Specifics of new school funding formula unfurled
Red Bank in line for 18% hike; all districts would get at least 2%
BY CHRIS GAETANO and MELISSA KARSH Staff Writers
Red Bank public schools could receive an 18 percent increase in state funding for the second year in a row, bringing the 2008-2009 proposed state funding to the district to $2.424 million.

"The last year was the most significant where we actually saw this 18 percent increase in state aid, which was significant in the sense that we had not received any increase in a number of years," said public schools Superintendent Laura Morana of the governor's new school funding formula, details of which were released Dec. 13.

The state aid figures from Gov. Jon Corzine's proposed new school funding plan would give some area school districts, like Red Bank, a significant cash increase from Trenton, while others would be receiving the minimum 2 percent rise, if the new formula passes the Legislature.

Also in line for a significant increase in state school funding under the new formula are Rumson Borough schools, with a 10 percent rise proposed for the 2008-2009 school year.

Last year, Rumson schools received about $682,000 in state funding and would receive about $750,000 this year. Rumson- Fair Haven regional schools also are projected to receive a 10 percent increase from last year, an increase from about $676,000 to $744,000 in state funding.

For school districts like Fair Haven and Oceanport that would see 2 percent increases to $698,000 and $598,000, respectively, the frustration with the new formula is palpable.

Officials of both districts said they are grateful to be looking forward to increases at all, but disappointed by the small margin of increase, barely enough to cover half of the average teacher's salary.

"We appreciate everything we get," said Fair Haven school district Business Administrator Valery Petrone, "but we need more."

Petrone added that any funding from the state would help ease the burden for Fair Haven taxpayers.

Little Silver, including both borough schools, and Red Bank Regional High School, also received the 2 percent minimum increase in state funding.

The proposed new funding formula, which the governor formally unveiled last week, changes the way state aid to local school districts is apportioned. Currently, funding is primarily determined through a school's location, with wealthier areas receiving less aid and poorer ones receiving more. This has led to some criticism, because even in areas where the average income is higher, there may still be students in need who require extra money to educate them. To this end, the governor is proposing a fundamental shift in the state aid formula, from a district's location to how many needy students a district has.

The basic mechanism behind the formula is a base rate given for every student in a district depending on grade level, determined by how much money the state feels is necessary to adequately educate a child. For elementary schools, this base rate is $9,649 per pupil. For middle schools, it is $10,035. For high schools, it is $11,289. Students in vocational schools, meanwhile, will net a base rate of $14,789.

On top of these base amounts would be additional funding for each student who is classified as "at risk," of limited English proficiency (LEP), combined at risk and LEP, in special education, or requiring speech therapy. Further aid, depending on need, is also provided for security, transportation, equalization and adjustment.

Every district, for at least one year, would be receiving a 2 percent increase in state aid and would be guaranteed to not lose state aid for at least three years.

Morana said Dec. 13 that this year's projected 18 percent increase would translate into an approximately $400,000 increase in funding from last year, where the district received about $2.056 million for the 2007- 2008 school year.

Although the district received over $2 million in state funding last year, Morana said that number was split with the Red Bank Charter School, making a transfer payment in the amount of $1,793,000 for the 2007-2008 school year and she said she expects a similar transfer for the proposed 2008-2009 aid.

With 77 percent of the schools population receiving free and reduced lunches and 22 percent of the primary school population and 14 percent of the middle school's being eligible for English language learning (ELL) programs, Morana said those criteria were key factors that enabled the district to receive an 18 percent increase in state funding for a second year.

"We're not looking at it as 'Oh, we have $400,000 more to spend.' It just simply means we take that into account so as we develop our budget we will use that and therefore whatever monies will need to be raised through property tax will be a lot less," said Morana.

Morana was also concerned about the affect the new funding formula would have on the targeted at risk aid (TARA) that the district receives in addition to the general state funding. She said last year the district received about $308,000 in TARA funding.

"At this point we welcome any aid but I'm just hoping that they still give us the TARA aid. If they don't give us the TARA aid, then it really means that I'm not getting additional aid just about. If we do get the TARA aid, plus the 18 percent, then we will be ahead and will be able to be very creative and do a combination of meeting our needs as well as looking at truly reducing the tax levy," said Morana.

Ways to fund the proposal

This question has been at the forefront since the Corzine plan was first announced. The Mayors' School Funding Committee, a group of 22 mayors chaired by Edison Mayor Jun Choi, recently released a set of recommendations to the governor on how the initiative can be paid for. Choi expressed general support for the plan, though he noted that any changes to the state aid distribution system must be met with an increased dedication to accountability and fiscal responsibility, especially in the face of a $3 billion-a-year deficit and a $32 billion debt.

