportunity for a sound basic education to more students and thus affect the scope of needed changes to the school funding system (see id. at 926-927). The Court directed the State to “ascertain the actual cost of providing a sound basic education in New York City,” to reform the current system of school funding and management to furnish every school in the City with the resources necessary for providing the opportunity for a sound basic education, and to “ensure a system of accountability to measure whether the reforms actually provide the opportunity for a sound basic education” (id. at 930). The Court of Appeals set a deadline of July 30, 2004, a little more than one year after the date of the decision, for defendants “to implement the necessary measures” (id.). Despite the Legislature’s thereafter having been called into extraordinary session and passing a budget in 2004 increasing statewide school funding by $740 million, of which $300 million would go to the New York City schools, the deadline passed without an agreement on additional court-ordered funding for New York City schools. In August 2004, Supreme Court appointed three Referees “to hear and report with recommendations on what measures defendants [had] taken” to follow the directives of the Court of Appeals. The Defendants’ Proposals At the Referees’ hearing defendants submitted a State Education Reform Plan, which proposed $4.7 billion in additional annual funds for the city schools, phased in over five years, plus various accountability reforms. That plan largely drew upon the report of the New York State Commission on Education Reform, the “Zarb Commission,”3 appointed by the Governor in 2003. The Zarb Commission had identified three methods of determining the actual cost of providing city schoolchildren — 180 — with the opportunity for a sound basic education: (1) the “econometric method,” which uses a statistical model to estimate the costs associated with different levels of school district performance; (2) the “professional judgment method,” which uses panels of education professionals to determine the scholastic elements needed to attain certain goals and then assigns costs to those elements; and (3) the “successful schools method,” which examines the expenditures of school districts that meet or exceed performance standards. The Zarb Commission rejected both the econometric method, since it had not been used by any other state, and the professional judgment method, which is based only on hypothetical constructs. The Commission selected the successful schools method as the most reliable, because it is based on actual data from school districts with a proven record of success, and is used by the State Board of Regents. The Commission retained Standard & Poor’s School Evaluation Services, which, using the successful school districts method, calculated an annual spending gap for the city schools ranging from $1.93 billion to $4.69 billion, depending on the standard for measuring a successful school district, the additional expenditures necessitated by special needs students, and the manner of converting “standard” education dollars into New York City dollars. Standard & Poor’s used four different academic achievement standards for identifying a successful school district: (1) the “top performers,” that is, the top 25% of the State’s school districts as measured by an “Index of Multiple Performance Measures,” which is comprised of scores on various state examinations, graduation rates, and high school enrollment retention rates; (2) the state school districts meeting the federal No Child Left Behind Act’s performance targets on various examinations for the year 2006; (3) the state school districts meeting the No Child Left Behind Act’s performance targets for the year 2008; and (4) the state school districts meeting the “Regents Criteria,” where at least 80% of the students demonstrated proficiency on seven Regents examinations. The successful school analyses produced “base expenditures,” which are estimated costs per student. Base expenditures were multiplied by “weightings” for students with special needs. Relying on research literature, Standard & Poor’s assigned a weighting of 2.1 to students with disabilities, 1.35 to economi — 181 — cally disadvantaged students, and 1.2 to students with limited English proficiency.4 Because the purchasing power of a dollar varies across the state, and the successful schools method examined all of the school districts in the state, Standard & Poor’s offered two alternative regional cost factors to determine the cost in New York City dollars: (1) the “New York Regional Cost Index,” provided by the State Education Department; and (2) the “Geographic Cost of Education Index,” provided by the National Center for Education Statistics. Finally, Standard & Poor’s applied a “cost effectiveness filter” of 50%, the same method used by the New York State Board of Regents, to screen out successful school districts that either spent money inefficiently or spent more than was necessary to provide the opportunity for a sound basic education. Under that approach, Standard & Poor’s used the average expenditures of the lower spending half of successful school districts. Since the average achievement levels of the lower spending half of successful school districts closely resembled the achievement levels of the higher spending half of successful school districts, Standard & Poor’s concluded that there was little evidence that the additional spending by the higher half led to meaningfully