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The State of New York faces a major challenge stemming from a 2003 ruling by the Court of Appeals, the State’s highest court, which found that the more than one million children in New York City’s public schools were not provided with the sound basic education guaranteed to them by the State Constitution. The report concludes that: 1) The State, rather than local school districts, should be responsible for raising additional funding, and the State should play a larger role than it does now in raising the money already being spent on public schools; 2) If less than $3.2 billion is needed, the State can avoid tax increases by (a) using current public school resources more efficiently and (b) generating non-tax revenues from expanded State-regulated gambling activities; and 3) If the remedy requires more than $3.2 billion annually, then taxes will need to be increased. In line with these conclusions, the report offers five recommendations.