LARRY MAISTO v. STATE OF NEW YORK (2026)

MEMORANDUM AND ORDER

Calendar Date:  September 15, 2026

Appeal from a judgment of the Supreme Court (Kimberly O'Connor, J.), entered February 28, 2025 in Albany County, which determined, among other things, that defendant's remedy to address certain constitutional violations is rational.

This school funding litigation has been ongoing for over 18 years (221 AD3d 1141 [3d Dept 2023];  196 AD3d 104 [3d Dept 2021];  154 AD3d 1248 [3d Dept 2017];  Hussein v. State of New York, 81 AD3d 132 [3d Dept 2011], affd 19 NY3d 899 [2012] ).  Following a series of Court of Appeals cases concerning defendant's failure to satisfy its constitutional obligation to provide the students in the New York City School District with the opportunity to obtain a sound basic education (see Campaign for Fiscal Equity, Inc. v State of New York, 8 NY3d 14, 20 [2006] [hereinafter CFE III ];  Campaign for Fiscal Equity v. State of New York, 100 N.Y.2d 893, 908, 915 [2003] [hereinafter CFE II ];  Campaign for Fiscal Equity v. State of New York, 86 N.Y.2d 307, 316 [1995] [hereinafter collectively referred to as the CFE cases] ), plaintiffs commenced this action alleging that defendant similarly failed their children by insufficiently funding their respective small city school districts (see N.Y. Const, art XI, § 1).  This Court ultimately declared that defendant violated its constitutional obligation with respect to the at-risk student population in those districts during the 2006–2007 through 2013–2014 academic years and remitted the matter for defendant to craft an appropriate remedial response, subject to judicial review for its rationality (196 AD3d at 153).

Central to the remedial inquiry is Foundation Aid – the primary and largest unrestricted source of statewide school funding, enacted by the Legislature in 2007 in response to the CFE cases (see L 2007, ch 57, part B, § 13;  see Executive Order [Pataki] No. 131 [9 NYCRR 5.131] ).  The formula underlying Foundation Aid incorporates aspects of the cost methodology upheld as rational in CFE III, deriving a base per-pupil cost of a sound basic education from the lower-spending half of academically successful school districts, while separately adjusting for regional costs and heightened student needs, including poverty and English-language-learning needs, as well as a district's ability to contribute local revenue (see Education Law § 3602[4], as amended by L 2007, ch 57, part B, § 13;  see also Campaign for Fiscal Equity, Inc. v State of New York, 8 NY3d at 30–31).  As enacted, Foundation Aid was slated to increase the State's share of school funding by $5.49 billion annually once fully phased in over a four-year period.  The phase-in, however, was subsequently delayed amid the Great Recession and ensuing state budget deficits, followed by years of incremental funding increases then further interruption during the COVID–19 pandemic;  defendant ultimately recommenced a three-year phase-in in 2021 and fully funded the formula in 2023 (see L 2023, ch 56, part A, § 2;  L 2021, ch 56, part A, § 10–b).  As part of the 2024–2025 budget, defendant also commissioned the Nelson A. Rockefeller Institute of Government of the State University of New York to undertake a comprehensive study of the Foundation Aid formula and recommend potential modifications thereto (see L 2024, ch 56, part A, § 9).

Following an appeal concerning the scope of the remittal proceedings (221 AD3d 1141), defendant submitted proof concerning the historical and current levels of state and federal education funding received by each of the subject districts and the extent to which that funding addressed the constitutional violations identified by this Court.  Plaintiffs were permitted the opportunity to respond and elected to put forth proof concerning continuing educational conditions in the districts and alleged deficiencies in the manner in which Foundation Aid presently functions.  In February 2025, Supreme Court determined that defendant had adopted a rational remedial response to the constitutional violations identified by this Court, relying upon the needs-based methodology of Foundation Aid, its full implementation, the resulting substantial increases in state aid in the subject districts, evidence of corresponding educational progress, and defendant's demonstrated commitment to continuing to assess the efficacy of its funding scheme.  Concluding that further judicial intervention was unwarranted, Supreme Court dismissed plaintiffs' remaining claims.  Plaintiffs appeal.  This Court subsequently granted the application of 15 organizations involved in public education, school administration, school funding and children's rights for leave to file a brief amici curiae.

