New Jersey's Judicial Road to Fiscal Perdition

New Jersey’s Judicial Road to Fiscal Perdition

When he decided against running for president last fall, New Jersey Gov. Chris Christie said he had lots more to do to fix his "broken" state. Certainly true on spending and taxes, where Mr. Christie has made significant progress. But there’s another issue he’s only begun to take on: the New Jersey Supreme Court.

Last month Mr. Christie nominated two new members to the court, easily one of the most activist in the nation. His appointments could reshape the seven-member panel, which over the past half-century has transformed the Garden State, seizing control of school funding and hijacking the zoning powers of towns and cities, among other moves.

"I don’t think the supreme court has any business being involved in setting the budget of the state government," the governor complained last year. Yet it is, extensively.

New Jersey’s supreme court is the product of the state’s 1947 constitution, which jettisoned the unwieldy 16-member Court of Errors and Appeals. The new court established in its place was shaped by Arthur Vanderbilt, a former dean of New York University’s law school who served as the court’s first chief justice. Vanderbilt is best remembered for persuading President Dwight Eisenhower to appoint to the U.S. Supreme Court William Brennan, who then led that court’s liberal activist wing for more than three decades.

The New Jersey court was power-hungry from its inception, but its ambition began bearing serous fruit, especially regarding education policy, in the 1970s.

That’s when several plaintiffs argued that New Jersey’s method of financing schools through local property taxes-which allowed wealthy districts to spend far more than their less affluent counterparts-violated the state constitution’s guarantee of a "thorough and efficient system of free public schools" for all residents.

The court agreed and ordered the state to spend extra in poor districts (which came to be known later as "Abbott districts," so named for a series of court cases beginning with Abbott vs. Burke). When the legislature didn’t comply quickly enough, the court shut down the public schools in 1976 until the legislature instituted an income tax to fund the education spending.

The chief justice at the time was Richard Hughes, who had previously been governor and tried fruitlessly to enact a tax for education spending. "They didn’t want the income tax then?" Hughes told the press in 1976. "Well, they’ll want one now."

But merely mandating new funding wasn’t enough to satisfy the court. In 1985, it ruled the state had to fund education in urban districts at a level commensurate with wealthy suburban districts. And it said that the state had to add yet more "supplemental" spending to poor districts to help offset the "additional disadvantages" that students in those areas faced.

There was more. In 1998, the court ordered the state to fund preschool classes for all 3-year-olds and 4-year-olds in Abbott districts. That cost $500 million annually-even though no research shows that such widespread pre-K has lasting benefits.

Since 1998 alone, the state has sent more than $40 billion to Abbott districts. Asbury Park leads the way, spending an astounding $29,797 per student. Camden spends $23,356, while Newark spends $21,895 and Jersey City $20,366.

All this has prompted a massive redistribution of wealth. Of New Jersey’s nearly 600 municipalities, 166 get back 10 cents or less in education spending for every dollar their residents send to Trenton in income taxes, according to data compiled by state Sen. Mike Doherty. Thus taxpayers in much of the state effectively support many school districts at once-their own, through property taxes, and the Abbott districts through income taxes.

The tens of billions spent on Abbott districts have yielded almost no educational gains. A 2011 study of federal test scores in math and reading showed that the gap separating whites and Hispanics is roughly the same in New Jersey (where half of all minority students live in Abbott districts)as it is nationally. According to a similar study from 2009, the reading gap between whites and blacks in fourth grade was virtually the same in New Jersey as in the nation, and by eighth grade Jersey’s black students were further behind.

Then there’s the court’s effect on housing policy. This too began in earnest in the 1970s, when the NAACP sued the town of Mount Laurel, charging that its zoning laws-which set minimum lot and dwelling sizes for new residential construction-were illegal because they excluded the development of high-density, low-income housing.

The court ruled in 1975 that affordable housing was essential to the general welfare of the Jersey population and was therefore a necessary concern of government. This, in turn, forced municipalities to alter their zoning laws to ensure that they had a "fair share" of affordable housing.

The court went further several years later when it created a "builder’s remedy," empowering developers to sue towns to force compliance with the affordable-housing decrees. Within two years of that decision, builders sued 140 Jersey municipalities. Quiet towns became sprawling suburbs. In West Windsor, a tiny township near Princeton, a single lower court decision increased the number of residences by 15% when it approved a 1,100-unit development.

In 2002, the state government’s Council on Affordable Housing determined that after nearly 30 years and 45,000 units of affordable housing built under mandate, municipalities still needed to build an additional 73,000 homes to satisfy the high court. The estimated future cost to taxpayers of building all those homes: $10 billion.

And so state supreme court directives help leave Jersey taxpayers groaning under the nation’s highest tax burden. Hence the importance of Gov. Christie’s appointments. His first, corporate lawyer Anne Patterson, took her seat last year.

To join her, the governor has nominated Bruce Harris, an African-American Republican who’s currently mayor of Chatham Borough, an affluent suburb. The governor’s second nominee is Phil Kwon, a Korean immigrant who worked under the governor when he was the U.S. attorney for New Jersey.

Neither nominee has served on the bench, so they have no record of decisions. But Mr. Christie has said that he is intent on appointing judges who would interpret the law, not legislate from the bench. That might put him on a collision course with the Democratic-controlled state Senate. The state’s future depends on its outcome.

This piece originally appeared in Wall Street Journal

This piece originally appeared in The Wall Street Journal