Monday, April 24, 2017

Adjustment Aid Has No Statutory Sunset

One claim I often see regarding Adjustment Aid is that Adjustment Aid was intended to be temporary:

For instance, journalists make this claim, eg, the New Jersey Spotlight:

Adjustment Aid, sometimes called “hold harmless aid,” was created by the 2008 School Funding Reform Act (SFRA) to make sure districts would not see big drops in their state aid when the new formula went into effect. It was calculated based on their aid packages in 2007-2008, and was supposed to gradually phase out as districts adapted to their lower aid allotment.

And so do politicians, eg, Steve Sweeney:

The original formula was altered to include provisions that have prevented districts with increased student enrollment from receiving fair compensation at the same time other school systems are overcompensated with money for students they don’t have. These add-ons – “growth caps” and “Adjustment Aid” – were intended to be temporary but continue to be funded eight years later.

Ok, the above is not correct.  SFRA only allows the most marginal decreases in Adjustment Aid, and only for districts that lose enrollment after 2008.  There are no decreases allowed for districts whose wealth increases but whose student enrollment is stable.  

The only section of SFRA that contains any references to reducing Adjustment Aid is this excerpted section:

First, here is the paragraph in SFRA that creates Adjustment Aid in the first place and then disallows any reduction of Adjustment Aid whatsoever for three years:

For the 2008-2009 school year, each district will receive Adjustment Aid in such amount as to ensure that the district receives the greater of the amount of State aid calculated for the district in accordance with the bill’s provisions or the district’s 2007-2008 State aid increased by 2%. In the 2009-2010 and 2010-2011 school years, districts will receive Adjustment Aid in such amount as to ensure that the district receives the greater of the amount of State aid calculated for the district in accordance with the bill’s provisions or the amount of State aid, other than educational adequacy aid, that the district received for the 2008-2009 school year. 

But there is a tiny amount of reduction Adjustment Aid allowed for districts with large enrollment drops post-2008:

For the 2011-2012 school year and for each subsequent school year, a district that has a decline in its weighted enrollment, adjusted for bilingual and at-risk pupils, between the 2008-2009 school year and the budget year that is not greater than 5% will receive adjustment aid in such amount as to ensure that the district receives the greater of the amount of State aid calculated under the bill or the amount of State aid that the district received in the 2008-2009 school year. In the case of a school district that has had such a decline in enrollment that is greater than 5%, the district will experience a reduction in Adjustment Aid in accordance with its percentage decline in resident enrollment that exceeds 5%.

What this means is that if a district loses 15% of its (weighted) enrollment post 2008-09, would lose Adjustment Aid equivalent to 10% of its 2008-08 per pupil Adjustment Aid.  (10% = 15% - 5%).

(In reality there is an additional complication because the amount of Adjustment Aid the district is entitled to could (theoretically) change due to changes in Local Fair Share, but the basic rule is as above.) 

The provision respecting the loss of Adjustment Aid is significantly flawed because it misses the following important scenarios under which a district's aid could become unfairly high:

  • If a district had enrollment loss prior to 2008-09 and received Adjustment Aid in 2008-09, but thereafter its enrollment was stable, it does not lose Adjustment Aid, since SFRA's clock starts ticking only in 2008-09.
  • If a district has an increase in wealth post 2008-09 and becomes overaided (or even more overaided) as a result of that, it likewise does not lose Adjustment Aid.
So, SFRA's mechanism for the reduction of Adjustment Aid only allows for marginal cuts

As SFRA is written, the only real reduction of Adjustment Aid would occur at a decades-long timescale, as inflation and state spending growth gradually push Adequacy Budgets and Categorical Aid spending upwards and Adjustment Aid erodes away under inflation.

The inadequacy of the Adjustment Aid-loss provision in SFRA can be seen in the Department of Education's "2017-2018 Additional School Funding Scenario (Information Only)."

These funding scenarios give the amount of aid districts would get if SFRA were followed exactly as the legislature and Jon Corzine wrote SFRA back in 2008, meaning, with Adjustment Aid and the State Aid Growth Limits intact.  

Under these scenarios, there are only 41 districts in all of New Jersey who would lose any state aid and the grand total of their losses is $11.6 million.

Jersey City, which based on the core formulas of SFRA is overaided by $159.9 million, would only lose -$920,741 (0.6% of its Excess Aid). Hoboken would only lose $1.3 million, which is 17% of its Excess Aid, the highest percentage of any aid-losing district.

