Understanding Changes to School Funding Formula

By Vin Gopal

The state aid school funding numbers the governor released last week were a step toward making funding more equitable, with nearly 70 percent of New Jersey’s school districts seeing an increase in state aid. This shift brings much-needed stability after years of volatility, ensuring that districts can better plan their budgets and continue providing quality education for students.

For the past several months, our team has been working on legislation that would create new guard rails around the state’s school funding formula and we’re thrilled to see Governor Murphy propose similar mechanisms in this year’s budget. In announcing the funding numbers, the administration proposed capping cuts in state aid at 3 percent while capping increases at 6 percent.

Part of the problem in predicting school budgets and state aid in recent years is caused by a confusing element of the school funding formula for calculating a school district’s local fair share. Sharp year-to-year changes in local fair share calculations can be blamed for much of the formula’s volatility, which is why the proposal also calls for using a three-year average of local property values in calculating a district’s local fair share. These guard rails are welcome changes to the formula, but we still have a long way to go.

The Legislative District 11 team has been working on legislation to correct many of the longstanding issues with the state’s school funding formula. The Governor’s proposals, in many ways, mirror that legislation, which also takes steps to make the formula more dynamic.

Every three years, the Governor is required to review pieces of  the state’s funding formula and recommend changes through the Educational Adequacy Report. Our legislation proposes a more comprehensive educational adequacy report, allowing every aspect of the formula to be reviewed, and making opportunities for stakeholder input.

We need predictability and transparency and the way to achieve that is to give educators, municipal leaders, and residents access to how the state is calculating aid and how their school district is calculating its budget. Our bill would also change districts’ budget deadlines to give them more time to formulate their budgets in addition to requiring that the Department of Education publish a “user-friendly” overview of each district’s state aid numbers.

Our bill would also initiate an immediate review of the state’s “census-based” method for funding special education and convene a task force to propose a fairer alternative.

With significant uncertainty surrounding federal education dollars, these changes will provide much-needed stability to New Jersey’s school funding streams. No school should have to build a budget while uncertain about how much aid they will receive. We remain committed to working with local school officials to bring more fairness and accountability to the funding process so that every student in New Jersey has access to the quality education they deserve in a way that local property taxpayers can afford.