Writing in the Harvard Law Review in 1977, Supreme Court Justice William Brennan, Jr., exhorted state judges to embrace activist interpretations of the law. The high court had taken a frustratingly conservative turn, Brennan noted, stepping back from the crucial role it had played as an agent of social change under previous chief justice Earl Warren. Among the most important Warren Court decisions, Brennan argued, were those that expanded individual liberties under Section I of the Fourteenth Amendment, which guarantees citizens equal protection under the law and prohibits state governments from depriving “any person of life, liberty, or property, without due process.” Brennan believed that state judges could find in state constitutions and laws “counterparts” of these decisions that would guarantee citizens “even more protections” than those provided by the U.S. Constitution.
Brennan is rightly seen as one of the fathers of the “living Constitution,” under which judges continually reinterpret the nation’s fundamental law “in light of conditions existing in contemporary society.” On the federal bench, he worked primarily to widen the scope of individual rights—protections against government intrusion—like those afforded the criminally accused in Miranda v. Arizona. But in his Harvard Law Review article, Brennan also ventured onto terrain that the Supreme Court had largely avoided: a defense of the idea of constitutionally protected economic, or what legal scholars have come to call “positive,” rights—government guarantees of a material nature. In the modern world, Brennan contended, the Fourteenth Amendment’s guarantee against deprivation of property “has come to embrace”—he doesn’t say how or by whom—“such crucial expectations as a driver’s license or the statutory entitlement to minimum economic support, in the form of welfare.”
Brennan’s 1977 essay helped inspire a “positive rights” revolution in state courts. Over the 36 years since Brennan’s appeal, a number of state high courts have aggressively used vague state constitutional language—referring, say, to the general welfare—to force legislators to spend billions of dollars on new entitlements. And more recently, state courts have extended their imaginative jurisprudence to the fiscal battle over government pensions, securing extraordinary retirement protections for state employees at taxpayers’ expense. Liberal legal scholars, meanwhile, want state judges to go still further, and mandate everything from universal health care to a guaranteed annual income for every citizen.
The U.S. Supreme Court continued to move away from the Warren Court’s activist extremes throughout the rest of Brennan’s career, which ended in 1990 under Burger’s successor as chief justice, William Rehnquist. The rightward shift disconcerted Brennan, but the liberal judicial lion has had his revenge through his enduring and expansive influence on the judiciary.
In an American context, President Franklin Delano Roosevelt first popularized the notion of positive rights—though, like Brennan, he didn’t use the term—in his 1944 State of the Union address. It was time, argued Roosevelt, for the nation to adopt a “second Bill of Rights,” which would add to the traditional protections of the Constitution a new set of economic guarantees. “True individual freedom cannot exist without economic security and independence,” Roosevelt said. “Necessitous men are not free men.” His proposed new rights included a “useful and remunerative job,” “a decent home,” “a good education,” and more.
Roosevelt died 15 months later, but his notion of an economic bill of rights took root in the ruins of post–World War II Europe. As the devastated countries rebuilt, they approved new constitutions that included economic and welfare guarantees—a development reflected in the newly formed United Nations’ Universal Declaration of Human Rights, adopted in 1948, which urged governments to secure for each citizen “the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing.”
Roosevelt’s positive-rights idea then returned from Europe to the United States, and one place it landed was New Jersey, where Brennan served as a state supreme court justice from 1951 to 1956. In the late 1940s, Jersey had fashioned a new constitution inspired by the emerging international law, and its high court was soon reading it as liberally as possible. By the time Brennan issued his call for state court activism, New Jersey’s justices had interpreted the state constitution to require, for instance, taxpayer-subsidized housing and shelter for poorer citizens—a decision, Brennan observed approvingly, that the U.S. Supreme Court was “utterly without jurisdiction to review” (see “The Court That Broke Jersey,” Winter 2012). The Jersey court could serve as a model for other states, Brennan believed.
State judicial activism has been especially aggressive in compelling taxpayers to spend lots more money on public schools. The U.S. Constitution says nothing about public education, as the Supreme Court recognized in its 1973 Rodriguez v. San Antonio decision, which ruled that education funding was a state, not a federal, matter. The decision seemed to foreclose efforts to use federal courts to strong-arm states to spend more on education, or to modify their formulas for dispensing education dollars to school districts. So litigants began to look to state constitutions, 48 of which mention education in some way, to push their agenda.
