Wednesday, March 21, 2018

Looking at the 2018-19 State Aid Disparities

When Phil Murphy's Department of Education released state aid figures for FY2019 it released the amount of aid a district received the year before and what Phil Murphy wanted it to get in 2018-19.  The Department of Education claims that it wants every district to be "fully funded" by 2022-23, but this is a total misrepresentation of what "fully funded" means in a real sense, since the aid targets for underaided districts are just their Capped Aid level and New Jersey's 200+ overaided districts will be more than fully funded.

To the Murphy administration's credit, they did at least calculate Uncapped Aid, which I have been able to get via an  OPRA request and can now share with the public on a Google spreadsheet(Please note: I have taken Uncapped Aid vs Actual Aid data originally from the DOE and calculated aid deficits/surpluses, aid ratios, and tax ratios myself.)

While I am very disappointed and angry at the proposed distribution for 2018-19, at least the Murphy administration is attempting to follow some rational distribution of aid.  From 2013 to 2018 the Christie administration more or less flat-funded all districts, with the exception of Interdistrict Choice districts.  For 2017-18, the Christie administration did not even initially calculate Uncapped Aid .

Although the Murphy administration describes itself as a 180 turn from the Christie administration in education policy, and that's the reality in a lot of ways, one thing the Murphy administration and Christie administration have in common is that they have no choice but to prioritize the state's debt payments.  As large as Murphy's $283 million increase in K-12 aid is, it is significantly smaller than the increase for teacher pensions, ie the Teachers Pension And Annuity Fund.

(Note, this does not include money from the lottery that is going to education)

See below for a definition of "Uncapped Aid."

The Scope of the Disparities:

The Big Picture:
There are 212 overaided districts with a total surplus of $708.7 million.  This is almost $70 million more than 2017-18, when the surplus was $643 million.  (I am excluding Interdistrict Choice aid)

There are 380 underaided districts with a total deficit of $1.913 billion.  This is $52 million less than 2017-18, when the deficit was $1.965 billion.  (again, I am excluding Choice Aid, plus I am also excluding Atlantic City's Commercial Valuation Stabilization Aid, which is $32 million.)

If New Jersey could redistribute Adjustment Aid, the net deficit is only $1.205 billion.

Notes on New Jersey's State Aid Have-Nots
There are 75 districts getting 50% or less of their Uncapped Aid.

If the state wanted to prioritize this sub-50% districts, it would only cost $106 million to bring them all up to at least 50% funding, or less than one-seventh of the total excess aid that the overaided districts receive.

Chesterfield is, yet again, in in last place, getting only 21% of the state aid SFRA recommends for it. River Edge is the next lowest aided, getting 24%, then Hasbrouck Heights at 24.5%, Elmwood Park at 26%, and Robbinsville at 27%.

There are 43 districts whose deficit is larger than $4,000 per student.  To bring all of these districts up to a deficit of $4000 per student (which is still terrible) would require $155.7 million, which is about one-fifth of the state's excess aid.
(The $155.7 million number does include Atlantic City's Commercial Valuation Stabilization Aid)
Atlantic City's Taxes are 287% of Local Fair Share. 
(+$52 million over LFS)
Phil Murphy's proposed budget will give Atlantic City $1.2
million in tax relief.

Bound Brook is the worst-off in deficit in dollars per student, at -$8,999 per student. Then Atlantic City (even with the $32 million CVSA), Manchester Regional, Fairview, and Freehold Boro.

Several vo-techs, like Atlantic County Vo-Tech, Cumberland Vocational, and Passaic County Vocational are also extremely underaided.

Atlantic City, has, by far, the worst taxes, with a tax levy at 287% of Local Fair Share. ($81,888,890 out of $29,396,657) 

Manchester Regional, up until his year, had the worst taxes, but its tax levy was in the low-200% rage of Local Fair Share. Manchester Regional's 2017-18 taxes are still at 219% of Local Fair Share, which is the second worst in New Jersey.

Newark's deficit is the largest in total dollars, $130,042,863.

