New Jersey's 21st Legislative District

Senator Tom Kean, Jr.

Senator Joe Pennacchio
Senator Mike Doherty
Senator Sam Thompson
Senator Steve Oroho
Senator Tom Kean

Senate Republicans Propose School Funding Reforms to Improve Opportunities for Students, Provide Property Tax Relief for Families

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Proposals Eliminate Abuses, Establish More Equitable Funding for Overlooked Students in Underfunded Districts

In an effort to improve educational opportunities for New Jersey students and provide real property tax relief to overburdened families, New Jersey Senate Republicans released a series of school funding reform proposals as the starting point for discussions on the replacement of the state’s failed school funding system.

New Jersey Senate Republicans released a series of school funding reform proposals as the starting point for discussions on the replacement of the state’s failed school funding system. (©iStock)

“Senate Republicans want to fix the broken school funding formula that has failed too many students and devastated middle-class property taxpayers,” said Kean. “We’re ready to roll up our sleeves to negotiate a funding formula that works, and we’re prepared to come to the table with detailed solutions that we believe will improve educational opportunities statewide and make New Jersey more affordable.”

During his Budget Message last month, Governor Christie challenged the legislative leaders of both parties to join with him to work on a new funding formula to replace the School Funding Reform Act of 2008 (SFRA).

“SFRA was flawed when it first passed, which is why I and many others warned of the damage it would do to both special education and property taxpayers,” said Thompson. “Unfortunately, our many concerns have proven to be true. The willingness expressed by the Governor to sit down with the four legislative leaders to work on a new school funding formula presents a clear path forward to achieve reform.”

In recognition of SFRA’s consistent failure to serve students and property taxpayers, both houses of the Legislature have held committee meetings in recent months to examine the school funding formula. The Senate created a dedicated committee for that purpose, the Senate Select Committee on School Funding Fairness.

Senate Republicans serving on the Select Committee include Senator Joe Pennacchio (R-26) as Vice-Chair, Senator Mike Doherty (R-23), Senator Steven Oroho (R-24), and Senator Sam Thompson (R-12).

“As a member of the both the Budget & Appropriations Committee and the Select Committee on School Funding Fairness, I’ve heard countless New Jerseyans present their personal stories of how SFRA has hurt their schools, children, and wallets,” said Oroho. “It’s hard to believe that any legislator of either party could listen to that testimony and not feel compelled to act. All New Jersey students deserve the opportunity to succeed, and all of our residents deserve a fair shot at property tax relief through an equitable funding formula.”

Senator Doherty noted that some of the Senate Republican proposals would fix long-reported abuses that municipalities and school districts have used to game the school funding formula.

“We’ve seen instances where some districts have manipulated student enrollment in federal anti-poverty programs, which artificially increases the state school aid they receive under SFRA at the expense of struggling students in other districts,” said Doherty. “We’ve also seen the abuse of PILOT agreements in rising cities like Hoboken and Jersey City, which further skews the funding formula in their favor by taking billions of dollars of new luxury developments off their tax rolls. This is a problem the Senate President has discussed, and an area where bipartisan agreement on reform is possible and necessary.”

The following are proposed changes to the state’s education funding formula that Senate Republicans believe should be addressed in any upcoming discussions on school funding reform:

  • To ensure educational opportunities for our state’s most vulnerable children in every school district , it’s crucial to re-calibrate how we fund special education:
    • Extraordinary special education should be fully funded, and that should be enshrined in the constitution to guarantee that it happens every year. School districts should not have to cover the entire financial burden of a $100,000+ cost that may accompany a child with special needs. The State should fully fund the costs over the threshold determined by the State Department of Education. It is only 58% funded in the current FY17 State Budget.
    • The current census approach to special education funding should be eliminated. We should return to a system where money follows our most vulnerable students depending on their unique needs, and not base funding on average needs.
    • Special education funding should be based entirely on the student and their individual need, and not be impacted by the incomes within a student’s district as is currently law. There should be no wealth equalization in special education funding.
  • School funding should follow the child so that enrollment changes and need changes are tracked and accounted for every year. A constitutional amendment would ensure that the State no longer allows certain practices employed in recent State Budgets, such as flat funding, across the board increases or hold-harmless aid. If a district has more kids and/or greater need, their funding should increase more than other districts. If a school district has a lower enrollment and fewer student needs, then funding should comparatively decrease.
  • In a small state like New Jersey, we must eliminate the use of any geographic cost adjustment because commuters and services flow across regions all the time.
  • To ensure that school aid is distributed fairly to school districts, payments in lieu of taxes (PILOTs) must be properly accounted for:
    • PILOTs should be distributed to local governments and schools in the same proportion as property taxes. A municipality should not be allowed to benefit from a PILOT to the detriment of the school district or county.
    • The local fair share or ability to pay of a local school district needs to include the full market value of any PILOT properties, regardless of taxes paid or previous blight.
  • Enrollment should be measured in a manner that is more difficult to manipulate than the current measure in SFRA – attendance on a single school day. Budgets should reflect needs over the entire year.
  • The measure of at-risk students needs to change from easily-manipulated enrollment in the Federal free and reduced-price lunch program. The greater needs of a district should be measured in other ways, such as the median income of a district or the percentage of children living below the poverty line.
  • For school districts in the Highlands, Pinelands, Meadowlands or other areas of our State where land-use is highly regulated, the NJDOE’s determination of local fair share must be adjusted to include certain communities’ land-use restrictions that may artificially lower property values.
  • Lastly, we have to work to ensure that any new formula is sustainable year after year. The current SFRA is not sustainable, which means it is never fully funded, leading to unfair distortions that hurt both students and property taxpayers.

“The school funding reforms proposed by Senate Republicans are the result of the important discussions we’ve had with school officials, parents and taxpayers,” Pennacchio concluded. “We believe these proposals will help lower property taxes and better serve the many students who don’t currently receive the state aid they deserve. We’re ready to work with the Governor and any other legislative leaders who are serious about accomplishing school funding reform.”

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