Plaintiffs in California and New Jersey had already filed local education lawsuits as Rodriguez v. San Antonio wound through the federal courts. But by the early 1980s, and continuing into the 1990s, the tide of state court “equity” funding cases rose dramatically. In the initial suits, plaintiffs sought extra state spending in poorer school districts to help them close the funding gap with wealthier areas. But soon plaintiffs were arguing that states needed to ensure not just spending equity but also an “adequate” education for all children, including those from disadvantaged families—a goal that likely would require far greater resources than schools spend on average students. Those cases advanced, even though the state constitutional language on education was often fuzzy and innocuous. The Wyoming and New Jersey constitutions, for example, only require the legislature to maintain a “thorough and efficient” system of public schools; New York’s constitution merely obliges officials to provide “free common schools.”
But the very generality of the constitutional language on education allowed activist judges to anoint themselves as the final arbiters on education adequacy in 17 states where these suits proved successful—at a cost to the public of tens of billions of dollars. Kentucky led the way. In 1984, schools superintendents sued for more funding, seizing on the word “efficient” in the education clause of the state’s constitution to challenge the existing system of school spending. A trial judge ruled that Kentucky’s General Assembly had failed to provide “sufficient” resources for efficient public education. The Kentucky Supreme Court in 1989 then defined an efficient education in its own way, encompassing the achievement of these ambitious student competencies: “Sufficient oral and written communications skills . . . to function in a complex and rapidly changing civilization; sufficient knowledge of economic, social and political systems to enable students to make informed choices . . . sufficient grounding in the arts to enable each student to appreciate his or her cultural and historical heritages.”
The judges’ relentless emphasis in the Kentucky case was on spending more money, even though funding is just a partial component of the success of any school system. To finance the court’s vision, the state, with a budget of only $8.8 billion at the time, raised taxes by $1.3 billion annually. Within five years, Kentucky’s tax burden jumped from 27th in the nation to 12th-highest among the states.
Education outcomes rose far less impressively. Kentucky students’ scores have increased over the years on the National Assessment of Educational Progress (NAEP) tests, true, but those gains largely mirrored national increases. Perhaps more important, given that the court’s push to reduce funding inequities was about improving disadvantaged students’ life chances, the achievement gap hasn’t shrunk in Kentucky. The disparity between the scores of the state’s African-American and white students has actually widened since 1992 on fourth-grade reading and math scores and eighth-grade math scores, according to a 2009 National Center for Education Statistics survey. Even on its own spendthrift terms, the judicial campaign on the schools failed.
Without waiting for the academic results of Kentucky’s massive funding increases, judges rushed to compel higher school spending in other states, viewing expensive new buildings and additional programs in themselves as signs of improvement. Spending became a de facto measure of success.
New York State’s highest court, the Court of Appeals, dismissed an education equity-funding case in 1982, ruling that school funding was the responsibility of the legislature and the political process, not the courts. In 1993, however, a new group of plaintiffs known as the Campaign for Fiscal Equity claimed that New York City schools were inadequate because they violated the state constitution’s requirement that New York provide “free common schools.” The Court of Appeals let the suit go forward, and a trial judge ruled in 1999 that the city’s schools must produce voters “with the intellectual tools to evaluate complex issues such as campaign-finance reform, tax policy, and global warming”—language that went far beyond anything in the state’s constitution. The judge ordered the state and the city—already spending more than $12 billion on schools (about $10,500 per student)—to hike spending by a jaw-dropping $5.6 billion a year. The Court of Appeals later reduced that amount, but in 2006, Governor Eliot Spitzer agreed to boost Gotham school spending by $5.4 billion over a four-year period. The money helped fuel an increase in per-pupil spending to $19,000 by 2013.
As in Kentucky, the flood of new money did little to improve student achievement. “The spending surge has failed to produce a significant increase in students graduating from high school on time across the city,” lamented the Daily News in a July 2013 report. Scores on NAEP tests for New York City eighth-graders went up a bit, but less than in other big cities. In 2002, New York’s eighth-graders scored at the national average of 250 on reading tests; by 2013, they had fallen behind students in other big-city districts. In mathematics, the 2003 New York eighth-graders ranked four points above the big-city average; by 2013, scores had fallen slightly below that average. One reason for the disconnect between higher funding and mediocre results may be other shortcomings in the New York City school system, ignored by the courts—fiscal waste, the lack of an effective teacher-evaluation process, and rich employee-pension and health-care benefits that consume a growing portion of funding.
