Bill Text: NJ A5221 | 2026-2027 | Regular Session | Introduced
Bill Title: Makes various changes to school funding law.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-06-04 - Introduced, Referred to Assembly Education Committee [A5221 Detail]
Download: New_Jersey-2026-A5221-Introduced.html
Sponsored by:
Assemblywoman ROSAURA "ROSY" BAGOLIE
District 27 (Essex and Passaic)
SYNOPSIS
Makes various changes to school funding law.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning State school aid, amending various parts of the statutory law, and supplementing P.L.1996, c.138 and P.L.2007, c.260.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 5 of P.L.1996, c.138 (C.18A:7F-5) is amended to read as follows:
5. As used in this section, "cost of living" means the CPI as defined in section 3 of P.L.2007, c.260 (C.18A:7F-45).
a. Within 30 days following the approval of the Educational Adequacy Report, the commissioner shall notify each district of the base per pupil amount, the per pupil amounts for full-day preschool, the weights for grade level, county vocational school districts, at-risk pupils, bilingual pupils, and combination pupils, the cost coefficients for security aid and for transportation aid, [the State average classification rate and] the excess cost for general special education services pupils, [the State average classification rate and] the excess cost for speech-only pupils, and the geographic cost adjustment for each of the school years to which the report is applicable.
Annually, no later than August 1 of each year, the commissioner shall issue a public memorandum providing the timelines for the availability and certification of equalized valuation data and district income data from the Division of Taxation and the Department of Community Affairs, which data is utilized in the calculation of local share pursuant to section 10 of P.L.2007, c.260 (C.18A:7F-52).
Beginning with State school aid calculated for the first full school year following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner shall annually, within 15 days following the receipt of finalized equalized valuation and district income figures but no later than January 15, provide each district with a preliminary State aid notice that estimates the amount of State aid payable to the district in the succeeding school year pursuant to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.).
Annually, within two days following the transmittal of the State budget message to the Legislature by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), the commissioner shall notify each district of the maximum amount of aid payable to the district in the succeeding school year pursuant to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), and shall notify each district of the district's adequacy budget for the succeeding school year.
For the 2008-2009 school year and thereafter, unless otherwise specified within P.L.2007, c.260 (C.18A:7F-43 et al.), aid amounts payable for the budget year shall be based on budget year pupil counts, which shall be projected by the commissioner using data from prior years. Adjustments for the actual pupil counts of the budget year shall be made to State aid amounts payable during the school year succeeding the budget year. Additional amounts payable shall be reflected as revenue and an account receivable for the budget year.
Notwithstanding any other provision of this act to the contrary, each district's State aid payable for the 2008-2009 school year, with the exception of aid for school facilities projects, shall be based on simulations employing the various formulas and State aid amounts contained in P.L.2007, c.260 (C.18A:7F-43 et al.). The commissioner shall prepare a report dated December 12, 2007 reflecting the State aid amounts payable by category for each district and shall submit the report to the Legislature prior to the adoption of P.L.2007, c.260 (C.18A:7F-43 et al.). Except as otherwise provided pursuant to this subsection and paragraph (3) of subsection d. of section 5 of P.L.2007, c.260 (C.18A:7F-47), the amounts contained in the commissioner's report shall be the final amounts payable and shall not be subsequently adjusted other than to reflect the phase-in of the required general fund local levy pursuant to paragraph (4) of subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58) and to reflect school choice aid to which a district may be entitled pursuant to section 20 of that act. The projected pupil counts and equalized valuations used for the calculation of State aid shall also be used for the calculation of adequacy budget, local share, and required local share. For 2008-2009, extraordinary special education State aid shall be included as a projected amount in the commissioner's report dated December 12, 2007 pending the final approval of applications for the aid. If the actual award of extraordinary special education State aid is greater than the projected amount, the district shall receive the increase in the aid payable in the subsequent school year pursuant to the provisions of subsection c. of section 13 of P.L.2007, c.260 (C.18A:7F-55). If the actual award of extraordinary special education State aid is less than the projected amount, other State aid categories shall be adjusted accordingly so that the district shall not receive less State aid than as provided in accordance with the provisions of sections 5 and 16 of P.L.2007, c.260 (C.18A:7F-47 and C.18A:7F-58).
In the event that the commissioner determines, following the enactment of P.L.2007, c.260 (C.18A:7F-43 et al.) but prior to the issuance of State aid notices for the 2008-2009 school year, that a significant district-specific change in data warrants an increase in State aid for that district, the commissioner may adjust the State aid amount provided for the district in the December 12, 2007 report to reflect the increase.
b. Each district shall have a required local share. For districts that receive educational adequacy aid pursuant to subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58), the required local share shall be calculated in accordance with the provisions of that subsection.
For all other districts, the required local share shall equal the lesser of the local share calculated at the district's adequacy budget pursuant to section 9 of P.L.2007, c.260 (C.18A:7F-51), or the district's budgeted local share for the prebudget year.
In order to meet this requirement, each district shall raise a general fund tax levy which equals its required local share.
No municipal governing body or bodies or board of school estimate, as appropriate, shall certify a general fund tax levy which does not meet the required local share provisions of this section.
c. Annually, on or before March 4, or on or before March 20 in the case of a school district with an annual school election in November, each district board of education shall adopt, and submit to the commissioner for approval, together with such supporting documentation as the commissioner may prescribe, a budget that provides for a thorough and efficient education. Notwithstanding the provisions of this subsection to the contrary, the commissioner may adjust the date for the submission of district budgets if the commissioner determines that the availability of preliminary aid numbers for the subsequent school year warrants such adjustment.
Notwithstanding any provision of this section to the contrary, for the 2005-2006 school year each district board of education shall submit a proposed budget in which the advertised per pupil administrative costs do not exceed the lower of the following:
(1) the district's advertised per pupil administrative costs for the 2004-2005 school year inflated by the cost of living or 2.5 percent, whichever is greater; or
(2) the per pupil administrative cost limits for the district's region as determined by the commissioner based on audited expenditures for the 2003-2004 school year.
The executive county superintendent of schools may disapprove the school district's 2005-2006 proposed budget if he determines that the district has not implemented all potential efficiencies in the administrative operations of the district. The executive county superintendent shall work with each school district in the county during the 2004-2005 school year to identify administrative inefficiencies in the operations of the district that might cause the superintendent to reject the district's proposed 2005-2006 school year budget.
