Stagnant State Funding Remains Overriding Concern for New Jersey Schools

John Mooney | October 30, 2015 | Education
Education commissioner calls for dialogue between state and districts, but offers scant hope for increased aid

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The inaugural year of new online tests in New Jersey schools is getting much of the attention on the education front these days.

But it’s a long-running and familiar story that may have more lasting impact: State school aid has essentially been frozen for five years – and a thaw seems unlikely anytime soon.

State Education Commissioner David Hespe this week gave some of his first comments to date on the status of school funding going into the next budget season, and it was hardly encouraging for districts.

Speaking to school board members and administrators recently at their annual conference in Atlantic City, Hespe acknowledged that state aid has been pretty much stuck at level funding since 2011, following a steep cut in state aid, and not much will change going into 2016.

“The impact of a frozen formula is pretty severe,” Hespe said. “And devoting enough dollars to unfreeze the formula is probably not going to be a possibility.”

He reiterated the administration’s assertion that the state’s actual contribution to education overall is at an all-time high, topping $12.7 billion this year – amounting to nearly 40 percent of the state’s overall budget.

But virtually all of that growth has been in pension and other direct costs, and state aid for schools has barely risen at all in five years after it was cut by $1 billion in fiscal 2011. Most schools are still getting less from the state than they did before Gov. Chris Christie took office, according to legislative staff analysis.

In his talk on Tuesday, Hespe said he hoped state officials and school leaders will start talking about state funding now, rather than waiting until the new year – when the die will already have been cast with the announcement of the governor’s budget plan, including district-by-district aid.

“Everybody in this room should engage on this topic,” Hespe said. “There are difficult decisions to be made and, without your input, we’ll probably end up making the wrong ones.”

While the state cannot meet its obligations under the School Funding Reform Act (SFRA), according to Hespe, he acknowledged that some districts are suffering more than others, including districts with fast-rising enrollments or with spending below so-called “adequacy” level.

Hespe is supposed to present his annual finance report to the state Legislature this fall. His office said yesterday that it is still in the works but will be filed.

The commissioner has hinted that some short-term changes will be needed to address school funding. On Tuesday, he said it may start with providing at least some extra help to the neediest districts. But that would likely mean funding losses for other districts in what is becoming a zero-sum game, at least for the foreseeable future.

Hespe, in a brief interview, said he would like to run the SFRA formula at some level for fiscal 2016 to try to even out the widest disparities.

“We may not be able to do that,” he said. “But I’d like to have these conversations in October, and normally when they start in February, it’s too late.”

He acknowledged that as some districts see increases, others may have to lose aid.

“That is really the bottom line in these conversations,” he said. “These are all conversations we need to be having, and I would rather start them now than in February.”

The timing comes with political – and legal — implications.

The politics includes a governor running for president, with his next state budget coinciding with the first Republican primaries. What’s more, Democrats and Republicans alike – including some in the Legislature — are gearing up for New Jersey’s gubernatorial election in 2017.

[related]The legal implications include the long-running Abbott v. Burke litigation that requires the state to keep up its funding for its neediest urban schools, including the four school districts under at least partial state control.

In addition, a second case now in the appellate court – Bacon v. N.J. Department of Education — seeks to address finances in some of the state’s neediest rural districts.

Michael Vrancik, the chief lobbyist for the state school boards association, said after Tuesday’s talk by Hespe that a time of reckoning is clearly on the horizon.

“I think everyone is aware of the fact that the method of funding needs to be examined,” Vrancik said in an interview. “There is the potential for big swings for individual districts, but we need to know who they are. It is high time to move to the next level and have some real public discussions.”