Asbury Park, which is overaided by $11,000 per student would actually gain $2 million, because the cuts to Adjustment Aid that Christie made in 2012-13 were technically against SFRA.  Other districts who are actually substantially overaided based on their economic capacity-demographic needs, like Pemberton, Toms River, Brick, and Keansburg would gain as well.  

Sunday, April 23, 2017

State Aid Disparities Worsen for 2017-18

The Department of Education originally did not calculate Uncapped Aid, but pressure from legislators induced them to and I was able to acquire Uncapped Aid figures via an OPRA request.

(as usual, I've put everything online.)

As expected, another year of Chris Christie's frozen state aid distribution means that New Jersey's state aid disparities have become even worse.

In 2016-17, the 212 overaided districts had a total surplus of $618 million and the 379 underaided districts had a total deficit of $1.93 billion.

But for 2017-18 things are even more unjust:

  • There are 222 overaided districts with a cumulative surplus of $696,882,364.  ($27 million of this excess is from Interdistrict Choice)
  • There are 369 districts with a cumulative deficit of $2.072 billion.* 
I do not know the Extraordinary Aid deficit, but it is at least $100 million.

Additional Material:

  • The median NJ district gets $4,031 per student in K-12 state aid.
  • The median NJ district is underaided by $460 per student (compared to uncapped aid.)
  • The median NJ district gets 82% of its Uncapped Aid. 
  • There are 72 districts that get 200% or more of their Uncapped Aid.
  • Of the 222 overaided districts, 89 are overaided by $2,000 or more per student.
  • The total excess aid of the overaided districts is $696.9 million.
  • Of the 369 underaided districts, there are 127 districts that get 49.9% or less of their uncapped aid.
  • Of the 369 underaided districts, there are 113 that have aid deficits greater than $2,000 per student and 58 with deficits greater than $4,000 per student.
  • The total deficit for the underaided districts is $2.072 billion.

And to provide extreme examples:

  • Asbury Park is the most overaided in per student terms, with an excess of $11,278 per student. SFRA's target for Asbury Park is $13,401 per student, but Asbury Park's actual aid is $25,595 per student.
  • Deal is the most overaided in percentage terms, getting 1086% of what SFRA recommends. This is due to Interdistrict Choice money, although Deal is a small recipient of Adjustment Aid.
  • Bound Brook is the most underaided in per student terms, with a deficit of $10,592 per student. (It gets $8.2 million when it should get $26 million for 1,724 students.)
  • Chesterfield is the most underaided in percentage terms, getting only 9.5% of what it is supposed to. It gets $419,983 when it should get $4.22 million.
  • Jersey City has the most untapped Local Fair Share. Jersey City's Local Fair Share is now $370 million, but its actual tax levy is $114 million. 

Tuesday, April 18, 2017

The Skews of Capped Aid

Other than the Orwellingly named aid-hoarding mechanism known as "Hold Harmless Aid," the most unfair aspect of New Jersey's School Funding Reform Act is the State Aid Growth Limits, aka "Enrollment Caps."

According to the design of SFRA, due to these Caps, no matter how severely underaided a district is, the most aid a district can gain is a 10% or 20% of what it got the year previous, with 2007-08 as the baseline.  (Note: due to the cuts of 2010 and how low-aid districts then lost enormous percentages of their state aid, there are districts who would gain more than 20% from what they get now, however, the aid cuts of 2010 were never envisioned by SFRA's designers.)

Due to the existence of the Aid Caps and the fact that the Caps are percentage based, the more aid a district already receives, the more aid a district gains in dollars-per-student, which is the real measure of budgetary-tax impact.

(I got Capped Aid and Uncapped Aid amounts via an OPRA request to the DOE.  I've made the data publicly available here)

For instance, the following underaided districts all would be gaining the same amount in percentage terms if SFRA were operating:

But in the all-important dollars-per-student, the amounts the districts are getting are completely different and skewed.

What is unfair about this is that Chesterfield, Bound Brook, Manchester Regional Freehold Boro are New Jersey's most underaided districts against Uncapped Aid (Uncapped Aid = real SFRA full funding).  In percentage terms, Chesterfield does worse than any other district.  For 2017-18, Chesterfield will only get 9.5% of its Uncapped Aid, with Bound Brook (-$10,592), Manchester Regional (-$7,562 pp) and, Freehold Boro (-$8,484 pp) among the worst in dollars per student.

