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A New School Funding Formula – By Thanksgiving?!

ATLANTIC CITY, Nov. 14, 2007 — Get ready for the “Adequacy Formula.” The phrase came up more than once during today’s panel discussion of a new school funding system at the League of Municipalities annual conference in AC. In her opening remarks, Commissioner of Education Lucille Davy told the audience of municipal officials and legislators that Gov. Corzine said he wants a new school funding formula introduced by Thanksgiving. Right now, the “i’s” are being dotted and “t’s” crossed, she said.

Plans are for the Legislature to discuss, if not take final action on, the Administration’s proposed formula during its post-election session, according to Davy. If lawmakers don’t vote on the plan during the lame-duck session, the new Legislature would address the formula shortly after it convenes in January. The ultimate goal is for a new funding system to be in place for the 2008-09 school year, Davy said.

So what’s in the “adequacy formula”? As expected, the commissioner said she was not ready to provide the specifics today. However, she did cite some of the principles – some already known, others new – that would guide the formula:

• Adequate funds for students in need, whether the students are special education, English language learners, or economically disadvantaged.
• “Adequacy” defined by the state’s Core Curriculum Content Standards
• Funding that follows the child, regardless of the district where he or she attends school.
• A formula that the state can sustain.
• A system that is fiscally responsible.
• A formula with a local fair share contribution component.
• Incentives for regionalization, which would be implemented in conjunction with the K-12 consolidation studies to be completed by the new executive county superintendents over the next three years.

That’s a tall order. And the biggest question remains just how would the state pay for the new system?

A reporter posed that question to Davy. Have new revenue streams been identified? Are there any plans to realign state aid distribution? Davy stated that the new formula is designed to “maintain” progress in the Abbott districts. She also noted the issue of identifying revenue to meet the needs of the new system. Finally, the “M” word (monetization of assets) was mentioned by members of the panel, but in a most non-committal way.

One panelist, Assemblyman Herb Conaway, the father of the school accountability act, said that it’s imperative for a new formula to replace the defunct CEIFA system, which the court declared as unconstitutional as applied to the Abbott districts and which has not been fully funded for the non-Abbott districts since 2001-02. However, even if the Legislature puts a new school finance system in place, it might not be fully funded immediately, he said.

Jun Choi, mayor of Edison and chairman of the League of Municipalities school funding committee, noted that unless the state’s current deficit (which now stands at $3 billion) is resolved – and resolved permanently – no school funding formula could work in the long run.

Perhaps the most logical observations came from NJSBA Director of Governmental Relations Mike Vrancik, who also sat on the panel. Six consecutive years of flat or inadequate funding resulted in a shortfall of more than $2 billion in state aid. The stagnant funding was the major contributor to the steep increases in property taxes, said Vrancik, citing a January 2007 study by Rutgers Center for Government Services.

The current issue should not only center on the design of the new formula, but also the state’s ability to fully fund it. Any of the previous funding methods – going back to the 1977 – might have been found to be constitutional if the state had been able to fully fund them for more than a few years, Vrancik pointed out. That’s never happened.

Do you believe that the state Legislature and Administration will develop a new school funding formula that will meet the needs of all students in all districts? Post your viewpoints to this blog.

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