Democrats agree on school aid changes, not yet endorsed by Murphy

TRENTON — Democratic legislative leaders have agreed on changes to the school funding formula that would redistribute more than a half-billion dollars in state aid over the next seven years, Senate President Stephen Sweeney announced Monday.

The changes could be on Gov. Phil Murphy’s desk in a week. Sweeney, a Democrat from Gloucester County, said the intention is to have the bill, S2, advance through Senate and Assembly committees Monday, then get final floor votes Thursday.

Sweeney said the most underfunded districts would receive 58 percent of full funding in 2018-19 through the redistribution of $68 million in adjustment aid.

“We ramp it up with I think minor impact, if any at all. And we finally get to where all of our kids are going to get to 100 percent funding by the time we’re done,” Sweeney said.

“We feel that gives the districts that have lost children the chance to shrink in attrition and right-size their school districts,” he said. “It gives us a chance to end the unfairness that’s going on.”

Under the agreement, as described by Sweeney:

• Funding for districts that get more than the school-aid formula would allow, if it was being followed properly, would be gradually reduced over seven years.
• The extra aid would be cut by 5 percent for 2018-19, then an additional 8 percent, 10 percent, 14 percent, 18 percent, 21 percent and 24 percent the following years, meaning it would be phased out by the 2024-25 school year.
• Enrollment caps that limit how much school funding can go up for growing school districts would be eliminated, starting with the 2018-19 school year.
• Former Abbott districts that lose state aid through the redistribution would have permission to raise property taxes by an amount equal to that reduction, as a waiver around the 2 percent levy cap.
• County vocational-technical schools would be exempt from the aid reductions.
• Through a separate bill, Jersey City – which would be in line to lose $174 million in state aid over five years – would be allowed to impose an employer payroll tax of 1 percent, strictly for school funding. The tax wouldn’t be paid for Jersey City residents who are employed. There’s a similar law now in Newark.

Gov. Phil Murphy, speaking on New Jersey 101.5’s “Ask the Governor,” said he agrees the decade-old formula needs to be updated but didn’t specifically commit to endorsing Sweeney’s bill.

“So we’re going to get there. We can’t solve everything overnight, but we’ve had good cooperation. I think we all see this in a similar way, and I’m highly confident we will get to a good place,” Murphy said.

Murphy said the aid distribution announced in March had to adhere to current funding formula.

“But I’m on the side of all the folks who are mad as heck about their kid not getting the money they deserve, and we aim to fix that,” Murphy said.

Though Murphy said he hadn’t seen the details of the bill, Sweeney said it wouldn’t be a surprise.

“The governor, we shared this with him a month ago,” Sweeney said. “Last time I spoke with him, they said we were very close. Which was Friday.”

Asked specifically if some districts would wind up receiving less state aid for 2018-19 than they promised in March, Murphy said: “The answer to that is: It’s going to be an equitable distribution, much more so.”

Sweeney said he doesn’t want to see anyone lose their jobs but that districts that lose money will have seven years to shrink through attrition.

“What we hear every year is: Oh, we can’t do it this year,” Sweeney said. “Last year, we did it in August. They lost $31 million, the over-funded districts. They didn’t cut one program, which I’m proud of. They didn’t cut one teacher, which I’m happy about. And they lost $31 million going into September. They know how to do this.”

Murphy has proposed putting an additional $284 million into the school-aid formula next year, the first step in a four-year push toward full school funding.

Murphy’s budget plan is also contingent on about $1.5 billion in net tax increases that Democratic legislative leaders have so far refused to endorse.