Sweeney Introduces Bill To Reform School Funding
Would Help To Deliver Full & Fair Funding To All Districts By Removing Growth Caps, Phasing Out Adjustment Aid
TRENTON, May 31, 2018
– Senate President Steve Sweeney today introduced legislation to modify the state’s school funding law, making the reforms needed to allow the school aid formula to realize its goal of providing full and fair funding for all of New Jersey’s school districts. The bill, S-2, would phase out the “adjustment aid” that continues to compensate districts for students they no longer have and eliminate the “growth caps” that deny other districts funds for enrollment growth.
Senator Sweeney said that the original school funding law enacted in 2008 was a fair and equitable plan that was undermined by legislative changes that were supposed to be phased out within a few years but have remained in place, effectively undermining the state’s ability to make the funding formula fully effective.
“The School Funding Reform Act of 2008 promised to provide full and fair funding for all schoolchildren,” Senator Sweeney said. “State aid was supposed to be distributed based on a formula that took into account each town’s property tax base, its ability to pay, changes in enrollment and the special needs of the children. Nine years later, both adjustment aid and the growth cap are still in place, and state aid has been virtually flat. The state broke its promise by failing to properly fund the formula and meet the changing needs of school districts.”
The current school aid growth cap of 10 percent for school districts spending above their adequacy threshold and 20 percent for school districts spending below that threshold would be eliminated under the bill. Growth caps on aid for increased enrollment would be eliminated starting in the 2019-2020 school year and the adjustment aid that has continued to flow to overfunded districts would be phased out over seven school years.
“The current system has become unfair to schools and harmful to local taxpayers,” said Senator Sweeney. “It’s creating a structural problem in school funding and taxation that will only grow worse if it isn’t addressed. Our goal is to fully fund every school district in support of equal opportunity for every student.”
The seven-year phase-out schedule would reduce adjustment aid and other overfunded categories of state aid by five percent this year, eight percent next year, then by 10 percent, 14 percent, 18 percent, 21 percent and 24 percent in the following years, when it would be completely eliminated and the districts would be at 100 percent of the formula.
To ensure that districts receive the needed support, the SDA districts, which are former Abbott Districts, will be allowed to have “cap relief” for seven years, with their cap limit being the local tax levy.
“A large number of school districts are being shortchanged in state school aid, forcing local taxpayers to make up the difference,” Senator Sweeney said. “These communities are subsidizing other districts that are receiving more than their fair share. This disparity is undermining equal educational opportunities and adding a financial burden with higher taxes.”
The bill would not take any money away from Career Technical Schools. It would create a category of aid called “vocational expansion stabilization aid” to ensure vocational technical schools receive either the amount determined under the formula or the amount of aid received in the 2017-2018 school year, whichever is greater. This will address the unique needs of the vocational schools which cannot raise their own taxes to offset any reductions in state aid.
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