The principles governing our review may be found in the CFE cases.  Having determined in CFE II that defendant failed to afford the students in the New York City School District the opportunity of a sound basic education, the Court of Appeals directed defendant to ascertain the actual cost of providing such an education, ensure that its funding system provided the necessary resources for same, and implement a system of accountability to measure whether the reforms achieved their intended result (see Campaign for Fiscal Equity v State of New York, 100 N.Y.2d at 930).  When the adequacy of defendant's ensuing cost calculation was challenged in CFE III, the Court of Appeals emphasized the limited role of the judiciary in reviewing the remedial choices of the coordinate branches, explaining that, although courts may declare constitutional rights, “the manner by which the State addresses complex societal and governmental issues is a subject left to the discretion of the political branches of government” (Campaign for Fiscal Equity, Inc. v State of New York, 8 NY3d at 28 [internal quotation marks and citations omitted] ).  Accordingly, this Court's role is to determine whether defendant's chosen remedy is rational, “not ․ to determine the best way to calculate the cost of a sound basic education” (id. at 27), and plaintiffs face a “formidable burden of proof” to demonstrate that the remedy is irrational (id. at 29 [internal quotation marks and citation omitted] ).

Defendant's proof principally consisted of the affirmation of Sean Giambattista, Director of the Office of State Aid within the State Education Department (hereinafter SED), whose office oversees the apportionment of state funds to school districts.  Giambattista initially explained that public school districts are funded through a combination of local, state and federal sources, which, on average, respectively account for approximately 55%, 40% and 5% of total statewide school funding.  For the 2023–2024 school year, Foundation Aid constituted approximately 70% of the total state aid distributed to school districts, with the remainder distributed through various other aid formulas and grants.  Relying upon SED State Aid Handbooks and other supporting documentation, Giambattista detailed the history and operation of Foundation Aid, including its adjustments for regional costs, local fiscal capacity and heightened student need.  Of particular relevance here, the formula employs a Pupil Need Index that increases the foundation amount according to a district's concentration of students with extraordinary needs, measured during the relevant period by poverty, English-language-learner status and geographic sparsity (see Education Law § 3602[1][q], [r], [s], [w];  [4][a][3] ).  The statutory calculation also incorporates additional pupil weightings that account for, among other things, students with disabilities (see Education Law § 3602[2] ).  From the resulting adjusted per-pupil cost, the formula subtracts an expected local contribution based upon the district's fiscal capacity (see Education Law § 3602[4][a] ).  Giambattista further documented substantial increases in Foundation Aid and total state aid received by each of the subject districts between the liability period and the 2023–2024 school year, when Foundation Aid became fully funded statewide.  Those increases occurred notwithstanding declining enrollment in most of the subject districts, resulting in still greater increases in state aid on a per-pupil basis.  Most significantly, Giambattista quantified the practical effect of the formula's need-based adjustments upon the subject districts, demonstrating that, largely as a result of their comparatively high concentrations of at-risk students, the districts received Foundation Aid ranging from approximately 74% to 435% greater than they would have received in the absence of those populations, depending upon the district.¹

This proof demonstrated not merely that additional funds had been appropriated but that state resources available to each of the subject districts had substantially increased pursuant to a formula that directs additional funding based upon characteristics associated with the at-risk student population at issue in this litigation.  That relationship is significant.  Our 2021 determination held that inadequate funding contributed to deficient educational inputs and outputs during a period in which Foundation Aid was repeatedly deferred, reduced or incompletely implemented (196 AD3d at 148–153), and defendant's failure to fully implement Foundation Aid formed a significant part of plaintiffs' own causal proof, connecting the districts' resource deficiencies to defendant's funding practices.  Although not directly challenged, we also note that defendant further presented evidence of continuing evaluation and accountability – including the Rockefeller Study – supporting Supreme Court's conclusion that defendant did not simply implement Foundation Aid and regard its constitutional obligation as complete but instead has continued to assess the operation of its system of funding schools and consider adjustments as warranted (see e.g. L 2026, ch 56, part A, §§ 2–a, 2–b [expanding the formula to account for students experiencing homelessness or foster care and increasing the weighting for English-language learners, among other things] ).  Similarly, during the final phase-in, districts receiving specified increases in Foundation Aid were required to submit plans to SED identifying how the additional funds would be used to improve student performance, including measures directed toward the needs of at-risk students.  Taken together, this proof supports Supreme Court's determination that defendant's actions were rationally directed toward remedying the deficiencies underlying our prior determination.

