Summary of Concerns: The Corzine School Funding Formula
Property Tax Reform
The new school funding formula should provide a reliable, sustainable level of state aid. It should remedy New Jerseys's current over-reliance on the property tax to fund education. It should ensure that districts do not commit to programs and then find that the state aid they relied on has evaporated
NJSBA's primary goal is a new school funding formula that provides relief from the over-reliance on local property taxes to support education, a problem that has worsened since school aid was frozen in 2002.
– After almost four decades of litigation, four school funding formulas and a special session of the Legislature, New Jersey still relies far too heavily on property taxes to pay for education. This situation is at the core of our school funding problems.
– We would be concerned if the new formula continues to shortchange districts, does not provide any type of property tax relief for them and does not enhance their ability to offer needed programs and services.
– The average state pays approximately half of the cost of public schools, while New Jersey state government covers only 37 percent of public school expenditures, according to the National Education Association. Because of the low proportion of state funding, property taxes provide an average of 60 percent of the cost of public education in New Jersey — significantly more than the average among the states.
To be successful, a new school funding formula must shift a portion of school revenue away from the local property tax.
The proposed formula would base the local school district's contribution to public schools on a combination of property wealth and personal income. NJSBA believes that property wealth alone is the best way to determine a school district's fair share of education costs. Factoring per capita income into the formula places many districts at a disadvantage since New Jersey communities can only tax property, not income.
Timelines
School districts need a new formula for 2008-09. We haven’t had one for seven years. State funding has been determined through horse-trading in the Legislature during the annual budget process.
But we are concerned with the speed of the process. No numbers have come out. No legislation has been introduced. Yet, the administration prefers for a new formula to be enacted during the Legislature’s lame duck session, which ends at the beginning of January
We want a new formula, but we want it done right. Haste caused problems with the development of previous funding formulas. Careful review might necessitate that the new Legislature take up the issue when it convenes in early January.
Special Education
NJSBA supports the current practice of distributing state special education aid based on students' educational eligibility — and not on community wealth.
– NJSBA believes that the state should provide the full cost for special education programs.
– Special education is a state and federal requirement. Yet today, local school districts pay 57 percent of its cost.
– Providing special education aid on a wealth-basis would only push more of the cost onto already stressed school districts.
A September 2007 research project commissioned by NJSBA, Financing Special Education in New Jersey, showed that poverty does not contribute substantially to learning disability.
Equal Educational Opportunity
New Jersey's school-funding formula must enable children to achieve the state's education standards, regardless of the community where they live.
At the same time, there must be a realization that an extremely high concentration of poverty within an individual community places severe strains on its education program.
These are principles underlying the Abbott decision, and we will need more information to determine if the new formula will uphold them.
The formula should also recognize that the impact of poverty does not stop at the city limits of Abbott districts.
Hold Harmless
School districts are coming off seven years of flat or inadequate state funding – in essence, seven years of being held harmless.
In this scenario, being held harmless for another year or two isn't a positive development for all school districts.
– If a district has been paying more for state and federal requirements, such as special education, and for other fixed costs, being held harmless won’t help it provide needed programs and services.
NJSBA is also concerned about the implications for local school districts when the two-year hold-harmless provision expires. How much money would be reallocated?
Adequacy
The Governor and the Commissioner are referring to the new school aid system as an "adequacy" formula. If it is an adequacy formula, it must be based on a realistic level of spending per pupil that is tied directly to the state's academic standards. Cost assumptions should not be backed into a predetermined level of spending.
Without the actual aid numbers next week, we will not be able to develop a complete and informed assessment of the proposed formula.
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The New Jersey School Boards Association, a federation of district boards of education, advocates the interests of school districts, trains local school board members, and provides resources for the advancement of public education.
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