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Testimony Before the Assembly Education Committee
Special Hearing on School Funding
Wednesday, January 18, 2017
GSCS is grateful that the Committee has turned a bright public spotlight on school funding and pleased to have the opportunity to testify this morning. We will address this complex issue in the context of our member districts’ experiences.
SFRA Background: One Formula for Everyone
Like many of the groups testifying today, GSCS helped with the creation of SFRA. Though the formula was not perfect at its inception, it was conceived as a way to bring the New Jersey public education community together by allocating funding according to student and community need. It was also engineered so that no district would suffer in the transition from the old formula to the new. Unfortunately SFRA arrived in 2008, at the same time as the Great Recession. Many of the subsequent funding issues flowed from that simple collision of circumstances. Our member districts were not immune to the economic hardships of the Great Recession and have not been immune to the hardships caused by the recurrent underfunding of the formula.
What Happened to the Formula After 2008?
Simply put, SFRA has only been fully funded once since its inception and it has not been carefully monitored in the intervening years. State revenues have never equaled the amounts needed to fully fund SFRA, resulting in funding categories being frozen, even as districts’ costs rose. As time passed and economic and demographic circumstances changed, the formula also was not reviewed and reset to accommodate those changes. In the 2010-2011 school year, all districts faced a disastrous, state-imposed five percent cut in operating expenses. For some GSCS member districts, this meant a loss of most, or even all state aid. Budgets were remade in a period of ten days, resulting in major layoffs and program cut-backs in the majority of our districts. Now, in 2017, the consequences of that five percent cut, coupled with near flat funding since, have had a multiplier effect on district budgets. Most of us are not back to the aid levels of 2009.
The consequences of the Funding Crisis
Taxes have already gone up in all member districts, as administrators and boards of education raised budgets to the two percent cap and beyond (with the few allowable waivers) to try to maintain programs, comply with an avalanche of new mandates and deal with cost drivers beyond district control, like health care and special education, that continue to rise at rates far in excess of two percent. To minimize the damage, GSCS member districts, like most in the state, have done everything possible to control or offset costs: privatizing services when possible, sharing services, buying cooperatively, imposing athletic/activity fees, pooling resources and generating revenue through various entrepreneurial ventures. We have consistently complied with various imposed spending limits, including administrative spending caps.
As the years since 2008 have passed, we have also worked, both alone and in conjunction with other education advocates, to find innovative solutions to funding issues. The attached material, created by the Somerset County Superintendents Round Table, is typical of that work, offering both analysis and thoughtful suggestions to help reduce costs, strengthen local control of schools and maintain education quality.
As the result of underfunding, class sizes have risen, so that in some member districts 26 first graders now share the same classroom for most of the day. Personnel have been cut, even in the wake of rising enrollments. Library and guidance positions have been eliminated. New, innovative programs, like the International Baccalaureate, have been put on hold because districts simply can't afford them. Capital projects have been deferred as we patch up our aging buildings for yet another year and hope that nothing catastrophic goes wrong. Communities with resources, including some GSCS districts, have turned to private funding for the technology and supplies that will help our students compete with their peers in the nation and world. Communities with fewer resources, a category that also includes some GSCS districts, often "do without".
Teachers--the lifeblood of every school--grow frustrated because districts are limited in the compensation that they can offer. A record number of districts are in mediation because the funding crisis has made it difficult to work out fair labor agreements. This is not the result of greed on anyone's part, but of economic--and sometimes political--circumstances beyond local control. Tight budgets, high taxes, hard choices and public outcry over those choices have made local school board service increasingly difficult, with the result that many qualified people choose not to run.
Each year, an increasing number of districts, including GSCS districts with high levels of community support, find that no candidates are interested in open board of education seats. According to the NJSBA, in 2015, more than half of open school board races in New Jersey were uncontested (805), and in an additional 130 cases, no candidates ran for open seats. When good people do not enter public service, the door is open for those whose commitment to the social contract that binds us all has been superseded by private agendas.
Concerns for the Future
Our member districts are extremely concerned about the prospects for the '17-'18 school budgets and beyond. Right now, as we plan our budgets, some of our districts—even those with enrollment growth--cannot hire new regular education teachers because they must hire special education teachers to fulfill state mandates and the requirements of students' Individual Education Plans (IEP's). Providing the right services for our special needs students is a very important part of public education, and being forced to make these kinds of choices polarizes our communities.
For many of our member districts, the advent of Chapter 78, mandating employee healthcare contributions, helped offset diminished state funding. Now, with districts in Tier 4, those offsets are gone and along with them the fiscal “breathing room” that some districts encountered.
We believe strongly in local elected officials’ ability to tailor spending decisions to the economic, demographic and political realities of their individual communities. The current funding crisis, coupled with the restrictions tied to the two percent cap, has hindered that local control. In the absence of realistic school funding, our members will have to continue to raise taxes to the 2% limit, making our towns less affordable, driving out our seniors, limiting the options for young families and lessening the economic, age and cultural diversity of our communities. The property values that are the foundation of many GSCS communities will suffer. School districts everywhere, even in towns perceived as wealthy, are walking a razor’s edge in an attempt to balance educational quality with a persistent lack of funds. If people abandon our towns because taxes are too high, educational quality too low and local control almost non-existent, some of New Jersey’s brightest educational beacons will be dimmed.
GSCS Recommendations
GSCS continues to support SFRA, and hope that in the future, it will be used as it was designed—as a living, flexible formula that will be subject to regular oversight and changed as circumstances dictate
In a perfect world, the SFRA formula would be fully funded. Realistically, full funding is unlikely in the ’17-’18 school year and, most likely, beyond. Until full funding becomes a reality, the formula should be run every year and the available aid pro-rated accordingly.
Special Education should also be reviewed and we recommend abandoning the current census-based approach to special education funding in favor of a more realistic way of apportioning aid. We also hope that a greater proportion of special education aid will be made categorical, rather than wealth determined. (Currently only 1/3 of special education aid is categorical, the other 2/3 is wealth-determined.) Finally, the percentages of extraordinary aid costs borne by the state should return to the levels of several years ago ((2012—77%, 2014—63%, 2016—58%).
After the Great Recession and six years of diminished funding, the desire to find easy solutions is understandable and even tempting. GSCS’ position is that we must reject funding remedies that offer quick fixes for some districts while harming others. Formula adjustments should be made in a gradual, defined way, because at the end of the day, no one wants to impoverish innocent children in any district. When one part of the body of public education hurts, we all suffer.
GSCS believes that this hearing is a sign that legislators know that our children can't wait. Educators as a whole are skillful at making more out of less, but at some point reality sets in—even the best and the brightest of our educators can’t make something out of nothing. We have a proud tradition of high quality public education in New Jersey, believe that it continues to be one of the hallmarks of a civilized society and understand that it is more necessary now than ever.
We appreciate the opportunity to testify today and will do all that we can to help you and your legislative colleagues find solutions to the funding crisis.
Elisabeth Ginsburg
Executive Director