While the courts are supposed to provide checks on legislative power, such cases remind us that the judiciary has few checks on its own power. In 1995, the Wyoming Supreme Court interpreted the state constitution’s “thorough and efficient” clause on public education to mean that government must build an educational system that is “the best that we can do”—and then, with breathtaking arrogance, added that “lack of financial resources will not be an acceptable reason for failure.” From 1995 through 2007—the years the court kept the pressure on Wyoming—school spending grew by 130 percent per pupil, driving the state from 15th to sixth in the nation in school expenditures, according to U.S. Census data. Yet the payoff is again hard to see. As the Hoover Institution’s Eric Hanushek and litigator Alfred Lindseth point out in their book, Schoolhouses, Courthouses, and Statehouses, Wyoming’s eighth-grade test scores remained in line with the state’s very similar neighbors, North and South Dakota and Montana, which now spent significantly less than it did on schools.
Beginning in the early 1970s, the New Jersey Supreme Court, seeking better and more equal schools, usurped authority from lawmakers and educators alike. First, the court demanded that the state impose an income tax to finance higher spending in low-income districts. Then it proceeded to micromanage education policy—requiring, for instance, taxpayers to pay for universal prekindergarten in urban districts. New Jersey used spending as its sole standard for adequacy, ignoring abundant evidence that corruption and mismanagement hurt educational outcomes in districts like Camden and Newark. By one New York Times estimate, judicial education decrees have cost the state some $40 billion over 15 years, boosting per-pupil expenditures to astronomical levels in places like Asbury Park ($29,797), Camden ($23,356), and Newark ($21,895)—once more, with little demonstrable improvement in student outcomes.
State judicial activism hasn’t just exploded education budgets. Today, state leaders are increasingly struggling with how to pay for lavish retirement benefits for government workers without shattering public finances—and the courts aren’t helping, to put it mildly.
Roosevelt’s proposed economic bill of rights had also included a right “to adequate protection from the economic fears of old age.” By 1944, when Roosevelt delivered his call, the country’s Social Security Act, granting limited retirement benefits to eligible Americans, was already nine years old. Some 30 years later, Congress passed the Employee Retirement Income Security Act (ERISA), providing safeguards for worker pensions granted by private-sector employers. Over the years, federal courts have clarified the protections enjoyed by workers, thanks to these statutes, but the courts have also clarified limits of the protections. The Supreme Court, for instance, has ruled that membership in Social Security is a property right, which means that the government cannot take it away from someone without due process—but Congress remains free to alter the program’s benefits. ERISA protects the benefits that workers have already earned in a private plan, so that employers cannot simply appropriate them, but employers can still alter benefits and otherwise change pension systems for future work.
State and local government workers, however, don’t have to belong to Social Security, and local pension systems reflect state laws, not ERISA. This reality gives state courts influence over state and local pensions far beyond what they have over private pensions. In at least two dozen states, courts have provided government workers with far more protections than exist in the private sector, locking in hundreds of billions of dollars in long-term, yet-to-be-funded liabilities. Much of the difficulty with reducing the cost of local pension systems stems from this obstacle.
The California Supreme Court provided the template for this approach, described as “the California rule” by University of Minnesota law professor Amy Monahan. The California justices argued that, when a law creates the terms or conditions of a public-sector job, as pension statutes do, the employee thereby “obtains a right, protected by the contract clause, to require the public employer to comply with the prescribed condition.” This idea of a binding contract between state government and its employees was something new. “Under federal law, state laws are presumed to be noncontractual absent clear and unambiguous evidence that the legislature intended to bind itself,” observes Monahan. Even contract law usually does not protect yet-to-be-earned employee benefits. But for California’s courts—and at least a dozen other states have followed its lead—any changes to government pension systems were illegal. Government-worker pension rights and benefits become indissoluble “from the moment one accepts public employment,” as a California appellate court ruled in 1989.
This logic is hard to justify, Monahan argues. “Considering that nearly all other terms and conditions of employment can be changed prospectively, it is difficult to see why pension accruals enjoy special protection,” she writes. These cases suggest that government employees deserve special protections because their service somehow disadvantages them. Boston University Law School’s Jack Beermann makes the point explicitly: “A 20-year government employee suddenly faced with significantly lower future accrual of retirement benefits may be seriously damaged economically by the change and may not be in a position to seek alternate employment.” Of course, private-sector workers face these same possibilities.
