The fiscal year 2023 Appropriations Act includes $420 million of extraordinary special education aid to reimburse districts for costs incurred in fiscal year 2022 (the 2021-2022 school year).

The $420 million in aid represents a 5% increase from the $400 million that was given to districts to reimburse them for costs in fiscal year 2021, as School Board Notes reported last year.

Looking over a two-year period, the increase in special education aid is even more impressive, going from $275 million in fiscal year 2021 to $420 million this year — a more than 50% increase.

The New Jersey School Boards Association has made increasing extraordinary special education aid a top priority for several years. Most recently, the NJSBA’s reiterated this commitment in its testimony on the governor’s fiscal year 2023 budget proposal. The NJSBA deeply appreciates the work of the state Legislature and the governor to continue the trajectory toward increasing funding of this important category. Recent trends in district expenditure data serve to underscore the importance for the state to build on its trend of increasing investments in this program. According to an analysis by the nonpartisan Office of Legislative Services (see section titled “Background Paper: Extraordinary Special Education Costs Aid”), districts’ extraordinary special education costs increased from $387.5 million in the 2017-2018 school year to $444 million in the 2020-2021 school year, an increase of approximately 15%. Should costs continue to rise, it will be paramount for the state to ramp up its investment to further the critical goal of reimbursing 100% of eligible costs.

“This aid is tremendously important and benefits all New Jersey school districts, providing them with fiscal stability so they can focus on what matters most: educating students,” said Dr. Timothy Purnell, executive director of NJSBA. “We applaud the state for boosting the aid, but there is more work to be done as costs to provide special education services continue to go up for districts.”

According to a broadcast memo from the New Jersey Department of Education, the award notices are available through the “School Aid” link on the New Jersey Department of Education’s Homeroom webpage. The award is based upon the individual student’s primary placement in one of three categories:

  1. Student educated in a public-school program with nondisabled peers: For those direct instructional and support services costs in excess of $40,000, a district shall receive aid equal to 90% of the amount of that excess.
  2. Student educated in a public school with only disabled peers: For those direct instructional and support services costs in excess of $40,000, a district shall receive aid equal to 75% of the amount of that excess.
  3. Student educated in a private school: For tuition costs in excess of $55,000, a district shall receive aid equal to 75% of the amount of that excess.

The final award amount was then prorated (as shown on Line F of the notice) to arrive at a payment amount. Districts can expect the payment to be made through the Automated Clearing House in September. Reimbursement funds should be recorded as revenue and a receivable in your district’s detailed general ledger for fiscal year 2022 as “extraordinary aid” in revenue account 10-3131.

Extraordinary aid amounts that can be clearly documented as having not been appropriated during fiscal year 2022 may be used as an allowable adjustment for the audited excess surplus calculation, and in accordance with N.J.A.C. 6A:23A-13.3(d)6 districts may also appropriate that amount in the next fiscal year (2022-2023) without approval from the education commissioner.

All funds received by your district may be subject to later statutory and single audits. If you have any questions or concerns regarding this letter or reimbursements, email the New Jersey Department of Education.