For the 2006-2007 school year and each school year thereafter, each district board of education shall submit a proposed budget in which the advertised per pupil administrative costs do not exceed the lower of the following:
(1) the district's prior year per pupil administrative costs; except that the district may submit a request to the commissioner for approval to exceed the district's prior year per pupil administrative costs due to increases in enrollment, administrative positions necessary as a result of mandated programs, administrative vacancies, nondiscretionary fixed costs, and such other items as defined in accordance with regulations adopted pursuant to section 7 of P.L.2004, c.73. In the event that the commissioner approves a district's request to exceed its prior year per pupil administrative costs, the increase authorized by the commissioner shall not exceed the cost of living or 2.5 percent, whichever is greater; or
(2) the prior year per pupil administrative cost limits for the district's region inflated by the cost of living or 2.5 percent, whichever is greater.
d. (1) A district's general fund tax levy shall not exceed the district's adjusted tax levy as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39).
(2) (Deleted by amendment, P.L.2007, c.260).
(3) (Deleted by amendment, P.L.2007, c.260).
(4) Any debt service payment made by a school district during the budget year shall not be included in the calculation of the district's adjusted tax levy.
(5) (Deleted by amendment, P.L.2007, c.260).
(6) (Deleted by amendment, P.L.2007, c.260).
(7) (Deleted by amendment, P.L.2004, c.73).
(8) (Deleted by amendment, P.L.2010, c.44)
(9) Any district may submit at the annual school budget election, in accordance with subsection c. of section 4 of P.L.2007, c.62 (C.18A:7F-39), a separate proposal or proposals for additional funds, including interpretive statements, specifically identifying the program purposes for which the proposed funds shall be used, to the voters, who may, by voter approval, authorize the raising of an additional general fund tax levy for such purposes. In the case of a district with a board of school estimate, one proposal for the additional spending shall be submitted to the board of school estimate. Any proposal or proposals submitted to the voters or the board of school estimate shall not: include any programs and services that were included in the district's prebudget year net budget unless the proposal is approved by the commissioner upon submission by the district of sufficient reason for an exemption to this requirement; or include any new programs and services necessary for students to achieve the thoroughness standards established pursuant to subsection a. of section 4 of P.L.2007, c.260 (C.18A:7F-46).
A district without a board of school estimate may also submit to the voters at a special election authorized pursuant to section 2 of P.L.1995, c.278 (C.19:60-2), a separate proposal or proposals for additional funds for the subsequent budget year, including interpretive statements, specifically identifying the program purposes for which the proposed funds shall be used. A proposal submitted at a special election shall comply with the requirements of this paragraph and section 4 of P.L.2007, c.62 (C.18A:7F-39). A separate proposal or proposals for additional funds may only be submitted on a date of a special election once during a school year. Nothing in this paragraph shall be construed to prohibit the submission to the voters of a question or questions for the approval of a capital project or projects on the same special election date as the submission of a separate proposal or proposals for additional funds.
In the case of a school district in which the annual school election has been moved to November pursuant to subsection a. of section 1 of P.L.2011, c.202 (C.19:60-1.1), the school district may submit a separate proposal for additional funds for the budget year, or a separate proposal for additional funds for the subsequent budget year, or separate proposals for additional funds for each of those budget years. In the event that a school district submits a separate proposal for additional funds for the subsequent budget year and the separate proposal is approved, the school district shall not add to its adjusted tax levy for the subsequent budget year any amount authorized pursuant to subsection e. of section 4 of P.L.2007, c.62 (C.18A:7F-39).
The executive county superintendent of schools may prohibit the submission of a separate proposal or proposals to the voters or board of school estimate if he determines that the district has not implemented all potential efficiencies in the administrative operations of the district, which efficiencies would eliminate the need for the raising of an additional general fund tax levy.
(10) Notwithstanding any provision of law to the contrary, if a district proposes a budget with a general fund tax levy and equalization aid which exceed the adequacy budget, the following statement shall be published in the legal notice of public hearing on the budget pursuant to N.J.S.18A:22-28, and posted at the public hearing held on the budget pursuant to N.J.S.18A:22-29:
"Your school district has proposed programs and services in addition to the core curriculum content standards adopted by the State Board of Education. Information on this budget and the programs and services it provides is available from your local school district."
(11) Any reduction that may be required to be made to programs and services included in a district's prebudget year net budget in order for the district to limit the growth in its budget between the prebudget and budget years by its tax levy growth limitation as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39), shall only include reductions to excessive administration or programs and services that are inefficient or ineffective.
e. (1) In the case of a district having a board of school estimate, other than a Type II district with a board of school estimate, which has a proposed budget that includes a general fund tax levy and equalization aid in excess of the adequacy budget, the general fund tax levy shall be submitted to the board for determination of the amount that should be expended. If the board of school estimate reduces the district's proposed budget, the district may appeal any of the reductions to the commissioner on the grounds that the reductions will negatively impact on the stability of the district given the need for long term planning and budgeting. In considering the appeal, the commissioner shall consider enrollment increases or decreases within the district, the impact on the local levy, and whether the reductions will impact on the ability of the district to fulfill its contractual obligations. A district may not appeal any reductions on the grounds that the amount is necessary for a thorough and efficient education.
(2) In the case of a district having a board of school estimate, other than a Type II district with a board of school estimate, which has a proposed budget that includes a general fund tax levy and equalization aid at or below the adequacy budget, the general fund tax levy shall be submitted to the board for determination. Any reductions may be appealed to the commissioner on the grounds that the amount is necessary for a thorough and efficient education or that the reductions will negatively impact on the stability of the district given the need for long term planning and budgeting. In considering the appeal, the commissioner shall also consider the factors outlined in paragraph (1) of this subsection.
In addition, the board of school estimate shall be required to demonstrate clearly to the commissioner that the proposed budget reductions shall not adversely affect the ability of the school district to provide a thorough and efficient education or the stability of the district given the need for long term planning and budgeting.
(3) In lieu of any budget reduction appeal provided for pursuant to paragraphs (1) and (2) of this subsection, the State board may establish pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an expedited budget review process based on a district's application to the commissioner for an order to restore a budget reduction.
