B . D e f e n d a n t s ' A s s e r t e d " S u b s t a n t i a l L e g i t i m at e J u s t i fic at i o n s " The plaintiffs having made out a prima facie case, the burden of persuasion now shifts to defendants to demonstrate a substantial legitimate justification for its system of distributing school funding. As noted above, the State's justification must be related to "educational necessity," that is, it must bear a "demonstrable relationship to classroom education." (Georgia State Conference v Georgia, 775 F.2d 1403, 1417-1418, supra.) 50 Defendants articulate four broad justifications for the disparate impact caused by the distribution of State school aid. First, [187 [187 Misc.2d Misc.2d 110] 110] defendants argue that school funding formulas are wealth-equalizing and New York City is a relatively more affluent school district. Second, they argue that directing funding according to districts' average attendance, rather than to enrollment, is related to the State's legitimate objectives of encouraging districts to keep attendance up and discouraging their inflation of enrollment figures. It is undisputed that the City is harmed by using attendance, rather than enrollment, as the benchmark, because it has a higher than average truancy rate. Third, defendants argue that distributing transportation and building aid on a reimbursement basis, which has historically harmed the City, is justified. Fourth, defendants argue that their formulas take student need into account. This final justification may be disposed of summarily. The court has already found that New York City does not receive State aid commensurate with the needs of its students and that it in fact receives less State aid than districts with similar student need. Defendants claim that wealth equalization is "the principal explanation for NYC's receipt of lower aid per enrolled student than the average in the rest of the State." 51 The court finds that wealth equalization, when properly implemented, can be a valid goal for State school aid. By attempting to compensate for differences in district wealth, wealth equalization may be an important component of a school funding scheme that assures the delivery of a sound basic education. However, as implemented, the State's efforts at wealth equalization do not further this substantial legitimate purpose. There are two principal reasons why this is so. First, wealth equalization can do actual harm, where, as is the case in New York State, it is not coupled with funding mechanisms that effectively take account of differences in districts' student need. It may be generally true that a district's wealth is inversely correlated with its percentage of at-risk students, but that generalization does not hold for New York City. New York City, though it is treated by State funding formulas as a relatively wealthy district, has a very high concentration of at-risk students. Its public schools serve a relatively small proportion of middle- to upper-class children. Most of its students come from poor and working-class families, [187 [187 Misc.2d Misc.2d 111] 111] and many of these children are at risk of academic failure. The State's school funding system does not adequately account for the needs of such children. This is one of the great failings of the State school financing system. The State Education Department has long documented the misalignment of resources in its needs/resource capacity index, which is discussed above. Based on a comparison of districts according to their needs/resource capacity index ratios, SED has determined that New York City receives substantially less State aid than districts with similar needs. Second, as described above, defendants' measure of wealth is inaccurate because it does not account for differences in regional costs. School districts face significant variation in costs incurred in delivering educational services, which in turn affects their ability to pay for various educational inputs. In 1999, SED noted the long-standing recommendations made by various blue ribbon panels to include regional cost estimates in the State aid formulas and concluded that "[t]he failure to explicitly recognize geographic cost differences within the major operating aid formulas has led to formula allocations which are inequitable." SED has quantified these differences in regional costs. New York City's regional cost ratio is the highest in the State, which means that a dollar buys fewer educational resources in New York City than anywhere else in the State. This failure to include estimates of regional costs in its assessment of wealth compromises the State's wealth equalization scheme. For these reasons, defendants have demonstrated that wealth equalization in school funding, in the abstract, is related to legitimate educational objectives. However, plaintiffs have demonstrated that this objective is not served in practice by the State's current school funding mechanism. It would be more effectively served by an alternate school funding mechanism that accounts more completely for student need and regional costs. Defendants' defense of basing State funding on districts' average attendance, rather than enrollment, suffers from similar flaws. The State argues that keying State funding to attendance encourages districts to keep attendance levels high. The goal is laudable; the State's implementation of the goal is counter-productive or worse. There is no question that a student's regular attendance at school is a prerequisite to a sound basic education. As SED has repeatedly recognized: Attendance is critical to teaching and learning. Poor attendance is statistically linked to low achievement. Schools with low attendance rates tend to be in urban areas, have large numbers of students on free or reduced lunch and high minority composition * * * Poor attendance is often a signal that a student is disengaging from involvement in school. This disengagement can begin with not paying attention in class, can move to class cutting, and can end up in truancy. It can be caused by low self-esteem, poor instructional programs, fear for personal safety and lack of meaningful activities or relationships with others. Family environment and lack of parental encouragement can also contribute to attendance problems, as can health-related conditions, such as asthma. The evidence demonstrates that at-risk students have much higher rates of truancy. Accordingly, New York City, with its high percentage of at-risk students, has a lower average attendance rate than most districts in the rest of the State. Lower attendance rates do not reduce New York City's obligations, however. The City is still required to provide space and staff to serve all enrolled pupils. This is a source of disparate impact. The State's choice to base school funding on districts' average attendance is unnecessarily punitive. It creates a perverse direction of State aid by directing aid away from districts with large numbers of at-risk students. The evidence at trial demonstrates that at-risk students require a higher level of intervention to ensure attendance. As is clear from the facts recited in this opinion, the vast majority of the City's at-risk students do not receive such services and instead are placed in schools lacking basic resources necessary for a sound basic education. In part because of the State's insistence on attendance as a guiding measure of school aid distribution, the City is denied the resources it needs to provide a sound basic education. Modifying State aid formulas to give some consideration to enrollment and at-risk factors would result in less racial disproportionality than the