As we look ahead to the Assembly hearing tomorrow and budget negotiations for the next several months, it is clear that many questions remain about how we, as a State, should be moving forward to create an equitable system that optimizes funding for our schools.

Small increases in aid, several years of flat funding, and State resources being allocated to the growing costs of pensions, public employee health benefits and debt service among other categories have put many districts in a particularly tight financial situation—especially those experiencing shifts in demographics and enrollment.

New Jersey does indeed invest a considerable amount of money in its public schools—for the 2013-2014 school year, the average total cost per pupil in the state was $19,211, one of the highest in the nation. However, we also need to focus our attention on spending those dollars wisely and efficiently.

If we’re committed to addressing equity, we cannot ignore the 2008 School Funding Reform Act (SFRA).  Full disclosure: I worked on this extensively during the Corzine Administration.  Using base per-pupil calculations and then additional weights for at-risk students, the SFRA was designed, in theory, to redistribute school aid in a fairer manner across the state so that funding would adjust for enrollment patterns and students who needed the most resources.

Adjustment or ‘hold harmless’ aid was built-in to the new SFRA formula to protect any school from experiencing reductions; meaning districts that received less aid in the new formula calculation were allowed to keep their old level of funding.   However, adjustment aid was supposed to fade out over time for districts with consistent enrollment decreases, but never did—so the intended redistribution of aid never actually happened.

The current funding inequities we are facing are further exacerbated by the fact that we have never fully funded the formula to begin with—according to Commissioner Hespe at the Senate hearing last week, it would take an additional $864 million to fund for FY 2017.  Given the current budget constraints for the State now and in the future, it does not seem likely that we will have the necessary level of resources to fully fund the formula anytime soon.

The bottom line is that the current approach to school funding for districts needs to be re-examined, especially for the districts that are truly getting squeezed.

In fact, dozens of parents from Freehold Boro and Red Bank showed up to the Senate Budget Committee hearing last week to fight for fairer funding solutions.  Both districts have seen large increases in enrollment and a greater number of English-language learners and low-income students in recent years without additional support to address these changes.

While the usual debate on the viability of school funding ensued at last week’s hearing, there was a tangible sense of interest around the ‘adjustment aid’ category and the subsequent inequities it has created.  For instance, Senate President Steve Sweeney and Senator Jennifer Beck have been working on a bipartisan plan, the details of which are being finalized, that would work to phase out hold harmless aid or ‘adjustment aid’ for over-aided districts and then redistribute that money to underfunded districts.

According to Senator Beck in this recent article, about 110 school districts are considered “over-adequacy” and still receive about $175 million in “hold harmless” aid. Senator Beck has proposed to have that approximate $175 million in hold harmless aid gradually redistributed to districts that are the furthest behind.

At JerseyCAN, we applaud Senator Sweeney and Senator Beck for jumpstarting this difficult conversation. It is becoming increasingly unlikely that we will be able to afford an additional $864 million allocation now or even in the future to fully fund the formula. We are in full agreement that we must figure out ways to optimize school funding if we want to boost student achievement and narrow the state’s disturbing achievement gaps, and it is an area we focused on in our Framework for Excellence. One of several key policy recommendations in this research included gradually reducing adjustment aid to the districts that are spending above their adequacy budgets over a period of five years.

While such reallocations of aid would be highly controversial, as it will force some over-aided districts to lose money, this is a difficult reality that has to be confronted.

In a time of increasingly limited resources and shifting demographics, populations and wealth patterns, we have to have difficult discussions about creative ways we can optimize school funding to meet the needs of our students.  Clearly we cannot continue to keep doing what we’re doing if we want to serve our children in the most equitable way possible.  Redistributing school funding definitely will not be easy, but it will be a necessary pursuit if we are going to find a path forward on fairer school funding.


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