NJ details how next year’s school aid will shrink by $335 million

Revised state aid figures for New Jersey public schools were issued Thursday evening by the state Department of Education, detailing how $335 million in funding promised in February will disappear due to the financial crunch brought on by the coronavirus pandemic.

As part of its plans for closing a projected $10 billion revenue shortfall through June 2021, including more than $7 billion next fiscal year, Gov. Phil Murphy’s administration is withdrawing $850 million in proposed spending increases for fiscal 2021, including planned increases in school aid.

“We’re flat funded to the FY20 levels,” said Lynn Azarchi, deputy director of the state Office of Management and Budget. “We are rerunning the formula, which just means that the overfunded districts will still see the same reduction as they would have. The winning districts will just win by a little bit less than what was in their aid notices.”

For about one-third of districts, nothing changes. They were already losing state aid as the state continued its shift back to its funding formula, and they continue to absorb a $156 million reduction in state aid.

But the change matters for the two-thirds of districts that are gaining aid. They will share the $156 million that’s being reduced from "overfunded" districts but won’t receive a share of the $335 million in additional state aid that had been planned.

For many districts, that means their promised increase will shrink, generally by around two-thirds, though that’s not how it applies across the board. See the full list below.

Newark will get $36 million less than had been expected. Elizabeth gets $17 million less. Among suburban communities, the biggest drop is $8 million in Woodbridge. Communities that had long suffered when the funding formula was temporarily abandoned also take hits, such as $1.9 million in Bound Brook and more than $1.4 million apiece in Kingsway Regional and Freehold Borough.

State Treasurer Elizabeth Maher Muoio told the Assembly Budget Committee the administration is looking to “stick to the schedule” in S-2, the bill enacted into law that transitions the state back to its school funding formula.

“Part of the worry is that when … the School Funding Reform Act was derailed years ago, once they stopped following the formula it never really came back on, so we want to make sure we continue with the steps to move through the formula,” Muoio said. “But the amount of money we have to work with will be held to the FY20 level.”

Aid amounts were released around three hours after the budget committee hearing ended. When asked during the hearing when revised school aid notices would go out, Muoio said she didn’t know and would check with the Department of Education.

Assemblyman Benjie Wimberly, D-Passaic, said schools aren’t in a good financial position for the additional sanitation, smaller class sizes and in-home technology demands on education in the era of coronavirus.

“Not just in urban areas but in rural areas, people do not have the technology that’s much needed for remote learning. And when you talk about classroom ratio, if you’re looking to cut back or come back into the local property taxes, I just don’t see how fiscally that would work,” Wimberly said.

“You’re looking at probably classroom ratios of 9:1 for safety purposes. You’re looking at facility issues where many of our older districts and buildings do not have any type of ventilation or air conditioning,” he said.

Muoio said the state is planning to use a $400 million portion of its roughly $2.4 billion in aid received through the federal CARES Act to help with K-12 education relief and reopening.

“It’s recognizing that schools are going to face significant costs associated with social distancing, reopening of schools, remote learning and modified operations as a result of the crisis,” Muoio said.

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Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at michael.symons@townsquaremedia.com.