Plaintiffs' challenge to the rationality of defendant's remedial response is twofold:  that continuing deficiencies within the subject districts prove that any increases in funding have not addressed the constitutional violations identified;  and that Foundation Aid itself no longer provides a rational measure of the cost of providing a sound basic education.  As to the former, relying upon the affirmation and reports of education consultant Stephen Uebbing, plaintiffs sought to demonstrate that, notwithstanding the substantial increases in state funding, the subject districts continued to lack the resources necessary to provide their at-risk students the opportunity for a sound basic education.  Uebbing conducted detailed district-by-district evaluations for the 2014–2015 through 2023–2024 academic years, including with respect to staffing, academic intervention services, counseling and social-emotional supports, class sizes, prekindergarten programming and other educational resources, together with student performance and graduation data.  He identified continuing deficiencies in a number of those areas and opined that, although the funding increases had enabled meaningful improvements, they remained insufficient to provide the expanded services necessary for the districts' high concentrations of at-risk students.  He also maintained that much of the increased Foundation Aid had been absorbed by inflation and corresponding increases in salaries, benefits and other operating expenses.

We must first reject plaintiffs' request for a declaration that defendant failed to provide at-risk students in the subject districts the opportunity for a sound basic education during the post-liability period.  Evidence concerning educational conditions during that time was relevant insofar as it bore upon whether defendant's remedial measures rationally responded to the violations previously identified, but our remittal did not contemplate a new determination of constitutional liability for succeeding academic years that were not at issue at trial.

Relatedly, plaintiffs appear to maintain that evaluation of defendant's remedial response required a current, district-by-district determination of resources.  We rejected substantially the same argument on the immediately prior appeal, explaining that assessment of the rationality of defendant's response did not require “an itemized understanding of the needs of the subject districts” (221 AD3d at 1145).  We reiterate that the remedial inquiry does not require defendant to demonstrate that every deficiency identified by plaintiffs' expert has been eliminated, nor does it require defendant to fund every program and staffing level that he considers necessary.

Viewed within that framework, Uebbing's proof fails to establish that defendant's remedial response was irrational.  His assessments demonstrate that real educational challenges remain within the subject districts, including among their at-risk students, and he identifies additional resources that could reasonably be expected to improve their educational opportunities.  At the same time, Uebbing acknowledged meaningful improvements following the funding increases shown by defendant, including expanded programming, additional personnel and improvements in certain educational outcomes.  Again, many of the additional resources he identified are professional judgments concerning desirable staffing levels or best educational practices, not what is required to satisfy the “constitutional minimum or floor” identified by the Court of Appeals (Campaign for Fiscal Equity, Inc. v State of New York, 8 NY3d at 20, citing Board of Educ., Levittown Union Free School Dist. v Nyquist, 57 N.Y.2d 27, 47–48 [1982] ).  In short, the persistence of educational shortcomings, without more, does not establish that defendant's remedial response was “patently irrational” (id. at 29 [emphasis omitted] ).

The second aspect to plaintiffs' rebuttal, which underlies many of the arguments advanced by the amici, identifies a more substantial concern.  To challenge the adequacy of the way in which the Foundation Aid formula practically operates, plaintiffs proffered the affirmation of Elizabeth Biggerstaff, Executive Director of the New York State Association of Small City School Districts, who has extensive experience analyzing state education aid and school-finance data.  Biggerstaff focused upon ways in which, in her view, Foundation Aid has departed over time from the successful-schools methodology upon which it was originally based.  The successful-schools study was first conducted in 2003 and thereafter updated in 2006, 2009 and 2012, periodically identifying districts satisfying specified performance criteria and examining the expenditures of the lower-spending half of those districts to derive the base cost of a sound basic education.  In 2015, however, only the expenditure data associated with the successful schools was updated;  the State did not undertake a new successful-schools analysis, and it has not done so since.  According to Biggerstaff, when measured against subsequent student-performance data, some districts remaining on the 2015 successful-schools list no longer satisfy the criteria by which successful schools were originally identified, undermining the premise that their expenditures reliably measure the contemporary cost of educational success.  Since 2015, the foundation amount has been adjusted annually using the Consumer Price Index (hereinafter CPI).  Biggerstaff opines that CPI, a general measure of changes in consumer prices, does not adequately capture increases in the costs actually borne by school districts.  She advocates instead for use of Approved Operating Expenditure per pupil (hereinafter AOE), which measures specified day-to-day operating expenditures actually incurred by school districts.  Comparing the two measures from 2016 forward, she demonstrated that increases in AOE per pupil exceeded the CPI adjustment in most of the years examined, sometimes substantially, and contended that continued reliance upon CPI has caused the foundation amount to fall progressively behind the actual growth in school operating costs.  Biggerstaff further challenged the statutory limits placed upon the wealth measures used to calculate a district's expected local contribution, particularly the utilization of a floor that artificially attributes greater fiscal capacity to the poorest districts.  It is the position of Biggerstaff, and the amici, that the foregoing departures from the methodology considered in CFE III render Supreme Court's reliance upon the completed phase-in of Foundation Aid undue.

