ELC Proposes Five-Year Plan to Close the Statewide Adequacy Gap

The number of New Jersey school districts funded below their constitutional level of “adequacy” has risen to 187 in 2019-20. An additional $1.6 billion in state aid is now required to close the “adequacy gap” in these underfunded districts according to a new Education Law Center analysis of the School Funding Reform Act (SFRA), the State’s weighted student funding formula.

The adequacy gap in the 187 underfunded districts represents the shortfall in state aid and/or local revenue required to fully fund the cost of educating all district students to achieve state academic standards, including the additional cost of educating low-income students, English language learners and students with disabilities. The adequacy budget for each district is calculated by the NJ Department of Education annually under the education cost parameters in the SFRA formula.

In 2008, the State Supreme Court, in the landmark Abbott v. Burke school funding litigation, ruled the SFRA formula was capable of delivering an adequate level of funding to provide all New Jersey students a “thorough and efficient” education as guaranteed by the State Constitution so long as the State fully funded the districts at their SFRA adequacy budget levels.

To close the persistent and unconstitutional adequacy gap within five years, ELC is proposing that Governor Phil Murphy and the New Jersey Legislature enact four measures in the upcoming FY21 State Budget:

  • Increase state aid targeted to below adequacy districts by $320 million as the first of five annual installments in the State budget on the $1.6 billion owed to New Jersey students.
  • Halt any further cuts in state aid to below adequacy districts imposed by the Legislature in 2018 in Senate Bill 2 amendments to the SFRA until these districts reach their constitutional funding level.
  • Mandate that below adequacy districts increase local revenue by 2% if they have a local revenue shortfall (that is, they are not raising their “Local Fair Share” as calculated by the formula).
  • Allow below adequacy districts to increase local revenue above the 2% property tax cap to speed up the time needed to reach full funding of the required local contribution.

“Our four-point plan is carefully designed to make meaningful, steady progress to close the adequacy gap in every district through increases in state aid and local revenue as required under the SFRA formula,” said Danielle Farrie, the ELC Research Director who carried out the SFRA analysis.

In 2019, district adequacy budgets rose due to the Murphy Administration’s three-year update in education costs required by the SFRA. The formula update increased adequacy budgets by over 5%, or $1.3 billion statewide.

Yet, in the State budget for 2019-20, the Governor and Legislature increased state aid by only $191 million. At the same time, local property tax revenue increased by $365 million. These increases lag well behind what’s required for most districts to reach their full adequacy budgets under the SFRA on the seven-year timetable promised in 2018 by legislative leaders.

“Two years ago, leaders in the New Jersey Legislature promised to reach full funding under the SFRA formula for all districts in seven years,” said David Sciarra, ELC Executive Director. “Yet, in two successive budgets, they have not done enough to reach that goal and, even worse, have moved some districts in the opposite direction by imposing ill-conceived cuts in state aid under Senate Bill 2.”

ELC is calling on parents, educators and advocates to step up demands for the Governor and Legislature to take real action to close the adequacy gap in the FY21 State Budget.

“We will be working with our many partners in the Our Children/Our Schools network and beyond to send lawmakers the message that students in far too many districts have been forced to endure chronic and often severe underfunding of their education, in violation of the constitutional right to a thorough and efficient education,” said Sharon Krengel, ELC Policy and Outreach Director. “We will be making our voices heard loud and clear in Trenton over the next few months.”

Use ELC’s interactive tools to see more school funding data, including district funding profiles.

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Press Contact:

Sharon Krengel
Policy and Outreach Director
973-624-1815, x 24

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Press Contact:
Sharon Krengel
Director of Policy, Strategic Partnerships and Communications
973-624-1815, x240