Bill Text: NJ A1125 | 2024-2025 | Regular Session | Introduced
Bill Title: "Fully Funding Schools and Cutting Property Taxes Act"; repeals certain sections of law; requires additional aid to lower property taxes commensurate with residents' ability to support schools; appropriates $2.9 billion.
Spectrum: Partisan Bill (Republican 24-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Education Committee [A1125 Detail]
Download: New_Jersey-2024-A1125-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Co-Sponsored by:
Assemblymen Rumpf, McGuckin, Barranco, Assemblywoman N.Munoz, Assemblyman Sauickie, Assemblywoman Swift, Assemblymen Guardian, Scharfenberger, Assemblywoman Flynn, Assemblyman DePhillips, Assemblywoman Matsikoudis, Assemblymen Bergen, Clifton, Assemblywoman Dunn, Assemblymen Simonsen, McClellan, Peterson and S.Kean
SYNOPSIS
"Fully Funding Schools and Cutting Property Taxes Act"; repeals certain sections of law; requires additional aid to lower property taxes commensurate with residents' ability to support schools; appropriates $2.9 billion.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning State school aid, supplementing P.L.2007, c.260 (C.18A:7F-43 et al.), revising various parts of the statutory law, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) Sections 2, 3, and 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and may be cited as the "Fully Funding Schools and Cutting Property Taxes Act."
2. (New section) a. In the 2023-2024 school year and each school year thereafter, a school district or county vocational school district shall receive State school aid in such amounts to ensure that the district receives the greatest of:
(1) the amount of equalization aid, special education categorical aid, security categorical aid, and transportation aid as calculated for the district in accordance with the provisions of sections 11, 13, 14, and 15 of P.L.2007, c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57), respectively; or
(2) the amount of equalization aid, special education categorical aid, security categorical aid, and transportation aid as calculated for the district in accordance with the provisions of sections 11, 13, 14, and 15 of P.L.2007, c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57), respectively, and, if applicable, the amount of aid received pursuant to subsection a. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill); or
(3) the amount of the district's State school aid received in any of the school years between and including the 2017-2018 school year and the 2022-2023 school year.
b. In the 2023-2024 school
year and each school year thereafter, a school district or county vocational
school district may petition the Commissioner of Education and the State Treasurer
to receive any amount of State school aid in addition to the amount of State
school aid determined pursuant to this section, provided that the district
demonstrates that its adjusted tax levy for the budget year will be reduced
from the prebudget year adjusted tax levy in an amount equal to the amount of
additional State school aid approved by the Commissioner of Education and the
State Treasurer under this subsection and any other increase in State school
aid received above State school aid received in the prebudget year.
3. (New section) a. In addition to the amount of State school aid provided to a school district pursuant to P.L.2007, c.260 (C.18A:7F-43 et al.) in the 2023-2024 school year, a school district that meets the criteria set forth in subsection b. of this section shall receive an amount of State school aid in the 2023-2024 school year that is equal to the total amount of reductions experienced by the district in any of the school years 2018-2019 through 2022-2023.
b. The provisions of this section shall apply to any school district that experienced a State aid reduction during any of the school years 2018-2019 through 2022-2023 because:
(1) it had a State aid ratio in the 2017-2018 and 2018-2019 school years greater than 1.00, as determined in accordance with the provisions of the fiscal year 2019 appropriations act;
(2) it had a State aid ratio for the 2017-2018 school year that was less than 1.00 and a State aid ratio for the 2018-2019 school year that was greater than 1.00, as determined in accordance with the provisions of the fiscal year 2019 appropriations act; or
(3) it had a State aid differential that was positive in any of the school years 2019-2020 through 2022-2023.
c. As used in this section:
"Non-SFRA aids" means the sum of supplemental enrollment growth aid, per pupil growth aid, PARCC readiness aid, professional learning community aid, under adequacy aid, and host district support aid received by a school district in the prebudget year.
"State aid differential" means the difference between the sum of a school district's allocations of equalization aid, special education categorical aid, security categorical aid, transportation aid, adjustment aid, and non-SFRA aids in the prebudget year, and the sum of equalization aid, special education categorical aid, security categorical aid, and transportation aid as calculated for the budget year in each category in accordance with the provisions of sections 11, 13, 14, and 15 of P.L.2007, c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57), respectively.