Newark, Paterson, Trenton, and Elizabeth are indeed badly underaided, but not by nearly as much.  Newark's aid deficit is only -$3,059 pp, Paterson's is $3,252, Trenton's is $3,003, and Elizabeth's is $3,198.

As a consequence of the percentage-based mechanism of the Aid Caps, new aid under SFRA goes disproportionately to large, moderately underaided districts.

Fortunately, reforming the State Aid Growth Limits (aka Enrollment Caps) is part of Steve Sweeney's state aid proposal.  Unfortunately, no one in the media (eg, John Mooney) and few among other politicians understands what the State Aid Growth Limits even are.


See Also:

Wednesday, March 29, 2017

The Tide is Turning: Even Education Law Center Accepts Cuts to Adjustment Aid

For years, the Education Law Center has opposed any cuts to Adjustment Aid and insisted that any relief for underaided districts must come from increases in overall spending on K-12 aid.

In October 2015 the Education Law Center published a lengthy defense of Adjustment Aid called "The Facts on Hold Harmless Aid" that attempted to make Adjustment Aid look far more progressive than it is.

The introduction to this report began with a frequent ELC call to fully-fund SFRA without cutting any district's Adjustment Aid: 
“The goal of this policy brief is to clear up common misconceptions about hold harmless aid in the SFRA formula. Much of this aid is used to support the adequacy budgets of districts that are unable to, or restricted from, raising those funds themselves,” said Danielle Farrie, ELC Research Director and policy brief co-author. “It’s time to focus on the key task at hand – getting back on track to full funding of the SFRA to make sure all students receive the resources they need and a meaningful opportunity to succeed in school.”
Over the next year, the Education Law Center repeatedly reiterated its opposition to cutting Adjustment Aid for any district.
The ELC couldn't even use the term "over adequacy" without quotes, like it is not a real concept.

The ELC named Jersey City (!!!) specifically as a district it didn't want to see lose aid.

What the ELC ignored is that JC and many more under-Adequecy Adjustment Aid districts,  insufficient local taxes are the reason they are below Adequacy, and sustaining their Adjustment Aid is rewarding them for their refusal to tax themselves.  

And in February 2017 the Education Law Center mocked Kingsway Regional's new lawsuit to have Adjustment Aid declared unconstitutional, saying Kingsway Regional was "barking up the wrong tree."  After the NJ Supreme Court dismissed Kingsway's suit, the Education Law Center celebrated on Twitter.

Something has changed...

Perhaps Steve Sweeney's fight for aid fairness and the grassroots demands for justice have persuaded the ELC that Adjustment Aid is unjust and not defensible any longer, because now the ELC is accepting losses of Adjustment Aid from any district, as long as all below-Adequacy districts are required to make up for the lost state aid with local taxation.

From March 2017:

There is no mystery why districts are spending below T&E: they have gaps in state aid or local revenue or some combination of both. It’s important to recognize that about two-thirds of adjustment aid goes to districts that are spending below T&E because of shortfalls in local revenue. Therefore, if adjustment aid is simply reduced in these districts, children may be harmed if the aid reduction is not replaced with a commensurate increase in local revenue. 
Any formula modifications should address the three causes of spending below the T&E level: 1) increasing aid in districts with a “state aid gap;” 2) increasing local revenue in districts with a “local revenue gap;” and 3) increasing both in districts where the gap is a combination of the two. If Adjustment Aid is to be reduced in any of these districts, it must be coupled with a State mandate that local revenue be increased by, at a
minimum, the amount needed to replace the adjustment aid reduction. 
And just to be clear: the State has to require local revenue increases from year to year in districts below T&E with local revenue gaps. The decision to increase revenue to shrink that gap cannot be left to the discretion of local elected officials or to a “waiver” process before the Commissioner of Education.

The ELC even made this unprecedented statement recognizing that New Jersey has fiscal limits.
We understand the constraints on the State Budget and the many competing priorities facing the state. But quite frankly, an eighth straight year of diminished resources essential for children to learn and thrive is unthinkable. ELC stands ready to work with you to enact a fair and equitable budget for all students. 
I think what aid-losing districts do with their taxes is their democratic discretion, but whatever, any acceptance of cuts to Adjustment Aid from the Education Law Center is welcome and surprising news.

