The evidence demonstrates that the State aid distribution system is unnecessarily complex and opaque. It is purportedly based on an array of often conflicting formulas and grant categories that are understood by only a handful of people in State government. Even the State Commissioner of Education testified that he does not understand fully how the formulas interact. However, more important than the formulas' and grants' needless complexity is their malleability in practice. The evidence at trial demonstrated that the formulas do not operate neutrally to allocate school funds—at least with respect to annual increases in State aid. Rather the formulas are manipulated to conform to budget agreements reached by the Governor, the Speaker of the State Assembly, and the State Senate Majority Leader. The court emphasizes that a process in which the final allocations to the State's school districts is determined by three elected officials is not inherently unconstitutional. Rather, it is the fact that the State's school funding mechanism has failed for more than a decade to align funding with need—and thus has failed to provide a sound basic education to New York City's school children—that runs afoul of the Education Article. 1 . S t at e F u n d i n g F o r m u l a s a n d C at e go r i c a l G ra n t s In 1999-2000 New York State used approximately 50 different formula-based aids and categorical grant programs to distribute the $12.5 billion allocated to the State's public schools by the Legislature. As in past years, the formula-based aids constituted approximately 95% of State aid, while categorical grants constituted the remaining 5%. The individual formulas generally consist of several components that may include a base amount, a student count, a weighting factor and additional multipliers. For each type of aid, these components are combined together, with one or more mathematical calculations, to determine the amount of aid generated for each district. Such formulas exist for each type of aid. As a result the entire State aid distribution is extremely complicated. SED's description of all the formulas extends to [187 [187 Misc.2d Misc.2d 84] 84] 59 pages. The State Division of the Budget's explication of a single formula can require several pages of dense calculations. Basic Operating Aid, the largest State aid program, illustrates the complexity and arbitrariness of the State aid formulas. SED's description of the Basic Operating Aid formula requires three and a half pages of single-spaced text and mathematical formulas. Operating Aid is distributed according to a complex formula which involves four components: (1) a "fixed sum" for calculating the maximum district expenditure for which State aid will be calculated, (2) a "ceiling adjustment," which permits a small second tier of aid above the basic expenditure ceiling, (3) a "state operating ratio," and (4) a "selected total aidable pupil unit (TAPU)" for payment. TAPU, which is a weighted student count, appears in several State aid distribution formulas. It begins with an attendance-based student count and adds "weights" for additional student characteristics. For example, TAPU includes a weight of .25 for a category of at-risk students called "Pupils with Special Education Needs." There was no evidence in the record that the TAPU weightings bear any relation to actual student need. In addition, TAPU is based on a district's attendance, rather than its enrollment figures. Since districts with large numbers of at-risk students will have higher absentee rates, this aspect of TAPU harms schools with high concentrations of poor and minority students. Even State aid formulas that purport to address specific needs do not in fact attempt to measure or prioritize the needs of different districts or the actual costs of addressing these needs. For example, Class Size Reduction Aid for 1999-2000 includes a complex formula that estimates the number of kindergarten classes needed as "the positive result of 1995-1996 full-day and half-day enrollment divided by 20 minus such enrollment divided by a district's 1993-94 average kindergarten class size." The basic grant per classroom uses the 1994-1995 median teacher salary. New York City is phased in using a lower percentage (0.187) than either the other "Big 5" school districts (0.333) or school districts in the rest of the State (0.400). There is nothing in the record that demonstrates that any of these factors are related in any way to the actual cost of reducing class size. So-called "transition adjustments" also distort the operation of State aid formulas. Transition adjustments are used either to increase or decrease the amount of aid that a district is entitled to receive pursuant to the terms of a particular [187 [187 Misc.2d Misc.2d 85] 85] formula. There are two types: (1) "caps" that limit any increase in funds to a fixed percentage determined independently of the operation of any particular aid formula, and (2) "hold harmless" provisions that prevent districts from losing State aid from one year to the next through operation of the aid formulas. Transition adjustments have had an impact on the distribution of State aid. In 1997-1998 SED determined that due to caps or hold harmless adjustments, only 12.8% of districts in the State received the aid that they would have been entitled to under the formulas in the absence of the transition adjustments. Defendants are correct that in recent years fewer aid categories have been subject to transition adjustments. Defendants' expert James Guthrie, a professor of public policy and education at Vanderbilt University, demonstrated that transition adjustments amount to less than 6% to 7% of total State aid. Nonetheless transition adjustments have a significant impact on yearly increases in State aid and permit the State to direct millions of dollars in resources without regard to its aid formulas. Defendants defend the State aid distribution system by stating that it serves several legitimate State purposes. Principally, defendants claim that the distribution of aid is equalized, so that relatively poor districts receive more aid than relatively wealthy districts. Additionally, defendants claim that the system is responsive to student need. Defendants are correct that the State aid distribution system is equalizing in that aid is generally distributed in inverse relation to wealth. As measured by the State's combined wealth ratio (CWR), which gauges a district's income and property wealth, New York City is a relatively wealthy district and for this reason sees its share of State funding somewhat depressed. By definition, a CWR of 1.0 identifies a district of "average" wealth, but the index number would not fairly disclose where a district in fact lies within the distribution of all districts in the State. In 1995-1996 only 232 school districts out of 683 in New York State had CWR's of 1.0 or greater—in other words the school district wealth distribution is so skewed that only about one third of the State's districts were of average or greater wealth. New York City's CWR of .985 for 1995-1996 ranked it 237th, wealthier than 65% of the districts in the State. However the evidence indicates that CWR overstates New York City's wealth. First, CWR and other formula components that purport to account for