Notes on New Jerseys' State Aid Haves

There are 68 districts getting 200% or more of what SFRA's real recommendation for them is is.  23 lucky districts get over 300%. Washington Township in Burlington County tops off the overaided districts, getting 563% of its aid target.

If the districts receiving 200% or more of their state aid got their aid reduced to "only" 200%, it would free up $76.8 million.

Tavistock is a non-operating district that claims three students living there.  It is getting $2299 on an aid target of $299, so it technically gets 1003% of its recommended aid.

Jersey City's Taxes are only 29% of Local Fair Share.
Jersey City is Gaining $1.8 Million in State Aid.
Deal, whose tax base is astronomically large, is getting $2,039,184 in Interdistrict Choice money, plus $200,045 in formula aid, on an aid target of only $187,443. That works out to 1195% of Local Fair Share, but I have decided to exclude Interdistrict Choice money from this analysis.

In total dollars, the biggest excess is Jersey City's, at $175 million. Powered by surging real estate and a little additional state aid from Phil Murphy, Jersey City's excess aid is up $24 million from its $151 million excess in 2017-18. Jersey City's school taxes are now only 29% of Local Fair Share.

Jersey City's excess aid is the ninth highest in dollars per student too, $5,716 per student. That's more than the total aid of its impoverished neighbors Guttenberg and Fairview get total!

Jersey City's Local Fair Share is $398 million. This is growth of $30 million in Jersey City's Local Fair Share in one year. This means that if Jersey City lost $30 million in state aid per year and made up for that loss with local taxes that its tax rate would not increase.

Also, Jersey City's Local Fair Share is growing at a rate where it will no longer qualify for Equalization Aid in 6-7 years.  Right now the Local Fair Share is $398 million, but once it reaches Jersey City's $590 million Adequacy Budget (for Equalization Aid) the only state aid Jersey City will qualify for will be the three categorical aids.

This means that even if Jersey City's Adjustment Aid is redistributed the state should still be able to use money currently going to Jersey City for needier school districts.

Hoboken's Local Fair Share is $217 million, which surpasses Edison to be the second largest in NJ after JC.
Hoboken's Local Fair Share is $217 million, the second largest
in NJ.  Hoboken's LFS is  $79,000
per student and yet it gets $10.5 million.
Hoboken's LFS per student is more than 2x Millburn's.

Pemberton's surplus state aid is $25,680,554, the second most in New Jersey.

Asbury Park is overaided by the most per student, with a surplus of $11,827 per student. That excess aid alone is more than what low-wealth non-Abbotts like Freehold Boro, Dover, Guttenberg etc get total for their students.

Loch Arbour is at 100%
Loch Arbor is the only district in New Jersey to get 100% of its Uncapped Aid: getting $3,944 for its 5 students, which is exactly SFRA's recommendation. (Since Loch Arbour's Local Fair Share is $1,301,988, it could give up all of its aid and not notice a thing.)

Abbott Specific Notes

The Abbotts are disparate. They range from Asbury Park and its mammoth $11,827 per student surplus to Plainfield, with its -$4,594 per student deficit (itself the 32nd largest in New Jersey).

For 2018-19 eleven Abbotts will be overaided, which is two fewer than the thirteen overaided Abbotts of 2017-18. The two Abbotts who slipped from overaided to underaided are Salem City and Burlington City. Their slippage, despite additional state aid, underscores how dynamic state aid is and that the deficit against Uncapped Aid constantly grows.

Only three of the Abbotts pay above their Local Fair Share (Burlington City, Salem City, and Phillipsburg)

The median Abbott only pays 56% of Local Fair Share. Hoboken's taxes are only 20% of Local Fair Share, despite having a levy that is extremely high in dollars-per-student.
Lakewood is now overaided!

Lakewood actually has a rapidly growing tax base and its Local Fair Share increased from $92,974,112 for 2016-17 to $102,034,106 for 2017-18 to to $111,534,172 for 2018-19. During that time there has also been a decrease in the student population.

Thus, Lakewood's state aid deficit, which was $19 million for 2016-17, has increased to a small surplus of $1,566,821.