This also might signal a shift in the NJEA's position, since ELC stances can be interpreted as NJEA stances due to the NJEA's large financial support for the Education Law Center and its having two representatives on the ELC's board.

We have a long way to go, but the tide is turning!

Sunday, March 26, 2017

Why NJ Can't Wait Until the Next Governor to Change State Aid

NJEA President, Wendell Steinhauer

After it became public that Chris Christie, Steve Sweeney, and Vincent Prieto were having some private conversations about state aid reform - and had actually would have met on Wednesday, March 15th if a snowstorm hadn't intervened - NJEA President Wendell Steinhauer released an op-ed demanding that any changes to state aid wait until New Jersey's next governor takes power.

Here are the most important parts of "Leave School Funding to the Next Governor":

Now the same governor who robbed public schools of $8 billion over seven years wants to move at break-neck speed to blow up SFRA, which is New Jersey's best hope for restoring fairness and adequacy to school funding. 
Here's why that should not happen under this governor.....
The governor is now audaciously using his neglect of SFRA to say we need a new formula. We don't. We need a transition back to the sound funding formula we have.

That's not something the governor and legislative leaders should cook up in a back room over the next 100 days -- as the governor has suggested. ... 
New Jersey should follow a similarly thoughtful and deliberative process for reviewing the current aid formula and recommending reasonable adjustments. That should include an honest look at the adverse financial impact that charter schools have on host district schools and ways to alleviate that harm. It must also create a pathway back to implementation and full funding of SFRA. 
We should not abandon the notion of a formula, as Christie has proposed, or pit students and communities against each other in a fight over inadequate resources, as some other funding "reform" proposals being floated would do. Instead, we must live up to the promise of SFRA to provide every student in every community the resources needed for the thorough and efficient public education our constitution promises.

There are several parts of this I disagree with (and think are factually wrong), but I'll focus on Steinhauer's major point that we must wait until 2018 (at the earliest) to address school funding.

  1. The FY2018 budget process is not completed, so it is possible that a deal made now could mean help for certain districts 2017-18.
  2. If we wait until winter 2018 and the new governor  it's possible that new aid could be distributed fairly, but even if the new governor were inclined to accept some redistribution, it would already be too late for redistribution for the 2018-19 school year since the aid-losing districts would have so little time to prepare.
  3. There is no guarantee that Steve Sweeney will remain as Senate President after this year and his replacement might not prioritize state aid as much, might support Adjustment Aid, or might not understand the problems of SFRA as well.

Don't Give Up on 2017-18 Yet (or 2018-19 either)

I agree with Steinhauer that Chris Christie has been a bad for New Jersey and state aid.  He's been a disaster in progressive terms for ignoring districts in acute financial need; he's been a disaster in conservative terms by making no attempt to update the Abbott list or pare back the most extreme Abbott privileges, like the lack of means-testing for PreK and 100% state construction funding.

Yet, it would be a huge mistake for New Jersey to miss this chance at reform.

Steinhauer is rejecting sight-unseen a proposal that doesn't even exist.  It's possible that Christie will follow his recent (post June 2016) history and dig his heels in for something like his "Fairness Formula," but if that's the case, why worry? since Sweeney, Prieto, and the legislature would never agree to that.

Christie cannot "blow up SFRA" unilaterally and Steinhauer knows it.

Although Christie has been at his worse on state aid since June 2016, previously Christie was more erratic, even good at times.  When Christie rebuilt school aid after the 2010 aid cuts he basically followed SFRA's principles.  In 2012 Christie's Department of Education actually endorsed halving Adjustment Aid for districts that are above Adequacy and for 2012-13 Christie actually did redistribute $40 million in Adjustment aid.  In the 2016 Education Adequacy Report, Christie's Department of Education recommended lowering the weights for at-risk students, but it did not remotely suggest that all districts have equal spending or equal state aid.

In 2016 Christie also came through for Freehold Boro and had his DOE agree to give $25 million for expansion costs, even though as a non-Abbott Freehold Boro had no legal standing to demand this money.

I'm not letting Christie off the hook.  His method of cuts in 2010 - in which every district lost aid equivalent to 5% of its budget regardless of it being overaided or underaided - is unforgivable.  Christie's refusal to redistribute aid for the 2016-17 and 2017-18 aid cycles is terrible too, since there was legislative support for doing so.

