School-Aid Reform: Not Enough Legislative Action to Keep Topic at Top of Agenda?

School-funding inequities have plagued New Jersey for almost a decade; is this finally the time to set things right?

Legislative leaders participate in a roundtable discussion in the State House that was organized by the New Jersey State League of Municipalities.
For the past several weeks, lawmakers in both the Senate and the Assembly have been holding a series of hearings to analyze growing state school-aid inequities. But legislative leaders are not any closer to agreeing on specific solutions, fueling concerns that the issue could once again be pushed off the top of the agenda.

The lack of consensus on the school-funding issue comes just weeks before Gov. Chris Christie is due to present the next state budget, and also release state-aid figures that school districts throughout New Jersey typically rely on as they set their own annual spending plans, which is adding to the anxiety.

Christie, a second-term Republican, has already presented his vision for redoing the state’s school-aid formula, but it’s been roundly rejected by the Democrats who control the state Legislature. What remains to be seen now is whether Christie will try to force some version of his funding plan through the annual budget process, or work with the legislative leaders on a compromise, assuming they can eventually find common ground among themselves.

New Jersey’s current school-aid law, enacted in 2008 by former Gov. Jon Corzine, was the product of a lengthy effort to resolve decades of state Supreme Court involvement in education funding to enforce the state constitution and protect the interests of students in the poorest communities.

Known as the School Funding Reform Act, or SFRA, the 2008 law linked state aid to student need, and it also set up an “adequacy budget” for each district based on factors such as special education, English-language learners, and at-risk low-income students. The state Supreme Court signed off on the formula in 2009. But Christie has only partially funded it since taking office amid recession in early 2010, leading to a gap this year of up to $2 billion. And given the state’s deep fiscal challenges, including the grossly underfunded public-employee pension system, immediate full funding of the school-aid formula is virtually impossible in the next budget, which Christie is due to present to lawmakers on February 28.

But the underfunding and other policy decisions have also produced deep inequities in how the available aid is being distributed to districts throughout the state. Adjustment aid, which was provided initially as a short-term fix for districts that were slated to see state-aid reductions when the new formula went into effect, has not been eased back. Arbitrary caps on annual state-aid increases have also remained in place. So together with the overall insufficient funding, many districts are now receiving more than 100 percent of their estimated state aid while many others are receiving less than 100 percent.

Senate President Stephen Sweeney (D-Gloucester) has been leading hearings on education funding in the Senate, and he’s proposed a plan that would see adjustment aid reduced while at the same time adding $100 million in new dollars to the school-funding formula on an annual basis over five years. His plan would also allow some new aid for districts with increasing enrollment to make up for underfunding. But so far, the plan has not been fully embraced by Assembly Speaker Vince Prieto (D-Hudson).

“There’s nowhere in that formula where it says you’re supposed to have districts at 150 percent funding and at 40 percent funding, and we’re going to do something about it this,” Sweeney said yesterday following a legislative-leaders forum in the State House that was organized by the New Jersey State League of Municipalities.

“We’re going to continue to pressure the Assembly,” Sweeney said. “We’re not letting this get put on the backburner.”

For his part, Prieto said during the forum that his house is also holding its own set of hearings on the education-funding issue, and that he wants to see the problems fully evaluated by education experts and stakeholders.

“How far apart are we? I think we’re exploring in the Assembly every aspect of the funding formula,” Prieto said.

“Are there inequities there, absolutely,” Prieto said, citing the adjustment-aid issue and other concerns. “We need to look at it all, what has worked and what hasn’t worked.”

While concerns have also been raised that school districts in Prieto’s home county of Hudson and in his own legislative district could end up as net losers under Sweeney’s plan, Prieto promised yesterday to look at the impact on all communities without being “parochial.”

“We need to have balance,” Prieto said. “If there’s an easy fix, listen, we can look at it.”

No one on the panel yesterday came to the defense of a plan that Christie put out last year, one that would completely replace SFRA with a formula based on a uniform, $6,599 statewide per-pupil aid figure. Christie has called his plan the “Fairness Formula,” but it would likely produce big property-tax cuts for many suburban communities at the expense of less wealthy, urban communities. The state Supreme Court also recently rejected Christie’s attempt to reopen school-funding litigation.

Assembly Minority Leader Jon Bramnick (R-Union) said yesterday that the school-funding issue is “not that complicated” in concept because everyone knows some money has to be shifted.

“It doesn’t have to be the governor’s fairness formula, but it has to be some fairness formula,” Bramnick said.

“The hearings are important, but let’s have some relief as quickly as possible,” Bramnick said. “We know that we have some ability to move money around and I think we need to do that sooner rather than later.”

Senate Minority Leader Tom Kean Jr. (R-Union) also called for more urgency and raised concerns that the school-funding issue could get put on the backburner once the new budget comes out. He also pointed to rising property-tax bills as a reason to take quick action. In most communities, school funding accounts for more than half of the local property tax bill.

“It’s got to be done now,” Kean Jr. said. “People are being taxed out of the state because it’s simply unaffordable for too many people.”

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