Senate Hearing In Newark Puts Focus on Fair & Equitable School Funding  

Bipartisan Panel Holds Public Session on School Aid Formula & Distribution

Newark –. The bipartisan Senate Select Committee on School Funding Fairness, co-chaired by Senate President Steve Sweeney and Senator Joseph Pennacchio, held its fourth hearing today in Newark, gaining input on the fairness and equity of the formula that distributes funding to all of New Jersey’s school districts. The session drew education officials from school districts in the region, including superintendents, school board members, teachers, principals, state and local officials, as well as statewide education advocacy groups.

“These hearings are generating more information that documents the problems with the distribution of state education aid to school districts in New Jersey,” said Senator Sweeney. “It is already more than obvious that two of the needed reforms are to adjustment aid and enrollment caps because they are contributing to the lopsided funding that shortchanges districts throughout the state. Those fatal flaws need to be corrected in order to make the formula fair and equitable.”

The hearings are examining the effectiveness of the school aid formula, the distribution of local funding, and the impact on education and property taxes, giving the panel input to make recommended reforms.

With full funding, school districts in Essex County would gain $236 million and those in Union County would gain $249 million. Newark and Elizabeth would see aid increases of $134 million and $97 million, respectively.

Full funding would also help support the expansion of pre-K programs in schools throughout New Jersey. Early childhood education has proven to be successful in preparing young students for academic progress, especially in urban districts.

“There is no issue more important than investing in the education of our children, but we have to make sure that state funding is allocated in a fair and responsible way. We are committed to working to address the inadequacies in the school funding formula with a goal of bringing all districts to 100 percent funding,” said Senator Ruiz. “This hearing was part of the process of examining the impact of the current funding structure on districts as we work to remedy the system.”

The original formula was altered to include provisions that have prevented districts with increased student enrollment from receiving fair compensation at the same time other school systems are overcompensated with money for students they don’t have. These add-ons – “growth caps” and “adjustment aid” – were intended to be temporary but continue to be funded eight years later, exacerbating a disparity that leaves some districts with as little as 40 percent funding while others get 140 percent or more of the formula aid.

According to the Garden State Coalition of Schools, taxpayers in 200 communities are paying nearly $1 billion more than their local fair share to make up the inadequacy of school funding. At the same time, $538 million in “adjustment aid” is going to districts that already receive more than 100 percent of formula aid, a disparity that will only grow worse if it isn’t corrected, Senator Sweeney said.

“This is a fiscal issue as well as an education priority,” said Senator Sarlo, who chairs the Senate Budget Committee. “School funding has a real impact on local taxpayers. We make significant investments in our schools and we want to make sure the funds are used effectively and responsibly.”

Statewide, this year’s budget for formula aid to school districts is currently $8 billion. This includes about $530 million in adjustment aid to school districts that are overfunded based on their student population and property tax base. If the state did not underfund the SFRA, it should be providing about $9.5 billion in aid to school districts. As a result, hundreds of school districts are levying higher school property taxes on their residents than they should be to make up for shortfalls created by the State.

The committee will also assess the impact of tax growth on the ability of school districts to fund their schools, evaluate special education services, look at per-pupil administrative costs, the fairness of the current equalized valuation and income measure, and the impact of property tax abatements. It will also look for recommendations to lower property taxes.

Senator Sweeney has also advocated for an increase in total school aid of $100 million annually over five years to reach full funding.

“We heard a lot of testimony from concerned parents and education officials who only want the best opportunities when it comes to the children,” said Senator Sandra Cunningham, chair of the Higher Education Committee.  “I look forward to continuing this process and hearing from districts and officials across the state in our effort to address the school funding formula and its impact on communities statewide.”

The committee also includes Senator M. Teresa Ruiz, who also serves as chair of the Senate Education Committee, Senator Sandra Cunningham, chair of the Senate Higher Education Committee, Senator Paul Sarlo, chair of the Budget Committee, Senator Steven Oroho, Senator Michael Doherty and Senator Samuel Thompson.

Also participating in the hearing were Newark Mayor Ras Barraka, Senator Ron Rice and Jersey City Mayor Steve Fulop.