(4) When the board of education or the board of school estimate authorize the general fund tax levy, the district shall submit the resulting budget to the commissioner within 15 days of the authorization.
f. (Deleted by amendment, P.L.2007, c.260)
g. (Deleted by amendment, P.L.2007, c.260)
(cf: P.L.2025, c.234, s.1)
2. (New section) Beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, the Department of Education shall annually, within two days following the transmittal of the State budget message to the Legislature by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), make publicly available on the department's Internet website the calculation of each category of aid payable to each school district in the succeeding year pursuant to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.). The calculations shall be written in a user-friendly manner and shall include, at a minimum, explanations of the variables used to determine the district's aid.
3. Section 2 of P.L.2007, c.260 (C.18A:7F-44) is amended to read as follows:
2. The Legislature finds and declares that:
a. The Constitution of the State of New Jersey states that the Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all children in the State between the ages of five and eighteen years. (N.J. Const. art. VIII, sec. 4, par.1).
b. The State, in addition to any constitutional mandates, has a moral obligation to ensure that New Jersey's children, wherever they reside, are provided the skills and knowledge necessary to succeed. Any school funding formula should provide resources in a manner that optimizes the likelihood that children will receive an education that will make them productive members of society.
c. Although the Supreme Court of New Jersey has held that prior school funding statutes did not establish a system of public education that was thorough and efficient as to certain districts, the Court has consistently held that the Legislature has the responsibility to substantively define what constitutes a thorough and efficient system of education responsive to that constitutional requirement.
d. Every child in New Jersey must have an opportunity for an education based on academic standards that satisfy constitutional requirements regardless of where the child resides, and public funds allocated to this purpose must be expended to support schools that are thorough and efficient in delivering those educational standards. In turn, school districts must be assured the financial support necessary to provide those constitutionally compelled educational standards. Any school funding formula should provide State aid for every school district based on the characteristics of the student population and up-to-date measures of the individual district's ability to pay.
e. New Jersey's current public school funding formula, established under the provisions of the "Comprehensive Educational Improvement and Financing Act of 1996," (CEIFA) P.L.1996, c.138, has not been used to calculate State aid for public schools since the 2001-02 school year. Any new school funding formula should account for changes in enrollment and other significant developments, providing relief to those districts that have experienced substantial enrollment increases.
f. The decisions in the Abbott cases have resulted in frequent litigation and a fragmented system of funding under which limited resources cannot be distributed equitably to all districts where at-risk children reside, instead dividing the districts sharply into Abbott and non-Abbott categories for funding purposes without regard to a district's particular pupil characteristics and leading to needlessly adversarial relationships among school districts and between districts and the State.
g. In the absence of a clear, unitary, enforceable statutory formula to govern appropriations for education, crucial funding decisions are made annually, in competition for limited State resources with other needs and requirements as part of the annual budget negotiation process, utilizing many different classes and categories of aid, leading to an uncertain, unpredictable, and untenable funding situation for the State and school districts alike.
h. This act represents the culmination of five years of diligent efforts by both the Executive and Legislative branches of State government to develop an equitable and predictable way to distribute State aid that addresses the deficiencies found in past formulas as identified by the Supreme Court. Working together toward this common goal, the Department of Education and the Legislature engaged nationally recognized experts in education funding and provided significant opportunities for stakeholder involvement and public input to assist in formulating and refining a comprehensive school funding model that has been validated by experts. The formula accounts for the individual characteristics of school districts and the realities of their surroundings, including the need for additional resources to address the increased disadvantages created by high concentrations of children at-risk.
i. The formula established under this act is the product of a careful and deliberative process that first involved determining the educational inputs necessary to provide a high-quality education, including specifically addressing the supplemental needs of at-risk students and those with limited English proficiency (LEP), and a determination of the actual cost of providing those programs. The formula provides adequate funding that is realistically geared to the core curriculum content standards, thus linking those standards to the actual funding needed to deliver that content.
j. In recognition of the unique problems and cost disadvantages faced by districts with high concentrations of at-risk students, it is appropriate to reflect in the formula a greater weight as the district's proportion of at-risk students increases. In addition, the new formula recognizes the disadvantages of an expanded group of students by including in the definition of at-risk those students who qualify for free or reduced-price lunch. Expanding the definition of at-risk students in this manner will significantly increase the resources flowing to districts with high concentrations of these low-income students.
k. In light of the demonstrable, beneficial results and success of the current Abbott preschool program, it is appropriate to build upon this success by incorporating in the formula an expanded high-quality preschool program for all children who qualify for free and reduced price meals in all districts. It is appropriate for the formula to acknowledge that at-risk children do not always receive the same educational exposure at an early age as their peers and to provide the additional resources necessary through high-quality preschool to prepare every child to learn and succeed.
l. It is appropriate to reflect in this formula the inherent value of educating a child in the least restrictive environment and, whenever possible, in that child's neighborhood school alongside his peers. The new funding formula should provide incentives for keeping classified students in district.
m. It is also appropriate to recognize in the formula the need for all schools to incorporate effective security measures, which may vary from district to district depending upon the at-risk student population and other factors, and to provide categorical funding to address these important requirements.
n. In recognition of the potentially wide variability in special education costs, even for the same category of disability, from district to district, it is appropriate for the [new] funding formula to [mitigate the impact of that variability by establishing a census model based on the actual Statewide average excess cost of educating special education students and by providing for an increase in State aid for extraordinary costs incurred by districts.] provide State aid in accordance with the number of students requiring special education services in each school district to ensure an equitable distribution of resources and to provide State aid for extraordinary costs incurred by districts in the provision of special education services.
o. It is imperative that any [new] school funding formula work in conjunction with the key school accountability measures that have been enacted [in recent years] to promote greater oversight, transparency, and efficiency in the delivery of educational services. These accountability measures include the New Jersey Quality Single Accountability Continuum, the "School District Fiscal Accountability Act," P.L.2006, c.15 (C.18A:7A-54 et seq.), P.L.2007, c.63 (C.40A:65-1 et al.) which established the duties and responsibilities of the executive county superintendent of schools, and P.L.2007, c.53 (C.18A:55-3 et al.).
p. Together with a renewed legislative focus on and commitment to providing sufficient means to maintain and support a high-quality system of free public schools in the State, a new funding formula supported by significantly increased State resources will ensure compliance with all statutory and constitutional mandates. Districts that were formerly designated as Abbott districts will be provided sufficient resources to continue those Court-identified programs, positions, and services that have proven effective while being provided the flexibility to shift resources and programmatic focus based on the needs of their students and current research.