So Christie is terrible overall, but there are glimpses of common sense in his record too. Christie-Sweeney-Prieto process should be given a chance to produce something decent.  If they can't agree or their proposal is bad, reject it, but don't reject something that doesn't yet exist.

So what's Steinhauer's real worry?  And what should our worry be about waiting until 2018?

First, Steinhauer hates Steve Sweeney in the first place over Sweeney's support for pension reform, but second, his policy worry is that Christie will agree with Sweeney to cut Adjustment Aid and then pressure Vincent Prieto to go along.

 The NJEA is strongly against cutting Adjustment Aid, denouncing the concept as "divisive" and that would "pit students and communities against each other in a fight over inadequate resources."

The NJEA, rather than seeing the stark differences between Sweeney's proposal and Christie's "Fairness Formula," see's Sweeney's proposal as "the lesser of two evils."

[NJEA Vice President] Blistan criticized two competing school funding proposals, one from Gov. Christie and one from Senate President Steve Sweeney that purport to address problems with school funding. Both proposals would reduce funding to hundreds of thousands of students. While Christie’s proposal is more draconian, Sweeney’s would reduce aid to approximately 715,000 students across the state. Both proposals would pit communities against each other and reduce funding too. Blistan was adamant that “choosing the lesser of two evils is not acceptable here.” She urged legislators to support a proposal championed by Assembly Speaker Vincent Prieto that would preserve the existing formula while also studying it to determine where it could be more effective.

The NJEA also gives the Education Law Center a third of its funding too and has two members on the ELC's board, so the ELC's staunch opposition to cutting Adjustment Aid must also be interpretted as an NJEA stance.

So the NJEA is against reform too, even though it screws over the majority of NJEA affiliates and NJEA members who live in underaided districts.

Although it's difficult to make predictions for what Christie, Sweeney, & Prieto might actually agree on, we cannot afford to reject a proposal that hasn't even been made and that we are months away from even seeing.

Perhaps my optimism dies hard, but part of a deal could be an increase in K-12 aid for 2017-18 and that money could be channeled through a formula and go where it's needed most.

And even if there is no help for 2017-18, I want a fair framework in place for 2018-19.

Murphy with NJEA Leadership
2.  Phil Murphy is a Utopian, Not a Realist

Murphy rarely talks about state  and when he does, he shows no emotional feeling about how bad the crises are in many districts, even though Murphy strongly reacts against most of Christie's other misdeeds and accuses Christie of quite a bit Christie isn't responsible for.

Murphy also says inaccurate things about how SFRA even works, like a claim that it has extra weights for kids from single-parent families.  Like the NJEA, he also uses the misleading Capped Aid deficit, which is $1 billion instead of $2 billion.

In his August 2016 interview with Larry Mendte, Murphy refused two point-blank questions on whether or not he would redistribute aid and more recently in Murphy's endorsement of Steve Sweeney for the LD-3 Senate seat, he did not endorse Sweeney's Senate Presidency, nor did he mention state aid as something that he and Sweeney had in common.

I am pleased to endorse Senator Sweeney for re-election, and look forward to running together on a platform of growing our middle class and creating a new economy based on innovation, good-paying jobs, and fairness for workers — including equal pay for equal work.

Steve and I share many of the same goals for the years ahead: raising the minimum wage, repairing our dangerously outdated infrastructure, creating ‘green’ jobs in the alternative energy field, and fully funding Planned Parenthood and ending Chris Christie’s politically motivated war on women.

I look forward to working with Steve to make New Jersey a state that once again works for all of us.”
The fact that Murphy doesn't mention what has become Sweeney's signature issue is very revealing in my opinion.  Murphy could change, but so far, everything indicates that Murphy will defer to the NJEA on funding and preserve aid hoarding.

I'm sure that the most severely underaided districts would benefit under Murphy, but since NJ is not going to have the (at least) $2 billion it would take to fully fund SFRA, that means that NJ will still have a situation where districts get 150%, 200%, even 1000% of what they are supposed to get while others are significantly underfunded.

3.  Sweeney May Not Remain Senate President

We in the general public never really find out how someone becomes a legislative leader or how much longer someone will be in that post, but various NJ political websites like PolitickerNJ do speculate that Sweeney could be forced out of the Senate Presidency.