higher achievement levels. The Zarb Commission found Standard & Poor’s methodologies to be valid and recommended increased annual spending within the ranges of that study, phased in over five years. The Commission declined to endorse a specific dollar amount, believing that the decision should be left to the State’s elected officials. In July 2004, the Governor proposed legislation that would adopt the Zarb Commission’s recommendations and, using the New York State Regents Criteria as the measure of a successful school district, would increase funding of the city school districts by $4.7 billion annually, phased in over five years. However, that legislation was not enacted. In August 2004, as noted, the Legislature passed, and the Governor signed, a bill to provide $300 million more to the city schools than had been appropriated the previous year. — 182 — The Proposals of Plaintiffs, the City, and the Board of Regents Plaintiffs submitted to the Referees a report by the American Institutes for Research (AIR) and Management Analysis and Planning, Inc. (MAP), which recommended additional annual expenditures of $5.63 billion. The AIR/MAP study used the professional judgment method (rather than the successful schools method, used by Standard & Poor’s), and the Regents Learning Standards as the academic achievement standard (rather than the Regents Criteria). The City submitted a plan calling for $5.3 billion in additional annual funds and $13.1 billion in capital improvements. The Board of Regents, using the successful schools method, the Regents Criteria as the measure of success, a cost efficiency filter of 50% the New York Regional Cost Index, and poverty weightings ranging from 1.5 to 2, recommended an increase in annual funding of $4.7 billion, phased in over seven years. The Referees’ Recommendations In November 2004, the Referees issued their report, recommending additional annual funds of $5.63 billion, phased in over four years, and capital improvements of $9,179 billion over a five-year period. They accepted the Zarb Commission’s use of the “successful schools method,” and the “Regents Criteria” as the appropriate achievement standard, but rejected the 50% cost effectiveness filter (or any cost effectiveness filter), recommended a weighting of 1.5 for low income students rather than 1.35, and proposed modifications to the Geographic Cost of Education Index calculations. The Referees recommended a costing-out study every four years, “until it becomes clear that reforms to the State’s education finance formulas have rendered such studies no longer necessary to assure all New York City students the opportunity for a sound basic education.” The studies would be designed and supervised by the Board of Regents, with an opportunity for the parties to be heard, and would incorporate both the successful schools method and the professional judgment method. Similarly, there would be a facilities review every five years. The Referees recommended against the State’s proposed Office of Educational Accountability, but endorsed the parties’ agreed-upon accountability enhancements. Finally, the Referees recommended leaving to the State the decision of how much of the additional funding should be paid by the City. Supreme Court confirmed the Referees’ report. We conclude that the confirmation should be vacated. The Referees determined that the “Regents Criteria,” the achievement standard utilized by the State and the Board of — 183 — Regents, was an appropriate measure of student success, and not the “Regents Learning Standards,” which had been found to exceed a sound basic education by CFE II (100 NY2d at 907-908). The Referees rejected the 50% cost effectiveness filter as “both unsupported and arbitrary.” However, there was no evidence to support the Referees’ apparent assumption that every successful school district spends only the minimum amount necessary to succeed under the Regents Criteria. On the other hand, the Board of Regents based its adoption of the identical cost-efficiency factor upon “a careful examination of characteristics of these two groups of successful school districts,” which demonstrated that the higher spending districts had “chosen to offer more than a sound basic education.” More importantly, the record establishes that the academic performance of the successful school districts in the lower spending half was nearly the same as that of the higher spending half of successful school districts, which in itself indicates that the efficient use of funds produces results. In recommending a multiyear phase-in to enable the “efficient planning to use prudently the additional funding,” the Referees acknowledged that efficiency is a legitimate concern. Although several testifying witnesses criticized the use of any cost efficiency filter, and others would have used a formula different from the one adopted by the State, the Board of Regents, to whom the Referees deferred as experts in other matters, used the same 50% filter. The Referees were also concerned that the filter has the effect of eliminating most of the school districts in Westchester and Nassau, counties that border New York City and thus resemble the City in the concentration of students who are not English proficient and in the higher regional costs, particularly in hiring and retaining capable teachers. However, the weightings (representing extra funding) for students with limited English proficiency and the geographical cost indexes are designed to address just such factors. The Referees found “only limited