Some New Jersey legislators, led by Senate President Steve Sweeney, are pushing a plan to cut $733 million from the 200 districts receiving adjustment aid under the state’s school funding formula – the School Funding Reform Act or SFRA.

Few details about the plan have been released, but it is clear that the loss of adjustment aid – designed to prevent steep drops in local budgets as districts transitioned to a new funding formula – would trigger deep and recurring cuts in teachers, support staff and programs essential to provide students with a “thorough and efficient,” or “T&E,” education under the SFRA and state constitution.

To evaluate Senate President Sweeney’s plan, Education Law Center estimated the impact of a 20% loss of adjustment aid in year one of the proposed funding cut, and the full amount of the aid loss over the five-year period in which adjustment aid would be phased out entirely. ELC also analyzed the impact of the aid loss on a district’s adequacy budget under the SFRA, that is, the spending level required to provide a T&E education to the unique student population in each district.

Click here for a complete list of the 200 adjustment aid districts and their estimated aid cuts, grouped by legislative district. 

ELC’s analysis of the impact of the proposed cuts to adjustment aid show:

  • The 200 adjustment aid districts would experience a total aid cut of $146.7 million in year one and $733.5 million over five years. These school districts are in almost every legislative district across the state.
  • Jersey City students are the biggest losers, experiencing an aid cut of $31.8 million in year one, followed by four consecutive years of cuts for a total of $158.8 million over five years. The district is currently spending $94 million below its adequacy budget. With a state-imposed 2% property tax cap, it would take decades to replace the lost adjustment aid with local dollars. The aid cut would also drop Jersey City spending to over $8,000 per pupil below the SFRA adequacy level.
  • Students in such diverse districts as Toms River Regional (Ocean), Freehold Regional (Monmouth), Vernon Township (Sussex), Lower Cape May Regional (Cape May), and East Orange (Essex) are big losers with aid cuts between $5 and $25 million over five years.
  • Thirty-seven of the adjustment aid districts are spending below their adequacy budgets. These districts are already spending, on average, 11%, or $1,949 per pupil, below what is necessary for T&E. Cutting adjustment aid would drop the districts even further below adequacy with an average gap of $4,008 per pupil.
  • Cutting adjustment aid over five years would drive 39 districts now spending above adequacy to below the constitutional T&E threshold. On average, these districts are spending $1,187 per pupil above adequacy. Adjustment aid cuts drop spending in these districts to an average of $1,318 per pupil below adequacy.
  • Cutting adjustment aid also disproportionately affects high need districts – those with student poverty rates over 40%. Forty-two high need districts are currently spending on average $639 per pupil below adequacy. The adequacy gap in these districts would grow to $3,454 per pupil if adjustment aid is eliminated.

When the NJ Legislature enacted the SFRA in 2008, adjustment aid was included to ensure no district would receive less state aid than under the previous formula. Districts receiving adjustment aid would be flat funded until their adequacy budgets grew to the point where adjustment aid was replaced with other revenue and no longer needed.

“It’s simply wrong to rely on adjustment aid to get New Jersey out of the school funding hole dug by Governor Christie,” said David Sciarra, ELC Executive Director and counsel in the Abbott v. Burke litigation. “Much of this aid actually supports T&E, and cuts would erode the quality of education for students in these districts. Any serious school funding proposal must put the needs of all students front and center and not allow some students to benefit at the expense of others.”

Many school districts are in budgetary distress because of SFRA underfunding. ELC has proposed a five-point plan to begin addressing the needs of those districts in the FY18 State Budget, without cutting aid and thereby creating an entirely new set of “winners” and “losers.”

The goal of any school funding reform must be to increase state and local revenue to ensure all districts are moving towards full funding of their SFRA adequacy budgets.

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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