The Work to Fix NJ’s School Funding Formula Has Just Begun

An elementary school class. Duane Prokop/Getty Images

The school funding deal reached during the recent budget impasse is a small step in the right direction. Clearly, New Jersey’s next governor still has much work to accomplish.

The battle over school funding has persisted for decades. Under Gov. Chris Christie, New Jersey has repeatedly failed to fully fund its public schools in accordance with the formula set out in the School Funding Reform Act of 2008. As a result, many school districts are deprived of millions of dollars in state aid each year. In addition, because the formula has not been adjusted for enrollment or demographic changes, many other districts continue to receive more funding than they are entitled to, despite a provision in the law stating that districts facing a loss in funding are entitled to one year of “hold harmless” protection.

The cost of public education accounts for approximately one-third of the state’s budget, making it a subject of frequent debate and negotiation. In his fiscal 2018 budget, the governor proposed $13.8 billion in state aid for schools, which reflected a $523 million increase over the current fiscal year. However, once divided over the state’s approximately 600 school districts, school funding would have largely remained flat and again failed to comply with the SFRA.

After proposing their own competing school funding proposals, Assembly Speaker Vincent Prieto and Senate President Steve Sweeney eventually formed a united front. Their plan called for $100 million in additional school aid. Underfunded schools would actually receive $131 million in aid, with $31 million taken from districts that receive more than the formula requires.

Under the final deal, New Jersey public schools will receive additional public funds. The budget devotes $25 million for preschool expansion. It also provides $25 million in additional extraordinary special education aid to help school districts pay for high-cost out-of-district placements required by a child’s individual education program.

However, while the budget includes additional funding of $150 million, and a reallocation in adjustment aid of $31 million, schools will still receive $2 billion less than what is mandated under the SFRA. In addition, the allocation of funding will also change, creating both winners and losers. Reductions in aid were capped at no more than 2 percent of a district’s total state aid, while increases were also reduced.

In another significant change, districts that will receive less funding can  apply to the state Department of Education for additional financing. “The commissioner of education may use an amount appropriated to the emergency fund to provide to a school district that is experiencing fiscal distress as a result of receiving less state school aid in the 2017-18 school year than the amount received in the prior school year,” the budget states. “The commissioner shall determine the repayment terms, if any, that will be assessed.”

While it is certainly a step in the right direction, the latest budget deal is just a stopgap measure. To provide certainty to public school districts, which are often caught in the middle of budget battles, the state still needs to enact more meaningful education reform. It will be up to the next governor to prioritize education and develop a plan that reflects current enrollment and meets the needs of all students.

John G. Geppert has extensive experience in education law. He runs the public law section at Scarinci Hollenbeck and edits the Government & Law Blog. He currently serves as chairperson of the Education Law Committee of the New Jersey State Bar Association.