New Jersey must give poor schools $500 million: Supreme Court (Reuters)

NEW YORK (Reuters) – New Jersey must provide about $500 million for its poorer school districts next year, the state Supreme Court said on Tuesday, complicating the state's ongoing budget negotiations.

The 3-2 court ruling, concerning what are known as the Abbott districts, is the latest development in a decades-long battle over state education funding for poor and other disadvantaged students.

Governor Chris Christie criticized the ruling, saying it was not the court's place to dictate "how taxpayer dollars are spent," but said the state would obey it.

"Those responsible for making decisions regarding how money is raised through taxes and how it is spent by government are those elected by the people and ultimately held accountable by the people," said Christie, according to a transcript provided by his office.

"We should be getting better results with the taxpayer money we already spend, and we aren't, which means changing the educational system goes beyond dollars and cents," he said.

Depending upon how the funding gap was calculated, the shortfall could have been as high as $1.7 billion, but the court strictly limited its decision to the Abbott schools.

Last year, Christie, a Republican, ordered about $1 billion in cuts in education spending, which the Democrat-controlled state legislature enacted under protest.

The state is due to approve a budget for the next fiscal year, which starts July 1, by the end of June.

In its ruling, the court said the legislature's power of the purse does not bar the judicial branch from acting when the failure to fund is "a real, substantial, and consequential blow" to the constitutionally required education.

Though New Jersey has not fully recovered from the recession, an independent fiscal monitor last week predicted the state would collect an extra $914 million in tax revenue.

Senate President Steve Sweeney, a Democrat, said on Tuesday the money should be spent on education, calling last year's cuts "draconian."

The Newark-based Education Law Center, which brought the latest legal action last June, said Christie's cuts have forced New Jersey school districts to lay off teachers and support staff and reduce or end vital programs and services.

In the last year, the state's wealthiest districts saw an average decrease of $211 per student, while the poorest districts lost $572 per student, the group said.

(Reporting by Joan Gralla and Edith Honan; additional reporting by Karen Pierog in Chicago, Editing by Chizu Nomiyama )