UPDATED STATE AID ANALYSIS IS HERE
On Thursday, March 15th, the Murphy Department of Education, led by Asbury Park's former superintendent Lamont Repollet, released its proposed state aid figures for 2018-19.
Due to a combination of raising the income tax to 10.75% and a surge in state revenue, the Murphy administration is able to meet the next step of the Christie administration's ten-year rampup to full TPAF funding (+$392.5 million), as well as provide big increases for free community college (+$50 million), free PreK (+$57 million), and what I assume is another round of mostly Abbott construction (+$148 million in debt service)
The Murphy administration is proposing to increase K-12 operating aid by $283 million, which would be the biggest state aid increase since 2012-13. They are claiming this will bring New Jersey to full funding of SFRA, "The Governor is committed to putting New Jersey�s schools on the path to full funding within four years, and is proposing an additional $283 million in formula aid."
While that increase is worth lauding, the Murphy administration is following SFRA (almost) to the letter, including increasing Adjustment Aid for already overaided districts and utilizing SFRA's flawed design of how to distribute new aid.
Therefore, while the underfunding of state aid diminishes slightly, the inequalities of the distribution are exacerbated.
(I have calculated aid growth in dollars per student and put it online here.)
(I also have Actual Aid vs. Uncapped Aid here.)
1. Insufficient Help Goes to the Lowest Aided
The reason the distribution is unfair to the most underaided districts in NJ is that the Murphy
For the 2009-2010 school year and thereafter, total stabilized aid shall include Equalization aid, Special Education categorical aid, Security Aid, and Transportation aid.Back in 2008 the authors of SFRA were being overly optimistic about NJ's revenue growth, but Capped Aid was supposed to be an incremental step towards the goal of real, full funding, not the goal itself.
d. For the purposes of this section, �State aid growth limit� means 10% in the case of a district spending above adequacy and 20% in the case of a district spending below adequacy.
The Murphy administration, however, is treating Capped Aid as the goal in itself, is making the achievement of Capped Aid by FY2023 the goal and calling that "full funding."
Hence, the districts that are supposed to get a 20% gain in one year are stretching that out into four 5% gains.
Because the State Aid Growth Limits are calculated based on existing aid, the lower a district's state aid is, the less money it gains in real terms. (see "The Skews of Capped Aid")
For instance, Freehold Boro got 45% of its recommended, Uncapped Aid for 2017-18 and is underaided by over $7,675 per student.
Under the proposed State Aid distribution, Freehold Boro will gain 5% ($534,991), which equals $318 per student. Likewise, Red Bank Boro, which only gets 38% of its Uncapped Aid (-$4219 per student), will likewise only gain 5%, or $178,503, and yet that only equals $127 per student.
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| Phil Murphy to New Jersey "Capped Aid = Full Funding" |
For instance, Freehold Boro got 45% of its recommended, Uncapped Aid for 2017-18 and is underaided by over $7,675 per student.
Under the proposed State Aid distribution, Freehold Boro will gain 5% ($534,991), which equals $318 per student. Likewise, Red Bank Boro, which only gets 38% of its Uncapped Aid (-$4219 per student), will likewise only gain 5%, or $178,503, and yet that only equals $127 per student.
Bound Brook, NJ's most underaided district in dollars per student (-$9,546 per student for 2017-18)), is gaining 5%, but that is only $300 per student.
In 2017-18 Steve Sweeney and his state aid reform allies - Paul Sarlo, Louis Greenwald, Teresa Ruiz, Joann Downey, Eric Houghtaling - based new state aid on deficits and even though they had only $130 million to work with, they delivered larger aid boosts to the most underaided districts in New Jersey.
Half of all new aid will go to only thirteen districts, all Abbotts. As usual, the Abbotts get about 55% of all new aid.
In 2017-18 Steve Sweeney and his state aid reform allies - Paul Sarlo, Louis Greenwald, Teresa Ruiz, Joann Downey, Eric Houghtaling - based new state aid on deficits and even though they had only $130 million to work with, they delivered larger aid boosts to the most underaided districts in New Jersey.
On the other hand, districts that are modestly underaided will gain far more.
Trenton was only underaided by $2856 per student, but for it to gain 5%, equals $793 per student.
Newark was underaided by $2852 per student for 2017-18 but its 5% gain equals $729 per student. Paterson was only underaided by $3,062 per student but its 5% gain equals $717 per student.