Although SFRA does not work for Lakewood and the district does require additional state aid, the district also has the ability to increase the tax levy in excess of 2% (which it has been doing).

Debt Takes Most of the Money

In a continuation of what happened under Christie, the state is putting much more money into various debt categories than it is putting into

See Also:


Definition of Uncapped Aid:
Uncapped Aid = the real full funding for every school district. The term "Uncapped Aid" derives from the fact that SFRA contains legal "caps" on how much a district can gain in a single year, which are usually a 10% or 20% increase on what the district received the year before. Due to these caps, a school district's statutory "full funding" may differ greatly from what SFRA's formulas say it actually needs.

Uncapped Aid also refers to the amount of state aid that overaided districts would get if it were not for the mechanism of Adjustment Aid delivering over 100% of their state aid to them. In the case of Adjustment Aid districts, "Capped Aid" might more accurately be called the "pre-Adjustment Aid state aid target," but that is too wordy, so I just call it "Uncapped Aid" even though the aid caps do not apply to districts who are already getting over 100% of their recommended state aid.

Friday, March 16, 2018

Despite Aid Increases, Inequalities Worsen: Phil Murphy's FY2019 Aid Proposal

On Thursday, March 15th, the Murphy Department of Education, led by Asbury Park's former superintendent Lamont Repollet, released its proposed state aid figures for 2018-19.

Due to a combination of raising the income tax to 10.75% and a surge in state revenue, the Murphy administration is able to meet the next step of the Christie administration's ten-year rampup to full TPAF funding (+$392.5 million), as well as provide big increases for free community college (+$50 million), free PreK (+$57 million), and what I assume is another round of mostly Abbott construction (+$148 million in debt service)

The Murphy administration is proposing to increase K-12 operating aid by $283 million, which would be the biggest state aid increase since 2012-13. They are claiming this will bring New Jersey to full funding of SFRA, "The Governor is committed to putting New Jersey’s schools on the path to full funding within four years, and is proposing an additional $283 million in formula aid."

While that increase is worth lauding, the Murphy administration is following SFRA (almost) to the letter, including increasing Adjustment Aid for already overaided districts and utilizing SFRA's flawed design of how to distribute new aid.

Therefore, while the underfunding of state aid diminishes slightly, the inequalities of the distribution are exacerbated.

(I have calculated aid growth in dollars per student and put it online here.)
(I also have Actual Aid vs. Uncapped Aid here.)

1.  Insufficient Help Goes to the Lowest Aided

The reason the distribution is unfair to the most underaided districts in NJ is that the Murphy
administration strictly followed the State Aid Growth Limits, which restrict a district's aid gain to 10% or 20% of what it got the year before, regardless of how underaided it is.
For the 2009-2010 school year and thereafter, total stabilized aid shall include Equalization aid, Special Education categorical aid, Security Aid, and Transportation aid.
d. For the purposes of this section, “State aid growth limit” means 10% in the case of a district spending above adequacy and 20% in the case of a district spending below adequacy.
Back in 2008 the authors of SFRA were being overly optimistic about NJ's revenue growth, but Capped Aid was supposed to be an incremental step towards the goal of real, full funding, not the goal itself.

The Murphy administration, however, is treating Capped Aid as the goal in itself, is making the achievement of Capped Aid by FY2023 the goal and calling that "full funding."

Hence, the districts that are supposed to get a 20% gain in one year are stretching that out into four 5% gains.

Phil Murphy to New Jersey
"Capped Aid = Full Funding"
Because the State Aid Growth Limits are calculated based on existing aid, the lower a district's state aid is, the less money it gains in real terms.  (see "The Skews of Capped Aid")

For instance, Freehold Boro got 45% of its recommended, Uncapped Aid for 2017-18 and is underaided by over $7,675 per student.

Under the proposed State Aid distribution, Freehold Boro will gain 5% ($534,991), which equals $318 per student. Likewise, Red Bank Boro, which only gets 38% of its Uncapped Aid (-$4219 per student), will likewise only gain 5%, or $178,503, and yet that only equals $127 per student.  

Bound Brook, NJ's most underaided district in dollars per student (-$9,546 per student for 2017-18)), is gaining 5%, but that is only $300 per student.

