## Facts

- New Jersey enacted the Charter School Program Act of 1995 (CSPA), authorizing public charter schools with increased autonomy and requiring districts of residence to transfer per-pupil funding (presumptively 90% of the local levy amount per pupil, subject to adjustment).
- The Commissioner of Education and State Board approved charter applications for Englewood on the Palisades Charter School, the Classical Academy Charter School of Clifton, and Franklin Charter School.
- Local school boards challenged the approvals, asserting unconstitutional application of the CSPA and inadequate consideration of (a) racial balance effects and (b) financial impact on sending districts.
- Englewood had existing desegregation-related concerns and argued the charter would exacerbate racial imbalance unless the Commissioner performed a specific pre-approval analysis.
- Clifton and Franklin argued the funding transfers would harm district finances and threaten the ability to provide a constitutionally required “thorough and efficient” education.
- The Commissioner had used conditional approvals in implementing the charter program, allowing charters to proceed subject to later satisfaction of specified conditions.

## Issues

1. Whether the Commissioner must affirmatively and explicitly evaluate potential racial-balance effects of a proposed charter school on the district of residence, particularly in districts with desegregation concerns.
2. Whether the CSPA, as applied, unconstitutionally threatens the provision of a “thorough and efficient” education by shifting district funds to charters without requiring financial-impact consideration at the approval stage.
3. Whether the Commissioner has statutory authority to grant conditional charter approvals.

## Decision

- The court affirmed the judgments upholding the charter approvals and rejected the as-applied constitutional challenges on the record presented.
- The court held the Commissioner has a continuing obligation to consider and prevent racially segregative effects in charter approvals and oversight and must make that consideration explicit, especially in racially sensitive districts.
- The court held the CSPA is not unconstitutional merely because it may create fiscal pressure; a district must show, on a developed evidentiary record, that funding transfers actually deprive students of a thorough and efficient education.
- The court upheld the Commissioner’s authority to grant conditional approvals as a reasonable administrative mechanism consistent with the statutory scheme.

## Legal Principles

- The Legislature has primary responsibility for structuring the public education system under the “thorough and efficient” clause; courts generally defer to the Commissioner’s educational judgments unless arbitrary, contrary to statute, or unconstitutional.
- In approving and supervising charter schools, the Commissioner’s obligations include ongoing monitoring and intervention to avoid racially segregative consequences; oversight continues through reporting, renewal, modification, and revocation tools.
- The CSPA does not require financial-impact analysis as a mandatory precondition to every charter approval; financial invalidation claims require district-specific proof of actual or impending denial of a thorough and efficient education.
- Conditional charter approvals fall within the Commissioner’s administrative discretion when used to ensure compliance with statutory and regulatory requirements and when not used to bypass required safeguards.

## Conclusion

The court upheld New Jersey’s charter approvals and rejected predictive fiscal and as-applied constitutional claims on the existing record, while requiring explicit and ongoing administrative attention to racial-balance effects and confirming the Commissioner’s discretion to issue conditional approvals and to respond to proven educational deprivation in specific districts.


In re Grant of the Charter School Application of Englewood on the Palisades Charter School, 164 N.J. 316, 753 A.2d 687 (N.J. 2000)