This week, Legislative Leadership came to a compromise on school funding for the FY2018 school year. The New Jersey Principals and Supervisors Association (NJPSA) appreciates the changes that seek to provide additional revenue to significantly underfunded school districts and which begin state funding of districts based upon the provisions of the School Funding Reform Act (SFRA). However, we are concerned that the proposal, which seeks to divert $46 million in adjustment aid from certain districts, will negatively impact the education of students in these districts, particularly given the timing of the proposal.
“While NJPSA is pleased to see an increase in state aid to underfunded districts, and supports the goals of our legislative leaders, we worry about what impact removing aid at this critical time will have on students and schools in negatively impacted districts,” said NJPSA Executive Director Pat Wright. “Reductions in aid to schools at this late juncture, where school and municipal budgets have been struck, can and will have a deleterious impact on students and schools.”
On June 14, the Senate and Assembly leadership announced a plan that would provide $146 million in additional aid to underfunded school districts. This number is arrived at by increasing state aid by $100 million while also diverting $46 million through a reduction in adjustment aid to districts ‘over adequacy.’ The plan additionally includes an extra $25 million to expand pre-school education.
The Office of Legislative Services has prepared a state aid notice, showing the impact of the proposal on each school district. The notice appears to indicate that adjustment aid reductions are limited to an amount equal to 1.5 percent of the district’s total budget. Unfortunately, this can still equate to significant dollars in some of the state’s larger districts.
While the School Funding Reform Act of 2008 set parameters for state aid distributions, since 2009 the amount of state aid allocated annually has not met the requirements of the formula. Rather, school funding has been flat funded based upon available revenues and, as a result, state aid figures failed to reflect increases in enrollment in the ensuing years since 2009. Additionally, as part of the legislative compromise of the SFRA, adjustment aid was disbursed pursuant to statutory language that no district receive less aid than allocated in the prior year. This led to increasing inequity in the distribution of state aid to districts with increased enrollment. It also allowed some districts to spend over the ‘adequacy’ level while continuing to receive state adjustment aid. These resulting funding disparities have grown over the years.
However, for those districts who were ‘over adequacy,’ meaning they received adjustment aid that ensured their allocation of state aid equaled or exceeded the amount of aid from the previous year, a notice of reduction in a state aid allocation must be carefully timed to allow districts time to make informed and responsible decisions. NJPSA is concerned that the announced reductions in state aid to certain districts at this late hour may be difficult to address locally since staff has been hired, programs established and tax rates have been set.
School districts build their budgets around the state aid allocations provided by the Department of Education following the budget address in February. In the ensuing weeks, districts craft their proposed budgets, field public input, and ultimately adopt a budget and corresponding local tax levy. Districts are required to have this completed by May 19 – almost a month prior to this week’s decision. Given that local levies have already been set for the coming year, any reduction in state aid would require a concomitant reduction in district costs. This could potentially include student programs and services as well as possible staff reductions. This announcement requires certain districts to make these difficult choices after their budgets have been struck.
“We appreciate the efforts Legislative Leadership has made to come to a compromise on this critical issue,” Wright continued. “We wholeheartedly support increases in aid to underfunded districts, the effort to begin funding districts according to the SFRA formula, as well as efforts to expand preschool education – we merely urge the Legislature to carefully consider the impact of any reduction in state aid to schools at this late hour, given what limited options these districts have. Ultimately we must ensure that any choices made do not detrimentally impact our students.” Wright added. “We look forward to working with the legislature and the administration in the coming days to successfully address these concerns.”
NJPSA will keep you advised of all developments with regard to school funding and the state budget. We urge all of our members who have questions and concerns to contact the NJPSA Government Relations team at email@example.com.