To underfunded N.J. schools, Murphy's budget a 'blow'

When Chesterfield Superintendent Scott Heino learned of the funding increase that Gov. Murphy planned for his school district, his reaction was "absolute shock." This was worse than nothing.

By his calculation, the $41,060 increase was a mere 1/100th of the Burlington County district's entitlement, about $4 million, based on how its student population has grown.

"I think if we would have received the same exact number of aid as last year, I wouldn't have been as shocked," said Heino. "The fact that there was an effort made, and changes were made and money was allocated, and still we only received the $41,000, … it was a blow."

School officials were hopeful about the new Democratic governor's pledge to remedy years of failure by the state to follow its own law for funding public schools. But some were crestfallen when they saw the details of the new governor's proposed plan — despite its nearly across-the-board increases.

"It was deflating, honestly, when those numbers came out," said Joe Meloche, superintendent of the Cherry Hill School District, another one that is getting an aid boost but felt short-changed.

That dissatisfaction speaks to difficulties Murphy confronts in fulfilling his promise to "fully fund" schools. Driven by landmark court rulings that sought to reduce disparities among schools in rich and poor communities, New Jersey's funding formula has been hailed by education advocates.

Yet the state hasn't been able to put it into practice.

In theory, New Jersey's formula works like this: The state determines what it costs to educate students in each district based on enrollment, with added money for students with greater needs. It calculates what the district can afford to pay, then makes up the difference.

In reality, it's more complicated. As the formula was being adopted in 2008, lawmakers realized that some districts stood to lose money because of it. Rather than make cuts, the state added a provision to the law giving those districts "adjustment aid." Many districts still receive it.

At the same time, the state hasn't spent the money the formula requires, with years of near-flat funding under Gov. Chris Christie. Districts that have grown, or that are enrolling more needy students, have racked up charges that the state hasn't paid.

Even with the $283 million in additional aid Murphy proposes to give school districts next year, it would cost the state an additional $831 million to fully fund districts under the formula. The state allocated just over $8 billion to schools for this year.

But the deficit is much larger if enrollment changes are fully taken into account, and the formula limits how much additional aid a district can receive each year. If those caps are removed, 363 districts are owed nearly $1.9 billion, according to an Inquirer and Daily News analysis of data provided by the state Department of Education. Murphy's proposed budget for next year is $37.4 billion, and includes $1.6 billion in tax increases.

"After reviewing the individual state aid notifications, our association remains seriously concerned about the plight of severely underfunded school districts," Lawrence Feinsod, executive director of the New Jersey School Boards Association, said in a statement Thursday.

On the other end, 228 districts are slated to get a total of $740 million more in state aid than they would be entitled to if they were funded on the basis of their enrollments. Some are getting two, three, or even five times what they're owed.

While lawmakers last year reached a compromise to reduce aid to some districts and redirect money to those that were underfunded, Murphy's proposal doesn't cut any district's aid. The budget gives increases to the vast majority of districts.

Murphy spokesman Dan Bryan said the governor's budget represents "the first step toward his commitment of fully funding the school funding formula over the next four years."

The governor "looks forward to working with the Legislature to modernize the school funding formula and address any disparities that may exist," Bryan said.

The imbalances in New Jersey's school funding aren't just at the state level. Some districts aren't taxing as much as they should be under the formula, while others are raising more than their fair share.

"The burden that's on our taxpayers is so incredibly great here in Cherry Hill," said Meloche, the superintendent. Cherry Hill property owners pay on average more than $8,000 in property taxes.

By the state's calculation, the district should be able to raise $136 million to pay for schools; last year, the township's total was nearly $170 million.

The state would owe Cherry Hill nearly $30 million if funding were based on enrollment. Under Murphy's proposal, Cherry Hill would get an additional $596,000 next year, bringing its total to just under $15 million.

Chesterfield, where enrollment has nearly doubled over the last decade, is slated to get just 21 percent of the total aid it's owed — the smallest share in the state. The district has been unable to replace its social studies curriculum, now 12 years outdated, Heino said. It needs, but is unable to hire, another special-education teacher. And with more students, it needs more room in its bike racks.

Some districts fared far better despite being "much closer to 100 percent funding," Heino said. "I just don't understand how."

Lawmakers agreed last year to shift aid from districts getting more than their share of state funding to those underfunded by the state. The move was pushed by Senate President Stephen Sweeney (D., Gloucester) — who earlier this year announced his own funding plan — but fiercely opposed by the New Jersey Education Association, the state's largest teachers' union.

Sweeney said last week he was committed to helping underfunded districts. "We started to make progress last year on school funding and we need to continue it," he said on radio station NJ 101.5. While the Murphy administration has said it's open to changes in school funding, Sweeney said, "It has to happen this year."

David Sciarra, executive director of the Education Law Center, which argued the Abbott v. Burke cases that laid the groundwork for the state's school-funding formula, said districts like Chesterfield have "valid complaints" about their state aid. The problem is the state's chronic underfunding of schools, he said: "It's not like [Murphy]'s targeting these districts somehow for particular treatment."

If lawmakers add money to Murphy's budget, Sciarra said, they should direct it to districts that are spending less than their "adequacy" budgets — the formula's calculation of what each district must spend to give its students a "thorough and efficient" education — and are owed large amounts of money by the state. The law center has also recommended the state lift the 2 percent property-tax cap for some districts that aren't raising enough local revenue.

"The entire educational community has to come together and realize it's going to take a while for districts to come back after what they've experienced over the last eight years," Sciarra said.

Others questioned how Murphy would manage to ramp up funding in the coming years given other demands on the state budget, like the pension liability, and Murphy's other goals — like offering free community college tuition.

"We haven't addressed the seriousness of the underfunded nature of our formula," said John Donahue, executive director of the New Jersey Association of School Business Officials. "The fundamental problem at this point is finding resources" to support it.