Gov. Mikie Sherrill devoted a record $12.4 billion in school funding in a 2027 spending proposal that continues to limit state aid fluctuation, so financially constrained local districts can budget with less uncertainty.
In addition to the high aid — a $370 million increase over the current fiscal year — the budget outlined increased funding for preschool and high-impact tutoring. It also included measures to increase accountability from the New Jersey Department of Education and to support consolidating some operations among almost 600 school districts.
“It continues to fund the school formula with a record investment in K-12 education – although everyone in this room knows we’re not getting the bang for the buck that we need,” Sherrill said during her $60.7 billion budget address on Tuesday in Trenton before a joint legislative session.
Sherrill, who took office in January, touched on key points and promises made during her campaign, including mental health support for children and cooperation among school districts and municipalities.
“Evidence shows the huge benefits of shared services for things like special education, transportation, books and software,” Sherrill said. “So this budget invests in and lays the groundwork for consolidating services and curricula.”
‘Sigh of relief’
School districts this month must submit their budgets for approval from county superintendents and they’ll make their calculations based on anticipated state aid.
School funding in recent years has become volatile as the state reallocated money from districts that critics say were overfunded to those that were underfunded.
Credit: (John Mooney)Sherrill’s predecessor, fellow Democrat Phil Murphy, limited sharp aid reductions, though advocates are pushing for a school funding formula update for more long-term stability.
“Schools should probably be breathing a sigh of relief right now,” Danielle Farrie, the research director at Education Law Center, told NJ Spotlight News on Tuesday. “It’s a generous budget given the financial constraints the state is facing.”
The proposed budget continues a 3% cap on losses and a 6% cap on gains in aid for the fiscal year that starts on July 1, and calculates special education aid based on enrollment, according to the state “Budget in Brief.”
“These guardrails provide funding stability while the state undertakes the important long-term work of modernizing the current formula to better reflect today’s educational needs and ensure a fair, sustainable approach to school funding in the coming years,” the brief states.
Any state aid loss will have an effect on district budgets, “but having the caps in place make it much more manageable than the alternative,” Farrie said.
Limits on aid increases also present challenges.
“This poses some issues for a lot of our school districts, especially those urban districts that have been severely underfunded for many years,” Assemblywoman Eliana Pintor Marin (D-Newark) told NJ Spotlight News. Budget negotiations will determine whether more funding is feasible for those districts, she said.
As districts continue to face deep budget holes, Sherrill wants to add experts at the state Department of Education “to enhance school district monitoring and prevent sudden financial challenges,” according to a summary released by her office.
High-impact tutoring
Sherrill wants $15 million for high-impact tutoring — double the current fiscal year’s amount.
“School funding has soared, but too many third-graders still read below grade level, and kids’ mental health keeps getting worse,” Sherrill said.
The $22.5 billion overall funding for K-12 education programs and initiatives, which includes the $12.4 billion in school aid, marks a $222.6 million increase from the current fiscal year.
Funding for high-impact tutoring is key as districts are trying to improve literacy and math proficiency rates that dipped after the COVID pandemic.
“We’re in a tough budget year, so any increase we can get on some of these really important initiatives is going to be appreciated,” said Jonathan Pushman, senior director of advocacy for the New Jersey School Boards Association. “Everybody wants more money, but we know we’re dealing with some pretty difficult fiscal challenges right now — so we’ll work with the money that’s available to us.”
The proposed budget includes a record $1.4 billion for preschool education aid, marking a 9% increase. That would help 300 districts with state-funded preschools.
Preschools are under-enrolled in Abbott districts, the state’s 31 high-poverty districts, according to a 2025 Education Law Center report. Only about 78% of eligible preschool-age children in those districts are participating.
“We probably need a lot more attention paid to the lagging enrollment in some of the Abbott districts and other low-income districts that have had preschool for many years but are seeing fewer and fewer kids show up,” Farrie said.
Murphy enacted the state’s cell-phone-free-scohols legislation, starting in September. Sherrill’s 2027 budget includes $125,000 for a new Office of Youth Online Mental Health Safety and Awareness in the state Department of Health to recommend responsible social media use for teens.
Another $500,000 would go toward the creation of a social media research center at a New Jersey university.
— John Mooney contributed to this report.