support in the record” for the weighting of 1.35 for low income students, because it was not focused on the specific circumstances of the city schools. The Referees attached “much greater probative value” to the weighting recommended by the Board of Regents and implicit in the AIR/MAP study, on the ground that they purportedly were focused on New York City. But as the Referees recognized, by their own characterization, the State’s weighting assessment — 184 — had record support. In such circumstances, as with the cost effectiveness filter, Supreme Court should not have substituted the Referees’ opinion for that of the State on an issue that was clearly debatable. As a consequence, Supreme Court converted a factor that was arguable and reasonable for the Legislature and Governor to consider into an incontrovertible fact. As long as the State’s choices remained within the range of professionally accepted practices in determining the costs of a sound basic education, Supreme Court should have left the conclusions for legislative and gubernatorial consideration and determination. The Referees accepted the use of the Geographic Cost of Education Index to convert statewide costs to New York City costs, but recommended the use of a more updated version and the calculation of costs in 2004-2005 dollars, rather than January 2004 dollars, to account for inflation. Defendants do not contest that modification. The Standard of Review and Constitutional Requirements Plaintiffs argue that the Referees’ factual findings are owed deference if supported by the record. Concededly, there is evidence in the record to support the Referees’ findings with respect to the actual annual cost of providing the opportunity for a sound basic education in the City. There is also, however, a respectable body of evidence to support the State’s plan, as found by the Board of Regents, Standard & Poor’s, and the Zarb Commission, and as proposed by the Governor. The “burden of proof. . . is on one who attacks the [State’s] budget plan” and “[i]t is a formidable burden” (Wein, 41 NY2d at 505). That burden has not been met. Insofar as the Referees derived “comfort” from the “relative convergence” of the yearly additional funding levels recommended by plaintiffs, the City, and the State (as modified by the Referees), they should find repose in the nearly exact correspondence of the calculations of the Board of Regents and the State’s unmodified plan. Indeed, one of the most crucial facts established by the record is that reasonable minds can differ as to the actual cost of providing the opportunity for a sound basic education within the city schools. Where there is sufficient evidence to support a range of numbers, it ill behooves the Court to dictate the result; at that point, more than ever, the issue becomes a matter of policy for the other branches of government to determine. As the Court of Appeals observed in the context of undisputed, serious gaps in rent-control legislation, — 185 — “[ujltimate resolution requires correction at the legislative level . . . and not at the judicial level. The courts have limited access to the controlling economic and social facts. They are also limited by a decent respect for the separation of powers upon which our system of government is based” (Matter of 89 Christopher v Joy, 35 NY2d 213, 220 [1974]). Although that case did not entail a constitutional challenge, the salient point is that, “[b]ecause of the significant policies involved,” i.e., the conservation of necessary housing, the well-being of residents, and the property interests of building owners, “they should be resolved by legislative action” {id.), and “it is not the province of the courts to direct the legislature how to do its work” (People ex rel. Hatch v Reardon, 184 NY 431, 442 [1906], affd 204 US 152 [1907]). The doctrine of the separation of powers is so fundamental to our system of government that the Legislature is precluded from enacting legislation charging the judiciary with the mandatory performance of nonjudicial duties (see Matter of Richardson, 247 NY 401 [1928] [the Governor and the Legislature may not instruct a justice of the Supreme Court to investigate and prosecute a public official pursuant to a provision of the Public Officers Law]). Just as the other branches of government may not compel the judiciary to perform nonjudicial functions of government, the courts must refrain from arrogating such powers to themselves. Indeed, the New York Constitution prohibits members of the judiciary from holding “any other public office or trust” (NY Const, art VI, § 20 [b] [1]), which embodies a policy “to conserve the time of the judges for the performance of their work as judges, and to save them from the entanglements, at times the partisan suspicions, so often the result of other and conflicting duties” (Matter of Richardson, 247 NY at 420). As pointed out by the Court of Appeals in CFE II, “in a budgetary matter the Legislature must consider that any action it takes will directly or indirectly affect its other commitments” (100 NY2d at 930 n 10). Thus, without the ability or the authority to review the entire state budget, “it is untenable that the judicial process . . . should intervene and reorder priorities, allocate the limited resources available, and in effect direct how the vast [city and state] enterprise [s] should conduct [their] affairs” (Jones v Beame, 45 NY2d 402, 407 [1978]). “While it is within the power of the judiciary to declare the vested rights of a specifically protected class