Specifics of new school funding formula unfurled
All districts would receive at least 2% increase in state aid; some up to 20%
BY CHRIS GAETANO Staff Writer

TRENTON - The state aid figures from Gov. Jon Corzine's proposed new school funding plan would give area school districts a significant cash increase from Trenton if the new formula passes the Legislature.

The proposed new funding formula, which the governor formally unveiled on Dec. 13, changes the way state aid to local school districts is apportioned. Currently, funding is primarily determined through a school's location, with wealthier areas receiving less aid and poorer ones receiving more. 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 governor is proposing a fundamental shift in the state aid formula, from a district's location to how many needy students a district has.

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.

Every district, for at least one year, would be receiving a 2 percent increase in state aid and would be guaranteed to not lose state aid for at least three years.

However, the proposition is an expensive one. The plan will put at least $530 million into the school system, and officials are wondering where all this money is going to come from.

Ways to fund the proposal

This question has been at the forefront of many minds since the Corzine plan was first announced. The Mayors' School Funding Committee, a group of 22 mayors chaired by Edison Mayor Jun Choi, recently released a set of recommendations to the governor on how the initiative can be paid for. Choi expressed general support for the plan, though he noted that any changes to the state aid distribution system must be met with an increased dedication to accountability and fiscal responsibility, especially in the face of a $3 billion-a-year deficit and a $32 billion debt.

"One concern we have is, longer term, how are we going to pay for it? And we list the set of recommendations that call for greater fiscal responsibility, greater accountability and investment in programs that work and the elimination of educational programs that do not work. That is the quick summary of the report," said Choi.

The report offers a number of specific policy recommendations that it says would help account for the costs of the new school funding formula, but generally says that the state must consider any and all options specifically to address the deficit and debt. Some examples brought up include the use of casino and lottery revenues, the re-allocation of sales tax dedications from property tax rebates to education, and impact fees for development that go directly to schools. The report also stresses the importance of making sure that state aid formulas are consistent from year to year, preferably through legislation rather than ad hoc.

The report spends a great deal of time focused on increasing accountability as well. Overall, the report recommends that the state examine and improve its current means of measuring student success against set standards and make a firm commitment to gathering better data. It also recommends giving the Commissioner of Education authority to withhold state aid from a district for lack of effectiveness or efficiency.

Other recommendations include moving school board elections to November, with an April budget election being held only if the district's proposed spending plan exceeds a predetermined cap level. The report also states that the state should remove disincentives for school district consolidation, and encourages local districts and municipalities to increased shared services.

Concerns from the Abbott districts

Abbott districts came about following a New Jersey Supreme Court decision. According to the state Department of Education's Web site, "The New Jersey Supreme Court in 1998 established a single criterion for determining whether a constitutionally guaranteed education is being provided to students in the poorest schools in the state."

Under the Abbott decisions, these districts receive state aid that is calculated to provide them with the same per-pupil operating budgets as that of one of the state's wealthiest school districts. This funding, called Abbott parity aid, is adjusted annually to reflect spending and enrollment in wealthy districts. The Abbott districts are selected by the court and the Legislature to benefit from financial assistance and to implement specific remedies mandated by the court.

Paul Tractenberg, a law professor at Rutgers Newark and the founder of the Educational Law Center, which advocates for Abbott districts, said he is worried about the governor's proposed funding formula and that it has significant constitutional as well as practical issues.

"I think there are big problems constitutionally, but the problems are much bigger than just that," said Tractenberg.

Trachtenberg is capable of speaking at great length about what he believes are the problems with the Corzine plan.

One problem is that the adequacy funding approach will leave Abbott districts with less aid than they would get with the parity approach currently used, and said that the adequacy figures across the board are still much too low. Another is that the weighted factors, such as at risk, LEP and at risk/LEP, don't cover the wide variety of other needs districts might have that could require extraordinary aid themselves; the new program would collapse the current 26 aid categories to 10. Also, the plan is still unclear about school facilities costs to provide construction of new buildings and renovations of old ones.

He was also critical of the plan to have the aid money go to districts rather than directly to the individual schools, and the speed at which the initiative is being pushed through the government.

In the hands of the Legislature

With the proposal formally rolled out, it is now up to the Assembly and the Senate to piece together a bill that would ultimately put the governor's plan into effect. Corzine has stated that he hopes to have the new school funding formula in place by the end of the current legislative session, because local districts must factor state aid into their budget analyses for the upcoming school year.

The proposal has gained cautious support from state lawmakers, with a general agreement that a new scheme for state aid distribution has been a long time coming.

"A school funding formula is critical not only for the state budget process but [for] our schools. … About five years of flat aid has taken its toll in school districts," said Assemblyman Bill Baroni (R-14), who sits on the Education Committee.

Baroni said he would like to examine the way special-education aid is distributed a little more closely. He noted that while he does not want to rush any legislation through, it is the burden of lawmakers to keep to a timeline for the sake of local school districts trying to get their budgets together.

Sen. Barbara Buono (D-18) said she is approaching the plan with a degree of healthy skepticism, saying that she has seen other attempts to improve the school funding formula come and go. Still, she is hopeful that this can be the time the state gets it right.

"Basically, the way I can summarize my position is [that] while I don't think we're out of the woods yet, this formula, while not perfect, represents long-overdue and significant progress toward more fair and equitable funding of our schools. And in addition to ensuring that education is a top priority, it also makes progress on property tax relief, and that's key," said Buono.

She said she was concerned over whether the formula would provide a static adequacy mode over the years, or whether it would change through time. She noted that all things become more expensive over time, and that adequacy should be re-examined year after year.

"What is adequate today may not be adequate tomorrow. … We need to spell that out in the legislation," Buono said.

She said that Democratic legislators have given a generally positive initial response, but that lawmakers representing areas with Abbott districts have expressed worry that this will, once the three-year hold-harmless provision is up, result in a loss of state funding.