Gov. Phil Murphy’s decision to increase state aid to schools is not the welcome news for taxpayers that many think it is. At best, it will perpetuate an imbalance in school funding that is driving up property taxes to a painful threshold. At worst, it will continue throwing money at education in a state that spends vastly more than most states — without demanding accountability for how the money is spent.
Whatever anyone may think is wrong with New Jersey’s education system, money is not it. Between state and local spending, the state system is gobbling up more than $28 billion a year. New Jersey spends more on education than all but three other states — with average school spending exceeding $20,000 per student. To this blizzard of spending Gov. Murphy wants to add another $283.5 million, and he will increase taxes to do it.
A closer look at the governor’s plan shows that most of the added funds will go to districts that are already receiving outsized portions of the state aid. In communities where property taxes are oppressive for the middle class, the added aid won’t do much, if anything, to significantly lower the property-tax burden.
Under the governor’s plan, Newark will get an additional $37 million in aid, bringing its total school aid to $787 million. Paterson will receive an added $20 million on top of the $405 million it already gets in state aid. And Garfield, which already consumes 24 percent of all the state school aid that goes to Bergen County, will get another $2.27 million on top of the $56 million it already receives.
Suburban school aid shorted
The governor’s proposal purports to show significant rises in state school aid to suburban districts in percentage terms. But the vast majority of suburban districts get little state education aid relative to their school budgets; what appears to be impressive increases in education aid across the board are misleading.
For example, Parsippany has a school budget of $146.5 million; in the current school year the district received just $4.92 million in school aid or about 3.63 percent of its budget — which does nothing to offset the homeowners’ property-tax burden. Consequently, school funding makes up 65.7 percent of the property-tax levy in Parsippany.
In Montville, school costs are about $80.1 million with the state chipping in just over $2.2 million in aid. As a result, the local school costs account for 66 percent of the local tax bill. Wayne Township received $4.34 million in state aid this year (about 3 percent of its school budget), and the figure will rise to $4.9 million under Murphy’s plan. But that still does little to offset the district’s $159 million budget. As a consequence, school taxes are 52 percent of the local property-tax levy, which helps explain why the average homeowner in Wayne pays more than $12,400 in property taxes.
Similar numbers can be replicated to varying degrees throughout suburban New Jersey, where local school costs can range from 50 percent of the local tax dollar to 74 percent.
On the urban side
On the flip side are the big urban districts that receive so much aid that their school costs represent a much smaller fraction of their property-tax bill. Newark’s current school budget is $1 billion, but only $131 million of it is paid for by local taxpayers; therefore school costs are just 30.3 percent of the local property tax levy. That helps explain why the average city property-tax bill in 2017 was just $6,236.
In Paterson, the state’s aid formula pays for 75 percent of the city’s school budget of $558 million, bringing the school levy down to just 17.7 percent of the local property-tax levy. Camden’s school costs represent just 14.5 percent of the city’s total property-tax bills, and in Asbury Park, which has one of the highest per-pupil spending costs in the state, school costs make up just 25 percent of the property-tax levy because the district receives $55 million in state aid. As a result, Asbury Park’s average property-tax bill is more than $3,000 below the state average of $8,500.
Continuing the inequity in school aid will worsen New Jersey’s No. 1 problem: property taxes. Rather than throwing more money at school districts, the state should be investigating how that money is spent and determining where savings can be made.
Currently, there is no mechanism to hold districts accountable for how they spend taxpayer money. Periodically, we receive media reports about abuses of education monies, such as the investigation by WPIX-TV that found Elizabeth’s school district paid approximately $5.98 million to attorneys in the 2014–2015 school year — seven times more than it spent on textbooks. Similar issues of waste and abuse can be found in many other school districts, but the reports are episodic.
Calling for an audit
Before throwing more money into one of the most costly and inequitable state school-aid systems in the nation, I suggested on March 29 that Gov. Murphy undertake an audit of all state K-12 public school spending. I received no reply and as far as I can ascertain no such audit is being considered.
Nevertheless, billions of dollars are flowing from taxpayers to more than 600 school districts, and no one can tell us if that money is being spent wisely or foolishly or a combination of both. It is irresponsible to add more taxpayer money to a system that burdens the vast majority of homeowners and — in many cases — continues to produce poor results.
As legislators and taxpayers, it is our obligation to make sure our children receive a good education. But we also must make sure that money we spend on our schools goes to where it will do the most good for our students.