q. The time has come for the State to resolve the question of the level of funding required to provide a thorough and efficient system of education for all New Jersey school children. The development and implementation of an equitable and adequate school funding formula will not only ensure that the State's students have access to a constitutional education as defined by the core curriculum content standards, but also may help to reduce property taxes and assist communities in planning to meet their educational expenses. The development of a predictable, transparent school funding formula is essential for school districts to plan effectively and deliver the quality education that our citizens expect and our Constitution requires.
r. It is appropriate, from time to time, to revisit the structure of school funding to ensure that the funding formula continues to provide a thorough and efficient system of education for all New Jersey school children while meeting the operational and fiscal needs of school districts.
s. Changes in the economic environment of the State have highlighted areas of volatility within the existing funding formula and structural concerns that create challenges for school districts in developing balanced budgets while continuing to provide high-quality educational opportunities to all students.
t. School districts, and by extension students, would benefit from increased stability in district wealth metrics to reduce year-to-year fluctuations in State school aid, relieve the burden on taxpayers, and ensure adequate funding that provides for staffing stability and the continuation of existing academic and extracurricular programming.
u. It is important that school districts, particularly districts experiencing reductions in State school aid, have adequate time to prepare and submit budgets, including time to ensure that the budget proposal creates the best possible chances of future financial success for the school district.
v. In light of developing challenges, the time has come to consider improvements to the existing funding formula to better provide for stability and transparency in school budgets so that school districts can continue to deliver the quality education that our citizens expect and our Constitution requires.
(cf: P.L.2007, c.260, s.2)
4. Section 3 of P.L.2007, c.260 (C.18A:7F-45) is amended to read as follows:
3. As used in P.L.2007, c.260 (C.18A:7F-43 et al.) and P.L.1996, c.138 (C.18A:7F-1 et al.), unless the context clearly requires a different meaning:
"At-risk pupils" means those resident pupils from households with a household income at or below the most recent federal poverty guidelines available on October 15 of the prebudget year multiplied by 1.85;
"Base per pupil amount" means the cost per elementary pupil of delivering the core curriculum content standards and extracurricular and cocurricular activities necessary for a thorough and efficient education;
"Bilingual education pupil" means a resident pupil enrolled in a program of bilingual education or in an English as a second language program approved by the State Board of Education;
"Budgeted local share" means the district's local tax levy contained in the budget certified for taxation purposes;
"Capital outlay" means capital outlay as defined in GAAP;
"Combination pupil" means a resident pupil who is both an at-risk pupil and a bilingual education pupil;
"Commissioner" means the Commissioner of Education;
"Concentration of at-risk pupils" shall be based on prebudget year pupil data and means, for a school district or a county vocational school district, the number of at-risk pupils among those counted in resident enrollment, divided by resident enrollment;
"County special services school district" means any entity established pursuant to article 8 of chapter 46 of Title 18A of the New Jersey Statutes;
"County vocational school district" means any entity established pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes;
"CPI" means the increase, expressed as a decimal, in the average annualized consumer price index for the New York City and Philadelphia areas in the fiscal year preceding the prebudget year relative to the previous fiscal year as reported by the United States Department of Labor;
"Debt service" means payments of principal and interest upon school bonds and other obligations issued to finance the purchase or construction of school facilities, additions to school facilities, or the reconstruction, remodeling, alteration, modernization, renovation or repair of school facilities, including furnishings, equipment, architect fees, and the costs of issuance of such obligations and shall include payments of principal and interest upon bonds heretofore issued to fund or refund such obligations, and upon municipal bonds and other obligations which the commissioner approves as having been issued for such purposes;
"District income" means the aggregate income of the residents of the taxing district or taxing districts multiplied by the ratio of the median household income to the average income of the residents of the taxing district or taxing districts, based upon data provided by the Division of Taxation in the New Jersey Department of the Treasury and contained on the New Jersey State Income Tax forms for the calendar year ending two years prior to the prebudget year. The commissioner may supplement data contained on the State Income Tax forms with data available from other State or federal agencies in order to better correlate the data to that collected on the federal census. With respect to regional districts and their constituent districts, however, the district income [as described above] shall be [allocated] calculated by first allocating the aggregate income among the regional and constituent districts in proportion to the number of pupils resident in each of them and then multiplying each district's allocation by the ratio of the district's median household income to the district's average income;
"Equalized valuation" means the equalized valuation of the taxing district or taxing districts, as certified by the Director of the Division of Taxation on October 1, or subsequently revised by the tax court by January 15, of the prebudget year. With respect to regional districts and their constituent districts, however, the equalized valuations as described above shall be allocated among the regional and constituent districts in proportion to the number of pupils resident in each of them. In the event that the equalized table certified by the director shall be revised by the tax court after January 15 of the prebudget year, the revised valuations shall be used in the recomputation of aid for an individual school district filing an appeal, but shall have no effect upon the calculation of the property value rate, Statewide average equalized school tax rate, or Statewide equalized total tax rate;
"Full-day preschool" means a preschool day consisting of a minimum six-hour comprehensive educational program in accordance with the district's kindergarten through grade 12 school calendar;
"GAAP" means the generally accepted accounting principles established by the Governmental Accounting Standards Board as prescribed by the State board pursuant to N.J.S.18A:4-14;
"General special education services pupil" means a pupil receiving specific services pursuant to chapter 46 of Title 18A of the New Jersey Statutes;
"Geographic cost adjustment" means an adjustment that reflects county differences in the cost of providing educational services that are outside the control of the district;
"Household income" means income as defined in 7 CFR ss.245.2 and 245.6 or any subsequent superseding federal law or regulation;
"Net budget" means the sum of the district's general fund tax levy, State aid received pursuant to the provisions of this act other than preschool education aid, miscellaneous revenue estimated pursuant to GAAP, and designated general fund balance;
"Nonpreschool ECPA" means the amount of early childhood program aid, excluding prior year carry-forward amounts, included in a district's 2007-2008 school year budget certified for taxes that was allocated to grades K through 3;
"Prebudget year" means the school fiscal year preceding the year in which the school budget is implemented;
"Preschool expansion grant" means any grant funded by a portion of preschool education aid allocated by the Commissioner of Education or any other State funds appropriated for the purpose of expanding free access to high-quality preschool for resident three- and four-year old children in districts that do not, at the time of application for a grant, provide State-funded, high-quality, free preschool programs;