"State aid ratio" means total State aid divided by the sum of equalization aid, special education categorical aid, security categorical aid, and transportation aid as calculated for the budget year in each category in accordance with the provisions of sections 11, 13, 14, and 15 of P.L.2007, c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57), respectively for the corresponding school year.
4. (New section) a. Notwithstanding the provisions of this subsection or of any other law, rule, or regulation to the contrary, a school district that receives an increase in State school aid compared to the prior school year shall reduce its budget and adjusted tax levy in an amount equal to the increase in State school aid, provided that the total adjusted tax levy of the municipality or municipalities, as the case may be, comprising the school district is more than five percent of the district income as defined in section 3 of P.L.2007, c.260 (C.18A:7F-45).
b. (1) Notwithstanding the provisions of subsection a. of this section or the provisions of section 5 of P.L.1996, c.138 (C.18A:7F-5), section 3 of P.L.2007, c.62 (C.18A:7F-38), section 4 of P.L.2007, c.62 (C.18A:7F-39), or any other law, rule, or regulation to the contrary, in the 2023-2024 school year and each school year thereafter, the adjusted tax levy of a school district subject to the provisions of subsection a. of this section may only increase by an amount necessary to cover an increase in per pupil administrative costs, subject to the limitations in per pupil administrative costs established pursuant to subsection c. of section 5 of P.L.1996, c.138 (C.18A:7F-5), provided that the adjusted tax levy is first reduced pursuant to subsection a. of this section.
(2) Notwithstanding the provisions of this subsection or of any other law, rule, or regulation to the contrary, a school district subject to the provisions of this subsection may increase its budget or adjusted tax levy to cover deferred revenue.
(3) A school district subject to the provisions of this subsection may submit to the voters at the annual school election or on such other date as is set by regulation of the commissioner, a proposal or proposals to increase the adjusted tax levy by more than the allowable amount authorized pursuant to paragraph (1) of this subsection, in accordance with the provisions of section 4 of P.L.2007, c.62 (C.18A:7F-39).
c. A school district that receives an increase in State school aid compared to the prior school year shall not be subject to the provisions of subsection a. of this section if the total adjusted tax levy of the municipality or municipalities, as the case may be, comprising the school district is less than five percent of the district income as that term is defined pursuant to section 3 of P.L.2007, c.260 (C.18A:7F-45). Notwithstanding the provisions of this subsection or of any other law, rule, or regulation to the contrary, a school district that receives an increase in State school aid and meets the criteria set forth in subsection b. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be subject to the provisions of subsection a. of this section beginning in the 2024-2025 school year, provided that the district receives an increase in State school aid compared to the prior school year and the total adjusted tax levy of the municipality or municipalities, as the case may be, comprising the school district is more than five percent of the district income defined pursuant to section 3 of P.L.2007, c.260 (C.18A:7F-45).
5. Section 3 of P.L.2007, c.62 (C.18A:7F-38) is amended to read as follows:
3. a. Notwithstanding the provisions of any other law to the contrary, a school district shall not adopt a budget pursuant to sections 5 and 6 of P.L.1996, c.138 (C.18A:7F-5 and C.18A:7F-6) with an increase in its adjusted tax levy that exceeds, except as provided in subsection e. of section 4 of P.L.2007, c.62 (C.18A:7F-39), the tax levy growth limitation calculated as follows: the sum of the prebudget year adjusted tax levy and the adjustment for increases in enrollment multiplied by 2.0 percent, and adjustments for an increase in health care costs, and increases in amounts for certain normal and accrued liability pension contributions set forth in sections 1 and 2 of P.L.2009, c.19 amending section 24 of P.L.1954, c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15) for the year set forth in those sections[, and, in the case of an SDA district as defined pursuant to section 3 of P.L.2000, c.72 (C.18A:7G-3), during the 2018-2019 through the 2024-2025 school years, increases to raise a general fund tax levy to an amount that does not exceed its local share].
b. (1) The allowable adjustment for increases in enrollment authorized pursuant to subsection a. of this section shall equal the per pupil prebudget year adjusted tax levy multiplied by EP, where EP equals the sum of:
(a) 0.50 for each unit of weighted resident enrollment that constitutes an increase from the prebudget year over 1%, but not more than 2.5%;
(b) 0.75 for each unit of weighted resident enrollment that constitutes an increase from the prebudget year over 2.5%, but not more than 4%; and
(c) 1.00 for each unit of weighted resident enrollment that constitutes an increase from the prebudget year over 4%.
