N.J. is slashing state funding for 172 districts. Can they survive?

In Haddon Township, students won’t get new science equipment. In Toms River, officials are tapping reserves to stave off budget cuts. In Jersey City, the school board is eliminating 25 jobs. 

Across New Jersey, more than 150 districts have spent the past month scrambling to offset reductions in state funding announced in July, after they had already passed their budgets for the coming school year. The worst part, they say? Their state aid is set to get slashed again and again under a new state law. 

“This is a disaster,” Jersey City School Board President Sudhan Thomas said at a special meeting last week to discuss the more than $3 million in lost state aid. “War has been declared on this district.”

The combined $32 million in aid reductions are part of a complex school funding deal that increases New Jersey’s education spending by more than $300 million for the upcoming school year and changes how some aid is distributed. 

That plan pumps millions more into both urban and suburban districts long underfunded by the state. But it comes with a catch: Some of the dollars headed to those underfunded districts is money taken away from others.  

Find out if your district is losing aid

State officials say those districts should lose money now because they were winners for far too long, collecting more than their fair share of state funding over the past decade. Local school leaders, however, argue the state is effectively robbing Pemberton to pay Paulsboro and setting up districts for devastating cuts in the years to come. 

The fallout underscores a practical and political reality of the latest school funding deal: Even if some districts were getting extra funding for all those years, the state was never going to be able to reduce it without affecting kids and angering school officials. 

“You spend what the state gives you,” said Brigid Harrison, a professor of political science at Montclair State University. “No one ever says, ‘Well, we don’t really need that money.'” 

Less money, more problems 

Can the school districts that are losing aid still get by without those state dollars?

State officials say they should be fine. Local school chiefs disagree. And the answer isn’t so simple, said David Sciarra, executive director of the Education Law Center. 

New Jersey’s school funding formula tells the state exactly how much each district should spend, how much of a district’s funding should come from the state and how much the district should generate in local property tax revenue. 

There are 172 districts losing state aid, and all of them have been receiving more than the formula says they need, with some collecting millions and millions in aid for roughly a decade. 

Of those districts, 153 have been spending at or more than the state says they should in order to provide a quality education, according an Education Law Center analysis. 

Those districts are better positioned to survive the state’s seven-year phase-out of extra aid, but that doesn’t make budget cuts any less painful, and any reductions could quickly drop them below their target spending level, Sciarra said. 

The districts in a more perilous position are the 19 that are seeing their state aid reduced even though they weren’t spending what the state says is needed, he said. 

That group of districts hasn’t generated enough local tax revenue to cover their responsibility for funding their schools, and state Senate President Stephen Sweeney has characterized them as using the state as a piggybank. 

“They can undertax locally because they get our money,” Sweeney, D-Gloucester, said during budget negotiations. “Our money is leaving.”

Sciarra argues those districts have been miscast by politicians. 

Some of the districts haven’t been able to raise enough tax revenue because of the state’s 2 percent cap on property tax hikes, Sciarra said. When chunks of their state aid disappear, they’ll be left with little ability to make it up, he said. 

“This is the point we have been trying to make all along,” said Sciarra, who opposed the state aid cuts.  

An uncertain future 

School officials in Toms River are already warning of “dramatic budget cuts” after this school year. 

The district received about $18 million in extra state aid last school year toward its $228 million budget, but still spent about $25 million less than the state says it needs to, according to an Education Law Center analysis. 

Now, the state is phasing out that $18 million, beginning with a nearly $1 million reduction this year, followed by incrementally larger reductions through 2025. 

District officials said property tax hikes won’t be enough to avoid budget cuts. 

“Make no mistake,” Superintendent David Healy wrote in a letter to parents. “Our district will be nothing short of gutted and fully decimated if something does not change with regards to the allocation of school aid.” 

Neighboring Brick Township Public Schools is also spending below its goal and facing annual state aid cuts moving forward. Officials say the state funding formula doesn’t accurately capture ratables lost in Hurricane Sandy and expects Shore towns to generate an unrealistic amount of property tax revenue.

The district will get by this year by using $1.3 million from its reserves and leaving six teaching jobs and two administrative positions vacant, Superintendent Gerard Dalton said.  

After that, he said, he’s not sure what will happen. 

“We are worried about the future,” he said. 

In Cumberland County, Commercial Township spent about $500,000 less than the state recommends last year. Now, it’s losing about $1 million in state aid right away with more money disappearing down the road. 

The district just eliminated seven positions, including five layoffs, interim Superintendent Jean Smith said.  

“Devastating is the word I would use,” Smith said. 

Murphy’s proposed budget didn’t reduce funding to any district, but he agreed to the changes as part of a compromise with Sweeney, who had pushed for a redistribution of school aid. 

Dan Bryan, the governor’s spokesman, pointed to the fact that the state has attempted to soften the blow on some districts.

For instance, the state will allow some urban districts to raise taxes beyond the 2 percent cap to offset state aid reductions. And Murphy agreed to allow Jersey City to create a special 1 percent payroll tax paid by employers to generate extra revenue for its public schools. 

“Gov. Murphy signed landmark school funding legislation that sets the state on the path to a fairer and more equitable educational system,” Bryan said. 

The state will also offer emergency aid for districts that are able to demonstrate fiscal distress, Department of Education spokesman Mike Yaple said. 

Even though the state aid reductions weren’t Murphy’s idea, he can expect to take the blame for them, Harrison said, even in districts that are spending more than the state expectation. 

“The reality is that if you try to level the funding, the schools that are receiving a disproportionate amount of money and see their aid reduced are going to have to belt tighten,” Harrison said. “And that is not going to be politically popular.” 

Adam Clark may be reached at adam_clark@njadvancemedia.com. Follow him on Twitter @realAdamClarkFind NJ.com on Facebook

Olivia Rizzo may be reached at orizzo@njadvancemedia.com. Follow her on Twitter @LivRizz. Find NJ.com on Facebook

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