"Report" means the Educational Adequacy Report issued by the commissioner pursuant to section 4 of this act;
"Resident enrollment" means the number of pupils other than preschool pupils, post-graduate pupils, and post-secondary vocational pupils who, on the last school day prior to October 16 of the current school year, are residents of the district and are enrolled in: (1) the public schools of the district, excluding evening schools, (2) another school district, other than a county vocational school district in the same county on a full-time basis, or a State college demonstration school or private school to which the district of residence pays tuition, or (3) a State facility in which they are placed by the district; or are residents of the district and are: (1) receiving home instruction, or (2) in a shared-time vocational program and are regularly attending a school in the district and a county vocational school district. In addition, resident enrollment shall include the number of pupils who, on the last school day prior to October 16 of the prebudget year, are residents of the district and in a State facility in which they were placed by the State. Pupils in a shared-time vocational program shall be counted on an equated full-time basis in accordance with procedures to be established by the commissioner. Resident enrollment shall include regardless of nonresidence, the enrolled children of teaching staff members of the school district or county vocational school district who are permitted, by contract or local district policy, to enroll their children in the educational program of the school district or county vocational school district without payment of tuition. Disabled children between three and five years of age and receiving programs and services pursuant to N.J.S.18A:46-6 shall be included in the resident enrollment of the district;
"School district" means any local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes;
"State facility" means a State developmental center, a State Division of Youth and Family Services' residential center, a State residential mental health center, a Department of Children and Families Regional Day School, a State training school/secure care facility, a State juvenile community program, a juvenile detention center or a boot camp under the supervisional authority of the Youth Justice Commission pursuant to P.L.1995, c.284 (C.52:17B-169 et seq.), or an institution operated by or under contract with the Department of Corrections, Children and Families or Human Services, or the Youth Justice Commission;
"Statewide equalized school tax rate" means the amount calculated by dividing the general fund tax levy for all school districts, which excludes county vocational school districts and county special services school districts as defined pursuant to this section, in the State for the prebudget year by the equalized valuations certified in the year prior to the prebudget year of all taxing districts in the State except taxing districts for which there are not school tax levies;
"Tax levy growth limitation" means the permitted annual increase in the adjusted tax levy for a school district as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39).
(cf: P.L.2025, c.100, s.4)
5. Section 4 of P.L.2007, c.260 (C.18A:7F-46) is amended to read as follows:
4. a. The State Board of Education shall review and update the core curriculum content standards every five years. The standards shall ensure that all children are provided the educational opportunity needed to equip them for the role of citizen and labor market competitor.
The Commissioner of Education shall develop and establish, through the report issued pursuant to subsection b. of this section, efficiency standards which define the types of programs, services, activities, and materials necessary to achieve a thorough and efficient education.
b. By September 1 of 2010 and by September 1 every three years thereafter, the Governor, after consultation with the commissioner, shall recommend to the Legislature through the issuance of the Educational Adequacy Report for the three school years to which the report is applicable:
(1) the base per pupil amount based upon the core curriculum content standards established pursuant to subsection a. of this section;
(2) the per pupil amounts for full-day preschool;
(3) the weights for grade level, county vocational school districts, at-risk pupils, bilingual pupils, and combination pupils;
(4) the cost coefficients for security aid and transportation aid;
(5) [the State average classification rate for general special education services pupils and for speech-only pupils;] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
(6) the excess cost for general special education services pupils and for speech-only pupils; and
(7) the extraordinary special education aid thresholds.
The base per pupil amount, the per pupil amounts for full-day preschool, the excess costs for general special education services pupils and for speech-only pupils, and the cost-coefficients for security aid and transportation aid shall be adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.
The amounts shall be deemed approved for the three successive fiscal years beginning from the subsequent July 1, unless between the date of transmittal and the subsequent November 30, the Legislature adopts a concurrent resolution stating that the Legislature is not in agreement with all or any specific part of the report. The concurrent resolution shall advise the Governor of the Legislature's specific objections to the report and shall direct the commissioner to submit to the Legislature a revised report which responds to those objections by January 1.
(cf: P.L.2007, c.260, s.4)
6. Section 6 of P.L.2007, c.260 (C.18A:7F-48) is amended to read as follows:
6. a. Beginning in the 2009-2010 school year and for each school year [thereafter] until the first full school year following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the amount of equalization aid for the budget year shall equal the total Statewide equalization aid calculated pursuant to section 11 of [this act] P.L.2007, c.260 (C.18A:7F-53) for the prebudget year and prior to the application of section 5 of [this act] P.L.2007, c.260 (C.18A:7F-47) indexed by the sum of 1.0, the CPI, and the State average enrollment growth percentage between the prebudget year and the budget year as projected by the commissioner.
b. Beginning in the first full school year following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and for each school year thereafter, the amount of equalization aid for the budget year shall be equal to 33.67 percent of the sum of all school districts' adequacy budgets for the budget year as calculated pursuant to section 9 of P.L.2007, c.260 (C.18A:7F-51).
(cf: P.L.2007, c.260, s.6)
7. Section 9 of P.L.2007, c.260 (C.18A:7F-51) is amended to read as follows:
9. a. The adequacy budget for each school district and county vocational school district shall be calculated as follows:
AB = (BC + AR Cost + LEP Cost + COMB Cost + [SE Census] SE Cost) x GCA
where
BC is the district's or county vocational school district's base cost as calculated pursuant to section 8 of this act;
AR Cost is the cost of providing educational and other services for at-risk pupils as calculated pursuant to subsection b. of this section;
LEP Cost is the cost of providing educational and other services for bilingual education pupils as calculated pursuant to subsection c. of this section;
COMB Cost is the cost of providing educational and other services for pupils who are both at-risk and bilingual as calculated pursuant to subsection d. of this section;
[SE Census] SE Cost is the cost of providing programs and services to general special education services pupils and speech-only pupils as calculated pursuant to subsection e. of this section; and
GCA is geographic cost adjustment.
The GCA shall be the geographic cost adjustment developed by the commissioner and revised by the commissioner every five years in accordance with receipt of census data.
b. AR Cost shall be calculated as follows:
AR Cost = BPA x ARWENR x AR Weight
where
BPA is the base per pupil amount;
ARWENR is the weighted enrollment for at-risk pupils of the school district or county vocational school district, which shall not include combination pupils; and
AR Weight is the at-risk weight.
