Next year’s state aid to public education remains unresolved as Gov. Phil Murphy and legislative leaders negotiate over the 2018-2019 budget.

In late May, Senate President Steve Sweeney introduced legislation, S-2, that would modify New Jersey’s school funding statutes, changing the 2018-2019 state aid allocations proposed in the governor’s recommended budget. Allocation of state aid is a central element of the budget negotiations. At publication time, neither the Legislature nor the governor’s office have indicated a resolution on school funding or the status of S-2.

Supports Overall Goal In a statement issued this week, NJSBA Executive Director Dr. Lawrence S. Feinsod expressed support for the principle behind the legislation.

“The New Jersey School Boards Association supports the overarching goal of Senate Bill 2, which is to provide relief to the two-thirds of the state’s school districts that have been under-funded,” he said.

“The state’s inability, or failure, over the past decade to run the formula under the School Funding Reform Act has led to the severe underfunding of many school districts,” Feinsod continued. “This contradicts the philosophy at the foundation of the SFRA, namely, that state funding should follow the child.”

Last month, the New Jersey School Boards Association’s Delegate Assembly adopted a new policy expressing the belief that state aid should be based upon the most recent and available student population data—without any caps on the aid increases that would result from enrollment growth.

“S-2 is consistent with that belief,” said Feinsod. “The legislation is also consistent with our policies on equitable division of state aid and the need for communities to contribute a ‘fair share’ toward the education program.”

Concern about Cuts in Aid While S-2 would be a first step in resolving long-standing issues of under-funding for the majority of the state’s school districts, Feinsod noted that, as now written, the bill would result in aid cuts to others.

“NJSBA policy opposes state aid cuts this late in the budget process,” he said. “We are disappointed in the timing of the potential state aid cuts for 2018-2019, which would come long after the deadline for the adoption of school budgets. At this juncture, it would be challenging for districts to make adjustments to educational programs.

“We are pleased to hear that the Legislature has developed a plan that could enable all districts to plan strategically for future year adjustments in aid.”

Provisions of S-2 As now written, the bill would immediately repeal the statutory caps on annual school aid increases that would result from a district’s enrollment growth. It would also phase out adjustment aid, a hold-harmless provision, over a seven-year period starting with a 5 percent reduction in 2018-2019.

Approximately two-thirds of the state’s school districts are considered “underfunded” due to the enrollment growth caps and because state aid allocations have not reflected student population growth since the current school funding law was enacted in 2008. In addition, over 180 districts receive adjustment aid, a statutory provision designed to prevent aid reductions when the school funding system was implemented, but which the Legislature originally intended for phase-out.

As reported last week, S-2, as now written, would provide a five-year, rather than a seven-year, phase-out of adjustment aid for Jersey City. This provision is related to legislation that would allow Jersey City to implement a 1 percent payroll tax on citizens who work within its borders. That bill, S-2581, was approved by the Senate Budget and Appropriations Committee on June 4.