Legislative Update: Education Measures Advance as Budget Hearings Begin

Monday, March 11 was a particularly busy day for education activity at the State House.

As the Assembly Budget Committee held its first public hearing on the fiscal year 2025 state budget, the Assembly Education Committee met to advance several school funding measures designed to assist school districts experiencing state aid reductions adjust to new funding levels, or to help improve the School Funding Reform Act’s alignment to current district needs. An Open Public Records Act reform bill also moved through both the Assembly State and Local Government Committee and the Senate Budget and Appropriations Committee. The Senate Budget and Appropriations committee approved other education measures alongside the OPRA bill, including legislation that would allow school districts to submit separate proposals at a special election. Additional details follow below.

Assembly Education Committee

On March 11, the Assembly Education Committee approved:

Stabilizing SFRA Property Wealth Calculations A-942 would modify the formula for a district’s local share in the SFRA to replace the current prebudget year equalized valuation with a five-year average of equalized valuation. The New Jersey School Boards Association testified in support of the bill, noting its potential to stabilize year-to-year increases in equalized valuation used for determining local share, and in turn, stabilize year-to-year state aid reductions for certain districts. The bill next heads to the Assembly Appropriations Committee for further consideration.

Tax Cap Relief for Certain Districts Experiencing State Aid Reductions A-3452 would provide the following additional school district tax levy growth cap adjustments:

• In the 2024-2025 school year, for a school district experiencing a state aid reduction, an increase in an amount equal to the district’s state aid reduction.
• In the 2025-2026 school year and thereafter, for a school district experiencing a state aid reduction and that is spending below adequacy (pursuant to N.J.S.A. 18A:7F-70), an increase to raise a general fund tax levy up to the amount necessary for the district to be spending at adequacy.

The bill would also require, however, that if a school district “increases its tax levy … because the district experienced a reduction in State school aid in the … 2024-2025 school year … or because it experienced a reduction in State school aid and is spending below adequacy … in any school year after the 2024-2025 school year” then the district would be required to gain New Jersey Department of Education approval to reduce the following in the budget year:

• Total number of teachers employed by the school district.
• Total amount of general fund appropriations for either instruction or support services.

The NJSBA testified that, while strongly supporting the intent of the bill and tax levy cap flexibility generally, certain mechanics of the bill raise serious concerns that warrant amendments. First, the NJSBA requested removal of the provisions that would require NJDOE approval for reducing teaching staff or instruction/support spending when districts increase their tax levies per the terms of the bill, raising concerns that the requirement could significantly hamper important budget-development flexibility. The NJSBA also requested that the tax cap flexibility for 2025-2026 and thereafter be adjusted to allow districts to reach their “local share,” as that term is defined in the SFRA, rather than reaching “adequacy,” to adhere more strictly to the principles of the SFRA that the costs of a district’s adequacy budget be shared between the state and local tax revenue based on a community’s ability to pay.

The bill next heads to the Assembly Appropriations Committee, where it is scheduled for a vote March 14. The Senate Education Committee approved the bill’s Senate counterpart, S-2434, on Feb. 15, which now awaits further consideration in the Senate Budget and Appropriations Committee.

Stakeholder Feedback on Educational Adequacy Report  A-4048 would require the governor and the NJDOE to engage “a diverse group of stakeholders, including school administrators, staff, students, parents, and other community members,” in developing the next Educational Adequacy Report to identify the resources that are not currently adequately funded through state school aid. The administration would also be required to consult various school finance experts for recommendations on revising various SFRA parameters updated in each educational adequacy report. The NJSBA supports the bill, which next heads to the Assembly floor for further consideration.

Second Enrollment Count for State School Aid A-4049 would require that resident enrollment for determining state school aid pursuant to SFRA be based on the average of the number of students enrolled in the district on: (1) the last school day prior to Oct. 16 of the current school year; and (2) the last school day prior to Feb. 2 of the current school year. The NJSBA is monitoring the bill, which next heads to the Assembly floor for further consideration.

Non-CDL Drivers for Small School Buses A-2180, which is intended to alleviate the school bus driver shortage, would create a new “Type S School Bus Certificate” to be issued by the New Jersey Motor Vehicle Commission. The certificate would authorize a person to operate a Type S school bus to transport children to and from school without obtaining a commercial driver’s license, passenger endorsement, or school bus endorsement. A Type S bus is a school transportation vehicle that has a gross vehicle weight rating of 3,000 pounds or more, and which was originally designed by the manufacturer with a maximum seating capacity of nine passengers or less, excluding the driver. The NJSBA supports the bill, which next heads to the Assembly floor for further consideration.