For the 2008-2009 through 2010-2011 school years the at-risk weight shall be as follows:
for a district in which the concentration of at-risk pupils is less than [20%] 20 percent of resident enrollment, the at-risk weight shall equal 0.47;
for a district in which the concentration of at-risk pupils is equal to [20%] 20 percent but less than [60%] 60 percent of resident enrollment, the at-risk weight shall equal the district's ((at-risk % - 0.20) x 0.25)) + 0.47; and
for a district in which the concentration of at-risk pupils is equal to or greater than [60%] 60 percent of resident enrollment, the at-risk weight shall equal 0.57.
For subsequent school years, the AR weight shall be established in the Educational Adequacy Report.
c. LEP Cost shall be calculated as follows:
LEP Cost = BPA x LWENR x LEP Weight
where
BPA is the base per pupil amount;
LWENR is the weighted enrollment for the bilingual education pupils of the school district or county vocational school district, which shall not include combination pupils; and
LEP Weight is the bilingual pupil weight.
For the 2008-2009 through 2010-2011 school years the LEP weight shall be 0.5. For subsequent school years, the LEP weight shall be established in the Educational Adequacy Report.
d. COMB Cost shall be calculated as follows:
COMB Cost = BPA x CWENR x (AR Weight + COMB Weight)
where
BPA is the base per pupil amount;
CWENR is the weighted enrollment for pupils who are both at-risk and bilingual;
AR Weight is the at-risk weight; and
COMB Weight is the combination pupil weight.
For the 2008-2009 through 2010-2011 school years the COMB weight shall be 0.125. For subsequent school years, the COMB weight shall be established in the Educational Adequacy Report.
e. [SE Census] SE Cost shall be calculated as follows:
[SE Census] SE Cost = ([RE x SEACR] SEENR x AEC x 2/3) + ([RE x SACR] SPEONLY x SEC)
where
[RE is the resident enrollment of the school district or county vocational school district;
SEACR is the State average classification rate for general special education services pupils]
SEENR is the number of general special education services pupils included in the school district's or county vocational school district's resident enrollment;
AEC is the excess cost for general special education services pupils;
[SACR is the State average classification rate for speech-only pupils]
SPEONLY is the number of speech-only pupils included in the school district's or county vocational school district's resident enrollment; and
SEC is the excess cost for speech-only pupils.
[For the 2008-2009 through 2010-2011 school years the State average classification rate shall be 14.69% for general special education services pupils and 1.897% for speech-only pupils. For subsequent school years, the State average classification rates shall be established in the Educational Adequacy Report.]
For the 2008-2009 school year the excess cost shall be $10,898 for general special education services pupils and $1,082 for speech-only pupils. The excess cost amounts shall be adjusted by the CPI in the 2009-2010 and 2010-2011 school years as required pursuant to subsection b. of section 4 of this act. For subsequent school years, the excess cost amounts shall be established in the Educational Adequacy Report, with the amounts adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.
(cf: P.L.2007, c.260, s.9)
8. Section 10 of P.L.2007, c.260 (C.18A:7F-52) is amended to read as follows:
10. Each school district and county vocational school district shall receive equalization aid predicated on a local share determined by district property wealth and district income.
a. Each district's local share shall be calculated as follows:
LSHARE = (EQVAL x PVR x 50%) + (INC x INR x 50%)
where
EQVAL is the average of the district's [prebudget year] equalized valuation amounts for the preceding three school years;
PVR is the Statewide property value rate determined pursuant to subsection c. of this section;
INC is the average of the district's income for the calendar year ending two years prior to the prebudget year and the two calendar years prior to that; and
INR is the Statewide income rate determined pursuant to subsection c. of this section.
b. The local share for each county vocational school district shall be calculated as follows:
LSHARE = (COLSHARE/COAB) x AB
where
COLSHARE is the sum of the local shares for all school districts in the county calculated pursuant to subsection a. of this section;
COAB is the sum of the adequacy budgets for all school districts in the county calculated pursuant to section 9 of [this act] P.L.2007, c.260 (C.18A:7F-51); and
AB is the county vocational school district's adequacy budget calculated pursuant to section 9 of [this act] P.L.2007, c.260 (C.18A:7F-51).
c. For the 2008-2009 school year, the property value rate shall be set at 0.0092690802 and the income value rate shall be set at 0.04546684. For subsequent school years the values for the property value rate and the income value rate shall be annually determined by the commissioner as follows:
the property value rate shall be determined such that equalization aid equals the Statewide available equalization aid for all districts determined according to [this act] P.L.2007, c.260 (C.18A:7F-43 et al.) had each school district's local share equaled the product of the property value rate and the district's equalized valuation and each county vocational school district's local share equaled the product of the county vocational school district's adequacy budget and the average local share, expressed as a percent, of the school districts located in the county; and
the income rate shall be determined such that equalization aid equals the Statewide available equalization aid for all districts determined according to [this act] P.L.2007, c.260 (C.18A:7F-43 et al.) had each school district's local share equaled the product of the income rate and the district's income and each county vocational school district's local share equaled the product of the county vocational school district's adequacy budget and the average local share, expressed as a percent, of the school districts located in the county.
In the event that these rates, when used in accordance with the provisions of this section and assuming that each district's general fund levy is equal to its local share, do not result in equalization aid for all districts equal to the Statewide available equalization aid, the commissioner shall adjust these rates appropriately, [giving equal weight to each] so that any change in the property value rate is accompanied by a change in the income rate of the same amount, multiplied by the ratio of total equalized valuation to total district income for all districts receiving equalization aid.
(cf: P.L.2007, c.260, s.10)
9. 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-43 et al.); and
LSHARE is the district's local share calculated pursuant to section 10 of [this act] P.L.2007, c.260 (C.18A:7F-43 et al.).
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-43 et al.).
[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 does not accurately reflect the district's income wealth.]
(cf: P.L.2007, c.260, s.11)
10. Section 13 of P.L.2007, c.260 (C.18A:7F-55) is amended to read as follows:
13. a. Special education categorical aid for each school district and county vocational school district shall be calculated as follows:
SE = ([RE x SEACR] SEENR x AEC x 1/3) x GCA
where
[RE is the resident enrollment of the school district or county vocational school district;
SEACR is the State average classification rate for general special education services pupils]
SEENR is the number of general special education services pupils included in the school district's or county vocational school district's resident enrollment;
AEC is the excess cost for general special education services pupils; and
GCA is the geographic cost adjustment as developed by the commissioner.
