It’s budget time again in Trenton. That means just about every superintendent in New Jersey is fidgeting with great uncertainty about their district’s revenue projections for 2020-2021. Ask any of us. Most of us wonder if we will have the funds necessary to fulfill the needs of our students?
On its face this shouldn’t be a concern. The state has a law on how to fund schools. The School Funding Reform Act of 2008 (SFRA), which has been subsequently validated by the New Jersey Supreme Court, contains a formula that says how much money we need. Each year, based on the number of students in the district, every district knows the amount of money per pupil that it should spend to provide a New Jersey constitutionally-guaranteed thorough and efficient education. This level is called adequacy. But in New Jersey, sadly, many districts are well below adequacy.
Under SFRA, the New Jersey Department of Education determines what part of that adequate budget the local tax levy should bear, based on income and equalized housing values. This is called local fair share. The rest of the adequacy budget should be provided as state aid. Had the SFRA formula been properly run over the past decade we wouldn’t be faced with the problems we have today. But the move toward finally funding SFRA properly, started over the last two years and projected for five more years, has ignited a political backlash. The political noise currently being generated by those losing state aid is proof that the SFRA formula is seen by some districts as deficient. The equal amount of political noise being generated from districts like mine points to SFRA as an unfulfilled promise. All frame the problem in the coin of the negative impact on their students.
As a superintendent in an underfunded district, I look for the state aid that my district should receive under SFRA, all 100% of it. Right now, we are only getting 62% of the state aid that we should under the formula. As we wait on the governor’s budget speech later this month and the state aid allocations that follow, it is my hope that the clearly articulated commitment for full funding of the state aid formula remains unchanged. If SFRA is to remain the law, I offer two suggestions that may make that effort easier. Serious consideration should be given to mandate that all districts tax their local levy at least up to what is the “local fair share” as determined by the state, now that the state has committed to meet its own obligation. This would guarantee that the local levy is producing the required amount of revenue to guarantee students a thorough and efficient education. Secondly, the Department of Education should find a way to better show how the local fair-share calculation is actually run so as to eliminate any suspicions of errors, real or perceived.
SFRA can be adjusted without being changed. The Legislature could adjust the weight of the factors that go into calculating per-pupil adequacy. More radical solutions can be put forward as well. Alternate school funding formulas can and have been introduced for consideration in the Legislature. Legal challenges to portions of SFRA can and have been mounted in the courts. But absent successful legislative and judicial adjustments, SFRA adequacy remains the standard by which school aid and levy taxation should be set. That is the prism through which underfunded districts see the problem. Many actions can help achieve a solution, but 100% state aid funding per SFRA remains the focus. That is what the New Jersey Constitution guarantees to all our students. That is what should be the top priority.