Limited Gas Tax Exemption A-4050 would exempt fuel used for operation of certain school buses from the petroleum products gross receipts tax and the motor fuel tax (i.e., the state’s gas taxes). Under the bill, as amended in committee, buses operated for the transportation of pupils to and from school or school-sponsored events by a “qualifying school district” would be exempt from the taxes during that district’s “year of eligibility.” The bill defines “qualifying school district” as one that is experiencing a reduction in state school aid of at least 6% compared to the prior school year. Such districts would only be exempt from the tax during that particular “year of eligibility” and would cease to qualify for the exemption in any year in which they do not experience a state aid reduction of 6% or more. This exemption applies both to qualifying school districts that operate their own school bus fleets, as well as those that contract out for pupil transportation services. As introduced, the bill would have established a blanket gas tax exemption for all school districts regardless of their state aid status. The amendments will mitigate the overall fiscal impact of the legislation, while still providing relief to districts in years they are receiving less financial support from the state. The NJSBA supported the bill but remains hopeful that its applicability will expand to more school districts as it moves through the legislative process. It now heads to the Assembly Appropriations for further consideration.

Senate Budget and Appropriations Committee

On March 11, the Senate Budget and Appropriations Committee approved the following bills:

OPRA Reform S-2930 makes several changes to the state’s Open Public Records Act, including:

• Modifies the conditions under which a records custodian has to respond to a request for records, allowing the custodian discretion to deny duplicative or anonymous requests.
• Encourages and allocates funds to assist public agencies in moving documents online, making these records searchable via an online database, to the extent feasible.
• Creates a uniform and comprehensive definition of “personal identifying information” which, in many cases, is redacted by the records custodian.
• Establishes specific timelines for responses to records requests occurring under various circumstances, such as when a record may be unavailable or in storage and adds additional specificity and clarity to the items and information, which are exempt from public access.
• Prohibits records requests made by or for data brokers, who take the information they gather and use it for a commercial purpose.
• Transfers the responsibility for violations from the custodian to the public agency, and allows, in limited circumstances, for the courts to issue a protective order to shield the agency from harassment.
• Alters the composition of the Government Records Council, adding more public members, establishing staggered five-year terms and annual salaries for the members of the council.

The NJSBA supports the legislation. The bill’s lower house counterpart, A-4045, cleared the Assembly State and Local Government Committee on Monday as well and now heads to the Assembly Appropriations Committee for further consideration. S-2930 may now be posted for a Senate floor vote.

Supplemental Transportation Aid for Certain Districts S-787 provides supplemental transportation aid to certain districts participating in the interdistrict public school choice program. For choice districts that are under a desegregation order by the New Jersey Supreme Court, this bill provides additional transportation aid to the choice district to facilitate the transport of students to the choice district. To be eligible to receive the supplemental state aid for transportation, the choice district is required to demonstrate to the commissioner that the bus routes utilize cost efficient methods. The choice district is to annually report to the NJDOE at the end of each school year the cost of providing transportation to students from a sending district that exceeds the amount of funds the choice district receives from the sending district pursuant to the bill. The department is required to reimburse the choice district for the additional costs reported. The bill may now be posted for a Senate floor vote.

Special Election Separate Proposals S-2837 would allow districts to submit proposals to voters at a special school election to raise such additional funds for the subsequent school budget year. Special school elections may occur in January, March, September and December.  A separate proposal or proposals may only be submitted on a date of a special election once during a school year.  The bill would not prohibit the submission to the voters of a question for the approval of capital projects on the same special election date as the submission of a separate proposal for additional funds. The bill now heads to the full Senate for a vote. The NJSBA supports the bill and is seeking amendments to broaden its applicability to annual school elections, rather than special elections only.

Assembly Budget Committee Hosts Public Hearing

On March 11, the Assembly Budget Committee held a public hearing on the fiscal year 2025 state budget. A recording of the hearing can be viewed here. The hearing was the first of four opportunities for members of the public to testify on the proposed state budget; additional information on the Legislature’s public hearing schedule may be found in the NJSBA’s March 5, 2024, School Board Notes article PreK-12 Education Highlights of the Murphy Administration’s Fiscal Year 2025 Budget Proposal.

To view the full text of any of the bills summarized above, please visit the New Jersey Legislature’s website.