School Funding in the Final FY27 State Budget and Where NJ Goes from Here
When Governor Mikie Sherrill signed the FY27 State Budget last week, it marked another historic investment in New Jersey’s PK-12 public schools. But school districts across the state continue to face a challenging fiscal climate and continued uncertainty about their budgetary future, partially due to the Legislature’s failure this year to enact any significant reforms to the School Funding Reform Act (SFRA), New Jersey’s school funding law.
The FY27 budget maintains Governor Sherrill’s initial proposal to increase K-12 formula aid by over $370 million statewide. Nearly three-quarters of school districts will see a state aid increase, though increases are capped at 6% of the prior year’s state aid. About 30% of districts will see state aid reduced, though the reductions will be limited to 3% of the prior year’s state aid. The Governor’s budget also includes $118 million in additional Preschool Education Aid for the state’s high-quality early education program, with limited additional funding ($4.5 million) for expansion into new districts.
The budget also fails to secure significant new funding to address school facilities needs in the 31 Schools Development Authority (SDA) districts that are constitutionally entitled to full state funding for school construction. The budget provides only $50 million for capital maintenance and emergent projects, despite the overwhelming need for building repairs and upgrades that, left unaddressed, compromise student and staff safety. And the budget includes no new funding for capital projects even though the SDA has acknowledged billions in unmet need and its Strategic Prioritization Plan identifies dozens of high priority projects.
The FY27 state budget continues, for the second year, to make some modifications to the SFRA through budget language that alters how aid is calculated only for the upcoming school year. These include the state aid caps on increases and reductions; funding special education based on the projected enrollment of classified students, not the statewide average; and using three-year averages of property and income data for the Local Fair Share calculations. Though these changes may be beneficial, the failure of the Legislature to make them permanent by modifying the SFRA leaves school districts yet again unable to project their aid levels with any certainty beyond the coming school year.
Commissioner of Education Lily Laux and legislators across the state have expressed their desire to modernize New Jersey’s school funding law. In anticipation of the FY28 State Budget, a deep, expert-driven analysis of necessary changes to the SFRA should be undertaken to ensure that it reflects today’s educational standards and meets the needs of today’s students. This includes examining the cost of “adequacy,” or the funding levels needed to deliver a “thorough and efficient” education, as well as more fully addressing special education funding and assessing whether local funding expectations are both fair and feasible given existing pressures on property taxes and the longstanding local funding deficits in so many school districts across the state.
“Now is the time to act, so that school districts do not have to face yet another uncertain budget season and so that students across New Jersey have access to the resources they need and deserve,” said Danielle Farrie, Education Law Center Research Director.
Related Stories:
BREAKING DOWN SCHOOL FUNDING IN GOVERNOR SHERRILL’S PROPOSED FY27 BUDGET
NEW ELC REPORT: FIX THE CONTRADICTION IN THE LOCAL SHARE TO IMPROVE SCHOOL FUNDING IN NJ
ELC TO THE STATE OF NJ: THIS IS THE HOW AND WHY OF REVIEWING THE CURRENT SCHOOL FUNDING FORMULA
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