Taxpayers are the big losers. The court rulings have frozen in place unaffordable benefit levels in retirement systems that have accumulated between $1.5 trillion and $4 trillion in unpaid future liabilities. Last year, San Jose voters approved a pension-reform measure meant to curb costs by requiring workers to contribute more to their pensions, but a California court overturned key elements of the initiative. San Jose’s pension costs have soared from $72 million annually to $254 million annually over the last decade, forcing the city to lay off thousands of workers.
Similar battles are taking place in other states. Colorado’s government retirees are using previous state court rulings, citing the California rule, to challenge a reduction in annual cost-of-living adjustments voted by that state’s legislature. Most legal observers expect the workers to prevail. And Illinois’s legislature had balked for years at passing substantial pension reform because the state’s constitution describes public-employee pensions as a “contractual relationship” that can’t be diminished. Only recently did the state’s legislature, facing the worst pension debt among states, try reform that might survive in court, arguing that even contracts don’t bar changes for work not yet performed. That legislation is now headed to the Illinois Supreme Court.
Starting in the late 1970s, following a long period of government growth, voters in many states passed constitutional amendments designed to restrain state spending or limit the ability of elected officials to run up debt. Here, too, the state courts have been aggressive defenders of profligate government, shredding the new fiscal protections. As Columbia law professor Richard Briffault observes, “State courts appear quite sympathetic to the goals of many programs that would be curbed by fiscal limits.”
Nowhere have courts been more active in opposing voters’ efforts to control spending than in California. Golden State residents passed Proposition 13 in 1978, amending the state constitution to cap property taxes and requiring localities to obtain the approval of two-thirds of voters if they wanted to enact new, non-property taxes. The initiative, it’s worth noting, largely resulted from the California Supreme Court’s 1971 ruling in one of the nation’s first education-funding cases, Serrano v. Priest, which held that local property taxes could no longer be used to finance public schools, since doing so resulted in unfair differences in school funding between rich and poor neighborhoods. Severing residents’ property taxes from their kids’ local schools, however, meant a lot less public support for rising property taxes. In a 2002 study, published in The Journal of Regional Analysis and Policy, economists William Blankenau and Mark Skidmore surveyed tax- and expenditure-limitation measures across the country over a 12-year period after Prop. 13’s passage and found that the likelihood of voters approving a measure increased significantly if a state court had ordered higher education spending.
The courts swiftly got to work in eroding these taxing and spending limits. California courts let local governments get around Prop. 13’s supermajority requirement for new taxes simply by renaming the levies “assessments,” “fees,” or “charges.” From 1977 through 1996, according to a March 1999 National Tax Journal study, the portion of revenues that California municipalities generated from service fees and special assessments rose from 25 percent to 41 percent—a clear consequence of California courts’ complicity in undermining Prop. 13. And when California voters narrowed the exemptions from Prop. 13 with the passage of Proposition 218 in 1996, judges crafted loopholes around that measure, too. Small wonder that California’s combined state and local tax burden, after falling from fifth-highest among America’s states to 14th in the immediate aftermath of Prop. 13, has now risen back up to fourth-highest.
State courts have conspired with elected officials in other states to circumvent voters’ wishes. Washington State residents passed an initiative in 1993, responding to state tax increases, to limit state spending growth to the rate of inflation, plus population growth. At first, the measure proved successful, keeping per-capita expenditures in the state flat for three years. But then state lawmakers began amending the law to allow for fiscal gimmicks—approving increases in so-called sin taxes, for instance, and then shifting the money around special state accounts to push spending above the initiative’s limits. A lower-court judge ruled the maneuvers illegal, but the state’s supreme court overturned the decision. “It is neither the prerogative nor the function of this court to substitute our judgment for that of the legislature,” the high court announced. Apparently, the judgment of voters didn’t matter. Washington State voters subsequently passed three statewide initiatives mandating that two-thirds of lawmakers must agree to new tax increases—but the state’s supreme court shot down all three measures. Meantime, the court ruled in 2012 that the state was inadequately funding education and needed to hike spending annually by up to $7 billion by 2018.
