Nov. 20 (Bloomberg) -- New York's Court of Appeals ruled that the state needs to provide about $2 billion more in aid to New York City schools, less than half the amount recommended after lower-court proceedings.

Today's 4-to-2 decision by the state's highest court ends a 13-year legal battle in which city education advocates fought for more funding. Their hopes now rest on the Legislature and Governor-Elect Eliot Spitzer, who pledged during his campaign to seek $4 billion to $6 billion of increased aid for the city and unspecified billions more for other districts in the state.

``We must provide more statewide funding than this constitutional minimum,'' Spitzer said in a statement after the court's decision. Spitzer, who takes office Jan. 1, didn't repeat the amounts he cited in the campaign, saying that next year's budget ``will propose significant additional funding'' for schools across the state over a period of several years.

Governor George Pataki's administration argued that $1.93 billion more aid in 2004 dollars was enough to provide New York City students a sound basic education, the test set by the Court of Appeals in a 2003 decision.

``We conclude that this estimate was a reasonable one and that the courts should defer to this estimate,'' adjusting for inflation, the court said.

`Disappointing'

New York City Councilman Robert Jackson, a Manhattan Democrat who led a coalition in bringing the original lawsuit, called the decision ``very disappointing because the amount of money that the court is talking about is not what's needed.''

``The court process is now closed,'' said Randi Weingarten, president of the United Federation of Teachers, which represents more than 140,000 active and retired public school teachers. To reduce class sizes, offer universal pre-kindergarten and provide other resources to New York City's 1.1 million students, ``it's up to the governor and Legislature to give our kids the opportunity to receive the education they deserve,'' she said at a news conference.

The Campaign for Fiscal Equity, which brought the lawsuit, argued the city has been perennially shortchanged in state aid allocations. Lawmakers from upstate and suburban areas fought attempts to help the city at the expense of their districts.

New York has ``already made significant progress towards meeting the sound basic education funding levels recognized today by the court,'' Senate Majority Leader Joseph Bruno, a Republican from Brunswick, said in a statement. Pataki's spending plan, which the Senate backed, ``was more than sufficient,'' he said.

Court Shift

Pataki, in a statement, called the ruling a vindication of his position that school funding decisions ``should continue to be made by the people's elected representatives and not the courts.''

Lawyer Joseph Wayland, a partner at the New York law firm of Simpson Thacher & Bartlett who represented the group pro bono, said the court's majority had shifted with two Pataki appointees since the June 2003 decision. The most recent, Judge Eugene Pigott Jr., who wrote today's decision, was sworn in Oct. 10, minutes before oral arguments were presented.

Chief Judge Judith Kaye dissented from the majority, writing it ``does not resolve the inadequate funding of the New York City public schools'' in violation of the state constitution. She said the $1.93 billion figure was calculated by a flawed process that deliberately omitted the higher- spending half of the state's successful school districts.

``A sound basic education will cost approximately $5 billion in additional annual expenditures,'' Kaye said.

Referees

The majority opinion said State Supreme Court Justice Leland DeGrasse of Manhattan erred in appointing referees to set the price tag for a sound basic education. The lower court's proper role would have been ``to determine whether the state's proposed calculation of that cost is rational,'' Pigott wrote.

The Court of Appeals in 2003 ordered the governor and Legislature to create a new funding plan by July 2004. When the deadline passed without one, DeGrasse, the trial judge, named a panel of three referees. They found city schools needed $5.6 billion more a year in operating funds. That was later modified to a $4.7 billion-$5.6 billion range, phased in over four years.

The court noted that Pataki had developed a budget plan calling for a $4.7 billion overall increase to New York City schools over a five-year period, with $1.5 billion from the city and $1 billion from additional federal aid. That plan also called for $3.3 billion more to school districts outside the city, with $2.3 billion from the state and $1 billion from the U.S government.

Last Budget

Backers of the lawsuit agreed that poorer districts serving 1.9 students elsewhere in the state should also get more funds.

In the state budget adopted last April, aid to local school districts rose $1.3 billion from a year earlier to $17.6 billion, which is about 16 percent of the overall spending plan.

New York City spends $15.4 billion on schools, or 29 percent of its total non-capital outlays. The state currently pays 46 percent of the city's school costs and the city covers 42 percent, according to state Comptroller Alan Hevesi.

As attorney general, Spitzer's office argued against the mandated spending increase. As the Democratic candidate to succeed Republican Pataki, he promised to increase state spending.

The case is Campaign for Fiscal Equity v. State of New York, 111070/1993, New York State Supreme Court, Manhattan.

To contact the reporter on this story: Michael Quint in Albany, New York, at mquint@bloomberg.net.

Last Updated: November 20, 2006 16:30 EST