In 2017-18 Steve Sweeney and his state aid reform allies - Paul Sarlo, Louis Greenwald, Teresa Ruiz, Joann Downey, Eric Houghtaling - based new state aid on deficits and even though they had only $130 million to work with, they delivered larger aid boosts to the most underaided districts in New Jersey.

On the other hand, districts that are modestly underaided will gain far more.  

Trenton was only underaided by $2856 per student, but for it to gain 5%, equals $793 per student. 

Newark was underaided by $2852 per student for 2017-18 but its 5% gain equals $729 per student.  Paterson was only underaided by $3,062 per student but its 5% gain equals $717 per student.  

Half of all new aid will go to only thirteen districts, all Abbotts.  As usual, the Abbotts get about 55% of all new aid.

Under the Murphy/Repollet plan, any district that already gets 83% or more of its Uncapped Aid will reach full funding in four years, but districts that receive 60% or less will have to wait years, even decades.  

Since Freehold Boro receives 45% of its Uncapped Aid, At increases of 5% a year Freehold Boro will bring only be at 65% of what is its 2017-18 Uncapped Aid by FY2023. Under this pathway it would take Freehold Boro 16 years to reach what is just its 2017-18 Uncapped Aid (neglecting inflation and enrollment growth).

Some districts are even worse off. Chesterfield only got 19% of its Uncapped Aid in 2017-18. Under Murphy's planned 5% increases Chesterfield will take THIRTY SIX YEARS (2054!) to get what is only its 2017-18 Uncapped Aid.  (Chesterfield's aid increase is a paltry $52 per student)

Some districts that are underaided but nonetheless above Adequacy are the most screwed. Cherry Hill was underaided by $1397 per student, but it is gaining only $44 per student.  West Orange was underaided by $2459 per student, but is gaining a pathetic $36 per student.

Although it is a unique district, Lakewood is only gaining $239,242, or $39 per student.

2. Adjustment Aid is Sustained and Increased

Even worse than blindly obeying the flawed State Aid Growth Limits is the restoration of Adjustment Aid to about 150 districts, for a grand total of an additional $21 million increase in excess aid.  
  • Marlboro was overaided by $5.3 million, it is gaining $270,369 (+$58 per student)
  • Pemberton was overaided by $25 million, it is gaining $658,924 (+$154 per student)
  • Brick was overaided by $23 million, it is gaining $750,798 (+$88 per student)
  • Asbury Park was overaided by $24 million, it is gaining $796,127 (+$360 per student)
  • Hopatcong was overaided by $9.2 million, it is gaining $169,007 ($109 per student)
  • East Orange was overaided by $22.5 million, it is gaining $1,114,526 (+$115 per student)
  • Jersey City was overaided by $151 million, it is gaining $1,863,714 (+$61 per student)
  • Manalapan was overaided by $13 million, it is gaining $498,300 (+$100 per student)
  • Ocean Township was overaided by $5.5 million, it is gaining $464,924 (+$175 per student)
  • Keansburg was overaided by $6.9 million, it is gaining $160,716 (+$114 per student)
Even Deal, whose Local Fair Share is $17 million for 178 students, is gaining $124,117 (+$697 per student) (this is mostly from Interdistrict Choice)

Asbury Park's state aid gain of $796,127 is actually greater than its severely underaided neighbors, Red Bank Boro (+$178,503) and Freehold Boro (+$534,991) will get COMBINED.  No wonder Asbury Park's superinintendent is "delighted."
Since Murphy plans to "fully fund" (ie overfund) overaided districts for another three years, the total projected gain is $84 million.  

The legal justification for increasing aid to the overaided is that Adjustment Aid technically does not allow a district to receive less than 102% of what it got in 2007-08, but Adjustment Aid was cut in 2010, 2013, and 2017.

What Phil Murphy and Lamont Repollet are trying to do is bring all these overaided districts back to their aid levels of 2008-09. Hence, since Jersey City's aid was then $417.9 million versus $410 million for 2017-18 , the Murphy administration has it on a four year path back to $417.9 million. Likewise, Asbury Park's peak aid was $57.6 million versus the $54.4 million it got in 2017-18, the Murphy adminstration has a four year path for Asbury Park back to that peak.

