Report: Flat Funding Impacts Taxes

For the past four years, the New Jersey Legislature has essentially frozen public school funding at 2001-2002 levels, regardless of changes in enrollment, cost or need.

The Rutgers-Newark Institute on Education Law and Policy has released a report showing that flat funding has contributed significantly to New Jersey’s property tax situation.

In the report, “Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06,” Dr. Ernest C. Reock, Jr. demonstrates the impact of the freeze on most of the state’s school districts. (Reock is the retired director of the Rutgers Center for Government Services.)

For example, in the 2005-2006 school year, the state aid freeze resulted in total under-funding of $846 million—with middle-income districts bearing $508 million of the shortfall and poor non-Abbott districts $170 million.

Property Tax Impact If the entire amount had been applied to property tax reduction, it would have enabled the poor non-Abbott districts to reduce their local tax levy by 20.2 percent. In the middle-income districts, the local levy would have dropped 8.9 percent.