New Jersey public schools: a bottomless money pit


A new study by the Common Sense Institute of New Jersey, Misleading the Taxpayer: The Per-Pupil Expenditure Dilemma, confirms what some analysts have been asserting for years, namely, that the real per-pupil costs of New Jersey’s public schools are understated.  In fact, the actual cost per pupil is as much as $14,000 more than the official data show.  In other districts, the discrepancy is much less.

As the CISNJ study reports, “In 2010, New Jersey‘s local, state, and federal expenditures for its public Pre-K–12 system totaled $24.1 billion dollars…”  Yes, thanks to one of the Supreme Court’s Abbott decisions, New Jersey has to pay for pre-K schools in so-called at risk districts even though the state constitution does not require public funds for such expenditures.  In short, the Supreme Court overstepped its judicial duties by imposing on the taxpayers of the state a new financial mandate.

Nevertheless, with funds coming from three levels of government, it is no wonder school districts even though they are abiding by the letter of the law regarding financial reporting of per pupil costs, can provide inaccurate data to taxpayers who use this information to vote for or against annual school budgets.  How is this possible?

In New Jersey, the primary method to pay for public schools in most districts run by local school boards comes from local property taxpayers.  However, in 1976, the constitution was amended to allow the state to impose an income tax to help lower the burden of property taxes.  Since then, both tax rates and property taxes have soared.  In fact, as the CSINJ study reveals, “The U.S. Census Bureau reports that New Jersey spends 54.9 percent more per pupil than the national average: $16,271 vs. $10,499.”  In addition, when federal funds are added in, there is a hodgepodge of forms to fill out for the feds and the state, which underreport the actual cost of public educaiton.

Despite all the “reforms” by governors of both major political parties and Supreme Court decisions to increase aid to urban districts, the costs of public education has become a bottomless money pit.

Hence, Asbury Park, which was designated an Abbott District in the Supreme Court’s original decision, officially spends nearly $30,000 per pupil, according to 2010 Taxpayers’ Guide.  The CSINJ audit reveals the actual number is slightly more than $39,000.  Sea Isle City, a non Abbott District school, supposedly spent just under $26,000 per pupil, but CSINJ’s audit reveals the cost is $40,000 per pupil.  In other words, the CSINJ study reveals that school districts, no matter the socioeconomic composition of their students, spend in some cases, thousands of dollars more than the officially published per pupil expenditure.

According to CSINJ, Governor Christie and the Department of Education introduced the Taxpayers Guide to Educational Spending, which was supposed to improve the flawed data provided by the User-Friendly Budget (UFB).  Although the Taxpayers’ Guide is marked improvement over the previous reporting methodology, it still falls short in giving taxpayers an accurate accounting of how much it costs to educate the ‘average” child in New Jersey’s public schools.  

What is the bottom line regarding per pupil expenditures in New Jersey’s public schools?  Expecting politicians to hold the line on spending and having three levels of government pay for the cost of public educaiton creates a financial reporting nightmare and a huge moral hazard.  

Under the current public school structure, all costs of education should be borne by local taxpayers so they could see how their tax dollars are being spent.  Instead, as the CSINJ study argues, with the state picking up the cost of health and pension contributions for current and retired district employees, and in some cases huge capital costs, the real cost of educating the average schoolchild is hidden from taxpayers’ views. 

Although greater financial transparency will provide taxpayers with accurate information so they can make an informed decision about voting for or against school budgets, the real bottom line is that education is to important to be left to politicians. 

The best way to deal with the soaring costs of public education is to liberate taxpayers from the bottomless money pit and liberate children, teachers and parents from the “trickle down” philosophy, which is paying billions of dollars for failure in many school districts across the state.  This would require a totally new way of looking at education–an overhaul the poltical establishment and entrenched interests do not want to consider.  Meanwhile, school costs keep going up and more chilldren are being left behind in becoming life long learners.

Murray Sabrin is professor of finance at Ramapo College and blogs at


  New Jersey public schools: a bottomless money pit