Opinion: SFRA’s a Fossil, Abbott’s History — Bring School Aid into 21st Century

Laura Waters | April 1, 2016 | Opinion
Formula overcompensates some school districts while completely ignoring others dire need of more school aid

Laura Waters
In 1991, two German hikers found a frozen body in the Otzal Alps on the Austrian-Italian border. “Otzi,” as he’s fondly called, is believed to have died about 3350 BCE, either of an intestinal parasite or as a victim of ritual sacrifice, his body preserved for over 5,000 years in the icy Tyrolean mountains.

New Jersey’s school-funding formula isn’t quite so old and mummified but, like Otzi, can’t adapt to current climes and is rigidly frozen into postures that don’t address the needs of our school districts. Late last week, state Senate President Steve Sweeney (D-Gloucester) and Sen. Jennifer Beck (R-Monmouth) proposed a modest tweak to our school-funding corpse, formally called the School Funding Reform Act (SFRA). The senators deserve praise for their boldness — any proposed reform to SFRA is politically fraught — and yet their proffered adjustment is hardly enough to resuscitate the old boy’s usefulness in addressing fiscal equity in a rapidly changing educational landscape.

What must New Jersey do to transform its school-funding formula into a sustainable and adaptable law that serves its neediest students? There’s one pot of money and it’s not getting any bigger: Legislators have long memories of one-term-former-Gov. Jim Florio’s demise when he tried to raise taxes to cover increased school spending. For meaningful reform, we need to reallocate and establish incentive.

To begin, a short obituary of the SFRA. Its progenitor was a series of state Supreme Court rulings, dating back 25 years, that justly ordered the state to fund 31 poor districts at the level of wealthy districts and provide a variety of wraparound services. (Some of that money, by the way, came from short-changing the pension system.) Those 31 districts (here’s a list) were called “Abbott districts” after the first name on the alphabetical list of plaintiffs on the suit filed by the Education Law Center.

This compensatory funding plan worked well for a few impoverished districts like Union City but not for others. As Chief Justice Wilentz presciently warned in Abbott II, “without educational reform, the money may accomplish nothing.”

Over time New Jersey demographics shifted so that poor students resided throughout the state, not just in 31 school districts. Probably they did all along. In 2008 during the Corzine administration, the Legislature passed SFRA, a new funding formula that sought to “have the money follow the child,” regardless of ZIP code. The Education Law Center, enraged at what it regarded as an assault on its legacy, fought back vigorously. But the court-appointed Special Master sided with the state and ruled that SFRA was kosher, as long as the state fully funded the formula.

Cue the Great Recession, nine Moody’s downgrades, the teacher pension crisis, and the vainglorious assumption that New Jersey’s economy would grow each year. The state’s ability to fund the formula became as realistic as Christie’s presidential ambitions and, in fact, SFRA was fully funded for only one year.

Let‘s face it: SFRA is a corpse. If we hadn’t nailed it to the perch it would be pushing up daisies. Almost everyone knows this (the Education Law Center’s protestations to the contrary). Yet there’s a strong aversion to amending a bipartisan, court-approved, and NJEA-backed formula for allocating state aid to schools.

Thus, Sweeney and Beck’s proposal is a hopeful sign that our esteemed legislators are ready to move past denial and bravely accept SFRA’s demise. The actual proposal — phasing out a category called “Adjustment Aid” that was originally intended to hold districts harmless as we converted from Abbott funding to SFRA — is terrific. But it’s not enough. If we’re going to do this, let’s do this right.

First, let’s get over Abbott. Currently 17 of these 31 school districts are overaided and other non-Abbotts are in dire need of more state aid. (See this spreadsheet culled from DOE information, courtesy of Jeff Bennett who blogs at New Jersey Education Aid.)

For example, Asbury Park, an original Abbott, receives so much state aid for its 2,225 students ($24,258 each per year and a high school graduation rate of 49 percent) that it is over-aided by $10,929 per pupil after adjustments for socioeconomics and disabilities. Ninety-five non-Abbott districts have higher percentages of students eligible for free and reduced lunch than rapidly gentrifying Hoboken. The most underaided Abbott district, New Brunswick, still gets more state aid than 77 non-Abbots. Bound Brook, where 67 percent of students qualify for free and reduced lunch, has a per-student deficit of $9,200,

Abbott labels — and the state’s formula for distributing school aid — are so last century.

Some districts need to get more state aid. Some need to get less, including some once-upon-a-time Abbotts. Authentic school funding reform will tackle not only Adjustment Aid, as proposed by Sens. Sweeney and Beck, but also outdated “fair share” and “adequacy aid” calculations. (Here’s a great glossary from the New Jersey School Boards Association.)

Second, we need to look squarely at high-cost elements that often drive district budgets. One example is special education. New Jersey has a peculiar habit — at odds with federal mandates that children with disabilities be educated in the “least restrictive environment” — of placing proportionately more children in out-of-district schools than any other state in the country. Some of these placements are necessary. Some just cost a lot.

Placement decisions rest with district Child Study Teams. However, legislators can craft legislation that rewards districts for including special-needs children within their own educational communities. Imagine if parents wanted their children to stay in-district?

Otzi is in a museum. Abbot should be too. But first Statehouse leaders have to muster the will to create a reformed school-funding formula that privileges equity over obsolescence. If they do — and Sens. Sweeney and Beck’s proposal is a good omen — then all of us, especially our schoolchildren, will be the beneficiaries.

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