Bill Text: NJ S925 | 2026-2027 | Regular Session | Introduced
Bill Title: Requires Commissioner of Education to submit report on SDA district designation.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced) 2026-01-13 - Introduced in the Senate, Referred to Senate Education Committee [S925 Detail]
Download: New_Jersey-2026-S925-Introduced.html
STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
Requires Commissioner of Education to submit report on SDA district designation.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning SDA districts and supplementing P.L.2000, c.72 (C.18A:7G-1 et al.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
a. The Constitution of the State of New Jersey requires the Legislature to ensure a thorough and efficient education for all New Jersey students attending public schools, including those in poorer urban districts.
b. Today, there are 31 poorer urban districts that are classified as SDA districts. The initial 28 districts were recognized by the New Jersey Supreme Court, and the remaining three districts were added through legislation. SDA districts receive 100 percent of the State share of construction costs.
c. In 1990, the New Jersey Supreme Court established the initial 28 districts utilizing the Department of Education's District Factor Groups (DFGs), which were a measurement of school district socioeconomic status, and the department's list of urban districts.
d. The department's measurement to establish DFGs consisted of seven factors: 1) per capita income level; 2) occupation level; 3) education level; 4) percent of residents below the poverty level; 5) the average number of persons per household; 6) the percent of district considered urban; and 7) the percent of those in the work force who received some unemployment compensation.
e. Based on an analysis of these factors using data from the 1980 Census, the department ranked and classified districts into 10 groupings, with DFG A being the grouping of districts with the lowest socioeconomic status scores and DFG J being the grouping of districts with the highest socioeconomic status scores.
f. Although the New Jersey Supreme Court delegated the formal classification of poorer urban districts to the Legislature, the State Board of Education, and the Commissioner of Education, the court found that 28 of the 29 school districts designated by the commissioner as urban districts located in DFGs A and B should qualify as poorer urban districts and in need of increased State support. The Supreme Court excluded Atlantic City from designation as a poorer urban district because of its high property wealth.
g. In subsequent years, after the Supreme Court's 1990 decision, the Legislature expanded the list of SDA districts to include three additional school districts to make a total of 31 SDA districts.
h. In 2000, the New Jersey Supreme Court opined that "[w]hen a district no longer possesses the requisite characteristics for [SDA] district status...the Legislature, the State Board and the Commissioner may take appropriate action in respect of that district."
i. Additionally, as originally enacted, the "Educational Facilities Construction and Financing Act," P.L.2000, c.72 (C.18A:7G-1 et al.), included a provision requiring the commissioner, every five years, to recommend to the Legislature criteria to be used in the designation of SDA districts and a list of the school districts that meet the criteria for SDA district designation.
j. Since 2004, the department has not made updates to the DFGs, provided the Legislature with criteria for SDA designation, or analyzed whether it may be beneficial to remove wealthier districts from the classification in favor of needier districts.
k. Over the past 40 years, the socioeconomic status of certain SDA districts has changed dramatically since their initial classification in 1990.
l. For example, the 2023 Municipal Revitalization Index, which serves as the State's official measure and ranking of municipal distress based on the measurement of social, economic, physical, and fiscal conditions in each locality, ranks Hoboken City, an SDA district since 1990, with a depression score of 430. In contrast, Hoboken City had a depression score of 51 in 1996. Hoboken City is just one example of a municipality's revitalization and increased socioeconomic status since its initial classification in 1990.
m. The State needs to ensure that the neediest of school districts are receiving the benefits of SDA district classification, while simultaneously protecting the interests of taxpayers who bear the burden of the State's cost in maintaining the school facilities of SDA districts.
n. Therefore, it is necessary and proper for the Legislature to require the department to provide a report on the current socioeconomic status of each SDA district to ensure that the school districts most in need are receiving the benefits of SDA district classification.
2. a. Within 90 days of the effective date of this act, the Commissioner of Education shall submit a report to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1) on the designation of SDA districts.
b. The report shall include, but need not be limited to:
(1) criteria utilized by the Department of Education to determine the socioeconomic status of each school district;
(2) the current socioeconomic status of each school district;
(3) information on the current social, economic, physical, and fiscal conditions of each SDA district;
(4) a comparison of the social, economic, physical, and fiscal conditions when each current SDA district was designated as an SDA district and the district's current status;
(5) a determination of whether each current SDA district should maintain designation as an SDA district;
(6) a discussion on whether additional school districts should receive SDA district designation; and
(7) any recommendations concerning legislation:
(a) to revise the districts currently classified as SDA districts; and
(b) to require the commissioner to recommend to the Legislature the economic and school facilities adequacy criteria to be used in the designation of districts as SDA districts and a list of the school districts which meet the criteria for SDA district designation.
3. This act shall take effect immediately.
STATEMENT
This bill requires the Commissioner of Education to submit a report on the current status of SDA district designation.
Within 90 days of the effective date of this bill, the commissioner is required to submit a report to the Legislature that includes: (1) criteria utilized by the Department of Education to determine the socioeconomic status of each school district; (2) the socioeconomic status of each school district; (3) information on the current social, economic, physical, and fiscal conditions of each SDA district; (4) a comparison of these factors when each SDA district was designated as an SDA district and the district's current status; (5) a determination of whether each SDA district should maintain designation as an SDA district; (6) a discussion on whether additional school districts should receive SDA district designation; and (7) certain legislative recommendations. The legislative recommendations are to: address whether the districts currently classified as SDA districts should be revised; and to require the commissioner to recommend to the Legislature the economic and school facilities adequacy criteria to be used in the designation of districts as SDA districts and a list of the school districts which meet the criteria for SDA district designation.
There are currently 31 SDA districts. These school districts generally received this designation from either: (1) the Abbott v. Burke court decisions; or (2) the State Legislature through the enactment of various school funding laws.
A majority of SDA districts received classification in 1990. The New Jersey Supreme Court used the department's District Factor Groups (DFGs) and list of urban districts based on data from the 1980 Census when suggesting which districts should be classified as poorer urban districts. DFGs were created based on the department's statistical analysis of seven factors: 1) per capita income level; 2) occupation level; 3) education level; 4) percent of residents below the poverty level; 5) the average number of persons per household; 6) percent of district considered urban; and 7) percent of those in the work force who received some unemployment compensation.
As originally enacted, the "Educational Facilities Construction and Financing Act," P.L.2000, c.72 (C.18A:7G-1 et al.), included a provision requiring the commissioner, every five years, to recommend to the Legislature criteria to be used in the designation of SDA districts and a list of the school districts that meet the criteria for SDA district designation. This provision was removed with the enactment of the "School Funding Reform Act of 2008," P.L.2007, c.260 (C.18A:7F-43 et al.).
Since 2004, however, the department has not made updates to the DFGs, provided the Legislature with criteria for SDA designation, or analyzed whether it may be beneficial to remove wealthier districts from SDA classification in favor of needier districts.
Over the last 40 years, the status of certain SDA districts have drastically changed. Hoboken City is just one example of a municipality's revitalization and increased socioeconomic status since its initial classification in 1990.
It is the sponsor's intent to ensure the neediest districts are receiving the benefits of SDA classification and protect the taxpayers who bear the burden of the State's cost of maintaining the school facilities of SDA districts.
