New Jersey’s local school districts received notification last week of their projected state school aid under Gov. Chris Christie’s proposed 2015-2016 budget, hours after the governor gave his annual budget address to the state Legislature.

Most districts saw direct funding remain flat. District-by-district aid numbers are available here.

Overall, the state’s proposed budget calls for $33.8 billion in spending, an increase of $1.3 billion. This includes $12.75 billion in education spending, a little over $9 billion of which would be direct aid to school districts. Total direct aid would increase $4.6 million under this proposed budget. Highlights include:

  • A slight increase of $1.9 million in formula aid for a total of $7.86 billion;
  • $2.7 million increase in preschool aid totaling $655.5 million;
  • $52.5 million in School Choice Aid, a $3.3 million increase from last year;
  • The continuation of the PARCC Readiness and Per-Pupil Growth Aid categories, again at $13.5 million per category;
  • The School Development Authority (SDA) assessment is again held harmless at the same level as last year’s $26.5 million total;
  • Charter school aid is decreased from $12 to $10 million;
  • $2 million for Opportunity Scholarships;
  • Non-Public School Aid is decreased $3.6 million to $85.5 million; and
  • Under Adequacy Aid, Extraordinary Special Education Aid and Supplemental Enrollment Growth Aid are all held flat.

The bulk of the funding increases for education are in the direct payments the state makes for teacher benefits and in SDA debt service. This year’s payment into the Teachers’ Pension and Annuity Fund (TPAF) nearly doubles from $415.4 million to $802.4 million. Other increases include payments for post-retirement medical benefits, up $45.5 million to $1.1 billion for this upcoming year. Debt service for SDA projects also increases markedly from $520 million to $884 million in the projected budget.

Pension Roadmap  An extensive portion of the governor’s budget address was spent talking about proposed reforms to the state’s public employee pension plan. Under a study done by the New Jersey Pension and Health Benefits Study Commission, the proposed plan would freeze the current Teachers’ Pension and Annuity Fund (TPAF) and replace it with a new plan, which would incorporate elements of a defined contribution system. Both plans would be transferred to a trust managed by the NJEA. The state would then make obligatory payments, codified in the State Constitution through public referendum, over the course of approximately 40 years to address current unfunded liabilities.

Of particular note is the roadmap’s call for future employer payments for these pension benefits to be assumed by the local school districts. Additionally, under this plan, local districts would absorb the health care costs of retired employees of the district. It should be noted this is merely a proposal and, to date, no legislation effectuating these ideas has even been introduced.

The “Roadmap to Reform” sets a June 1, 2015 deadline for agreement on this proposal. This is based on the need to have a constitutional amendment on the November 2015 ballot. The roadmap agreement, signed jointly by the heads of New Jersey Education Association and the Pension and Health Benefit Study Commission, recognizes that if this plan is found not to generate sufficient savings or shifting the costs to local districts is not feasible; then by June 1, 2015 the plan will be withdrawn.

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