Senate President Steve Sweeney on May 31 introduced legislation (S-2) that would modify the state’s school funding statutes, changing the 2018-2019 state aid allocations proposed in the governor’s recommended budget. Those figures were transmitted to school districts in March.

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.

The bill has not yet been scheduled for consideration by the Senate Budget and Appropriations Committee, which has been deliberating over the proposed state budget.

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, 184 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.

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.

The Senate Budget and Appropriations Committee could meet again as early as next Monday. NJSBA is currently reviewing S-2 and will provide further information in School Board Notes.