The NJEA is openly vowing that it will do everything in its power to defeat Steve Sweeney for the Senate, or failing that, as Senate President:

“We’re looking for a new governor and a new Senate president,”

For the last two years Steve Sweeney has been, without peer, the state's #1 champion for fair aid.  Our movement has no money behind it, nor any institutional support like from the NJ Policy Perspective.  The NJ School Boards Association is neutral and the Garden State Coalition of Schools is ineffective.  The Superintendents Association, led by Patrick Fletcher and Ken Greene, has been very vocal, but other than them, it's just Steve Sweeney.

It's possible that the next Senate President could also be in support of reform.  Paul Sarlo is sometimes spoken of as a Sweeney successor and Sarlo is quite good on aid.

By the same token , Vincent Prieto could be forced out too and be replaced by someone with whom Steve Fulop doesn't have "significant clout" too.

And although Phil Murphy is the frontrunner and has bottomless money plus affability, he might be defeated too and a strong reformer like Jack Ciattarelli could be elected. 

HOWEVER, there is no guarantee that either of the next Senate and Assembly leaders will support aid reform and might instead be perfectly content to allow Jersey City, Hoboken, Asbury Park's etc aid hoarding to continue forever.  They might be inclined to go along with the NJEA and double-fund districts for charter students as well, which would subtract from the aid available to other districts.

And even if the next leaders do favor reform, they might not prioritize it.

Chris Christie has already said that he has burned Steinhauer's editorial.  Let's hope that he, Sweeney, and Prieto can work out a fair plan because right now that's the only hope we've got.  

Tuesday, March 21, 2017

Phil Murphy Stuck on Repeat Mode

Phil Murphy has done an interview with Steve Adubato in which he again got a question about state aid and again failed to answer the question in any substantive, accurate way.  I do recommend you watch the interview, but if you don't have the time, don't worry about it, because Murphy gives the same exact substance-free answer on state aid he gave to interviewer Larry Mendte back in August 2016.

Larry Mendte had framed his state aid question to Phil Murphy in terms of "districts
being overfunded or underfunded with no rhyme or reason."  Steve Adubato framed his state aid question with a specific query about the problems non-Abbotts have, and referred to the fact that residents are often badly overtaxed and cannot stay in their homes.

Murphy's answer isn't just a rerun of his Larry Mendte answer, it's internally repetitive itself.

From 4:15.
Murphy: The good news is thank God the governor abandoned his so-called Fairness Formula. Which is the ultimate us-versus-them proposal. 
The bad news is we have a funding formula. It was blessed by our Supreme Court, it’s the only formula that has been Blessed. It was a national model... I want to go back and fund that formula.

This governor has under by over $8 billion. It’ll be over $9 billion by the time he he leaves. Let’s fund the formula.

If we fund the formula which again was viewed to be one of the most innovative formulas in the country. If we fund that formula and get our priorities straight again we find our way to answering the question you’ve asked.

Adubato: You’re convinced the funding formula as it exists makes sense. It’s a good plan?

Murphy: It’s a good plan. It needs to be updated.

It was blessed in 2008 and it’s never been funded.
Murphy three times praises "the formula" and three times says he will "fund the formula."  He makes zero references to where he would get the money to do this from and without acknowledging any flaws that might exist in the formula.

Murphy does, implicitly, give the amount he thinks is the deficit when he says that the formula has been underfunded by $1 billion a year by Chris Christie. That $1 billion deficit is accurate only so far as Capped Aid is concerned, but Capped Aid is an arbitrary, artificial, and yet statutory funding target that limits a district's aid growth to 10% or 20% of what it got in 2007-08.  The real full funding of SFRA is Uncapped Aid and for 2016-17 alone, the 379 underaided districts had a deficit of $1.93 billion.

(See "Phil Murphy Doesn't Understand State Aid")

Murphy does say that some "updates" are needed, which is a replay of his state aid statement at the NJEA conference when he said that some "tweaks" were needed to the formula.

Like in the Larry Mendte interview, Murphy gives the same inaccurate description of how SFRA works, claiming that it gives more money to districts with more single-parent households (it doesn't) and more money to districts with more special ed kids (it doesn't because SFRA assumes all districts have the same percentage of kids in special ed.).

Unfortunately Adubato didn't ask a follow-up question on aid per se, but he did ask questions about how Murphy would pay for his agenda in general, to which Murphy answered he would increase taxes on millionaires, cut hedge fund investments, and also a vague "you prioritize."

