The Good, the Bad and the Missing: Education Funding in NJ’s FY25 State Budget
The FY25 State Budget marks a historic public education milestone for the state of New Jersey. The sixteen-year-old school funding formula, the School Funding Reform Act (SFRA), will finally be fully funded for the very first time since its implementation. And while this achievement is welcome – though long overdue – the budget leaves serious funding issues unaddressed with challenges looming for school districts across the state.
The Good News
- The FY25 State Budget fully funds the state’s share of the SFRA, providing much needed state aid increases for about two-thirds of school districts. For many districts, this is the first time in decades they are receiving the state aid to which they are entitled. This funding will help districts retain and attract qualified staff, continue or develop academic and social-emotional programs to support students, and generally provide students and staff with the resources they need to succeed. These funding increases are especially crucial this year, as school districts face the expiration of federal Covid relief funds that have supported staffing and programs to address pandemic-related academic and mental health concerns.
- The final budget maintains the $124 million increase in preschool funding first proposed in Governor Murphy’s budget, including $20 million to expand high-quality preschool seats or support other areas of need, such as workforce development. The budget also directs the Department of Education, the Department of Children and Families, and the Department of Human Services to publicly post information about current programs and eligibility for preschool expansion, including information on licensed childcare providers and Head Start programs in or near each eligible district. It also requires these three agencies to submit a report to the Legislature on the efficacy of the mixed-delivery model of preschool education by March 1, 2025.
The Bad News
The Murphy Administration and State Legislature did not address some of the more challenging issues facing public schools in the state:
- The budget includes no new capital funding for the Schools Development Authority (SDA), stalling progress fulfilling the state’s constitutional obligation to remedy unsafe and inadequate facilities in the 31 SDA districts. With over $7 billion in unfunded projects in the current strategic plan, failing to allocate revenue for additional construction is unacceptable. Although the budget includes $50 million for capital maintenance and emergent projects, that is woefully insufficient to meet the need.
- While legislation was passed during budget negotiations to provide some relief to school districts facing state aid reductions in the upcoming final year of the S2 amendment to the SFRA, the final budget removed the small amount of Stabilization Aid ($5 million) proposed by the Governor. In previous years, districts that lost funding could apply for Stabilization Aid to prevent major disruptions to their budgets. The FY24 budget included $20 million in Stabilization Aid. With no funding available this coming year, more school districts will be forced to make harmful cuts.
What’s Missing in the FY25 Budget
- The Administration and the Legislature also failed to commit any funding for an Educational Adequacy Report (EAR) to update the costs in the SFRA. The next EAR, required by the SFRA and expected in early 2025, will determine school funding levels for the next three years. School districts are struggling to keep up with the costs associated with delivering updated New Jersey Student Learning Standards, as well as growing costs for special education, transportation, security and other areas. An in-depth EAR with input from school district leaders, school finance experts, and community members is necessary to modernize the SFRA. An appropriation in the FY25 budget would have helped fund these efforts.
- Lawmakers also failed to pass any legislation that would put a stop to the unexpected and sometimes unmanageable cuts that result from state aid fluctuations under the SFRA. The S2 amendment included waivers of state aid cuts for overtaxed districts, which expire this school year. And though the legislation passed in May allowed school districts facing cuts to increase property taxes beyond the 2% cap, the exemption also expires this coming school year. The yearly volatility caused by the SFRA in some school districts requires proactive, long-term legislation, not reactive fixes that only apply for one year.
“Education Law Center remains committed to enforcing the state’s constitutional obligation to provide a thorough and efficient education to all students,” said Robert Kim, ELC Executive Director. “While the FY25 State Budget marks the first year the state is living up to its legal obligation to fund schools under the current formula, we remain insistent that the formula be updated to reflect the costs of delivering an education aligned with today’s educational demands, not outdated standards from two decades ago.”
“New Jersey still has a long way to go to provide every student with an equal educational opportunity, in safe and modern school buildings, and with programs and services that allow them to thrive,” said Danielle Farrie, ELC Research Director. “While the hurdle of ‘full funding’ may be behind us, the challenges of maintaining full funding in the years to come and providing equitable learning opportunities and well-resourced schools are still ahead of us. Elected leaders and public education supporters need to start that work yesterday!”
RELATED STORIES:
SOME SCHOOL FUNDING CUTS ARE RESTORED, BUT THE NJ LEGISLATURE’S WORK IS NOT DONE
ELC TO THE STATE OF NJ: THIS IS THE HOW AND WHY OF REVIEWING THE CURRENT SCHOOL FUNDING FORMULA
RECALIBRATION OF NEW JERSEY’S SCHOOL FUNDING FORMULA IS LONG OVERDUE
Press Contact:
Sharon Krengel
Director of Policy, Strategic Partnerships and Communications
skrengel@edlawcenter.org
973-624-1815, x240