Grant of Charter School Application of Englewood on the Palisades Charter School

The New Jersey constitution required the state to provide for a “thorough and efficient system of free public schools.” Historically, the legislature achieved the constitutional mandate through local school districts. Among other requirements, school districts were required by the commissioner of education (the commissioner) to monitor racial balance in public schools. School districts followed a set of guidelines (the guidelines) that allowed for the districts to compare racial-group percentages at each school to expected percentages. School districts could then proactively correct any imbalances. In the late 1990s, the state legislature enacted the Charter School Act (the act), authorizing the creation of charter schools. The legislative goals were varied and included improving public learning and increasing educational choices. Charter schools were public schools with more autonomy in staffing, curriculum, and spending choices. Under the act’s funding provisions, the district of the residence of the charter schools was required to forward a per-pupil amount set by the commissioner to the charter school. The default amount was 90 percent of the local levy budget per pupil for that student’s grade level in the district, and the commissioner could set an amount higher or lower than the presumptive 90 percent. Several school districts (plaintiffs) sued charter schools (defendants), challenging the validity of the act. Specifically, the school districts argued that the act did not require the commissioner to consider racial impacts from charter schools. The school districts further argued that the loss of funding to districts would cause them dire financial consequences. The appellate division upheld the act. The New Jersey Supreme Court granted review.