of individuals, . . . the manner by which the State addresses complex societal and governmental — 186 — issues is a subject left to the discretion of the political branches of government” (Matter of New York State Inspection, Sec. & Law Enforcement Empls., Dist. Council 82, AFSCME, AFL-CIO v Cuomo, 64 NY2d 233, 239-240 [1984] [declining to fashion a remedy that would “embroil the judiciary in the management and operation of the State correction system” (id. at 239)]). The principle is well stated in Klostermann v Cuomo (61 NY2d 525 [1984]), relied on by plaintiffs. In Klostermann, the plaintiffs, patients and former patients of state psychiatric hospitals, claimed that their constitutional and statutory rights had been violated when they were released into the community without residential placement, supervision, and care, under the least restrictive conditions suitable to their condition (see id. at 531-532). The Court of Appeals held that it had the authority to compel the State to exercise its mandatory duties, even if those duties are to be executed through discretionary means, but lacked the power to direct the State to act in a particular manner (see id. at 540). The Court could compel the State to perform a legal duty, but not direct how it should perform that duty, since “[t]he activity that the courts must be careful to avoid is the fashioning of orders or judgments that go beyond any mandatory directives of existing statutes and regulations [and constitutional provisions] and intrude upon the policy-making and discretionary decisions that are reserved to the legislative and executive branches” (id. at 541). Thus, the Court could direct the State to prepare plans and programs to provide suitable treatment (a mandatory duty), which would also necessarily require the expenditure of funds, but not dictate the specific manner in which such plans and programs operated (discretionary and policy decisions for the Governor and Legislature) (see id. at 539-541). In the Court of Appeals’ most recent decision concerning the Constitution’s Education Article, New York Civ. Liberties Union v State of New York (4 NY3d 175 [2005]), the plaintiffs challenged the failure of the State Commissioner of Education to take affirmative action to determine the causes of failure in their schools and rectify them by classifying them schools under registration review (SURE) (see id. at 182-183). The Court refused to compel the Commissioner, “[b]ecause the administrative action of deciding which and how many schools to place under registration review involves an exercise of judgment and — 187 — discretion by the Commissioner” (id. at 184). Even after a school is placed on the SURR list, the specific actions to be taken rest within the Commissioner’s expertise, judgment and discretion (id.). The act of choosing among different reasonable funding plans is no less a matter of discretion, and therefore one that does not belong in the courts. It is not for the courts to make education policy (see CFE II, 100 NY2d at 931). The judiciary must take “a disciplined perception of the proper role of the courts in the resolution of our State’s educational problems,” since “[p]rimary responsibility for the provision of fair and equitable educational opportunity within the financial capabilities of our State’s taxpayers unquestionably rests with that branch of our government [the Legislature]” (Board of Educ., Levittown Union Free School Dist. v Nyquist, 57 NY2d 27, 49 n 9 [1982], appeal dismissed 459 US 1139 [1983]). Indeed, the Constitution expressly states that “[t]he legislature shall provide for the maintenance and support of a system of free common schools” (NY Const, art XI, § 1 [emphasis added]). For that reason: “The determination of the amounts, sources, and objectives of expenditures of public moneys for educational purposes, especially at the State level, presents issues of enormous practical and political complexity, and resolution appropriately is largely left to the interplay of the interests and forces directly involved and indirectly affected, in the arenas of legislative and executive activity. This is of the very essence of our governmental and political polity. It would normally be inappropriate, therefore, for the courts to intrude upon such decision-making” (Levittown, 57 NY2d at 38-39). The criticism of the dissent herein of an adherence to separation of powers principles ignores the guidelines of Levittown, as set forth supra,5 and draws an erroneous inference from the interplay of the majority, concurring, and dissenting opinions in CFE I (supra) and CFE II (supra). The majority in CFE I did not reject the doctrine of the separation of powers as a vital component of our governmental structure or hold that the courts can or should conduct independent budgetary hearings, choose among different reasonable estimates, or dictate precise — 188 — dollar amounts of appropriation. Rather, the majority in CFE I expressly stated that its decision “does not extend the State’s funding obligations” and that “any discussion of funding or reallocation [of resources] is premature,” since “[t]he question of remedies is not before the Court” (86 NY2d at 316 n 4). In CFE II, the majority respected the separation of powers doctrine by declining the plaintiffs’ request “to initiate a legislative/ judicial dialogue” and by limiting its remedy to remanding to the Legislature and Governor to ascertain the cost of providing the opportunity for a sound basic education in the city schools (100 NY2d at 925, 930). The