After Complaints, Governor Willing to Rework Budget for School Funding?

Acting state Treasurer gives assurance of Murphy’s cooperation in finding remedy, as lawmakers let her know they’ve been taking ‘public fire’ on the issue

Gov. Phil Murphy
After being bombarded with complaints about the way his first state budget would distribute school aid, there are now clear indications that Gov. Phil Murphy is willing to go back to the drawing board with lawmakers.

The first-term governor has already given assurances to concerned parents during a recent town hall that he is open to making changes to the current school-funding formula, and yesterday acting state Treasurer Elizabeth Maher Muoio promised lawmakers that Murphy is now preparing to discuss the issue as budget talks progress in Trenton.

“The governor stands ready to work with the Legislature to amend the formula, if that’s what the Legislature would like to do,” Muoio said.

Her comments came yesterday, the second day of hearings before lawmakers on Murphy’s budget plan for the 2019 fiscal year, and in response to pointed questions from fellow Democrats in the Legislature, where she used to serve until Murphy picked her to fill the state’s top fiscal office late last year. They also came on the same day Senate President Steve Sweeney (D-Gloucester) revealed he will be holding up final confirmation for Murphy’s pick to lead the Department of Education, Lamont Repollet, citing concerns about the pace of action from the Murphy administration on addressing the school-aid issue.

But Sweeney takes hard line

Despite Sweeney’s new stance — he’s also holding up the final confirmation of Higher Education nominee Zakiya Smith-Ellis — Muoio’s remarks should come as good news for the dozens of parents who’ve been raising concerns about the school-funding issue at a series of public hearings since Murphy first rolled out his budget plan last month. Still, it remains to be seen exactly how much the new governor will veer from the current formula, or how much additional aid will make it to school districts across the state that are not getting the full amount of funding they deserve based on rising enrollment. The governor’s office provided no new details in response to follow-up questions posed by NJ Spotlight yesterday.

Also uncertain is whether some of the education-funding concerns that are being raised by minority Republicans in the Legislature will pick up any steam as budget talks go forward. They include questions about the millions of dollars Murphy is pledging to spend on public preschool and free community college even as the K-12 formula will continue to be underfunded.

“We can’t get the money to the K-12 schools that need the money, and yet at the same time we’re starting new initiatives. It just seems that there’s something that’s just not right here,” said Assemblywoman Nancy Munoz (R-Union).

In all, Murphy, a Democrat, is proposing to increase direct budget funding for K-12 districts by nearly $284 million in his overall $37.4 billion spending plan for fiscal 2019. That marks a clear departure from the trend of flat funding that was followed throughout the tenure of former Gov. Chris Christie.

Down payment on full funding

Instead, Murphy has proposed full funding of the formula, which was first enacted in 2008, as a goal to accomplish during his first term. He’s described the additional $283.6 million in school aid as a down payment toward that goal. But Murphy’s spending plan also doesn’t build upon efforts lawmakers from his own party launched last year to undo arcane elements of the funding formula that have kept some districts from receiving the full amounts they should be getting based on increasing enrollment.

A big point of contention is a $522 million line within the formula that is earmarked for so-called adjustment aid, a buffer written into the formula that was meant to protect districts from sudden steep cuts in their aid. Murphy in his budget has largely maintained that line, even as some districts are way behind on the aid they’re due to receive from the state in response to student rising enrollment.

Parents from the underfunded districts have inundated recent public hearings on the budget to air their complaints directly to lawmakers, something the lawmakers made sure to pass along to Muoio during her appearance yesterday before the Assembly Budget Committee.

“We’re the ones taking public fire on how this formula is awkwardly applied again this year,” said Assemblyman John Burzichelli (D-Gloucester).

‘Bad information’

As the exchange continued with Muoio, Burzichelli suggested that others in the Murphy administration have provided her with bad information. That came after the former assemblywoman told him the Murphy administration is simply distributing the additional K-12 aid directly through the school-aid formula.

“I would never suggest you’re telling me what you don’t believe to be true, but I don’t believe that what they told you is true,” Burzichelli said.

As part of the same discussion, Muoio repeated the assurances that Murphy is willing to work with lawmakers on the school-funding issue to address the concerns. The governor said something similar during a town hall in Willingboro earlier this month.

“The governor appreciates and sympathizes with what you have heard,” Muoio said. “He’s willing to work with the Legislature to change the statutory formula.”

After the hearing ended, Assembly Budget Committee Chair Eliana Pintor Marin (D-Essex) said she’s encouraged to see the administration has recognized the concerns about school-funding, but she’s still uncertain how the issue will be addressed, especially as school-aid notices have already been sent to districts across the state.

“We haven’t gotten that far, (but) we’re just very happy in the sense that they’ve given us a clear indication that they want to do something to help these in-need districts,” she said.

Will Sweeney’s stance affect the talks?

It’s unclear what impact Sweeney’s new hard-line stance on Murphy’s education nominees — who both cleared the Senate Judiciary Committee with ease in recent weeks — will have on the education-funding talks. The Senate leader was instrumental in getting the funding changes that lawmakers made through budget language last year, and he is clearly using Murphy’s nominees as leverage to push the new governor to see things the way he and other lawmakers do.

“The Senate president has concerns about the lack of responsiveness by the administration on the signature issues of school funding and college affordability,” said Sweeney spokesman Richard McGrath.

“These top officials in the Murphy administration are responsible for adopting the reforms needed to provide full and fair funding for New Jersey’s schools and for following through on the bills to help make college more affordable,” McGrath said. “We haven’t seen or heard the level of willingness needed to make progress on these major priorities.”

Increase other spending

Meanwhile, Muoio was also asked yesterday about Murphy’s plan to increase other spending on education, even as his overall budget — which seeks to raise nearly $1.7 billion in new revenues by hiking taxes — would still not fully fund the school-aid formula. Among the additional education spending being sought by Murphy is a proposed $57 million increase for public preschool programs, and a $50 million allocation to set the state on a course to provide free community college during Murphy’s first term.

“We’re starting initiatives on new programs. Wouldn’t it be wiser to make sure we properly and fully fund that (K-12) formula adequately, because the K-12 is our target that we need to fully fund before we look to go into areas that are on the periphery?,” Munoz asked.

In her response, Muoio suggested those are also key priority areas for Murphy where he thinks more state investment is needed.

“We have needs across the entire educational spectrum, which is what we’re trying to address in this budget, and as I said, we can’t fix it over night, but we’re taking a first step,” Muoio said.