Commissioner Testifies Before Assembly Budget Committee on FY16 Budget

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Commissioner David Hespe testified before the Assembly Budget Committee April 22.  The several hour session ranged from charter school funding and accountability, resources for non-public schools, and the need for funding to support HIB functions in schools.  Throughout the discussion, Commissioner Hespe focused in on the challenges tight revenues bring to the State, and in turn, districts and students as flat-funding prevails this year as well.


The Highlights

The proposed FY2-016 budget includes a recommended appropriation of approximately $12.8 billion ini State aid, an increase of $811.2 million, or 6.8 percent relative to FY 2015.  Over 90 percent (92%) of the increase is attributable to the State’s contribution to TPAF and debt service payments on bonds issued by the Economic Development Authority to support school construction.  Hence, a negligible bump in direct K-12 state aid.

The only districts to receive an increase are the 83 districts participating in the Interdistrict Public School Choice that are projected to serve more students this year.  All other districts will receive the exact same amount in FY2016 as they received in 2015.  The budget also reduces support to non-publics for nursing support and technology initiatives.

The proposal also includes $2 million for the establishment of an opportunity scholarship demonstration act. 

But, for all talk of ‘record levels of state funding for education,’ New Jersey schools are getting well less than what is authorized under the School Funding Reform Act (SFRA), the 2008 law that set a formula for how schools are to be funded by the state.  Such a shortfall is sadly not unusual. New Jersey has a poor record, dating back over several administrations, for fully funding its school-finance formulas.

That gap has only grown under the current Administration, with critics maintaining that districts next year will be another $1 billion short of full funding – amounting to $6 billion over the last six years. 

What does differ this year, however, is that concerns related to the Administration’s acceptance of ‘Average daily attendance’ rather than the number of student’s enrolled as of October 15 appears to have been eliminated with this year’s budget proposal – an item many onlookers found surprising as the Commissioner brought it up during Q&A with members of the budget committee.

Delving Into the Details

Beyond the over-arching details, there are a few items that raised the eyebrows of the non-partisan Office of Legislative Services – urging them to ask a few questions of the Department in expectation of yesterday’s testimony. 

Charter School Funding

One example was language that would protect charter schools from severe funding cuts that Commissioner Hespe said yesterday  could lead to the closing of several of the schools.  The revised wording would result in the transfer of over $100 million more – over a two-year period — than what would be required under the state’s charter school law by a handful of districts.

Under the 1996 Charter Act, districts must pay out 90 percent of their per-pupil costs for each student in a charter school. But that percentage is often lower for many charter schools since not all state funding is counted in a school district’s calculations.  The new language would require charter schools to be funded at least at 2013-2014 per-pupil levels, resulting in an additional $70 million in funding this year and $38 more next year for the charters.

For a vast majority of districts, it will mean a small blip in their payments, and in some cases charter payments will actually be slightly reduced. But, in a dozen districts with big charter school presences, the impact will be significant.

State Education Commissioner David Hespe was asked about the language change at the budget hearing yesterday, and said that as the state’s funding formula has been frozen for school districts, charters have suffered. He said the move was meant to strike a middle ground.

“The freezing of the formula has forced us to make some really tough decisions for fiscal 2016,” Hespe said.  “Some charter budgets are very, very frail, and we don’t want them shuttering because we made a bad decision.

He added, “We also don’t want to hurt district schools and only help charters – it’s imperfect, but it’s the best of the worst scenarios.”

OSA Redux

Also discussed in the Department Q&A was the Administration’s proposed allocation of $2 million for a “Opportunity Scholarship Demonstration Program,” in which low-income students would receive state-backed scholarships to attend schools of their choice, public or private.  So far, this perennial item has been a non-starter during the last several budget cycle.  Legislators didn’t even raise the subject during yesterday’s hearing.

Other Key Issues

In addition, several key items were raised during the several hour exchange between the Commissioner and Legislators. 


Once such item was the current PARCC assessment, with Hespe showcasing the successes associated with the first test administration which is currently  ongoing.   

“We should be proud as a State that some 98 percent of the PARCC tests were taken on computers, which puts New Jersey at the forefront nationally. Hespe said.

He also went on to address test refusal head on – indicating that refusals were low at the elementary level and explaining why the number was as high as it was at the high school level (15% of juniors refused to take the assessment). 

Hespe acknowledged that this was something the State would have to work with parents, educators and students on.  He also expressed concern, in response to a question posed by Assemblyman McKeon about the impact of refusals on Title 1 funding for schools, explaining that any New Jersey school that fails to have 95 percent of its students take the PARCC exams will be placed on a corrective action plan and could suffer the loss of aid.    

Hespe said Wednesday that the first step is corrective action plan, which could require a schools to hold more informational meetings about PARCC or to schedule face-to-face meetings with any parents who want to opt their children out of the tests.  Before levying any additional sanctions, the state would take into account whether this is the first year a district missed the 95 percent target, how much it missed it by and whether the school took actions either to prevent or promote opt outs, he said.

"Egregious situations" could result in the loss of federal or state funds, Hespe said.

HIB Funding

Also raised was the  issue of funding for anti-bullying activities in schools.  Two years ago the Legislature set aside $1 milliion for purposes of supporting HIB activities in school.  Since that time no funding has been made available.  

Hespe explained that while an important program, this year's tough economic climate made it necessary to make really tough decisions that sometime led to the non-funding of continuing initiatives such as HIB.