rationale for such forbearance was that the courts must “defer to the Legislature in matters of policymaking, particularly in a matter so vital as education financing,” since the courts have “neither the authority, nor the ability, nor the will, to micromanage education financing” (CFE II, 100 NY2d at 925). Moreover, after CFE II, the Court of Appeals squarely addressed the budgetary process in Pataki v New York State Assembly (4 NY3d at 97), declaring: “to invite the Governor and the Legislature to resolve their disputes in the courtroom might produce neither executive budgeting nor legislative budgeting but judicial budgeting—arguably the worst of the three.” Although there was a concurring and a dissenting opinion in that case, both stressed the importance of the separation of powers (see id. at 100 [Rosenblatt, J., concurring], at 107 [Kaye, Ch. J., dissenting]). Under the New York Constitution, “ ‘the executive and legislative branches of government . . . are the sole participants in the negotiation and adoption of [a] budget’ ” (Saxton v Carey, 44 NY2d 545, 550 [1978], quoting Hidley v Rockefeller, 28 NY2d 439, 445 [1971, Breitel, J., dissenting]). The fact that certain legislators might hope that the courts will take control of educational budgeting, as reported in various newspapers cited by the dissent herein, is of no moment. The allocation of budgetary powers set forth in the Constitution is not “a requirement which may be waived if the executive and legislative branches agree on it” (New York State Bankers Assn. v Wetzler, 81 NY2d 98, 104 [1993]). To the contrary: “The object of a written Constitution is to regulate, define and limit the powers of government by assigning to the executive, legislative and judicial branches distinct and independent powers. The safety of free government rests upon the independence of each branch and the even balance of power — 189 — between the three. . . . It is not merely for convenience in the transaction of business that they are kept separate by the Constitution, but for the preservation of liberty itself’ (id. at 105, quoting People ex rel. Burby v Howland, 155 NY 270, 282 [1898]). For the foregoing reasons, the Court should not substitute its own budgetary calculations for those of the other branches. It is undisputed that the State has failed to appropriate an adequate amount of funding to meet its educational mandate as outlined in CFE II. However, that neglect does not give the Court the authority to participate in budget negotiations or, absent a constitutional failing, to exercise a veto power over the State’s calculations of the cost of a sound basic education. The fact that the other two branches of government have not remedied constitutional failings in the past does not authorize the courts to commit their own constitutional violations now. Mindful of these constitutional and institutional constraints, the Court of Appeals in CFE II was careful to seek a “less entangling” remedy (CFE II, 100 NY2d at 925). By requiring judicial approval of the educational budget plan currently at issue, and periodic reviews, Supreme Court would ensure the “decades of litigation” that the Court of Appeals has cautioned against (id. at 931). Thus, while the Legislature should consider the Governor’s proposal to increase annual funding by $4.7 billion, together with the Referees’ recommendation that $5.63 billion per year is the preferable amount to expend, in the final analysis it is for the Governor and the Legislature to make the determination as to the constitutionally mandated amount of funding, including such considerations as how the funds shall be raised, how the additional expenditures will affect other necessary appropriations and the economic viability of the State, and how the funding shall be allocated between the State and the City. Contrary to the dissent’s repeated characterization, this directive does not merely urge the Governor and the Legislature to consider taking action. They are directed to take action. The matter for them to consider is whether $4.7 billion or $5.63 billion, or some amount in between, is the minimum additional annual funding to be appropriated for the city schools. Although the State’s proposal originally projected a five-year phase-in, the passage of time since the plan was presented indicates that a four-year period would now be in accord. A — 190 — judicial decree enjoining the Legislature to spend the higher of the two reasonable figures is all the more unwarranted in light of the fact that the increased spending is to be phased in over the course of several years, which thus enables the Governor and the Legislature to revisit the issue and adjust the amount upward or supplement it in future sessions, should they determine, in the exercise of their constitutional responsibilities, that more is needed. Plaintiffs’ reliance on Montoy v State (279 Kan 817, 112 P3d 923 [2005]) for the proposition that the courts should review legislative funding determinations is misplaced. In that case, the Supreme Court of Kansas directed the State Legislature to implement an increase in annual school funding of $285 million, and rejected the State’s appropriation of $142 million as inadequate, because: there was no study or other evidence to support the State’s amount; the higher amount was derived from a study commissioned by the Legislature itself to determine the actual costs of a constitutional education; that study was the only evidence submitted to the court; and the Kansas State Department of Education