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No Fast Fixes for New Jersey’s Deeply Flawed School Funding

Is your district getting all the aid that’s coming to it, or is it one of many that’s being shortchanged?

No one is happy with the way New Jersey funds its schools, thanks in part to a state aid system that has become badly distorted in recent years. Some districts, are awarded more aid than they should be under the state formula, while others are consistently shortchanged. (Use our interactive database to see if your district is getting more aid — or less — than it should.)

Many experts say the system is unfair and outdated — and that now is the time to redress its shortcomings.

A recent proposal by Gov. Chris Christie to level funding across the state has electrified the debate. Politicians from wealthy — and some not so wealthy — suburban towns are cheering the idea, while others accuse the governor of pulling a political stunt.

The Christie proposal is also complicating a new effort led by state Senate President Stephen Sweeney and Senate Education chair Teresa Ruiz to reform the school-funding formula, which was developed eight years ago but never fully implemented.

Christie is calling for sending districts a flat $6,599 in state aid for every pupil, without additional help for poor districts. To avoid being blocked by the court, he would need a constitutional amendment, which is unlikely to get past legislative Democrats. Yet the proposal has spurred vigorous dialogue and drawn support in suburban districts where it would boost school funding and potentially allow reductions in property-tax bills.

Disadvantaged urban districts, which receive much higher amounts of per-pupil aid due to the state Supreme Court’s Abbott rulings, would see huge cuts that education officials say would be devastating for their students.

Even some who doubt the feasibility of Christie’s “fair funding” proposal say it at least has drawn fresh public attention to basic flaws in the way the state distributes aid. Sweeney (D-Gloucester) and Ruiz (D-Essex) have proposed a competing approach that aims to adjust the state-aid formula to make it more fair, as well as pump hundreds of millions of new dollars into schools. (Use our interactive database to see if your district is getting more aid — or less — than it should.)

Trying to follow the money

New Jersey has struggled for decades to properly fund its schools. Starting in 1985 the state Supreme Court made several Abbott rulings requiring additional aid for poor urban districts, and in 2008 the School Funding Reform Act (SFRA) created the current formula in an effort codify compliance and end court oversight.

Money is supposed to follow the student and track enrollment. The formula considers if local taxpayers are contributing their fair share — which is based on property values and income level — and if a district’s spending matches its “adequacy budget.” The adequacy budget is based on a per-pupil figure, which is higher for high school students, special-education students, English-language learners, and at-risk low-income students.

The state provides “equalization aid” to make up the difference between the fair-share taxes that a community can afford, and the district’s adequacy budget. The law grants separate, additional funding for special education, transportation and school security, and most districts get small amounts of PARCC readiness and per-pupil growth aid.

Adjustment Aid was included in the formula to ensure districts did not experience sudden large cuts when the new formula went into effect; it was supposed to start going away after three years. The law also has a cap setting the maximum percentage a district’s aid can increase per year.

The formula was run and funded for one year. Then the recession hit, Christie was elected, and he cut education aid overall by $1 billion (though half of that was eventually restored to Abbott districts). Legislators blocked the planned phase-out of Adjustment Aid in order to continue pegging total aid to affected districts to 2007-2008 levels.

In other words, districts like Asbury Park that happened to be slated for cuts in 2008, and that got Adjustment Aid as a result, have continued to get it -- regardless of how their enrollment, student demographics, or fair-share levels have changed since then. Districts like Bayonne, which did not qualify for Adjustment Aid in 2008, have never received it, even if they became poorer or saw their enrollment surge.

As a result, state aid levels vary from district to district in ways that often make no sense, since they are tied to 9-year-old demographics. The administration has tried to fix aid allocations, but without success. In 2012 then-Education Commissioner Christopher Cerf criticized Adjustment Aid as a subversion of the state’s carefully crafted funding formula, calling it a “political add-on” resulting from the legislature’s refusal to “make hard choices.”

How does this hodgepodge of rules and regulations and patches and exceptions play out in the real world?

One of the worst-off districts is Bayonne, where the $122 million school budget is about $51 million below the “adequacy” figure the state calculates is needed to provide students with a proper education. The district receives $53.5 million in state aid, only half what it would get if the formula were fully funded. Aid has barely increased in the past eight years, despite the district’s steady enrollment growth. It gets no Adjustment Aid.

At the same time, Asbury Park, an Abbott district that is much smaller than Bayonne, receives $55 million a year, including $24 million in Adjustment Aid -- 172 percent of what the formula says it should get. Local taxpayers contribute only 40 percent of their “local fair share,” the amount the state calculates they can afford, compared to 75 percent in Bayonne.

“The real issue is, why are there districts receiving more than 100 percent of their aid, and why are there districts receiving significantly less than 100 percent?” said G. Kenneth Greene, the superintendent in Newton and a vocal proponent of changing Adjustment Aid distribution.

Greene says his district in Sussex County gets just 56 percent of its full formula aid, and has only achieved an adequate level of spending by persuading residents to accept a tax levy that is 144 percent of the district’s calculated fair share. (Use our interactive database to see if your district is getting more — or less — than it should.) (Use our interactive database to see if your district is getting more aid — or less — than it should.)