As if all this weren’t enough, liberal judges and legal scholars are calling for state courts to push the positive-rights agenda even further by guaranteeing minimum welfare payments and government subsidies for food, clothing, housing, and medical care to every citizen. Like Justice Brennan before them, today’s judicial activists see state courts as their agents of change because the U.S. Supreme Court has failed to find any basis in the Constitution for a right to such material entitlements. Many state constitutions, by contrast, make some broad mention of supplying aid for the needy—an opening for aggressive interpretations of welfare rights.
In a 1979 decision, New York’s highest court became a trendsetter in this context when it interpreted the state constitution’s “aid” clause to mean that the homeless had a constitutional right to shelter. New York City, which had been sued by homeless advocates for not providing enough free shelter space, entered into a consent decree with the court concerning the size and nature of its homeless centers. That decree, in force for more than 30 years, has resulted in numerous other lawsuits by homeless advocates and court micromanagement of the city’s shelter system—including forcing the city to let homeless people into its shelters who don’t comply with shelter regulations. Similarly, in 2009, after the financial crisis had reduced New York City tax collections and squeezed the budget, the court ordered the city to add hundreds of new beds to its shelters.
State courts have construed what is traditionally known as “general welfare” language in state constitutions as another source of new economic rights. Though the U.S. Supreme Court has ruled that the federal Constitution’s references to the general welfare don’t compel Congress to take any specific action, the New Jersey Supreme Court interpreted language in the state’s constitution exhorting the legislature to “promote the general welfare” to justify its Mount Laurel housing decisions, which have bound communities over the last four decades to spend billions of dollars building 40,000 homes. The court held that housing and shelter at government expense are necessary to the general welfare—even though the words “housing” and “shelter” never appear in the state constitution.
In stretching the meaning of words so cavalierly, state courts and legal scholars never say who will actually pay for these new material rights. Typically, advocates brush the problem aside by observing that the United States is a rich country and can afford the bill. Nor do the legal writings and court decisions ever question whether these entitlements establish perverse incentives. They ignore, for instance, how the vast expansion of welfare, starting in the late 1960s, was followed by the emergence of an ingrained, intergenerational poverty, as children born to welfare families became adults heading welfare households.
Constraining state judicial activism won’t be easy. Reform must begin in law schools themselves, where faculties are overwhelmingly liberal and friendly to an activist judiciary (as long as it’s liberal in its activism). James Lindgren of Northwestern University Law School surveyed the nation’s top law schools and found that only 13 percent of professors identified as Republicans. While there’s no simple way to make the law schools less monolithic, much of the power to do so probably resides with school trustees and major donors, who invariably made fortunes in the private sector and who can make their displeasure known. Donors objecting to the leftward slant of law school faculties but still hoping to give should consider supporting institutions within universities—such as the James Madison Program at Princeton—that embrace notions of law and constitutional government more in keeping with the views of the Founders.
State-level reform should focus on judicial selection, a process that varies greatly from state to state. Judicial elections, once among the sleepiest precincts of electoral politics, have gotten far more contentious, thanks mainly to the efforts of special interests, especially trial lawyers, to elect liberal, plaintiff-friendly judges. Only in recent years have taxpayer groups, business organizations, and other reformers begun to recognize the importance of these elections and take campaigns more seriously.
Voters also need to understand the electoral implications in states where governors select judges. Too often, conservative and moderate governors have named judges to their highest courts who wind up being activists. But voters—and those running for high office—are catching on. Chris Christie made reform of the New Jersey Supreme Court—perhaps the most activist and costly court in the nation—a central theme in his successful 2009 gubernatorial campaign, and he has said that restraining the court’s activism may be the most important component of turning around the Garden State.
Without new constraints on state judicial activism, voters can expect more fiscal pain. In the aftermath of the Great Recession, we’ve entered a period of sustained retrenchment of state and local government. Political scientists D. Roderick Kiewiet and Mathew D. McCubbins call it the new “fiscal ice age,” in which the needs of an aging population and workforce will strain budgets for years to come. While the upheaval in financial markets beginning in late 2007 no doubt accelerated the coming of this chill, state courts helped lay the groundwork for it with decades of judicial spending mandates that left governors and legislatures in some states with little fiscal room to maneuver. Unless state judges return to a more cautious approach to constitutional language, states and municipalities will find it ever harder to devise sound budgets.
Photo: Supreme Court Justice William Brennan encouraged state courts to expand economic rights. (AP PHOTO)