supported the study (see 279 Kan at 829-830, 839, 844-845, 112 P3d at 931-932, 937, 940). By contrast, in the instant matter, New York State’s proposed annual funding amount has substantial record support, including the studies of the Zarb Commission and Standard & Poor’s, as well as the New York State Board of Regents. The Referees adopted plaintiffs’ proposed $9,179 billion five-year capital improvement plan to address overcrowding, reduce class sizes, provide computers and other technology, and create libraries, laboratories, and auditoriums. Defendants have neither presented evidence concerning the expected cost of capital projects nor outlined a basic plan. Rather, defendants maintain that all of the City’s needs will be satisfied by a project-by-project assessment under the existing building aid program, together with some accountability reforms. That assurance, considered in conjunction with the City’s endorsement of plaintiffs’ plan and the State’s failure to refute it or offer an alternative, indicates that the finding of Supreme Court with respect to a capital plan was not erroneous. As the Referees found, the accountability system of the Board of Regents is widely recognized as one of the best in the nation, and an Office of Educational Authority may well be an unnecessary bureaucratic expense, but to the extent Supreme Court’s order may be read as prohibiting the State from establishing — 191 — such an entity, it exceeded its authority. Such a ban would be based not on any constitutional clause, operation of law, or strong public policy, but only on Supreme Court’s personal view as to the preferable allocation of resources and administrative responsibilities. Defendants are directed to act as expeditiously as possible to implement a budget that allows the city students the education to which they are entitled. Accordingly, the order of the Supreme Court, New York County (Leland DeGrasse, J.), entered on or about March 16, 2005, which, inter alia, granted plaintiffs’ motion to confirm the Referees’ report, denied defendants’ cross motion to reject the report in part, and directed defendants to implement a funding plan to provide the New York City School District with at least $5.63 billion in additional annual operating funds, phased in over four years, to conduct quadrennial reviews of the cost of providing the opportunity for a sound basic education to all public school students in New York City, to expend a minimum of $9,179 billion on capital improvements over the next five years, to conduct capital improvement funding studies every five years, to enhance the current system of educational accountability by developing a comprehensive plan setting forth the precise management reforms and instructional initiatives that the Department of Education will undertake to improve student achievement, and to ensure that the Department of Education issues an annual Sound Basic Education Report, tracking additional spending and student performance, should be modified, on the law and the facts, to vacate the confirmation of the Referees’ report; to direct that, in enacting a budget for the fiscal year commencing April 1, 2006, the Governor and the Legislature consider, as within the range of constitutionally required funding for the New York City School District, as demonstrated by this record, the proposed funding plan of at least $4.7 billion in additional annual operating funds, and the Referees’ recommended annual expenditure of $5.63 billion, or an amount in between, phased in over four years, and that they appropriate such amount, in order to remedy the constitutional deprivations found in CFE II, and that, in enacting such budget, the Governor and the Legislature implement a capital improvement plan that expends $9,179 billion over the next five years or otherwise satisfies the city schools’ constitutionally recognized capital needs, and otherwise affirmed, without costs. Footnotes [1] The dissent questions the effect of a directive that the Governor and the Legislature appropriate the necessary funding. As the conjunctive indicates, both must act. Under our executive budgeting system, the Governor proposes a budget, or an “appropriation bill,” but it does not become a law, or an “appropriation,” until passed by both houses of the Legislature (see Pataki v New York State Assembly, 4 NY3d 75, 83-85 [2004]; NY Const, art VII, §§ 2-7). [2] Article VII, § 1 of the New York Constitution provides: “For the preparation of the budget, the head of each department of state government. . . shall furnish the governor such estimates and information in such form and at such times as the governor may require .... The governor shall hold hearings thereon .... Designated representatives of [the appropriate] committees [of the Legislature] shall be entitled to attend the hearings thereon and to make inquiry concerning any part thereof’ (emphasis added). [3] It was named after its chairperson, Frank Zarb. [4] Thus, for each $1 spent on a student without special needs, the city-schools would have to spend $2.10 for a student with a disability, $1.35 for an economically disadvantaged student, and $1.20 for a student with limited English proficiency. Since the weightings were cumulative, an impoverished student with a disability and limited English would require $2.65 for each $1 spent on a non-special needs student. [5] Levittown was reaffirmed in CFE I, CFE II, Paynter v State of New York (100 NY2d 434 [2003]) and New York Civ. Liberties Union v State of New York (4 NY3d 175 [2005]).