During a briefing for education stakeholders last week, Gov. Jon S. Corzine and Education Commissioner Lucille E. Davy described the structure of a new school funding formula that they want in place for 2008-2009.
Their proposed system would establish the concept of an “adequacy budget” based on the department’s cost studies over the past year. The adequacy amount would represent the components and the cost of a thorough and efficient education. It would apply to all school districts—Abbott and non-Abbott—without distinction.
However, numbers for the dollar figure for the “adequacy amount” or how much state aid each district will receive is not expected until Dec. 10 at the earliest. Nonetheless, Gov. Corzine has been cited in press reports as saying approximately two thirds of school districts will receive marked increases in state aid, while other school districts may receive increases in the 1- to 2-percent range.
Details of the governor’s plan include:
- More Money Statewide The amount of aid provided to school districts statewide will rise, but no exact dollar figure was provided. Aid increases could range from $400 million to $500 million, according to some news reports.
- 2-Year Hold Harmless No district will lose state aid this coming year. The governor said he wants to “commit to a two-year hold-harmless scenario.”
- Enrollment Change The formula would phase in additional state aid that results from large-scale enrollment increases. After the two-year hold-harmless period, changes in aid due to enrollment declines would also be phased in.
- New Local Tax Contributions The state is recalculating each district’s “fair share” contribution, which is the amount of money that a district raises for education through local property taxes and which is based on income levels and property wealth. This is the first adjustment to that figure in seven years. It means that the number of districts eligible (or not eligible) for wealth-based general education formula aid—called “equalization aid” under the proposed formula—could change. Because of the two-year hold-harmless provision, the actual aid dollars that a district receives in 2008-2009 would not decrease even if its fair share contribution increases.
- One Formula for All The administration plans a single funding formula that would apply to all school districts, Abbott and non-Abbott. Gov. Corzine said the administration will present the proposal to the state Supreme Court to determine its constitutionality as applied to the Abbott districts.
- New Special Education Funding The method for distributing special education aid would change markedly under the new system. Out the window would be the current four-tier formula, which establishes per-pupil aid amounts based on a student’s disability and need for service. Instead, there would be a single aid level set through a “census” approach. That amount would be based on the average statewide classification rate and the average statewide special education cost.
Significantly, the aid produced by this census approach would be distributed through a “hybrid” categorical/wealth-based method.
According to Davy, the amount of special education aid provided on a categorical basis (i.e., per child without regard to community wealth) would be roughly equivalent to the total amount of state categorical funding for the current year. On top of that amount, the state would provide an allotment of funding to be distributed on the basis of community wealth.
The basis for extraordinary special education costs aid would also change.
The state would fund 75 percent of the expenditure above $40,000 for in-district placements. It would pay 75 percent of the cost above $55,000 for out-of-district placements.
Policy Statement In many ways, the formula reflects the administration’s beliefs on how the state’s public school system should be structured. For example, the extraordinary cost aid distinction is clearly an attempt to move more special education students away from out-of-district placements. Other elements of the program reflect goals of the administration:
K-12 Model In determining the amount of money needed for an “adequate” education, the state based its calculations on a 5,000-student kindergarten through 12th grade school district. Davy was clear on why the state settled on that single model, rather than allowing for varying grade organizations: The state hopes to see all New Jersey school districts reconfigured into K-12 units.
In addition to a base amount per pupil, weights would be added for students in middle school, high school, vocational education, speech and special education, as well as for limited English proficient students and those academically at risk due to poverty.
At-Risk Students At-risk aid, provided per pupil for every student eligible for free or reduced price lunch, is a key to enabling the formula to pass constitutional muster. The formula would also increase the per-student amount when the proportion of poor students within the district increases past certain benchmarks. According to Gov. Corzine, this is one of several elements of the proposal that identifies the needs of children and provides money to follow those needs.
Early Childhood Education The adequacy model applied to all school districts will include the cost of full-day kindergarten—a change from the previous school funding system. However, even though the district’s adequacy budget, against which its state aid would be calculated, would factor in full-day kindergarten, there would not be a requirement for districts to establish the full-day programs.
Other elements of the proposal include using updated mileage and enrollment counts for transportation aid and establishing a new categorical aid program, security aid. All districts would be eligible for the security funding, although allocations would be based on the district’s concentration of students eligible for free or reduced-price lunch.
Legislature’s Decision Gov. Corzine says he wants the new formula in place by the time of his annual state budget message so school districts can have a logical and predictable formula in place when developing their 2008-2009 budgets. He would prefer for the lame duck Legislature to approve the new finance system, since nearly a third of the legislators who take office in early January will be new members who might not have sufficient background on the issue.
Visit BoardBlog NJSBA’s blog includes the latest updates and commentaries about the proposal. Read more and respond at BoardBlog.