Lawmakers in the state Senate and General Assembly narrowly passed a bill that would radically alter the way that state aid is apportioned to local school districts, after a tooth-and-nail struggle that, as one assemblyman observed, fell mostly along geographic lines.
The bills, S-4000 and A-500, respectively, are the result of weeks of intense debate and negotiation after Gov. Jon Corzine initially laid out his plan to both increase school funding and change how it is distributed. The governor’s initial proposal was formally unveiled to the public on Dec. 13, and since then, supporters have said that time would be of the essence if the new formula is to be applied for the upcoming budget cycle. To this end, there had been a scramble to pass the bills before the end of the legislative session. This was accomplished on Jan. 7, the last day of the 2006-07 legislative session.
Plan has several changes
The plan, as finally passed by the Legislature, remains mostly unchanged from the governor’s initial proposal, though there were a handful of changes introduced.
Currently, funding is primarily determined through a school’s location, with wealthier areas receiving less aid and poorer ones receiving more. But this has led to some criticism, because even in areas where the average income is higher, there may still be students in need who require extra money to educate them. To this end, the proposed fundamental shift focuses not on a district’s location but on how many needy children are in the district.
The basic mechanism behind the formula is a base rate given for every student in a district, depending on grade level, determined by how much money the state feels is necessary to adequately educate a child. For elementary schools, this base rate is $9,649. For middle schools, it is $10,035. For high schools, it is $11,289. Students in vocational schools, meanwhile, will net a base rate of $14,789.
On top of these base amounts would be additional funding for each student who is classified as “at risk,” of limited English proficiency (LEP), combined at risk and LEP, in special education, or requiring speech therapy. Further aid, depending on need, is also provided for security, transportation, equalization and adjustment.
The plan, which the governor admitted was an expensive proposition, would pump $532 million into the education system, with the exact source of the funding still to be revealed.
The final legislation differs fromthe governor’s original proposal in 17 different ways, many having to do with special education.
A change that had received a great deal of attention was an increase in how much the state would reimburse school districts for special-education costs. The original proposal called for districts to be reimbursed 65 percent by the state for special-education expenditures over $45,000 and 75 percent for expenditures over $55,000. Sen. Barbara Buono, a sponsor of the bill, said that schools in her district cravedmore stability on costs than the original proposal offered.
“What I heard from my districts is the enormous, unpredictable burden that these costs place on these budgets; it’s very difficult to predict fromyear to year what these costs will be.What the bill did is, it changed that, and I really was very insistent on changing this,” said Buono.
Under the new legislation, the state will now reimburse 90 percent of expenditures over $40,000 and 85 percent of expenditures over $55,000. If this is not enough due to an especially high population of students with disabilities, then districts will be allowed to apply to the state for additional aid.
Another provision in the bill that had changed was how much a state would need to devote to property tax relief if the formula determined that a district was taxing above a certain amount. Under the original proposal, if a districtwas spendingmore per pupil than what the formula deemed to be adequate, and if the district was taxing higher than what the formula determined to be its local fair share, then any state aid increase over 2 percent would need to be devoted to property tax relief. The final legislation allows a district to also use the Consumer Price Index, a general cost-ofliving indicator, or 2 percent, whichever is higher.
Other changes include progress reports to be issued by the state every three years rather than five, cost adjustments due to district location to be made with the Census rather than the aforementioned progress report, expanding what counts as “full implementation” of a preschool program from 80 to 90 percent of eligible students, and increases to security aid for charter schools.
Local impacts
Local officials were generally in good spirits when learning of the spending plan’s passage, noting that itmeans their own districts will be receiving an impressive jump in state aid.
The Upper Freehold Regional School Districtwould receive 20 percentmore state assistance in 2008-09 than it did last year, the Millstone Township School District would garner 10 percent more, and Roosevelt Borough would earn 2 percent more based on the new plan.
The Upper Freehold Regional School District, which currently receives $4,406,000 in state aid, would garner an $881,000 increase based on the new formula, for a total of $5,287,000 in 2008-09.
Roosevelt currently receives $796,000 in state aid. The new formula would provide it with a $16,000 increase, for a total of $812,000.
Millstone’s aid for 2007-08 amounts to $4,961,000.Under the provisions of the new formula, the district would get approximately $5,457,000 in 2008-09.
However, the new plan considers Millstone to be one of more than 100 districts throughout the state that spendsmore than what the state has deemed “adequate” on a per-student basis. Since the district is set to receive more than the minimum 2 percent aid hike under the new formula, it may have to return a majority of the aid that it will be getting to the taxpayers. Millstone spends $12,962 per student, whereas the Department of Education has deemed $12,490 per student “adequate spending.
Gearing up for a fight Both opponents and supporters of the legislation have admitted that a court battle is all but inevitable. This is because the legislation dismantles the current funding formula, which was based on a state Supreme Court ruling that established 31 so-called Abbott districts, less-affluent districts that now receive state aid based on bringing theminto financial parity with the wealthiest ones.
“The strong likelihood is [the state] will bring it back, or the Education Law Center will – or maybe others will – bring it back,” said Paul Tractenberg, president of the Education Law Center and one of the original lawyers on the case that established the Abbott districts.
Tractenberg said that the legislation raises several strong constitutional concerns and he was strongly opposed to its passage, having said in the past that the adequacy formula would leave state aid figures for those districtsmuch too low, among other problems. He said that any changes to the funding formula must have strong built-in protections for the Abbott districts, and called the current proposal “water torture that drips [Abbott districts] to death.”
“The state would have to convincingly demonstrate [that] some alternative to the parity funding approach really will protect the constitutional interests of the students …those of us who oppose the bill think the state has not even come close,” said Tractenberg.
He is not alone in his opposition. While the Legislature managed to pass the bills, it did so only barely, and even then, lawmakers needed to stay at the Statehouse in Trenton until about 1 a.m. to vote, the debate having gone on for that long. Buono said that a tipping point was the increase in special-education funding.
Barnes said he noticed that the votes didn’t form so much along party lines as they did along geographic lines, noting that legislators inmore urban districts tended to vote against it regardless of party, while those in more suburban districts tended to support it. Still, he said, there were a few exceptions, noting some lawmakers from urban districts voted for it and some from suburban districts voted against it.