The Assembly Education Committee advanced a bill that would require the state to release preliminary state aid figures to school districts and allow districts to submit their budgets after the state completes its own.
The legislation, which passed through the committee in a unanimous vote, would also require state officials to use multi-year averages of measures weighed by New Jersey’s school funding formula and, in a marked shift, launch a public tool that shows how inputs like enrollment and community wealth can impact state aid.
“I’ve been through the budgeting process 26 times, and the same ambiguity has been present 26 times. I appreciate this bill so much because it brings clarity to aspects of the budgeting process, and that is important,” said Glen Ridge School Board President Elisabeth Ginsburg, who is also executive director of the Garden State Coalition of Schools.
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While witnesses praised the bill’s intent and some of its provisions, they worried other sections would complicate local budget timelines, spread unreliable aid figures, or deliver flexibility months too late to prevent the layoffs that often follow sharp swings in state aid.
“There is a lot to appreciate in the intent of this bill. It’s clearly based in some laudable policy goals,” said Jesse Young, director of government relations at the New Jersey School Board Association.
The bill, which is sponsored by Assembly Speaker Craig Coughlin (D-Middlesex), would require the state’s funding formula to use three-year averages of a district’s property values and incomes, rather than only looking at the most recent year.
Using multi-year averages in the formula would reduce volatility in school aid by smoothing spikes that result from reevaluations or income surges that are caused by strong market returns, among other things.
If property values or incomes grow high enough, the formula would replace one year’s value with one equal to the preceding year’s value multiplied by 1.05. That provision would effectively cap increases in formula inputs that can decrease a district’s state aid.
The bill would also require the state Department of Education to send districts preliminary aid figures in the first week of December. School aid figures are now typically released in the days following the governor’s budget address, which is delivered in late February or early March.
“Whether quality information is available at that point in time to give school districts actionable data that they would need to responsibly craft their budgets, whether it’s early December or a different time of the calendar, we hope to study that a bit more,” Young said.
Education assistance is the single largest source of spending in New Jersey’s annual appropriations bill. Gov. Mikie Sherrill has proposed more than $12.4 billion in school aid for the coming July-to-June fiscal year.
Allowing districts to submit amended budgets in the five days after the state adopts its own — that’s a provision in Coughlin’s bill — could deliver flexibility too late to matter, Ginsburg said. Some school districts must adopt their budgets by late March. Others have until mid-May. The state usually does not finalize its budget until June 30.
“The ability to amend a budget in June or July after our state budget has been struck — we give our layoff notices in early May, so by the time that this provision would be activated, the employees that you might want to keep would already be gone,” Ginsburg said.
A law signed by former Gov. Phil Murphy allowed districts, for the 2024-2025 school year, to adopt their budgets in the days following the state budget’s adoption. It’s not clear how many districts took advantage of the wiggle room, and the Department of Education did not immediately return a request for comment.
School budget timelines, which are set by statute, have been a source for concern for local officials amid steep state aid swings, and lawmakers have sought to give some flexibility there in recent years.
Though they did not oppose them, some witnesses worried other provisions that would allow districts to amend their budgets in the first six months of the budgetary year could spread confusion.
“Functionally speaking, there’s enough dissonance in budget timelines as it is. Adding an arbitrary individual dissonance to that, we see as potentially problematic,” said Chris Nelson, assistant director of government relations for the New Jersey Principals and Supervisors Association.
Assemblywoman Verlina Reynolds-Jackson (D-Mercer) said she would relay witnesses’ concerns to Coughlin.
Sen. Vin Gopal (D-Monmouth), who chairs the upper chamber’s education committee and is sponsoring the bill’s Senate counterpart, said he intended to move the legislation there.
“I’ll get it moving,” Gopal told the New Jersey Monitor. “It’s a good bill.”
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