New State Budget Enacted for 2022-23 Fiscal Year
On Wednesday, June 29, 2022, the State Legislature passed a new State Budget for the 2022-23 fiscal year, which the Governor signed on June 30th in Cranford surrounded by legislative leaders. The passage and signing of the State Budget follow months of legislative hearings, some initial public hearings, revenue forecasts and updates and ultimately negotiations between the Executive and Legislative branches. Despite the months long process, the last week has been a whirlwind of budget activity, with the actual bills only being released to Republican lawmakers a short time before consideration in the budget committees of each house. Both budget committees of the New Jersey Legislature approved the state appropriations act for fiscal year 2023 on Monday, June 27.
The budget bills, S-2023/A-4402, appropriate $50.6 billion while providing a total of $18.6 billion to the New Jersey Department of Education, a 3% increase over the fiscal year 2022 budget. The budget includes an unprecedented $6 billion surplus, $9.5 billion in school aid, $2 billion for the governor’s expansion of the ANCHOR Property Tax Relief Program and the second, consecutive full payment to the public employee pension systems.
The 2023 State Budget relies on better-than-anticipated tax revenues to make additional investments in long-ignored needs for school construction ($1.9 billion for the Schools Development Authority). It also relies upon more than $2 billion in federal pandemic relief aid and $3 billion more for other capital investments, including the construction of preschool facilities across our state.
Education highlights of the budget bill and related spending measures include:
Direct Aid to Schools
- $9.54 billion in General Formula Aid (SFRA aid categories), the same amount proposed by Gov. Phil Murphy in his March 2022 budget address and an approximately 7.5% increase over fiscal year 2022 levels. This funding amount would keep New Jersey on the path to fully funding the SFRA by the 2024-2025 school year according to the schedule set forth by the school funding reform law commonly referred to as “S-2”, making the full scheduled phase-in for fiscal year 2023.
- $991.83 million in Preschool Education Aid, the same amount proposed by the governor in March and a $67.68 million increase over fiscal year 2022. As the governor proposed, the budget bill would direct $40 million of that increase to new high-quality preschool programs in accordance with state standards.
- $30 million in Stabilization Aid, designed to assist districts in implementing plans to adjust to their new funding levels under S-2. This represents a $10 million, or a 50% increase over the governor’s March 2022 proposal.
- $420 million in Extraordinary Special Education Costs Aid, a $20 million or 5% increase over the governor’s March 2022 proposal and the fiscal year 2022 amount. School Facilities Funding
- $85 million to continue support for capital maintenance projects and emergent needs in school districts, including $75 million for traditional districts (the same as fiscal year 2022 and the governor’s proposal) and $10 million for charter schools (a $5 million increase over fiscal year 2022 and the governor’s proposal).
- $1.9 billion appropriated from the New Jersey Debt Defeasance and Prevention Fund to the New Jersey School Development Authority for school facilities projects, emergent needs, and capital maintenance projects in school districts. Of that, $1.55 billion would be dedicated to SDA districts and $350 million to all other districts. This represents a significant expansion of the state’s allocation to SDA for facility project work. The governor’s proposed budget included a $350 million direct appropriation to SDA to support projects in SDA districts, which was a $150 million or 75% increase over fiscal year 2022’s $200 million figure.
The 2023 State Budget also includes specific funding for these education programs:
- $250,000 for a “Learning Loss Program” and $1 million for a “Learning Loss Report” to “support school districts and aid a statewide effort to analyze, understand and address the COVID-19 pandemic’s impact on learning loss and create tangible strategies and tools to mitigate the impact on student academic success.”
- $2 million for the “Reading Acceleration and Professional Integrated Development” program. While the budget itself does not include any language describing this program, the governor’s proposal included the same line item, which at the time was intended to “assess learning loss statewide so the [DOE] can develop long-term recommendations.”
- $5 million for Climate Change Education Grants to Schools to support the implementation of the NJDOE’s new climate change education standards, including through TA, PD, and instructional materials. This line item also includes $500,000 for the NJDOE to establish an Office of Climate Change Education.
- $2 million to continue the state’s Computer Science for All initiatives.
- $200,000 to establish an Office of School Bus Safety in NJDOE (P.L.2021, c.471).
- $1.3 million to continue the state’s support of initiatives to diversify the teacher pipeline.
- $1 million for the “New Jersey Tutoring Corps” program.
- $1.1 million for teacher loan redemption programs.
School Climate/Social Emotional Learning/Mental Health Programs
- $500,000 to for the state to continue implementing the Restorative Justice in Education program (P.L.2019, c.412).
- $500,000 for the state to continue implementing the School-Based Mental Health Training Grant Program (P.L.2021, c.322).
- $27.56 million for DCF’s School Linked Services Program, a $1 million increase over fiscal year 2022.
- $2.5 million for the Clayton Model Pilot Program (P.L.2021, c.85).
- $10 million for the Local Efficiency Achievement Program.
- $5 million to implement P.L.2021, c.402, the school district regionalization law enacted in January 2022.
ARP SFRF Funds
The budget allocates federal funds received by the state through the American Rescue Plan State Fiscal Recovery Fund to the NJDOE for the following purposes:
- $120 million for Universal Pre-K Facilities Fund (SDA).
- $3.6 million for “Developing Resiliency with Engaging Approaches to Maximize Success.”
- $3.3 million for educator and staff training initiatives
State Payments on Behalf of Districts
- $3.20 billion for teachers’ pension (i.e., TPAF) costs.
- $1.05 billion for TPAF post-retirement medical benefits.
- $861.85 million for Social Security tax contributions.
For additional information, please contact NJPSA’s Government Relations team.