On June 30, with only hours to spare before a government shutdown, the governor and legislative leaders agreed on a $37.4 billion state budget.

At issue was not so much the spending within the budget, but rather how to pay for these programs. In the end, the leaders agreed to raise income taxes on those earning more than $5 million annually and increase the corporate business tax by 2 percent over the next four years.

School Aid Changes The budget included significant changes in state aid to school districts. In his original budget proposed in March, Gov. Phil Murphy planned an increase of $283 million in state aid. Further, no district was to receive less aid than last year and 94 percent of districts were to receive an increase.

In the budget signed on Sunday, the legislature went beyond this proposal and increased state aid by $340 million over the 2017-2018 amount.  Additionally, the legislature also revisited the individual state aid numbers, resulting in change—both increases and decreases—in the amounts released in March.

Although supportive of the increase in total state aid and encouraged by efforts to assist underfunded districts, the NJSBA objected to changes made to districts’ state aid figures after they had adopted budgets based on preliminary aid numbers. This is the second consecutive year that some districts will be required to revisit their budgets and make cuts after the start of the new fiscal year.

“The New Jersey School Boards Association strongly supports the additional state aid for persistently underfunded school districts provided by the 2018-2019 state budget,” said Dr. Lawrence S. Feinsod, NJSBA executive director. “The state’s inability, or failure, over the past decade to run the formula under the School Funding Reform Act has negatively affected education programs in these school districts.”

“At the same time, we remain concerned about the impact that funding cuts have on other school districts and their students at this juncture. NJSBA policy specifically opposes reductions in school funding after the state has notified districts of their state aid entitlements and instructed them to use those figures in developing their budgets.”

A bill to modify school funding, S-2/A-2, is currently on the governor’s desk. Sponsored by state Senate President Steve Sweeney, this legislation would eliminate the caps on state aid increases resulting from enrollment growth, phase out “adjustment aid” while making other changes, and result in full funding of the School Funding Reform Act by 2024-2025.

Indications were the governor had agreed to sign S-2/A-2 as part of the budget negotiations, but at press time, no action had been taken.

Editor’s Note (July 5, 2018): A chart that was linked to an earlier version of this article compared district-by-district state aid allocations for FY19 with the state aid amounts for FY18 and the March 2018 state aid notifications. The sources for the information were the Office of Legislative Services (FY19 and FY18 state aid) and the New Jersey Department of Education (March 2018 state aid notifications). The FY19 state aid information was produced by the Office of Legislative Services following committee approval of the appropriations act.

The chart included inter-district school choice aid in the column listing the March 2018 state aid notifications from the Department of Education. However, inter-district school choice aid, which is received by approximately 130 school districts, was not reflected in data provided by the Office of Legislative Services, making comparison inaccurate for those districts.

Official notice of adjusted state aid for 2018-2019 will be issued through the NJDOE Office of School Finance. It is anticipated that guidance on addressing state aid changes will also be provided.

 School Board Notes will post a comparison chart following release of the final notices from the Office of School Finance.