(2) A school district may request approval from the commissioner to calculate EP equal to 1.00 for any increase in weighted resident enrollment if it can demonstrate that the calculation pursuant to paragraph (1) of this subsection would result in an average class size that exceeds 10% above the facilities efficiency standards established pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.).
c. (Deleted by amendment, P.L.2010, c.44)
d. (1) The allowable adjustment for increases in health care costs authorized pursuant to subsection a. of this section shall equal that portion of the actual increase in total health care costs for the budget year, less any withdrawals from the current expense emergency reserve account for increases in total health care costs, that exceeds 2.0 percent of the total health care costs in the prebudget year, but that is not in excess of the product of the total health care costs in the prebudget year multiplied by the average percentage increase of the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and Benefits in the Department of the Treasury.
(2) The allowable adjustment for increases in the amount of normal and accrued liability pension contributions authorized pursuant to subsection a. of this section shall equal that portion of the actual increase in total normal and accrued liability pension contributions for the budget year that exceeds 2.0 percent of the total normal and accrued liability pension contributions in the prebudget year.
(3) [In the case of an SDA district, as defined pursuant to section 3 of P.L.2000, c.72 (C.18A:7G-3), in which the prebudget year adjusted tax levy is less than the school district's prebudget year local share as calculated pursuant to section 10 of P.L.2007, c.260 (C.18A:7F-52), the allowable adjustment for increases to raise a tax levy that does not exceed the school district's local share shall equal the difference between the prebudget year adjusted tax levy and the prebudget year local share.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
e. (Deleted by amendment, P.L.2010, c.44)
f. The adjusted tax levy shall be increased or decreased accordingly whenever the responsibility and associated cost of a school district activity is transferred to another school district or governmental entity.
(cf: P.L.2018, c.67, s.6)
6. Section 4 of P.L. 2007, c.62 (C.18A:7F:39) is amended to read as follows:
4. a. (Deleted by amendment, P.L.2010, c.44)
b. (Deleted by amendment, P.L.2010, c.44)
c. A school district may submit to the voters at the annual school election, or on such other date as is set by regulation of the commissioner, a proposal or proposals to increase the adjusted tax levy by more than the allowable amount authorized pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38) or pursuant to paragraph (1) of subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). The proposal or proposals to increase the adjusted tax levy shall be approved if a majority of people voting shall vote in the affirmative. In the case of a school district with a board of school estimate, the additional adjusted tax levy shall be authorized only if a quorum is present for the vote and a majority of those board members who are present vote in the affirmative to authorize the additional adjusted tax levy.
(1) A proposal or proposals submitted to the voters or the board of school estimate to increase the tax levy pursuant to this subsection shall not include any programs or services necessary for students to achieve the core curriculum content standards.
(2) All proposals to increase the tax levy submitted pursuant to this subsection shall include interpretive statements specifically identifying the program purposes for which the proposed funds shall be used and a clear statement on whether approval will affect only the current year or result in a permanent increase in the levy. The proposals shall be submitted and approved pursuant to sections 5 and 6 of P.L.1996, c.138 (C.18A:7F-5 and 18A:7F-6).
d. (Deleted by amendment, P.L.2010, c.44)
e. A school district that has not been granted approval to exceed the cap under section 3 of P.L.2007, c.62 (C.18A:7F-38), pursuant to subsection c. of this section, may add to its adjusted tax levy in any one of the next three succeeding budget years, the amount of the difference between the maximum allowable amount to be raised by taxation for the current school budget year and the actual amount to be raised by taxation for the current school budget year. A school district that has not been granted approval to exceed the cap under paragraph (1) of subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) may, pursuant to subsection c. of this section, add to its adjusted tax levy the amount of the difference between the maximum allowable amount to be raised by taxation for the current school budget year and the actual amount to be raised by taxation for the current school budget year, provided that the sum of the amount of State school aid and the adjusted tax levy is less than the adequacy budget calculated pursuant to section 9 of P.L.2007, c.260 (C.18A:7F-51).
(cf: P.L.2011, c.202, s.3)
7. Section 11 of P.L.2007, c.260 (C.18A:7F-53) is amended to read as follows:
11. Each school district's and county vocational school district's equalization aid shall be calculated as follows:
EQAID = AB - LSHARE provided that EQAID shall not be less than zero; and
where
AB is the district's adequacy budget calculated pursuant to section 9 of [this act] P.L.2007, c.260 (C.18A:7F-51); and
LSHARE is the district's local share calculated pursuant to section 10 of [this act] P.L.2007, c.260 (C.18A:7F-52).
