New Jersey Lawmakers Revamp the State’s School Funding Formula

Published March 1, 2008

New Jersey is changing the state’s formula for dispersing education funds, news heralded by advocates of education reform, and increased annual school funding by more than a half-billion dollars.

The new legislation replaces the state’s Comprehensive Education Improvement Finance Act. Though passed in 1996, that measure was never fully funded or implemented after the State Supreme Court found it unconstitutional in 1997.

New Jersey Gov. Jon Corzine (D) signed the new bill January 14. Corzine had unveiled the detailed plan to overhaul education funding in early December to fix what he described as an “ad hoc” system jury-rigged to keep the courts happy.

Soon after, groups often at odds over how the state should spend education dollars–public schools, charter schools, and school choice advocates–found common ground in Corzine’s plan and fought side-by-side to see it through the legislature.

Increasing Transparency

Lawmakers approved the School Funding Reform Act by a narrow margin on January 8, adding $532 million to the state’s current $7.8 billion education budget.

Under the new formula, the amount of money a district receives will be based on the number of students currently enrolled–commonly called a “per-pupil” formula. Additional funds will be added based on the number of low-income and special-education students. Areas with an unusually high concentration of poverty can count on an extra cash injection above the per-pupil base.

Derrell Bradford, deputy director of Excellent Education for Everyone (E3), a school choice advocacy group, said the weighted formula will make schools more accountable–and almost everyone agrees accountability improves quality.

“This kind of formula, in a state like New Jersey, is an enormous win,” Bradford said. “This state spends more on education than any other state. However, it’s important to make sure that the money you weight and allocate for a specific child actually makes it to that child’s school–and that child’s classroom–and isn’t lost in a central office somewhere.”

Laying Foundations

Gregg Edwards, president of the Center for Policy Research of New Jersey, based in Bloomsbury, said school choice advocates like the plan because it’s an incremental step toward the ultimate goal–allowing each student to attend the school he wants with the funds attached to enrollment instead of the family’s geographic location.

“It is the beginning foundation for a ‘dollars follow the child’ approach–where the aid attaches to the child and follows the child,” Edwards explained. “This doesn’t do that, but at least it calculates per child. The elements are there, but the money just goes to the school district–the way the old formula worked. It doesn’t let the child pick the school, with the exception of preschool.”

Joyce Powell, president of the New Jersey Education Association, told The Press of Atlantic City for a January 8 story her organization is behind the new formula, despite the fact some districts fear it will cost them funding.

“We supported it because we think more children will benefit,” Powell said. “But it is a complex issue.”

Gaining Accountability

Edwards said the only groups unhappy with the legislation are those that wanted to keep the status quo.

“Nobody is losing–everyone is gaining,” Edwards said. “The gain may be minimal, but everyone is going to get a little bit more.”

Some districts may see only a 2 percent increase in funding, and they say it will be difficult to manage without more. But Bradford said that’s due in part to the mismanagement of current funding.

“A couple of districts approved budgets counting on a 5 percent increase,” Bradford said. “Now they have to figure out how to more efficiently use the funds they’ll actually receive.”

Making Strides

Charter schools, Bradford noted, will greatly benefit from the legislation. Under the old system, charter schools received as little as half as much funding as their public school neighbors.

“Now they will get up to 90 percent of the weighted total–an increase for some of 20 to 40 percent across the board,” Bradford said. However, he noted, “They’re still not getting 100 percent, though they should be equal.”

The disparity, Bradford said, shows there is still a lot of work to be done on the new formula, and his group will continue to educate lawmakers about the importance of school choice.

“There were things not addressed, like open enrollment,” Bradford said “These things are key in moving forward.”

Currently only preschool students in 31 districts have an opportunity to choose the program best suited for them. Of the 60,000 preschool students in such areas, two-thirds are in private or community-based programs.

Keeping Momentum

Under the new legislation, an additional 75 districts will allow preschoolers a choice. Bradford hopes legislators will see that as a blueprint for K-12 choice in the future.

“If we don’t fix K-12, we lose out on the preschool investment,” Bradford said. “The gains [of having a choice of preschool programs] disappear by fifth grade, and by sixth grade there is a marked drop in test scores–bigger if you are a minority.”

Bradford encouraged everyone in the choice movement to “more deftly examine the landscape.

“This is not a time to recoil, to shrink away, but to broaden the scope of success,” Bradford said. “To get a formula like this is a real sign that things are changing. The inertia of the status quo is changing.”

To build on that momentum, plans are underway to expand efforts to educate lawmakers about the benefits of open enrollment. When children and parents can choose the school that best suits their academic needs, Bradford explained, students thrive and schools are forced to raise their standards in order to attract enrollment.

School-based budgeting ensures schools are able to meet the needs of their population. Choice advocates are pushing for an open enrollment provision and school-based budgeting, Bradford said.

“Our goal is to get kids in terrible schools to a better place as soon as possible,” Bradford noted.

Wendy Cloyd ([email protected]) writes from Alaska.