A state appeals court on Monday rejected a challenge brought by Lakewood district parents to the school funding formula.

In the ruling, the judges said the real problem in Lakewood isn't the formula, but how the district manages its money.

Public schools there serve fewer than 5,000 students, but the town spends heavily on transportation and special education services for more than 50,000 private school students, mostly from the town's large Orthodox Jewish community.

Now, the court says those costs are draining resources from public classrooms.

Judges pointed to years of low local taxes, fiscal mismanagement, and ignored recommendations from the state.

But lawyers for the parents say the ruling misses the mark, arguing the system can't support both public and private school needs on a public school budget, with plans to take the case to the state Supreme Court, adding to what's already been a more than decade-long fight over the issue.

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