Gov. Phil Murphy on Tuesday signed a $32.7 billion state budget that keeps overall state aid to education at 2019-2020 levels, while adding money for extraordinary special education costs and restoring a critical student mental health program.

“We appreciate the preservation of the school-based mental health programs, which provide important services to students and families, as well as the increased funding for extraordinary special education programming,” said Dr. Lawrence S. Feinsod, NJSBA executive director.

Overall, the fiscal year 2021 budget provides $8.68 billion in formula aid and will fund government operations from October through next June. It reflects the amount of state aid to education proposed by the administration this summer.

“The NJSBA will continue to advocate for further support from the state and federal governments to help school districts meet COVID-related expenses,” said Feinsod.

School Based Youth Services The budget boosts funding for the Department of Children and Families’ Office of School Linked Services, which administers the School Based Youth Services Program (SBYSP), to a total of $15 million. The SBYSP provides services such as mental health counseling, employment counseling, substance abuse prevention, suicide prevention, pregnancy prevention and sexual assault prevention.

NJSBA advocated strongly for the restoration of funding for this critical program in which nearly 100 schools currently participate. On Sept. 10, Gov. Murphy announced his support for funding the program, which would have been reduced to less than $5 million under his original proposal

Extraordinary Special Education The new state budget increases aid for extraordinary special education by $25 million, a 10% increase over the 2019-2020 total appropriation of $250 million. In its testimony to the Senate and Assembly budget committees earlier this month, NJSBA had urged the Legislature to increase special education funding.

Tax Agreement Enacting a budget became a lot easier when legislative leadership and the governor came to agreement on a millionaire’s tax deal late last week. Under this agreement, taxes on income over $1 million will increase from 8.97% to 10.75%. Also, families making under $150,000 will be eligible for annual tax rebates of $500 next summer.

Education Appropriations Other school-related legislative additions in the budget signed by the governor include:

  • $10 million for “Shared Services and School District Consolidation Study” implementation grants, up from the $3 million proposed by the governor. In fiscal year 2020, $10 million was also appropriated for these grants, but the funding was frozen this past spring to help the state address the financial crisis created by the pandemic.
  • Up to $5 million for an “Education Rescue Grant Program” to support the costs of rehiring or retaining teaching staff members, or hiring similar teachers. This provision is modeled on pending legislation, S-2870, sponsored by Sen. Nicholas Scutari, to help school districts retain staff members in the wake of the freeze in state aid due to COVID-19.
  • $4.5 million for a “Supplemental Wraparound Program” that would provide aid to former Abbott districts to reduce family cost-sharing for before-school, after-school, and summer wraparound childcare.

The budget also contains a $2.5 billion surplus, the largest in over a decade, and a $4.7 billion state pension contribution. Supporters of these appropriations, including the governor, are hopeful they will help to improve the state’s credit rating, which is currently one of the worst in the nation.