For the 2008-2009 school year the excess cost shall be $10,898 for general special education services pupils. The excess cost amount shall be adjusted by the CPI in the 2009-2010 and 2010-2011 school years as required pursuant to subsection b. of section 4 of [this act] P.L.2007, c.260 (C.18A:7F-46). For subsequent school years, the excess cost amount shall be established in the Educational Adequacy Report, with the amount adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.
b. Extraordinary special education aid for an individual classified pupil shall be available when the student is educated in a general education classroom, special education program, including but not limited to a resource program or special class program, or any combination of general education and special education programs and services, subject to the requirements and thresholds set forth in this section.
(1) In those instances in which a pupil is educated in an in-district public school program with non-disabled peers, whether run by a public school or by a private school for the disabled, and the cost of providing direct instructional and support services for an individual classified pupil exceeds $40,000, for those direct instructional and support services costs in excess of $40,000 a district shall receive extraordinary special education State aid equal to [90%] 90 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.
(2) In those instances in which a pupil is educated in a separate public school program for students with disabilities and the cost of providing direct instructional and support services for an individual classified pupil exceeds $40,000, for those direct instructional and support services costs in excess of $40,000 a district shall receive extraordinary special education State aid equal to [75%] 75 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.
(3) In those instances in which a pupil is educated in a separate private school for students with disabilities and the tuition for an individual classified pupil exceeds $55,000, for tuition costs in excess of $55,000 a district shall receive extraordinary special education State aid equal to [75%] 75 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.
(4) Extraordinary special education State aid for an individual classified pupil shall be calculated as follows:
EA = ((ADC - $40,000) x .90) + (((AIC - $40,000) + (ASC - $55,000)) x .75)
where
ADC equals the district's actual cost for the direct instructional and support services in an in-district public school program as set forth in paragraph (1) of this subsection;
AIC equals the district's actual cost for direct instructional and support services in a separate public school program as set forth in paragraph (2) of this subsection; and
ASC equals the district's actual cost for tuition paid to a separate private school as set forth in paragraph (3) of this subsection.
(5) The receipt of extraordinary special education State aid for an individual classified pupil shall be conditioned upon a demonstration by the district that the pupil's Individualized Education Plan requires the provision of intensive services, pursuant to factors determined by the commissioner.
c. In order to receive funding pursuant to this section, a district shall file an application with the department that details the expenses incurred on behalf of the particular classified pupil for which the district is seeking reimbursement. Additional State aid awarded for extraordinary special education costs shall be recorded by the district as revenue in the current school year and paid to the district in the subsequent school year.
d. A school district may apply to the commissioner to receive emergency special education aid for any classified pupil who enrolls in the district prior to March of the budget year and who is in a placement with a cost in excess of [$40,000 or $55,000, as applicable] the applicable extraordinary special education aid thresholds enumerated in subsection b. of this section. The commissioner may debit from the student's former district of residence any special education aid which was paid to that district on behalf of the student.
e. The department shall review expenditures of federal and State special education aid by a district in every instance in which special education monitoring identifies a failure on the part of the district to provide services consistent with a pupil's Individualized Education Plan.
f. [The commissioner shall commission an independent study of the special education census funding methodology to determine if adjustments in the special education funding formulas are needed in future years to address the variations in incidence of students with severe disabilities requiring high cost programs and to make recommendations for any such adjustments. The study and recommendations shall be completed by June 30, 2010.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
g. [A school district may apply to the commissioner to receive additional special education categorical aid if the district has an unusually high rate of low-incidence disabilities, such as autism, deaf/blindness, severe cognitive impairment, and medically fragile. In applying for the aid the district shall: demonstrate the impact of the unusually high rate of low-incidence disabilities on the school district budget and the extent to which the costs to the district are not sufficiently addressed through special education aid and extraordinary special education aid; and provide details of all special education expenditures, including details on the use of federal funds to support those expenditures.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
(cf: P.L.2007, c.260, s.13)
11. Section 4 of P.L.2018, c.67 (C.18A:7F-68) is amended to read as follows:
4. a. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the contrary, in the 2019-2020 through 2024-2025 school years, a school district or county vocational school district in which the State aid differential calculated is negative shall receive State school aid in an amount equal to the sum of the district's State aid in the prior school year plus the district's proportionate share of the sum of any increase in State aid included in the annual appropriations act for that fiscal year and the total State aid reduction pursuant to subsection b. of this section based on the district's State aid differential as a percent of the Statewide total State aid differential among all school districts and county vocational school districts for which the State aid differential is negative. Any increase in State aid pursuant to this subsection shall first be allocated to equalization aid, followed by special education categorical aid, security categorical aid, and transportation aid, except that no category shall exceed the total amount as calculated 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.
b. Except as provided pursuant to subsection c. of this section, and notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the contrary, in the 2019-2020 through 2024-2025 school years, a school district or county vocational school district in which the State aid differential is positive shall receive State school aid in an amount equal to the district's State aid in the prior school year minus a percent of the State aid differential according to the following schedule:
(1) 13 percent in the 2019-2020 school year;
(2) 23 percent in the 2020-2021 school year;
(3) 37 percent in the 2021-2022 school year;
(4) 55 percent in the 2022-2023 school year;
(5) 76 percent in the 2023-2024 school year; and
(6) 100 percent in the 2024-2025 school year.
c. (1) An SDA district that is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid pursuant to subsection b. of this section.
(2) An SDA district that is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending above adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall be subject to a reduction not to exceed the amount by which the district is spending above adequacy multiplied by the corresponding percentage included in subsection b. of this section.
(3) A school district, other than an SDA district, that is located in a municipality in which the equalized total tax rate is at least 10 percent greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending at least 10 percent below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid pursuant to subsection b. of this section.
(4) [A] Except as provided in section 12 and section 13 of P.L. , c. (C. ) (pending before the Legislature as this bill), a school district that is a participating district under an application that is approved for a grant pursuant to subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or a school district that is a participating district under an application that receives preliminary approval pursuant to subsection b. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) and that has a State aid differential that is positive may elect to receive State school aid in an amount equal to the district's State aid in the prior school year minus a percent of the State aid differential according to the following schedule:
(a) 30 percent in the 2021-2022 school year;
(b) 37 percent in the 2022-2023 school year;
(c) 46 percent in the 2023-2024 school year;
(d) 55 percent in the 2024-2025 school year;
(e) 65.5 percent in the 2025-2026 school year;
(f) 76 percent in the 2026-2027 school year;
(g) 88 percent in the 2027-2028 school year; and
(h) 100 percent in the 2028-2029 school year.