Competing plans

One set of criticisms of the way state aid is distributed comes from urban districts and the Education Law Center, which brought the Abbott lawsuits against the state. ELC director David Sciarra said in an interview that the organization is considering suing the state again, because the Abbotts have been flat-funded for several years and are not receiving all their formula aid, which would appear to violate state Supreme Court mandates.

To partially address the underfunding, as well as Adjustment Aid and other issues, Sweeney has proposed a commission that would revise the formula and offer a set of changes to the legislature for an up or down vote. He would also increase education aid $100 million a year for five years, which by the end would provide perhaps half of the additional money needed to fully fund the present formula.

An opposing set of critics argues that the Abbott program has failed to significantly improve student achievement in cities like Newark and Trenton, while starving non-Abbott districts and forcing them to hike property taxes. Sen. Mike Doherty (R-Warren), Assemblywoman Holly Schepisi (R-Bergen) and others have for years argued that money should be taken from the Abbotts and given to other districts, and Christie recently surprised everyone by adopting that position and aggressively promoting it.

The administration has touted support for the “fair funding” proposal from mayors, freeholders, and other elected officials eager to see lower property taxes in their towns. One of the only educators to strongly endorse the plan is North Brunswick superintendent Brian Zychowski, a longtime ally of the governor who was once considered for education commissioner.

North Brunswick taxpayers contribute 106 percent of their fair share to the schools, but the district is still only at 72 percent of adequacy. Zychowski said it would receive $30 million more in aid if the formula were fully funded. Under Christie’s plan, the district would get an additional $17 million, more than doubling per-pupil aid. If the new money went directly to tax relief, the average taxpayer would save $1,862 a year.

“I'm excited for my district, and the taxpayers in my town, who have been paying more than the local fair share,” Zychowski said. “It's welcome news.”

North Brunswick schools are overcrowded and the district needs to build more schools, especially in light of a large new housing development planned for the town center. Zychowski suggested that giving residents a tax cut might make it easier to win their approval for construction bonding. Voters last year rejected a referendum to build two schools.

Zychowski said he was also interested in Sweeney’s plan, though he did not know how the cash-strapped state could come up with $500 million. He acknowledged that Christie’s proposal would sharply reduce funding to a number of districts, but said the cuts could be phased in over time as those districts work to become more efficient. While he’s “100 percent” behind the governor’s effort to help districts like his, he could also see the legislature enacting a compromise plan, he said.

“If they redistribute money, there will be winners and losers in terms of current aid received,” Zychowski said. “And those receiving less, I'm confident that the state of New Jersey is not going to just turn its back on them, that there will be some type of transition.”

Fears of destruction

As presented, however, Christie’s plan does not include any provision for helping disadvantaged districts. It would continue providing extra aid for special education students, but end higher spending for English-language learners and at-risk children receiving free and reduced lunches.

The Trenton school district, for example, would see its per-pupil aid slashed 71 percent. Like other Abbotts it has already been flat-funded for three years, contributing to a budget deficit that recently led to 164 layoffs. More than 90 percent of the district budget comes from the state, so a huge property tax increase -- far exceeding the state’s 2 percent cap -- would be required to make up even a small part of the cut.

“The governor’s proposed funding plan would further destroy the Trenton schools, which rely heavily on New Jersey’s current funding mechanism, which is weighted to provide resources based on student needs,” the district said in a statement. “The deleterious impact of the governor’s plan would undoubtedly result in the loss of instructional staff including teachers, aides and guidance counselors.”

At a forum hosted by Sweeney last week, superintendent Anna Belin-Pyles of Plainfield pushed back against the implication that Abbott districts like hers should be able to educate their students at the same cost as wealthier suburban districts. Many urban students live in poverty and require much more intensive help if they are to have a chance at success, she said. Plainfield has a 23 percent poverty rate, and 35 percent among children.

“When you say, why aren't these districts able to educate their children at the same level as suburban districts or other communities, it's apples and oranges,” Belin-Pyles said. “There are totally different needs, totally different elements that must be considered in the funding formula, in terms of supports that are needed.”

Christie’s office recommended several superintendents for interviews about his plan. The two that were available to talk were Zychowski and Carol Fredericks of Franklin, a small K-8 district in Hunterdon County.

Franklin’s taxpayers provide 95 percent of local fair share, and would get an average property tax cut of $1,941 under the adminstration’s plan. But Fredericks, who has also worked in Paterson, Atlantic City, and other districts, said she found the idea of her community benefiting at the expense of city children “very troubling.”

“In New Jersey, we have the idea of equity, not equality. The notion of equity is that you use what resources are required at the starting point for every child to get to the finish point. Some children, to get to the finish point, require more resources than others,” she said. “What the governor is proposing is equality. I like equality, but I have concerns that for special-needs populations, equality won't reach an equitable outcome.”

Fredericks said she agreed with the governor that money alone will not improve urban schools, but she would not say that the money is not needed. She also likes the idea of making the aid formula less “freakishly complex,” so that the average taxpayer could better understand how it works, she said.

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