First, not all of the alleged deficiencies are in fact departures as argued.  Use of the lower-spending half of successful districts to establish the foundation amount was expressly part of the methodology reviewed, and upheld as rational, in CFE III (see Campaign for Fiscal Equity, Inc. v State of New York, 8 NY3d at 30–31).  Similarly, annual CPI adjustments have been incorporated into the statutory formula since its enactment (see L 2007, ch 57, part B, § 13).

We do agree with plaintiffs, and the amici, that full funding of an existing statutory formula does not perpetually demonstrate constitutional compliance, and the record supports their observations that Foundation Aid has evolved since its enactment and that certain components continue to derive from historical data.  Those circumstances are properly considered in assessing whether reliance upon Foundation Aid remains rational.  However, they do not demonstrate that the formula has become constitutionally infirm.  Foundation Aid has not remained frozen at the dollar amounts calculated when it was enacted in 2007;  it continues to account for changing costs, student need, district wealth and fiscal capacity, regional costs and enrollment.  Additionally, neither CFE III nor our prior decisions require defendant to perpetually replicate the precise empirical methodology originally employed, nor recalculate the successful-schools analysis at judicially prescribed intervals;  requiring as much would approach the judicial selection among competing school-finance methodologies that CFE III cautions against.  Moreover, Biggerstaff failed to quantify the effect of including any allegedly unsuccessful schools upon the relevant calculations.  Her challenge to the statutory floor applied in measuring income wealth presents a similar problem.  Although she maintains that the floor may overstate the fiscal capacity of particularly poor districts, the expected local contribution is determined by reference to the lesser of alternative statutory calculations (see Education Law § 3602[4][a][4] ), and plaintiffs' proof does not establish that the challenged floor actually controlled the local contribution attributed to any particular district.  Her comparison of CPI and AOE does provide support for the claim that the foundation amount may not track increases in school operating costs as closely as periodically updating successful schools would.  Nonetheless, AOE does not identify the expenditures necessary to provide the constitutional minimum.  The Legislature may wish to select a different updating mechanism like AOE, but the existence of such competing options does not render the use of CPI outside the range of rational legislative choices.

We are also not persuaded by the amici's contention that completion of the Foundation Aid phase-in warrants diminished significance because it resulted from developments independent of this litigation.  Defendant's withholding, reduction and delayed implementation of Foundation Aid contributed to the inadequate resources available to the subject districts during the liability period.  Completion of the phase-in therefore bears an objective relationship to a significant component of the constitutional deficiencies previously identified, without regard to what prompted the Legislature to provide the funding (see 221 AD3d at 1145–1146).

The amici's invocation of the Rockefeller Institute's ultimate report concerning Foundation Aid does not require a different result.  To the extent the final report is properly before us, its identification of aspects of the formula warranting reconsideration lends support to the proposition that Foundation Aid should not be regarded as permanently insulated from scrutiny by virtue of CFE III. However, the Legislature's decision to commission a comprehensive review does not amount to an acknowledgment that the existing formula is constitutionally irrational.  Rather, it is equally consistent with continuing legislative evaluation and refinement of a complex funding system and, as Supreme Court recognized, bears upon defendant's ongoing accountability for the operation of its remedial measures.

Plaintiffs and the amici have identified legitimate reasons why aspects of the Foundation Aid formula may warrant reconsideration;  they have not demonstrated that it has become so disconnected from contemporary educational costs and student need that defendant's reliance upon it as part of its remedial response is patently irrational.  The question before us is not whether additional appropriations or alternative methodologies might further improve educational opportunities, it is whether defendant's chosen response falls within the broad range of reasonable policy judgments recognized in CFE III. Affording the deference required by that decision, we conclude that it does.

Aarons, Reynolds Fitzgerald and Ryba, JJ., concur.

ORDERED that the judgment is affirmed, without costs.

FOOTNOTES

1.   In accordance with Supreme Court's directive to address both state and federal funding sources, defendant also submitted the affirmation of Edward Lenart, SED's Director of Agency Budget Services, who documented the federal funding received by each of the subject districts during the relevant period.  Lenart explained that federal funding historically constitutes a comparatively small share of overall school funding and detailed the various federal funding streams available to the districts.

Garry, P.J.