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School Funding in New Jersey

IMPORTANT NEWS


STATEWIDE FUNDING ANALYSES

FY18 NJ School Funding Database
FY18 NJ School Funding Database by Legislative District
FY17 NJ School Funding Database
FY16 NJ School Funding Database 


Everything you need to know about school funding in NJ

NJ Spotlight, 7/25/18


ADVOCACY by the NEWTON PUBLIC SCHOOLS


 

STATE AID INEQUITY IN NEW JERSEY

The following overview of the School Funding Reform Act is excerpted from "Shortchanging New Jersey's Students", Education Law Center, July 2014

In 2008, the New Jersey Legislature enacted the first student-based, weighted formula to distribute state aid to schools called the School Funding Reform Act (SFRA).  It is driven by determinations of the cost of resources for all students to achieve the state’s academic standards. The formula delivers weighted funding based on the number of enrolled students who are disabled, and/or economically disadvantaged, and/or limited-English proficient.

The formula also establishes an “adequacy budget” for each school district that reflects the size, grade configuration, and demographic characteristics of the student population based on weighted enrollment. It represents the cost of delivering academic standards to all students based on the formula’s parameters. The adequacy budget is funded through a combination of local taxes and state aid, based on calculations of a municipality’s ability to pay. 

Unfortunately, the SFRA has been consistently underfunded since its inception. In 2010, the Governor proposed, and the Legislature adopted, a budget for FY11 that cut over $1.1 billion, or almost 15%, in state aid from the SFRA formula. Subsequent budgets have failed to properly implement the law, providing minimal and unpredictable state aid increases. 

The Education Law Center (ELC) maintains data on each district's funding situation, including the following graphic on the Newton Public Schools for FY18:

Newtongraphic


TWO SCHOOL FUNDING PROBLEMS = $2 BILLION

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This funding problem is made up of two components: (a) underaiding (i.e., the state not providing full aid to schools; and (b) inequitable distribution (i.e., allocating what is appropriated in an arbitrary manner).


THE UNDERAIDING PROBLEM

Underaiding is the larger of the two problems. SFRA is legislatively derived and judicially constitutional, but but the state has not funded the formula fully since FY09, and presently provides about 85% of the SFRA. On July 4, 2017, an additional $100 million was appropriated by the Legislature for school aid in FY18 following a state government shutdown. 

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This $1.3 billion in underaiding affects every region of the state in all income groups and at all enrollment levels.

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THE INEQUITABLE DISTRIBUTION PROBLEM

The State has set aside nearly $670 million outside the funding formula to keep every district at FY08 aid levels. This additional money, largely in the form of Adjustment Aid, is not distributed according to the formula. This overaids 38% of NJ's school districts at the expense of the rest and happens regardless of pre-2008 fairness issues, enrollment increases and decreases, or other demographic changes experienced by school districts over the past decade.  The majority of NJ school districts continue to be harmed every year by the status quo distribution.

A simple fact will make the point about inequitable distribution clear and unambiguous: for the FY18 school year, 222 of the state's 591 school districts receive more than 100% of their calculated state aid, while 225 others receive less than 70% of theirs.

How should the State of New Jersey be graded for its current distribution of state aid to schools?

Grade

Percentage of state aid received in FY18

Number of Districts

A+++++

> 130%

150

A++++

124-130%

15

A+++

116-123%

14

A++

108-115%

15

A+

100-107%

28

 

Total above 100%

222

     

A

93-100%

34

B

85-92%

35

C

77-84%

47

D

70-76%

28

F

< 70%

225

 

Total below 100%

369

FAIR LOCAL SHARE?

A related problem is that many municipalities contribute more than their fair share of the school budget through the local tax levy, while others provide much less than theirs.  If communities choose to pay higher taxes to support a more than adequate budget, then that is their right consistent with the standard of local control. 

However, 96 municipalities contribute more than 100% of their fair share of local taxes because they receive less than 70% of their state aid, while 123 others contribute less than their fair share while receiving more than 100% of their state aid.  How is that fair?

How should municipalities be graded for their current local tax contribution to schools?

Grade

Percentage of local fair share contributed in FY18

Number of Districts

A+++++

> 130%

47

A++++

124-130%

36

A+++

116-123%

55

A++

108-115%

64

A+

100-107%

64

 

Total above 100%

266

     

A

93-100%

62

B

85-92%

63

C

77-84%

42

D

70-76%

37

F

< 70%

121

 

Total below 100%

325


THREE IMPORTANT QUESTIONS TO ASK

DOES YOUR SCHOOL DISTRICT RECEIVE ITS FAIR SHARE OF STATE AID?
DOES YOUR MUNICIPALITY PROVIDE ITS FAIR SHARE OF LOCAL TAXES?
DOES YOUR SCHOOL DISTRICT SPEND AT OR ABOVE ITS ADEQUACY BUDGET?

 

For the answers to these questions, click here for the statewide database of all 591 NJ school districts for Fiscal Year 2018 with spreadsheets sorted by the following criteria:

State Aid Ratio (percentage of uncapped SFRA aid received)

Tax Levy Ratio (percentage of local fair share contributed)

Budget Adequacy Ratio (percentage of adequacy budget spent)

Funding Fairness Index (a single metric illustrating funding equity)

You can also access this data sorted for each of NJ's 40 Legislative Districts.


MEDIA COVERAGE OF NJ SCHOOL FUNDING SINCE 2016