School Funding Remains One Of Biggest Questions Ahead Of Murphy Budget Address

Murphy, who is expected to deliver his first budget proposal to the Legislature next month, hasn’t set a timetable for how soon he hopes to keep one of his biggest, and arguably, most difficult campaign promise, although he has said he intends to ramp up school funding as quickly as possible.

DELRAN — New Jersey has a new governor who has promised what no politician has managed in the last nine years: to fully fund the school funding formula so that every public district receives the amount of aid it prescribes.

It won’t be easy. By most estimates, Murphy and lawmakers will need to agree to add at least a billion dollars to the considerable sum already divvied out to public schools. And billions more would be needed to make up for the nine previous years that the formula was underfunded.

Murphy, who is expected to deliver his first budget proposal to the Legislature next month, hasn’t set a timetable for how soon he hopes to keep one of his biggest, and arguably most difficult, campaign promises, although he has said he intends to ramp up school funding as quickly as possible.

But residents in Delran and several other towns in Burlington County remain angst-ridden and continue to call for changes in how aid is distributed to prevent their districts from being shortchanged. Their complaints were heard by 7th District lawmakers Troy Singleton, Herb Conaway and Carol Murphy during a school funding forum last week at the Delran Middle School.

The most frequently heard gripe during the over two-hour discussion concerned discrepancies with so-called “overfunded” districts that have continued to receive more aid than prescribed by the formula, while residents’ own districts are forced to scrape and raise taxes.

“I believe all taxpayers should be concerned, because we’re being overtaxed to subsidize other districts,” said Stephen Heberling, school board president at Bordentown Regional, which is among the hundreds of districts still considered underfunded even after it received a roughly 3 percent increase this year.

Delran resident Ryan Huryn expressed the frustration felt by many taxpayers struggling with rising property taxes.

“It seems to me, as Joe Blow taxpayer, that things are out of control. You’re killing the middle class,” he said. “The way things are going, you’re truly going to be left with only the haves and the have-nots. What you’re doing is making people move to where they can afford to live a good life.”

Delran Superintendent Brian Brotschul told the group the intent was not to “create a divide among communities or pit District A against District B.” He stressed that residents need to understand how important the issue is to their children’s education.

″(The funding formula) is like a vehicle to provide resources to the classroom level. But in order to power the vehicle, we need fuel. That’s the biggest challenge,” Brotschul said.

Singleton and the other lawmakers at the event explained that the discrepancies among districts are because the state has been unable to provide enough money to implement the formula properly, and because of the politics involved in getting it approved in the first place.

The formula, known as the School Funding Reform Act, was created in 2008 during Gov. Jon S. Corzine’s tenure and sets district aid amounts based on enrollment, district wealth, and populations of impoverished and other special needs students. The law was written to provide fair funding amounts to all districts while still complying with the New Jersey Supreme Court’s long-standing Abbott v. Burke rulings, which mandate that extra aid should go to the poorest districts to ensure they have the opportunity to receive the same “thorough and efficient education” as students who reside in wealthier ones.

The Corzine administration was initially able to mix state tax dollars with federal stimulus money to award districts close to the prescribed aid amounts during the first year the formula was implemented. However, since then, the state has never had enough money to provide districts all the aid prescribed.

Rapidly growing districts like Delran and Chesterfield have been especially at a disadvantage, as their aid has not kept pace with enrollment increases, causing them to raise property taxes to cover growing expenses or forgo or cut programs. At the same time, some districts with significant enrollment losses have continued to receive large sums of extra money, called “adjustment aid” or “hold harmless aid,” which was created to ensure that no districts lost aid because of the formula..

In total, the state has shortchanged growing districts by about $1 billion a year, while awarding close to $700 million to shrinking districts to prevent their aid from decreasing.

“Hold harmless aid probably harms most people in this district,” Singleton said, adding that some districts that receive it have become dependent on it. “When it gets baked into your budget, you think it’s yours (forever).”

The issue came to a head during last summer’s state budget battle when Senate President Stephen Sweeney, D-3rd of West Deptford, pushed for the discrepancies to be addressed by both appropriating more money for school aid and by beginning to redistribute adjustment aid from overfunded districts. Former Assembly Speaker Vincent Prieto, D-32nd of Secaucus, initially resisted, arguing that no district should lose funding. But he eventually relented so that school aid was increased by $100 million while about $31 million more was redistributed from overfunded districts.

The changes marked the first time the state had reduced adjustment aid since the formula was created, but the increases marked only a fraction of the aid that underfunded districts claim they should receive.

Several residents asked the lawmakers why the state doesn’t redistribute all the remaining adjustment aid. Others suggested the state scrap the formula and start anew.

“This formula has been around 10 years. It was implemented the first year correctly, and the last nine years it hasn’t floated,” said Glenn Kitley, of Delran. “I think a reasonable person has to say there’s something wrong here. If it’s only worked one out of 10 times, then reasonable people have to say it hasn’t worked and let’s do something differently.”

The 7th District lawmakers said they understand the frustration, but they don’t believe the formula itself is flawed or needs to be replaced.

“I don’t want 40 years again trying to pass a formula that passes constitutional muster. We have one,” Conaway said.

Carol Murphy, who previously worked as the communications chief for the state agency responsible for school construction in New Jersey, said one big difference this year is the new governor, who has committed to keeping and funding the formula as intended.

“I do know the governor will be totally supportive of running the formula,” Murphy said. “Whatever resources we can come up with will be given to fully funding it.”

How much additional aid will be proposed and where it will come from are the big unknowns, the lawmakers said.

During his successful campaign, Murphy said he would press legislators to increase the state income tax on earnings over $1 million, as well as close tax loopholes used by large corporations or hedge funds to avoid paying New Jersey taxes. He said the extra revenue could be used to increase funding for public schools and increase the state’s payments into the public employee pension systems.

Sweeney had also endorsed the so-called “millionaires’ tax” as a way to boost school funding, but he has since reconsidered in the wake of the federal tax law and its new limit on the state and local tax deduction. Earlier this month, he described raising the income tax as the “absolutely last resort.”

Sweeney has assigned Singleton and Sen. Dawn Marie Addiego, R-8th of Evesham, to a special task force of lawmakers and financial experts charged with reviewing the state’s tax structure and how government services are provided. Among the topics the group expects to examine are the pros and cons of possibly transitioning to county school districts or merging smaller districts into new regional ones.

Singleton said other new revenue sources like legalizing and taxing marijuana or expanding and modernizing the sales tax have also been discussed, but it’s still unclear what Murphy will propose. He said Sweeney and new Assembly Speaker Craig Coughlin, D-19th of Fords, appear committed to continuing to redistribute adjustment aid from overfunded districts, but how much will likely need to be negotiated.

“The goal is for that (redistribution) to continue to occur,” he said before urging residents to keep lobbying lawmakers and press for fair funding. “We did something different (this year), and our goal is to build on it. ... I truly believe the only reason change occurred is because of these types of conversations.”

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