Funding Formula Delayed

A new school funding formula will not be in place for 2007-2008, Commissioner of Education Lucille E. Davy told leaders of NJSBA and other state-level education organizations on Monday. Implementation of a new formula next year has been a goal of Gov. Jon S. Corzine although, in a recent Associated Press report, he had cautioned, “We’re going to do it right...not fast.”

New Direction At Monday’s meeting, Davy said that, even without a new school funding formula in place, the governor’s state aid recommendations for 2007-2008 would reflect the direction that a new formula would take.

In an interview with NJ101.5 radio on Monday, Corzine said, “I do believe we’re going to have to increase funding for schools this year.”  He gave no indication about the size of an aid increase and how funding would be distributed among school districts.

Corzine is slated to deliver his budget address to a joint session of the state Legislature on Thursday, Feb. 22. Statute requires the state aid figures be released to local school districts within two days of the governor's budget message.

NJSBA will post information about new developments concerning 2007-2008 state aid on its Web site.

Cost of Education Up to now, the design of a new funding system has focused on the state education department’s study to define and cost out an adequate, or “thorough and efficient,” education. That figure would serve as a major component for a new aid formula.

In the fall, the education department issued a Report on the Cost of Education. The study was subject to criticism, in part because of its use of 2003 expenditure data.

On Monday, Davy released a review of the report by three funding experts. A significant recommendation involves revising the study with the use of 2005-2006 data. In most areas, however, the review indicated that the report was on target, she said.

“They made several recommendations that the department will take into consideration as we move forward with the process of developing a funding formula that is fair and equitable and will pass constitutional muster,” the commissioner said.

To read the report, go to the “NJDOE News” section of the state Department of Education’s Web site.

Tax Reform A new school funding formula is a central element of property tax reform.

New Jersey has not used its existing school funding formula, the Comprehensive Educational Improvement and Financing Act (CEIFA), since 2001-2002. Instead, the governor and the Legislature have determined state aid allocations through the annual budget. The result has been stagnant state aid.

A recent report from the Institute on Education Law and Policy at Rutgers-Newark identified flat state aid as the major cause of property tax growth in New Jersey over the past five years. The study was conducted by government finance expert Dr. Ernest C. Reock.