Shock for Three School Districts as New Funding Comes Up Way Short

Carly Sitrin | August 9, 2018 | Education
Recent landmark reform was supposed to correct big imbalances in state aid to schools. Glassboro and two other districts get a nasty surprise

Gov. Phil Murphy signed law to change New Jersey’s school funding system on July 24.
New Jersey lawmakers have been celebrating the long-awaited school funding changes set to end decades of confusion and unbalanced state aid. For three districts however, the changes were a shocking surprise.

When Senate President Steve Sweeney’s changes to the School Funding Reform Act were signed into law in July, there was an understanding that school aid would need to be redistributed: Overfunded districts would lose so that underfunded districts could gain, eventually bringing every district to full, uncapped funding. However, due to one provision in the appropriations act some districts were blindsided by substantial cuts despite being underfunded last year.

Glassboro school district in Sweeney’s own Gloucester County fell into this formulaic ravine. For months leading up to the enactment of school-funding reform, it was told it would be gaining state aid because it had been underfunded for years. After the law was signed, district officials were instead directed to slash their budgets by $1.8 million — a loss of $948 per student. Likewise, Bloomsbury schools in Hunterdon county, one of the smallest districts in the state, was told it will be seeing cuts of $844,512 — $4,196 dollars per student. Commercial Township schools in Cumberland County will lose $958,213 in state aid out of its $12.9 million budget for 2018-2019. That’s $1,481 dollars per student. All of these districts were underfunded just last year.

From underfunding to overfunding

According to the state Department of Education spokesman Michael Yaple, Glassboro, (as well as Bloomsbury and Commercial Township) fell under a special provision for districts that have gone from underfunding to overfunding, according to the school funding formula.

Senate President Steve Sweeney, left, and Glassboro school district superintendent Mark Silverstein at a discussion on school funding in February 2017.
“We’re an anomaly here,” Glassboro School District Superintendent Mark Silverstein said. “These cuts are catastrophic… something has to be done to correct this.”

What’s happening with Glassboro’s state aid is, oddly, proof that the SFRA formula is finally being followed to the letter after decades of unbalanced funding. For years, the district did not receive the appropriate amount of state aid and was therefore under the impression it would be better off under the modernized changes. But when the calculations were finally put through this year — without any of the caps and obstacles attached to the old school-funding law — Glassboro came out in a much different position than people there expected. The school’s population had dropped by 130 children from the 2017-2018 school year to the 2018-2019 school year, thereby reducing its state aid by enough to consider it overfunded for the next round of aid.

‘Glassboro really got blindsided’

Mark Magyar, policy director for the Senate Democrats under Sweeney, said Glassboro’s loss was a shock and the state is doing all it can to correct it. “Glassboro really got blindsided,” he said. “They were anticipating an increase, not a decrease… they’re in this weird category. We’ve been having conversations throughout the process and our view is if we create a problem we should fix it.”

The reason Glassboro has been saddled with such aggressive cuts is due to enrollment changes and demographic shifts. This year, for the first time, Glassboro was technically overfunded, triggering the aggressive cuts.

But how did a loss of 130 students turn into $1.8 million in cuts? It’s all about who those students were.

The funding formula in action

The way the school-funding formula works, it adds weights and values to every student in a district based on their individual need. It starts with a baseline per-pupil amount (how much it costs to educate one elementary school student with no special requirements) and adds on weights for “at risk” students — English-language learners, students enrolled in a free or reduced-cost lunch program, students with disabilities, and so on. Those weights are then used to determine how much state aid a district would need to provide the appropriate resources for each of these students.

In Glassboro’s case, many of those 130 students that left the district were low-income “at risk” kids. That means the district didn’t just lose aid because it lost students (fewer students means less funding in general); its losses were amplified because of the types of students who left.

Effects of demographic shift

The reason those students left is part of a larger demographic shift in the region which also impacts the district’s “fair share” contribution to school funding. (In addition to state aid, districts are also required to contribute their “fair share” of funding, based on property values and residents’ incomes.)

Glassboro is home to Rowan University, a rapidly expanding public research university with an enrollment of 17,370 students. As the university grows and recruits, the town of Glassboro has seen new construction and gentrification. Rent prices have increased, apartments are being snapped up by students, and lower-income individuals are moving a town or two away — which is all to say that the per-capita income in Glassboro is slightly higher and its fair-share contribution is also likely higher than officials there anticipated.

It’s hard to know the exact elements that contributed to Glassboro’s school-funding shock, as the Department of Education does not make its calculations public, but experts speculate that the population and demographic shifts were likely the cause.

As Magyar pointed out, the Glassboro, Bloomsbury and Commercial Township districts were outliers in the funding revamp and, he said, emergency aid is available to ease their transition.

On July 26, the day after Gov. Phil Murphy signed the momentous SFRA changes, Glassboro announced it would be applying for emergency aid. However, the application process is onerous and does not guarantee funding.

Emergency aid, maybe

Glassboro’s board of education had to first accept the $1.8 million in cuts and then adopt a resolution to apply for emergency-aid grant money to cover the losses. Magyar said Sweeney’s office will do all it can to ferry along the Glassboro application for emergency aid but there’s no guarantee that it will be approved by the state Department of Education.

What’s more, districts had to submit their school budgets months ago, in the spring. As Silverstein explained, the hiring process at Glassboro is already underway for the fall, and it is too late to adjust taxes.

“We already struck the budget, it’s too late for us,” Jody Rettig, Community Affairs Secretary for Glassboro schools said.

“We’re very fiscally conservative. It’s a slap in the face the one year we become overfunded we get this kind of a cut at one time,” Silverstein said. “It’s extremely unfair. I just don’t understand the whole process… why would we get this kind of a cut and be expected to absorb this? It makes no fiscal sense and it’s horrible for children.”

Bloomsbury and Commercial Township

For small districts like Bloomsbury and Commercial Township, absorbing the cuts is especially difficult. Commercial Township was forced to eliminate seven positions before classes start this fall.

Though the purpose of emergency aid is to assist districts through this period of change, adding additional adjustment-aid funding on top of formula aid was what got the state into this school-funding debacle in the first place. And if more districts fall into a situation like Glassboro’s year after year, the entire process could unravel again.

“The amounts of money [for emergency aid] are not large in the overall scheme of the state budget. If we need to throw in a couple million to fix three districts, OK. We have a surplus; that’s why we have a surplus.” Magyar said. “If this becomes a problem and next year we have a lot of districts in this scenario, we’ll adjust it.”