Newark was underaided by $2852 per student for 2017-18 but its 5% gain equals $729 per student. Paterson was only underaided by $3,062 per student but its 5% gain equals $717 per student.
Half of all new aid will go to only thirteen districts, all Abbotts. As usual, the Abbotts get about 55% of all new aid.
Under the Murphy/Repollet plan, any district that already gets 83% or more of its Uncapped Aid will reach full funding in four years, but districts that receive 60% or less will have to wait years, even decades.
Since Freehold Boro receives 45% of its Uncapped Aid, At increases of 5% a year Freehold Boro will bring only be at 65% of what is its 2017-18 Uncapped Aid by FY2023. Under this pathway it would take Freehold Boro 16 years to reach what is just its 2017-18 Uncapped Aid (neglecting inflation and enrollment growth).
Some districts are even worse off. Chesterfield only got 19% of its Uncapped Aid in 2017-18. Under Murphy's planned 5% increases Chesterfield will take THIRTY SIX YEARS (2054!) to get what is only its 2017-18 Uncapped Aid. (Chesterfield's aid increase is a paltry $52 per student)
Some districts that are underaided but nonetheless above Adequacy are the most screwed. Cherry Hill was underaided by $1397 per student, but it is gaining only $44 per student. West Orange was underaided by $2459 per student, but is gaining a pathetic $36 per student.
Although it is a unique district, Lakewood is only gaining $239,242, or $39 per student.
2. Adjustment Aid is Sustained and Increased
Some districts are even worse off. Chesterfield only got 19% of its Uncapped Aid in 2017-18. Under Murphy's planned 5% increases Chesterfield will take THIRTY SIX YEARS (2054!) to get what is only its 2017-18 Uncapped Aid. (Chesterfield's aid increase is a paltry $52 per student)
Some districts that are underaided but nonetheless above Adequacy are the most screwed. Cherry Hill was underaided by $1397 per student, but it is gaining only $44 per student. West Orange was underaided by $2459 per student, but is gaining a pathetic $36 per student.
Although it is a unique district, Lakewood is only gaining $239,242, or $39 per student.
2. Adjustment Aid is Sustained and Increased
Even worse than blindly obeying the flawed State Aid Growth Limits is the restoration of Adjustment Aid to about 172 already-overaided districts, for a grand total of an additional $28,604,340 increase in aid.
- Marlboro was overaided by $5.3 million, it is gaining $270,369 (+$58 per student)
- Pemberton was overaided by $25 million, it is gaining $658,924 (+$154 per student)
- Brick was overaided by $23 million, it is gaining $750,798 (+$88 per student)
- Asbury Park was overaided by $24 million, it is gaining $796,127 (+$360 per student)
- Hopatcong was overaided by $9.2 million, it is gaining $169,007 ($109 per student)
- East Orange was overaided by $22.5 million, it is gaining $1,114,526 (+$115 per student)
- Jersey City was overaided by $151 million, it is gaining $1,863,714 (+$61 per student)
- Manalapan was overaided by $13 million, it is gaining $498,300 (+$100 per student)
- Ocean Township was overaided by $5.5 million, it is gaining $464,924 (+$175 per student)
- Keansburg was overaided by $6.9 million, it is gaining $160,716 (+$114 per student)
Even Deal, whose Local Fair Share is $17 million for 178 students, is gaining $124,117 (+$697 per student) (this is mostly from Interdistrict Choice)
Asbury Park's state aid gain of $796,127 is actually greater than its severely underaided neighbors, Red Bank Boro (+$178,503) and Freehold Boro (+$534,991) will get COMBINED. No wonder Asbury Park's superinintendent is "delighted."
Asbury Park's state aid gain of $796,127 is actually greater than its severely underaided neighbors, Red Bank Boro (+$178,503) and Freehold Boro (+$534,991) will get COMBINED. No wonder Asbury Park's superinintendent is "delighted."
Since Murphy plans to "fully fund" (ie overfund) overaided districts for another three years, the total projected gain is $84 million.
The legal justification for increasing aid to the overaided is that Adjustment Aid technically does not allow a district to receive less than 102% of what it got in 2007-08, but Adjustment Aid was cut in 2010, 2013, and 2017.