A school district with a State aid differential that is positive, which is a participating district under an application that is approved for a grant pursuant to subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or that receives preliminary approval under subsection b. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) but has not created or joined a limited purpose or all purpose regional school district within two years following the grant application approval or preliminary approval shall not be eligible to receive State aid according to the schedule enumerated in this paragraph.
As used in this paragraph, "participating district" means a school district whose board of education by resolution certifies a commitment to participate in a feasibility study submitted as part of an application under the grant program established pursuant to section 2 of P.L.2021, c.402 (C.18A:13-47.2).
(5) Notwithstanding the provisions of section 32 of P.L.1996, c.138 (C.18A:7F-32) or any other law, rule, or regulation to the contrary, a school district that is a regional school district created following the approval of a grant application pursuant to section 4 of P.L.2021, c.402 (C.18A:13-47.4) shall, from the first full school year following the creation of the regional school district through the 2028-2029 school year, receive State school aid in an amount that is the greater of:
(a) the amount of State school aid that the newly created regional school district would receive as a regional school district; or
(b) the sum of the amount of State school aid received by each school district constituting the newly created regional school district prior to the creation of such regional school district.
(6) A school district shall not be not be subject to a reduction in State aid pursuant to this section provided that:
(a) the district is a regional school district consisting of at least five constituent school districts;
(b) the district has mitigated costs of regionalization, as determined by the Commissioner of Education;
(c) for the most recent school year for which data is available, the district's administrative costs per pupil are 15 percent lower than the Statewide average administrative costs per pupil for regional school districts; and
(d) the district's general fund tax levy has been increased by the maximum amount permitted pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38) in each of the last five school years.
A school district that is exempt from a reduction in State aid pursuant to paragraph (6) of subsection c. of this section shall provide courtesy busing to pupils who reside in the district, provided that the district was providing courtesy busing prior to the school year in which it is exempt from a reduction in State aid.
d. Any decrease in State aid pursuant to subsection b. or c. of this section shall first be deducted from a school district's or county vocational school district's allotment of adjustment aid. Any additional reduction shall be deducted from the school district's or county vocational school district's allotment of non-SFRA aids, followed by equalization aid, special education categorical aid, security aid, and transportation aid.
e. Any remaining adjustment aid or non-SFRA aids shall be reallocated to other State aid categories in a manner to be determined by the commissioner.
(cf: P.L.2023, c.140, s.1)
12. (New section) a. As used in this section, "total operating budget" means the sum of a district's general fund revenues from local sources, State sources, federal sources, and other sources. Total operating budget shall not include withdrawals made by the district from any reserve account established pursuant to section 6 of P.L.2007, c.62 (C.18A:7F-41) or reimbursements paid to the district for extraordinary special education aid pursuant to section 13 of P.L.2007, c.260 (C.18A:7F-55).
b. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other provision of law, rule, or regulation to the contrary, for the first three full school years following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a school district shall receive an allocation of reduction adjustment aid to ensure that the amount of State school aid provided to a school district is not decreased by more than two percent of the district's prebudget year total operating budget. In no school year during the first three full school years following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) shall a school district receive an amount of State school aid that has been reduced from the amount of aid disbursed in the prebudget year by an amount that exceeds two percent of the district's prebudget year total operating budget.
13. (New section) a. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, a school district that is spending above adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State school aid that exceeds the amount by which the district is spending above adequacy.
b. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, a school district shall not be subject to a reduction in State school aid if the district is spending below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) and the district has a projected resident enrollment for the budget year that is greater than 8,000 students.
14. Sections 1, 3, 4 and 6 through 13 of this act shall take effect immediately and shall first apply to the first full school year following the date of enactment. Section 2 of this act shall take effect immediately. Section 5 of this act shall take effect immediately and shall first apply to the Educational Adequacy Report to be issued next following the date of enactment.
STATEMENT
This bill modifies various provisions of school funding law, including timelines for the provision of State aid notices, the definition of district income, calculations of local share and special education costs, and limits on State aid reductions.
The bill requires the commissioner to annually issue a public memorandum providing the timelines for the availability and certification of equalized valuation data and district income used in the calculation of local share. The commissioner is also required, under the bill, to provide school districts with a preliminary State aid notice that estimates the amount of State aid payable to the district in the succeeding school year within 15 days of receiving finalized equalized valuation and district income data but no later than January 15 of each year.
The bill also requires the Department of Education to make available on the department's Internet website the calculation of aid payable to each school district in the succeeding year in a user-friendly manner, including explanations of the variables used to determine the district's aid. The information is required to be posted each year within two days of the Governor's Budget Message.
Additionally, the bill revises the definition of equalized valuation and district income used in a school district's calculation of local share to provide that both measures are equal to the average of the district's values for the preceding three years for which data is available. The definition of district income is further modified under the bill to use aggregate income multiplied by the ratio of median household income to average income. It is the sponsor's belief that this will provide a fairer representation of each district's income and protect against outliers that skew the assessment of a town's actual wealth and, consequently, a district's local fair share.
Additionally, the bill amends the calculation of equalization aid to ensure that the total amount of available equalization aid Statewide is 33.67 percent of the sum of all school districts' adequacy budgets.
The bill also changes how special education aid to school districts is calculated. Under the provisions of the "School Funding Reform Act of 2008," the State provides special education aid to school districts using the census-based method. Under this method, districts receive funding for special education based on the assumption that a fixed percent of the total student population requires special education services, rather than using the actual number of special education students to determine the amount of State aid that school districts will receive. This bill eliminates the use of the census-based methodology and calculates State aid for special education based on the actual number of special education students included in the district's resident enrollment.
Additionally, the bill establishes municipal overburden protections to prevent certain school districts from receiving a reduction in State school aid. Pursuant to the bill, a school district that is spending above adequacy would not be subject to a reduction in State aid that exceeds the amount by which the district is spending above adequacy. Meanwhile, a school district that is spending below adequacy and has a projected resident enrollment greater than 8,000 students would not be subject to a State school aid decrease.
Finally, the bill establishes a category of aid known as "reduction adjustment aid," which would only be provided for the first three full school years following the date of enactment of the bill. The aid would ensure that the total amount of State school aid provided to a school district is not decreased by more than two percent of the district's prebudget year total operating budget.