Sure.  New Jersey can prioritize, but the problem for us is that Murphy's priority isn't K-12 aid.  His priority seems to be pensions and post-retirement healthcare, and then transportation and a slew of initiatives including loan forgiveness for STEM majors, a child care tax credit, an increased senior property tax rebate, affordable housing, and grants for high-tech.  Within education, Murphy mentions PreK and higher ed far more than he mentions K-12.

Since the pension deficit alone is $2.5 billion for FY2018, the question for Murphy has to be "IF YOU DO NOT REDISTRIBUTE ADJUSTMENT AID, WHERE THE HELL ARE YOU GETTING THIS MONEY?"

NJ needs to increase taxes on high-earners and Murphy supports this, but if the income tax for people making more than $1 million a year is raised to 10.75% it still only brings in $600 million.

Phil Murphy implicitly indicated in the Larry Mendte interview that he would not redistribute Adjustment Aid and Phil Murphy has given clearer indications of his support for aid hoarding and his differences with Steve Sweeney:

Phil Murphy, ever a pragmatic politician, did quietly endorse Steve Sweeney for the State Senate on March 20th, but in his endorsement, Murphy did NOT mention state aid reform as an issue they had in common:

I am pleased to endorse Senator Sweeney for re-election, and look forward to running together on a platform of growing our middle class and creating a new economy based on innovation, good-paying jobs, and fairness for workers — including equal pay for equal work. 
Steve and I share many of the same goals for the years ahead: raising the minimum wage, repairing our dangerously outdated infrastructure, creating ‘green’ jobs in the alternative energy field, and fully funding Planned Parenthood and ending Chris Christie’s politically motivated war on women. 
I look forward to working with Steve to make New Jersey a state that once again works for all of us.”
State aid reform has become Steve Sweeney's signature issue and Phil Murphy doesn't mention it. The question has to be "why?"

In September 2016, after the State Auditor came out with a blistering report condemning the unfairness of the state aid distribution, Murphy was similarly SILENT.

Yet, whenever any other example of Christie-misgovernment comes up, Murphy condemns it immediately:
Murphy isn't wrong about public transit, but when there are ZERO equivalent statements from him on state aid he shows he doesn't consider state aid that important.
Phil Murphy has never retweeted a state aid editorial by Steve Sweeney, but Phil Murphy retweeted

on March 21 a (significantly inaccurate) state aid editorial written by NJEA president Wendell Steinhauer which demanded that New Jersey wait until the next governor to change anything about state aid, demanded that charter school funding be part of any change, and which criticized Steve Sweeney's aid proposal as something that "pit students and communities against each other in a fight over inadequate resources."

A retweet does not imply that the person retweeting the statement agrees with everything he or she is retweeting, but when Phil Murphy rarely mentions state aid at all, never talks specifics, repeatedly gives inaccurate depictions of how SFRA is supposed to work, doesn't know what the real funding deficit is, never shows any emotion about the disasters occurring in districts like Bayonne, Freehold Boro, Egg Harbor Township, Chesterfield, Paterson, and has never shown any disagreement with the NJEA, my belief that Phil Murphy will not do the right and fair things on state aid.

I don't want this blog post to be entirely negative.  Jack Ciattarelli (who actually is a public school parent) also did an interview with Steve Adubato and, in a very short space of time, laid out a comprehensive, realistic vision for state aid. Unlike Murphy, Ciattarelli talked specifics and even used terms like "Adjustment Aid," "Local Fair Share," "Adequacy," and "PILOTs."  See Minute 4:55.

Although in that Adubato interview Ciattarelli doesn't give any examples of school districts facing crisis, he has done so on numerous other occasions, and the districts he mentions aren't Republican bastions for whom Ciattarelli is trolling for votes from.

So, if state aid is your priority issue, the best candidate appears to be running on the Republican side.


See Also:

See Also:

Bury Pensions take on Phil Murphy's vapidity.

Friday, March 17, 2017

Ocean City Represents Jersey Shore Aid Hoarding

Ocean City, Cape May:
Huge Tax Base + Substantial
State Aid
= Life is Good
Across New Jersey, hundreds of districts are struggling with budget cuts they never would have imagined having to make only a few years ago, but unable to prevent those cuts due to tapped out taxpayers.

From the largest districts, like Newark, which faces a $30 million deficit and Paterson, which faces a $20 million deficit, to medium-sized districts like Egg Harbor Township, which faces a $6.6 million deficit and the loss of other 40 staff members, to small Chesterfield, which faces a $500,000 deficit on a Total Operating Budget that is only $9.6 million.

