Individual Needs Get Big Boost in New School Funding Formula

Heartland in Print

Asbury Park Press

February 6, 2008

circ. 145,508

School choice made inroads last month in an unlikely setting--the lame-duck session of the [New Jersey] state legislature convened to consider Gov. [Jon] Corzine’s bid to revamp the state’s complex school funding formula.

Not only was the governor seeking to reform how state aid is distributed among 615 local school districts, he was proposing to increase overall school spending by $533 million this year in a state that already consistently outspends all others on a per-pupil basis.

After marathon sessions over the holidays, Corzine’s $7.8 billion school-aid bill passed by a narrow margin Jan. 7, the legislature’s final day.

Adding to the unusual political dynamic, the revamped formula won despite the stern opposition of big-city Democrats, in opposition to many of their suburban Democratic legislative partners, and some suburban Republicans--and with support for key provisions from a group advocating school choice vouchers and tax credits: Excellent Education for Everyone, or E3.

One outcome was the significant expansion of a preschool voucher program in New Jersey that has received scant national attention but is beginning to generate positive results.

In addition, E3’s deputy director, Derrell Bradford, said that adopting Corzine’s weighted student funding statewide was “a huge win. I don’t know of another state that has done this. New York City is talking about it, but hasn’t implemented it yet.”

This means high-needs students will be funded based on their relative degree of educational difficulties instead of their ZIP codes. That is a departure from the school-finance system that grew out of the first of many state supreme court “Abbott” decisions that held that 31 poor, predominantly minority districts lacked the ability to adequately fund their schools.

Although the state has channeled billions into these Abbott districts, results have been generally disappointing.

Individual needs got lost in the process. As Bradford testified before the education and budget committees in December, “The Abbott designations, and their reliance on municipal indicators, are imprecise in effecting the delivery of the resources Abbott promised to students being denied their constitutional rights to a thorough and efficient education.

“There are children who are ‘Abbott-like’ across the state who do not receive Abbott-like resources under the current funding system or court orders,” Bradford said. “Weighted student funding allows for the strict identification of these students, and the direct targeting of necessary resources to them.”

Corzine’s formula limits 20 Abbott districts to the minimum budgetary increase of 2 percent, while awarding as much as 20 percent aid hikes to 150 other districts that have growing numbers of disadvantaged students.

Bradford said an excellent next step would be to give kids “a ticket out,” allowing them to take their weighted funding and transfer to schools better for them in other districts. The extra value attached to such students would give districts an incentive to address their needs. A bonus could be reducing racial segregation, he said.

Meanwhile, the governor’s new approach expands into almost 75 districts what has been a preschool voucher program for Abbott children. Families are eligible for state-funded grants of up to $11,000 to enroll a child in private or public preschools.

Data analysis indicates an improvement in third-grade reading scores attributable to the use of preschool vouchers by Abbott children since 1999.

The reforms in the formula could lead to greater accountability and choice for education consumers in the Garden State.

Robert Holland (holland@heartland.org) is a senior fellow for The Heartland Institute.