Coughlin & Greenwald Bill to Fix Inequity in School Funding Formula Clears Assembly Panel

Measure Helps Restore Fairness in School Funding Formula

(TRENTON) – Legislation sponsored by Assembly Speaker Craig Coughlin and Assembly Majority Leader Lou Greenwald to modify the school funding formula so schools receive fair and adequate funding that meets their needs was released Tuesday by the Assembly Budget Committee.

“The school funding formula in its current form is simply not viable. Basing funding on the formula without taking into account enrollment shifts has made it really difficult for some districts to adequately provide for their students,” said Speaker Coughlin (D-Middlesex). “This will help address the inequities that have plagued our schools for too long and unfairly benefitted some schools districts over others, and allow districts to properly meet the educational needs of their students.”

“Over the past year we’ve met with parents, faculty, and principals from districts across the state that have been underfunded and underserved by the current formula. Our students are being short-changed, and we must restore the balance in our funding formula to ensure the next generation of New Jerseyans receive the high-quality education they deserve,” said Greenwald (D-Camden/Burlington).

Furthering the Assembly’s investment in education, the sponsors noted that the Assembly budget, which was also approved yesterday by the Assembly Budget Committee, provides an additional $344 million in direct school aid to last year’s $8.1 billion school funding allocation.

The “School Funding Reform Act of 2008” (SFRA) was enacted with the purpose of determining the amount of state school aid each school district would receive based on the needs of the student population and local fiscal capacity. However, the SFRA has not been fully implemented since the 2008-2009 school year, resulting in school districts receiving levels of state school aid inconsistent with their current circumstances.

The bill (A-2) would make two modifications to the SFRA with the intent of realigning the amount of state aid provided to school districts with their current needs.

Under the provisions of the SFRA, a school district’s state aid may not increase from one year to the next by more than the state aid growth limit (10 percent for school districts spending above their adequacy threshold, and 20 percent for school districts spending below that threshold). The bill would eliminate that cap beginning in the 2018-2019 school year.

Secondly, the bill would transition school districts towards the amount of state aid that the school district would receive in the absence of the state aid growth limit and the adjustment aid that the school district received under the SFRA.

In the case of a school district in which the state aid received in the 2017-2018 school year is less than the amount that the district would receive in the absence of the state aid growth limit, the district would receive an increase in aid equal to its proportionate share of the sum of any additional state aid included in the annual appropriations act and the amount of any aid reduction made to other school districts. In the case of a school district that received a greater amount of state aid in the 2017-2018 school year than what the district would receive in the absence of the state aid growth limit and adjustment aid, the excess aid is phased out over a seven-year period.

The bill will now go before the full Assembly on Thursday.