Yet, there are some notable exceptions to this rule of sacrifice and austerity and this blog post is about one of those exceptions, Ocean City.

Like the rest of the state, Ocean City isn't getting any aid increase, but it only needs to increase taxes by 0.1%, or $5 per household, to avoid any cuts at all.  Whereas New Jersey's average school equalized tax rate is 1.3, Ocean City's is only .215.

The lack of a real tax increase isn't because of any kind of managerial genius by Ocean City's business office, it's because Ocean City was able to save over $2 million from the previous year and Ocean City's tax base is absolutely enormous relative to its (falling) student population.  A .1% tax increase for Ocean City brings in $1.2 million. 

Ocean City's example of budgetary abundance amidst an "ocean" of deprivation isn't alone.  There are many other districts at the Jersey Shore like it.  Avalon, Stone Harbor, Cape May Point, Allenhurt, Sea Isle City, Longport, Long Beach Island, Beach Haven, Seaside Park, Spring Lake, Lavallette, Bay Head, Sea Girt, Cape May City, Deal, Margate, Interlaken, and North Wildwood all possess over $60,000 in Local Fair Share per student.

Although a great deal of attention is (rightfully and necessarily) focused on Jersey City, Hoboken, and Asbury Park as aid hoarders, Jersey Shore districts ought to get some scrutiny too.

Like Hoboken, these Jersey Shore districts tend to have poorer students, but their enrollments are so small and their tax bases so gigantic, that these districts have no need for any state aid whatsoever, let alone their Adjustment Aid.

Ocean City's Equalized Valuation per student actually exceeds Hoboken's and dwarfs that of any affluent suburb, such as Millburn.

For 2016-17, Ocean City's Equalized Valuation was $11.6 billion, the sixth highest in New Jersey, but it only had 1,447 students.  Hoboken, by contrast "only" had $13.3 billion in Equalized Valuation for 2,600 students.  Ocean City's school tax rate is thus only 0.2, meaning the average homeowner with a $500,000 property only pays $1,000 in school taxes.   Yet that minute, 0.215 tax rate produces over $15,000 per student in local taxes.

Despite that enormous tax base, Ocean City receives $3,787,076 in state aid, or $2,617 per student.

With that large local tax contribution plus state aid, Ocean City's student spending is $17,869 per pupil, although unlike an Abbott its students are not particularly poor (they are 19% FRL-eligible, 2% ELL).

The example of Ocean City also underscores how misleading the Education Law Center's 2015 policy brief on Adjustment Aid was, "The Facts On Hold Harmless Aid."

That report took the (out-of-date) DFGs and used "low-DFG = low-wealth,"middle-DFG = middle-wealth" when the DFG classifications are socioeconomic, not tax base.

According to Danielle Farrie of the Education Law Center, a district like Ocean City would be "middle wealth," since its in DFG DE but, as you can see, calling Ocean City "middle wealth" is totally irrelevant when it comes to state aid.  Ocean City has very few students relative to its tax base and even if they were all in poverty, there is no justification for $3,787,076 in state aid while New Jersey is in fiscal crisis and so many hundreds of districts are budgetarily desperate and/or overtaxed.
Sen. Jeff Van Drew
(Democrat, Dist. 1):
Are other places in NJ
in budget crisis?
What a pity.  

What's more, Ocean City's DFG DE classification makes no sense based on its current student demographics.  As mentioned above, Ocean City is only 19% FRL eligible and 2% ESL.

So Ocean City represents the problems of Adjustment Aid, but also the problems of SFRA, since a district like Ocean City has no need for any state aid and the state is bankrupt.

Ocean City and the rest of Cape May's aid hoarding is also a political problem for reform, since Ocean City's State Senator, Jeff Van Drew, is anti-reform and was one of six Senators to vote against Steve Sweeney's state aid reform proposal, saying, “I believe there is a huge potential in the direction that the new commission would go not to hold them harmless anymore. It would be a very significant blow."

Based on Van Drew's opposition, it's likely Cape May's Assemblymembers are anti-reform too.

Ocean City also represents the wrongness of the Education Law Center's defense of Adjustment Aid.

Adjustment Aid rarely goes to genuinely needy districts.  It is privilege, not equity.

Update: Hoboken's budget picture is also excellent.