What Phil Murphy and Lamont Repollet are trying to do is bring all these overaided districts back to their aid levels of 2008-09. Hence, since Jersey City's aid was then $417.9 million versus $410 million for 2017-18 , the Murphy administration has it on a four year path back to $417.9 million. Likewise, Asbury Park's peak aid was $57.6 million versus the $54.4 million it got in 2017-18, the Murphy adminstration has a four year path for Asbury Park back to that peak.
(See "How Overaided Districts Would GAIN Money if SFRA is Not Changed.")
The legal justification for increasing aid to the overaided is that Adjustment Aid technically does not allow a district to receive less than 102% of what it got in 2007-08, but Adjustment Aid was cut in 2010, 2013, and 2017.
What Phil Murphy and Lamont Repollet are trying to do is bring all these overaided districts back to their aid levels of 2008-09. Hence, since Jersey City's aid was then $417.9 million versus $410 million for 2017-18 , the Murphy administration has it on a four year path back to $417.9 million. Likewise, Asbury Park's peak aid was $57.6 million versus the $54.4 million it got in 2017-18, the Murphy adminstration has a four year path for Asbury Park back to that peak.
(See "How Overaided Districts Would GAIN Money if SFRA is Not Changed.")
If Adjustment Aid were reduced by a fifth, according to Steve Sweeney's state aid reform plan, NJ's underaided districts would be gaining an additional $128 million. ($128 million = a fifth of 2017-18's $640 million in excess aid)
3. Ignoring SFRA When It Benefits the Overaided
Lamont Repollet has already told people that he had "no choice" but to blindly obey Adjustment Aid and the State Aid Growth Limits, but he is ignoring SFRA when it benefits overaided districts.
SFRA has no statutory sunset for Adjustment Aid, but it does allow a minimal decrease in Adjustment Aid is allowed if a district's enrollment loss after 2008 exceeds 5%. (See "Adjustment Aid Has No Statutory Sunset")
There are actually 45 districts that SFRA calls for $9.8 million in cuts to, but Murphy/Repollet are ignoring this provision of SFRA.
Conclusion
New Jersey is proposing to increase income taxes by $765 million and income taxes are actually surging, but only $283 million of that is going into K-12 state aid.
Increasing funding for NJ's many streams of indirect aid - TPAF, post-retirement medical, and construction debt service - is required, and Phil Murpy has a mandate by his electoral victory to increase PreK and community college aid as he wants.
However, Phil Murphy repeatedly promised to "fully fund that formula" and what he is doing will not bring New Jersey anywhere near to that point, and in fact, will preserve inequalities and in many cases, make them worse. By completely ignoring the legislature's work last year to expose and fix state aid inequalities, he is trying to govern without the input of Democtatic officials who are actually more knowledgeable on state aid than he is.
All of us in the state aid reform community have our work cut out for us in explaining to the public, elected officials, and journalists why the proposed increases have to be changed.
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See Also
3. Ignoring SFRA When It Benefits the Overaided
Lamont Repollet has already told people that he had "no choice" but to blindly obey Adjustment Aid and the State Aid Growth Limits, but he is ignoring SFRA when it benefits overaided districts.
SFRA has no statutory sunset for Adjustment Aid, but it does allow a minimal decrease in Adjustment Aid is allowed if a district's enrollment loss after 2008 exceeds 5%. (See "Adjustment Aid Has No Statutory Sunset")
There are actually 45 districts that SFRA calls for $9.8 million in cuts to, but Murphy/Repollet are ignoring this provision of SFRA.
Conclusion
New Jersey is proposing to increase income taxes by $765 million and income taxes are actually surging, but only $283 million of that is going into K-12 state aid.
Increasing funding for NJ's many streams of indirect aid - TPAF, post-retirement medical, and construction debt service - is required, and Phil Murpy has a mandate by his electoral victory to increase PreK and community college aid as he wants.
However, Phil Murphy repeatedly promised to "fully fund that formula" and what he is doing will not bring New Jersey anywhere near to that point, and in fact, will preserve inequalities and in many cases, make them worse. By completely ignoring the legislature's work last year to expose and fix state aid inequalities, he is trying to govern without the input of Democtatic officials who are actually more knowledgeable on state aid than he is.
All of us in the state aid reform community have our work cut out for us in explaining to the public, elected officials, and journalists why the proposed increases have to be changed.
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See Also
- "Tentative Reaction to the Murphy FI2019 Budget Proposal"
- "New Jersey = Debtor's Prison: The 2017-18 Budget"
- "Looking at the 2018-19 State Aid Disparities"
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