The New Jersey School Boards Association has called on the Legislature to develop a final budget that will address the needs of underfunded school districts without negatively affecting the education of any student.

The Senate and Assembly leadership last week announced a plan that would provide $146 million in additional aid to underfunded school districts and would reduce hold-harmless (“adjustment”) aid in districts considered to be “overfunded.” The plan includes $100 million in new state aid for underfunded districts; $46 million through a reduction in adjustment aid to “overfunded” districts; and an additional $25 million to expand pre-school education.

The Office of Legislative Services has prepared a state aid print-out, showing the impact of the proposal on each school district. (Adjustment aid reductions would be limited to an amount equal to 1.5 percent of the district’s total budget, according to the legislative leadership.)

“The New Jersey School Boards Association believes that increased state aid is vital to school districts that have experienced increases in enrollment and must expand their programming to meet the educational needs of their students,” said Dr. Lawrence S. Feinsod, NJSBA executive director. “We commend Senate President Steve Sweeney for his commitment to helping underfunded school districts. However, NJSBA cannot support the provision of the plan that would reduce state aid to certain school districts, especially at this stage of the budget cycle.”

“School districts have built their budgets around the state aid allocations announced by Governor Christie in February,” he continued. “Those budgets have undergone public hearings and review by local boards of education. Local school tax levies reflected in those budgets had to be finalized on May 19. Reductions in adjustment aid at this point may result in program and staff reductions. This will only hurt students.”

Sweeney Statement In announcing the proposal, Sweeney said that the governor had not been part of the negotiations. Rather, this was to be considered a fulfillment of the governor’s challenge in his February budget address to address school funding. In response, the governor’s office said he “is willing to consider the proposal, but he has some concerns about fairness.”

According to Sweeney, this is the first step in a five-year plan to bring the School Funding Reform Act (SFRA) to full funding. The plan includes the injection of $500 million total in new money, and complete reallocation of adjustment aid over that time; and would include re-adoption of the “Millionaire’s Tax” to help pay for it. Sweeney, however, conceded the tax would not be agreed to by the current governor, and would have to wait until at least next year, when a new governor will be sworn in.

Cause of Underfunding  Enrollment is a major factor in the state’s current school finance system, the School Funding Reform Act of 2008. The amount of state aid to education has been insufficient to cover the full cost of enrollment growth for many years. Additionally, funding has been disbursed with a requirement that no district receive less aid than allocated in the prior year. The situation is compounded by the fact that, on several occasions dating back to the early 2000s, the state did not run the previous school funding formula. As a result, districts with substantial enrollment increases have never received adjustments in state aid as intended by the school finance system.

“We urge the Legislature to develop an appropriations act that will help underfunded school districts, but will not be detrimental to the education of any public school student,” Feinsod concluded.

This article was updated on July 11, 2017 to provide additional information on the cause of the underfunding of districts with substantial enrollment growth.