"One concern we have is, longer term, how are we going to pay for it? And we list the set of recommendations that call for greater fiscal responsibility, greater accountability, and investment in programs that work and the elimination of educational programs that do not work. That is the quick summary of the report," said Choi.

The report offers a number of specific policy recommendations that it says would help account for the costs of the new school funding formula, but generally says that the state must consider any and all options specifically to address the deficit and debt. Some examples brought up include the use of casino and lottery revenues, the re-allocation of sales tax dedications from property tax rebates to education, and impact fees for development that go directly to schools. The report also stresses the importance of making sure that state aid formulas are consistent from year to year, preferably through legislation rather than ad hoc.

The report spends a great deal of time focused on increasing accountability as well. Overall, the report recommends that the state examine and improve its current means of measuring student success against set standards and make a firm commitment to gathering better data. It also recommends giving the Commissioner of Education authority to withhold state aid from a district for lack of effectiveness or efficiency.

Other recommendations include moving school board elections to November, with an April budget election being held only if the district's proposed spending plan exceeds a predetermined cap level. The report also states that the state should remove disincentives for school district consolidation, and encourages local districts and municipalities to increased shared services.

Concerns from the Abbott districts

Abbott districts came about following a New Jersey Supreme Court decision. According to the state Department of Education's Web site, "The New Jersey Supreme Court in 1998 established a single criterion for determining whether a constitutionally guaranteed education is being provided to students in the poorest schools in the state."

Under the Abbott decisions, these districts receive state aid that is calculated to provide them with the same per-pupil operating budgets as that of one of the state's wealthiest school districts. This funding, called Abbott parity aid, is adjusted annually to reflect spending and enrollment in wealthy districts. The Abbott districts are selected by the court and the Legislature to benefit from financial assistance and to implement specific remedies mandated by the court.

Paul Tractenberg, a law professor at Rutgers Newark and the founder of the Educational Law Center, which advocates for Abbott districts, said he is worried about the governor's proposed funding formula and that it has significant constitutional as well as practical issues.

"I think there are big problems constitutionally, but the problems are much bigger than just that," said Tractenberg.

Trachtenberg expanded on what he believes are the problems with the Corzine plan.

One problem is that the adequacy funding approach will leave Abbott districts with less aid than they would get with the parity approach currently used, and he said that the adequacy figures across the board are still much too low.

Another is that the weighted factors, such as at risk, LEP and at risk/LEP, don't cover the wide variety of other needs districts might have that could require extraordinary aid themselves; the new program would collapse the current 26 aid categories into 10. Also, the plan is still unclear about school facilities costs to provide construction of new buildings and renovations of old ones.

He was also critical of the plan to have the aid money go to districts rather than directly to the individual schools, and the speed at which the initiative is being pushed through the government.

In the hands of the Legislature

With the proposal formally rolled out, it is now up to the Assembly and the Senate to piece together a bill that would ultimately put the governor's plan into effect. Corzine has stated that he hopes to have the new school funding formula in place by the end of the current legislative session, because local districts must factor state aid into their budget analyses for the upcoming school year.

The proposal has gained cautious support from state lawmakers, with a general agreement that a new scheme for state aid distribution has been a long time coming.

"A school funding formula is critical not only for the state budget process but [for] our schools. … About five years of flat aid has taken its toll in school districts," said Assemblyman Bill Baroni (R-14), who sits on the Education Committee.

Baroni said he would like to examine the way special education aid is distributed a little more closely. He noted that while he does not want to rush any legislation through, it is the burden of lawmakers to keep to a timeline for the sake of local school districts trying to get their budgets together.

Sen. Barbara Buono (D-18) said she is approaching the plan with a degree of healthy skepticism, saying that she has seen other attempts to improve the school funding formula come and go. Still, she is hopeful that this can be the time the state gets it right.

"Basically, the way I can summarize my position is [that] while I don't think we're out of the woods yet, this formula, while not perfect, represents long overdue and significant progress toward more fair and equitable funding of our schools. And in addition to ensuring that education is a top priority, it also makes progress on property tax relief, and that's key," said Buono.

She said she was concerned whether the formula would provide a static adequacy mode over the years or whether it would change through time. She noted that all things become more expensive over time, and that adequacy should be re-examined year after year.

"What is adequate today may not be adequate tomorrow. … We need to spell that out in the legislation," Buono said.

She said that Democratic legislators have given a generally positive initial response, but that lawmakers representing areas with Abbott districts have expressed worry that this will, once the three-year hold-harmless provision is up, result in a loss of state funding.

Staff writer Jenna O' Donnell contributed

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