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Sweeney, Prieto Agreement Adds $125M to School-Funding Formula

Embattled Democratic leaders shake hands on a deal, but will Christie and the rest of the Legislature buy into their vision?

sweeney-prieto
Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Vince Prieto (D-Hudson)

Yesterday’s announcement of a deal among Democratic leaders to provide an additional $125 million in state aid for public education has settled at least one political battle.

But the defining one will come next, whether Gov. Chris Christie and the other key players will go along. And that’s just one of the big questions facing what until recently was among the biggest uncertainties of the budget season.

The agreement between State Senate President Steve Sweeney and Assembly Speaker Vincent Prieto is no small thing. The two Democratic leaders had been at odds over how to address the school-funding gaps, with little concord and plenty of acrimony between them.

But the agreement, finished midday yesterday after a 7:00 a.m. start to negotiations, calls for a net increase of $125 million in aid overall, divided up in ways that appear to appease both sides — at least for now.

How it adds up is complicated. A total of $146 million in additional aid would go to nearly 400 school districts that have been underfunded for nearly a decade under the state’s school-funding formula, a down payment on a close to $1 billion gap.

Paying for some of that, $46 million would be cut from districts that are receiving more than the formula requires, in part propped up by so-called adjustment or hold-harmless aid — leaving a net increase in K-12 aid of $100 million.

And the final piece is an additional $25 million for preschool expansion to an undisclosed number of districts, a favorite cause among Democrats of all stripes.

“This agreement is a landmark first step toward restoring fairness to the School Funding Reform Act for schoolchildren and taxpayers, and ensuring that every student receives the ‘thorough and efficient education’ promised by the constitution regardless of where he or she lives,” said Sweeney in the announcement.

Prieto added, “This is the type of compromise the Assembly was looking for — one that does not hurt children while providing immediate relief to the most troubled school districts, beginning the work of fairly adjusting school aid and making a major investment in preschool education.”

But even while the Democrats are celebrating the breakthrough, there are plenty of questions to be resolved, from the obvious to the intricate. (We’re sure you have questions as well. Use our interactive tool to tell us what they are.)

Will Christie agree?

A governor who just a year ago called for the destruction of the school-funding formula is now being asked to go along with a plan that not just reinforces it but adds money to it.

Christie is more than aware of the Democratic talks, and has even been part of them to a degree. He issued a challenge in his budget address three months ago to reach a deal in 100 days, and while that deadline passed, he has met several times with Sweeney and Prieto.

And the Democrats’ budget proposal does partially address one of Christie’s prime complaints that state aid as now distributed is hurting too many suburban districts.

Nonetheless, Christie faces a budget with little money to spare, and where he and the Democrats can find $125 million is a serious question itself. Will there be extra money if a deal is reached to use the state lottery to help defray pension costs? Or will it come from the enhanced tax collection that was promised with the latest revenue numbers?

And does Christie want to put new money into what for him is an old problem? In his last year in office, the budget is one of the few places he can make a final stand. The governor’s office last night did not respond to a request for comment.

Who are the winners and losers — and by how much?

Political deal-making in New Jersey often comes down to who wins and who loses?

The clearest winners would be the 380 districts that would see at least some increase in state funding, with Democrats saying it would favor most those who are most underfunded.

And they maintain that it would not be just suburban districts, but a cross-section that serves a wide range of needs, urban and suburban.

The losers are the trickier part, and the one that has held up any agreement until now. Drawing down money from overfunded districts receiving adjustment aid would take particular aim at Jersey City and Hoboken, the two highest-profile districts, but 200 districts overall receive at least some of the extra aid that totals more than $700 million a year.

The announcement yesterday said that no district would lose more than 1.5 percent of its operating budget under the deal, but that could still be a sizable hit, especially after budgets have been struck and the new fiscal year is only weeks away.

Democrats said a district-by-district list could be ready as soon as today, and that should prove a telling moment for how many others in the Legislature will go along.

What’s the long-term fix?

Even if this agreement makes it into the fiscal 2018 budget, it is only a first payment addressing a gap that has been a decade in the making. Will the Democrats seek to cast it in the language of the budget bill itself, or will they address it in separate legislation — opening up a new round of potential deal-making and infighting?

One key player is the New Jersey Education Association, the powerful teachers union that sided initially with Prieto in protecting school districts from any cuts. The union was not happy last night, releasing a statement that the agreement is at the expense of districts facing last-minute decreases and taking aim at especially Sweeney, a frequent target these days.

“We remain firmly opposed to any school-funding changes that take money away from New Jersey’s children,” said Wendell Steinhauer, the NJEA president. “They were not the ones who created our school funding problem, and we will not stop fighting to protect every student, in every district, from Steve Sweeney’s sick scheme.”

Another central player will be the next governor, whether it’s Democratic candidate Phil Murphy or Lt. Gov. Kim Guadagno, the Republican nominee.

Murphy has made closing the funding gap a campaign priority, but would he buck the NJEA — a big supporter and benefactor — in allowing cuts to some districts? And Guadagno has largely followed Christie’s path in opposing the funding formula as a whole.

All in all, a number of questions will be answered in the next few weeks, as the governor and the Legislature make their final budget dance. And as expected for quite some time, school funding will be at the center of it.

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