12-19-07

GARDEN STATE COALITION OF SCHOOLS/GSCS:  INITIAL CONCERNS - NEW SCHOOL FUNDING FORMULA PROPOSAL

GSCS SUGGEST YOU USE THE FOLLOWING ISSUES AS TALKING POINTS WITH YOU LOCAL LEGISLATORS AND  BY CALLING/WRITNG (given the press of time now, calling is recommended) THE GOVEROR , LEGISLATIVE LEADERSHIP (Senate President Codey and Assembly Speaker Roberts) and your LOCAL LEGISLATORS (contact info found at http://www.njleg.state.nj.us/members/legsearch.asp

·         A bill has not yet been finalized on the proposed school funding formula. It may be ready by this Thursday.

·         A hearing on the bill is required to be held in the Assembly. There is talk that Trenton may schedule a committee hearing during Christmas week, likely on the 27 ^th.

·         The push clearly remains to get this voted on during lame duck, which means a vote could be called for by January 3^rd and/or 7^th .

·         The new legislature is to be sworn in on January 8^th.

·         The Governor delivers his state of the state message also on January 8^th.

(See GSCS website at www.gscschools.org for Trenton  testimony  12-13-07…more information on funding proposal.)

GSCS Concerns -

Timelines & Process:

In order to make sound policy, Legislators, as well as the public, need to see the bill, analyze and debate that bill, prior to it becoming law.

There is no bill to analyze in hand yet, and the data released last week is still hard to sift through for impact, especially long term impact. Voting without full vetting on such complex and far-reaching legislation , results in incomplete understanding and less than fully informed policy-making.  Many legislators still have many questions, as of course, so does the public.

Special Education funding

Two-thirds of the formula for this aid is wealth-equalized and one-third of the formula's application remains 'categorical' in distribution method. Over time more of this aid will be funneled to the wealth-based side of that equation, hundreds of districts will be negatively impacted by aid loss and their special education programs will require additional local tax support. Using averages, rather than actual student costs, under the census-base approach is a concern since it does not consider circumstances of student populations and needs that vary from district to district; districts with special programs that attract disabled students will be financially penalized due to higher than average classification rates. In addition using averages contradicts the stated intent of the Administration that money will follow the child.  Funding for special education should remain as a full categorical aid – as it has been for more than 40 years in N.J. - that goes to individual disabled students no matter where they live. 

Spending over Adequacy Budgets

Historically, foundation budgets (in the new proposal dubbed as ‘Adequacy , under CEIFA known as ‘T & E’ budgets) have set at a low cost base. It  been estimated that approximately 360 districts are currently noted to be spending above their '08'09 Adequacy Budget and 130 are capped at receiving 10% in additional aid this year due to their spending over the Adequacy Budget. It is stated in the Administration's material that those that are spending beyond the Adequacy Budget will have to return some 'portion' of their state aid to direct property tax relief. State aid is property relief. This requirement would result in a cap within a cap (4% levy cap pr A4 and this new cap within this new formula bill). History repeats itself:  One of the major issues in CEIFA was that over half the districts in the state were spending over what was then called the "T & E  [Thorough and Efficient] Budget".  

What is Hold Harmless? What is the 2% minimum Increase and how long does it last?

The Hold Harmless provision is scheduled to last at least 3 years; after the 3^rd year districts that are faced with 'substantial' enrollment decline are likely to lose some of their Hold Harmless aid. Districts assigned hold harmless  funds tend to be those where community wealth has increased  and where enrollments have declined in recent years. Programs that have sustained a level of funding over the years will be vulnerable to the potential removal of the hold harmless funding.

The 2% is a minimum increase assigned to all districts to ease them into a new formula; it is a one-year commitment only and is not tied to the Hold Harmless provision.

The figures released so far do not make it clear what will happen to district aid if and when the Hold Harmless is eliminated or downscaled. What will happen district in the out-years ( i.e., year two, year three, year four, etc.)?

The data provided to date does not show how the formula will work without Hold Harmless and the 2% increase.

Sustainability: What funding will be committed to that new funding formula ? How will the formula grow year-to-year?

We do not know what renewable resources – if any – will be set aside for school funding.

There is no stated mention to date of what method will be used to increase aid in subsequent years. For example, CIEFA uses the ‘CPI’, and a ‘3% ‘whichever is greater’.

Full Day Kindergarten

While districts that have, or initiate full day kindergartens will benefit in that those full day students will be counted as a 'whole' student (FTE = 1) and thus their adequacy budget will appropriately reflect the count accurately, those districts that do not have full day programs now have no incentive to grow those programs. It costs to open up requisite new facility and staff a full day program, yet there is no provision for cap exclusion for those costs, or is there a provision for seed money that would go to   helping districts plan and implement full day programs.