Legislature Amends Funding Relief Proposal This Week Action Needed to Urge the State Senate to Act!

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By Debra Bradley, Esq., NJPSA Director of Government Relations

In an effort to fast-track legislation designed to assist New Jersey school districts scheduled to lose state aid in the 2024-25 school year, the Assembly Appropriations Committee met to consider A-4161 (Freiman) on Thursday, April 10. NJPSA supported the bill again in this committee. The Assembly Appropriations Committee released a committee substitute bill that modifies the original provisions of the law as noted below.  The Senate Budget and Appropriations Committee which also met on Thursday, failed to post either A-4161 or its Senate companion bill S-3081 (Zwicker) for consideration despite strong pressure from the school community to act quickly on this issue.

As favorably released from the Assembly Appropriations Committee, the substitute bill provides several types of relief depending upon the circumstances of the district for the 2024-25 school year only.  The relief includes a possible state aid grant of up to two thirds of a district’s proposed aid loss for the 2024-2025 school year and tax levy cap flexibility for certain districts. The bill does contain parameters for the total amount that the tax levy can be adjusted to prevent an overburdening on taxpayers in these communities.

A core component of the changes includes a provision that permits a “look back” over the district’s state aid allocations over the past years from the 2020-2021 school year through the 2023-24 proposed aid levels.  This “look back” is to see if a district has experienced a net reduction in school aid over the multi-year time period. This determination is relevant to the possible cap relief options available to the district, not to the awarding of a Stabilization Aid grant under this one year program.  

ACTION NEEDED:  Contact NJ Senate Leaders to Ask that A-4161 (Freiman) and S-3081 (Zwicker) be Fast-Tracked to Assist Local School Districts and Students!

In order for this legislation to help districts, it needs to be signed into law!  To make that happen, NJPSA asks that you reach out to the following leaders in the NJ Senate to urge that the bill be promptly considered this month!  Otherwise, local districts will be put in the position of notifying staff of a potential reduction in force on May 15th.  Other districts are considering major loans just to continue operations next year.  These significant and chaotic moves could be avoided with the passage of the legislation. 

Please contact these members of the NJ Senate with this simple message:  

Please post  and fast track A-4161 and S-3081 for passage this month! Schools losing state aid need prompt legislative action on these bills in order to retain staff, avoid issuing May 15 notices to staff, and pass school budgets that meet the needs of our students!  Time is of the essence to avoid these negative results!

If you call the district office of these Senate Leaders, please respectfully leave your message with the staff members in the office.  You can just read the message listed above and share your local story, if the staff member has time, and thank them for listening.  Time is of the essence in making these calls or sending an email.  

Thank you for taking action!  Here are more details about this legislation.  

Core Provisions of the Committee Substitute ACS-4161

The following is a summary of the bill changes made to A-4161 since last week’s article.

Please note that the bill may continue to change as the legislative process hopefully proceeds with haste!  The summary is provided to assist you as you prepare your district’s response to its funding situation.  NJPSA will continue to provide updates as the situation changes.  For now, here is the latest information.

The Stabilization School Budget Aid Grant Program

  • The bill, if enacted into law, would continue to provide an additional $71.4 million in aid to be dispersed to eligible districts through a  one-year grant program administered by the Commissioner of Education.  Eligible districts are currently considered those districts experiencing State aid reductions for the 2024-2025 school year. 
  • A Stabilization School Budget Aid grant program will be established within the NJDOE.  The purpose of the program is to provide grants to eligible school districts who are experiencing state aid reductions in 2024-2025.  Once the Commissioner verifies that a district is subject to a State school aid reduction in the 2024-2025 school year, a grant shall be awarded to the district equal to two thirds of the state aid reduction.
  • Eligible school districts must agree, as part of the preconditions of the  grant, not to reduce the total number of district employees compared to last year’s staffing totals except where the commissioner approves the district’s request to reduce staff due to an anticipated decline in enrollment.
  • Such districts may also request additional tax levy cap flexibility subject to the limitations further provided for in the bill.  If authorized by the Commissioner to exceed the tax levy cap, the district can raise the tax levy cap without going to the voters.  The maximum allowable increase to the adjusted tax levy for districts receiving Stabilization Aid grants is equal to one-third of the amount of the school district’s State school aid reduction provided that the raised tax levy is not greater than 9.9 percent of the prebudget year adjusted tax levy.  These districts may also be eligible for additional levels of cap relief if the district experienced net losses in state aid over the time frame of the 2020-2021 school year through the 2023-2024 school year, but again the 9.9 percent ceiling will apply. 
  • A district receiving a grant pursuant to this bill and that is approved to raise its tax levy under the bill, must submit a resulting final budget to the Commissioner within a  Commissioner- determined time frame, including any necessary re-certifications of the tax levy.

Cap Relief Provisions Dependent Upon District’s Situation  

As noted, a key change in this version of the legislation is an expanded option for district’s to access tax levy cap relief whether or not the district receives  a Stabilization Aid grant.  The levels of cap relief available to a district depend upon local circumstances including the district’s proposed reduction in state aid for 2024-2025, whether or not it receives a Stabilization Aid grant,  and whether it experienced net losses in state aid over the time period from the 2020-2021 through the 2023- 2024 school years.  If a district seeks to raise its tax levy beyond the current two percent threshold, the district must submit a request to the Commissioner. 

Districts that do not receive a Stabilization Aid grant (prior year reductions but no reduction in 2024-2025)  may still be authorized by the Commissioner to exceed the 2% tax levy cap, upon application. If a district has experienced net losses for the 2020-2021 through 2023-2024 time frame. The level of the tax levy cap increase, if approved, does not have to go to the voters. The maximum allowable tax levy increase in these cases shall be no more than the amount of the school district’s net reduction in State School aid during the 2020-2021 through 2023-2024 school years, provided however, that the district does not increase its adjusted tax levy by more than 9.9 percent of the prebudget year adjusted tax levy. 

SDA Districts, defined as a district that received an educational opportunity aid or preschool expansion aid in the 2007-2008 school year, are not eligible to seek cap relief under the provisions of this bill.  These districts do have other cap relief options under existing law (C. 18A:7F-38 and 39). 

A school district that is approved by the Commissioner for increases in its tax levy under the bill, must submit a resulting final budget to the Commissioner within a time frame and manner to be determined by the Commissioner. If a district has already certified its tax levy prior to approval, the board secretary is authorized to re-certify the sum or sums to be raised for the school year.  The municipality will include these amounts in the taxes assessed, levied, and collected. 

If passed by the Legislature and signed into law by Governor Murphy, this legislation will take effect immediately upon enactment.

Thank you for acting today to support our schools!  You can contact the NJPSA Government Relations Team with any questions or for additional updates.