Each district's equalization aid for general fund expenses shall be expended to provide a thorough and efficient system of education consistent with the core curriculum content standards established pursuant to section 4 of [this act] P.L.2007 ,c.260 (C.18A:7F-46).
A district's equalization aid shall include such additional amounts as may be necessary to ensure that the district is funded at the amount of its adequacy budget, after consideration of the adjusted tax levy and all other amounts of State school aid to which the district is entitled, provided that the total adjusted tax levy of the municipality or municipalities, as the case may be, comprising the school district is more than five percent of the district income as defined in section 3 of P.L.2007 , c.260 (C.18A:7F-45).
A school district may make an appeal to the commissioner on the amount of its equalization aid on the basis that the calculation of income within the local share formula under section 10 of [this act]
P.L.2007, c.260 (C.18A:7F-52) does not accurately reflect the district's income wealth.
(cf: P.L.2007, c.260, s.11)
8. There is appropriated from the Property Tax Relief Fund to the Department of Education the sum of $2,946,618,000 for the purposes of providing additional State school aid in the 2023-2024 school year. Notwithstanding the provisions of any law, rule, or regulation to the contrary and subject to the approval of the Director of the Division of Budget and Accounting, any unexpended balances from this appropriation are appropriated to the Schools Development Authority for the purposes of supporting school facilities projects and supporting emergent needs and capital maintenance in school districts.
9. The following sections are repealed:
Section 2 of P.L.2018, c.67 (C.18A:7F-5d);
Section 3 of P.L.2018, c.67 (C.18A:7F-67); and
Section 4 of P.L.2018, c.67 (C.18A:7F-68).
10. This act shall take effect immediately.
STATEMENT
The bill is to be known as the "Fully Funding Schools and Cutting Property Taxes Act." The bill requires that, beginning with the 2023-2024 school year, State school aid will be provided to school districts at levels consistent with the School Funding Reform Act of 2008 (SFRA) up to their adequacy budget, and prevents future cuts to State aid. It also requires a school district to reduce its tax levy in an amount equal to any increase in State school aid above the prior budget year under certain circumstances, allowing the district to subsequently increase its levy from a lower level than the prior budget year.
It is the sponsors' intent to bring equity to New Jersey's school system by increasing State aid contributions to SFRA adequacy budget levels in a manner consistent with the "thorough and efficient" education clause in the State Constitution (N.J. Const. art. VIII, sec. 4, par.1). Providing school aid in this manner will reduce property taxes based on the ability of each school district's residents to support schools.
The bill repeals certain sections of law enacted as part of P.L.2018, c.67 (commonly referred to "S2") that resulted in loss of aid and higher property taxes in certain school districts.
The bill requires the State to provide aid to school districts equal to the greatest amount of:
· aid according to the SFRA;
· aid according to the SFRA and, if applicable, additional aid to provided to school districts that lost funding as a result of the implementation of S2; or
· State school aid received in any of the school years between and including the 2017-2018 school year and the 2022-2023 school year.
Under the bill, a district may petition the Commissioner of Education and State Treasurer for additional aid if it demonstrates a willingness to reduce its adjusted tax levy by an amount equal to any additional aid received.
The bill requires a school district to reduce its school tax levy by the same amount of their State school aid increase above the prior year if the total tax levy of the municipality or municipalities comprising the district is more than five percent of school district income. After lowering its levy commensurate with a State aid increase, a school district may increase its levy by an amount necessary to cover an increase in per pupil administrative costs and deferred revenue. The bill requires a district to submit a proposal to voters of the district if it wishes to exceed this limitation. If the voters do not approve the proposal, a school district may add to its adjusted tax levy the difference between the maximum amount to be raised by taxation for the current budget year and the actual amount to be raised by taxation for the current school year if the amount of State school aid and the adjusted tax levy is below the adequacy budget in the next three succeeding budget years.
Lastly, the bill appropriates $2,946,618,000 for the purposes of providing additional aid under the bill. The bill stipulates that any unexpended balances are appropriated to the Schools Development Authority for the purposes of supporting school facilities projects and supporting emergent needs and capital maintenance in school districts.