(See "How Overaided Districts Would GAIN Money if SFRA is Not Changed.")

If Adjustment Aid were reduced by a fifth, according to Steve Sweeney's state aid reform plan, NJ's underaided districts would be gaining an additional $128 million. ($128 million = a fifth of 2017-18's $640 million in excess aid)

3.  Ignoring SFRA When It Benefits the Overaided

Lamont Repollet has already told people that he had "no choice" but to blindly obey Adjustment Aid and the State Aid Growth Limits, but he is ignoring SFRA when it benefits overaided districts.

SFRA has no statutory sunset for Adjustment Aid, but it does allow a minimal decrease in Adjustment Aid is allowed if a district's enrollment loss after 2008 exceeds 5%.    (See "Adjustment Aid Has No Statutory Sunset")

There are actually 45 districts that SFRA calls for $9.8 million in cuts to, but Murphy/Repollet are ignoring this provision of SFRA.

DistrictSFRA Allowed Aid Loss (despite Adj. Aid)Proposed Aid Change for FY2019
Beach Haven Boro-$619$0
West Cape May Boro-$3,929$0
Lawrence Twp-$7,368$0
Deal Boro-$12,602$0
South Amboy City-$13,695$0
Califon Boro-$25,451$0
Milford Boro-$31,640$0
Union Beach-$37,569$0
Hampton Boro-$37,857$0
Upper Freehold Reg.-$47,019$0
Cape May City-$57,377$0
Elk Twp-$60,133$0
Port Republic City-$63,349$0
Montague Twp-$68,702$0
Commercial Twp-$78,341$0
Hillsborough Twp-$81,254$0
Washington Twp-$86,701$0
Delaware Twp-$88,516$0
Downe Twp-$89,019$0
Dennis Twp-$92,124$0
Neptune City-$93,351$0
Oaklyn Boro-$98,879$0
Brooklawn Boro-$132,585$0
Lafayette Twp-$140,013$0
Frenchtown Boro-$154,323$0
East Amwell Twp-$157,165$0
Waterford Twp-$166,921$0
Byram Twp-$179,052$0
Estell Manor City-$202,559$0
Harrison Twp-$206,468$0
Roosevelt Boro-$213,779$0
Upper Pittsgrove-$252,837$0
Ogdensburg Boro-$259,688$0
Bloomsbury Boro-$286,288$0
Clinton Twp-$302,694$0
Delsea Reg. H.S Dist.-$381,559$0
Plumsted Twp-$421,093$0
Greenwich Twp-$455,185$0
Buena Regional-$546,074$0
Tuckerton Boro-$565,991$0
Lower Cape May Reg.-$761,881$0
Clearview Regional-$824,053$0
Freehold Regional-$885,391$0
Hoboken City-$1,069,199$0


New Jersey is proposing to increase income taxes by $765 million and income taxes are actually surging, but only $283 million of that is going into K-12 state aid.

Increasing funding for NJ's many streams of indirect aid - TPAF, post-retirement medical, and construction debt service - is required, and Phil Murpy has a mandate by his electoral victory to increase PreK and community college aid as he wants.

However, Phil Murphy repeatedly promised to "fully fund that formula" and what he is doing will not bring New Jersey anywhere near to that point, and in fact, will preserve inequalities and in many cases, make them worse.  By completely ignoring the legislature's work last year to expose and fix state aid inequalities, he is trying to govern without the input of Democtatic officials who are actually more knowledgeable on state aid than he is.

All of us in the state aid reform community have our work cut out for us in explaining to the public, elected officials, and journalists why the proposed increases have to be changed.


See Also

Tuesday, March 13, 2018

Tentative Reaction to Murphy FY2019 Budget Proposal

On Tuesday, March 13th, Phil Murphy gave his first budget address.

The budget address gives the amount of money Phil Murphy wants the state to spend in various categories.  It does not include the amount of state aid every district will get.  District-specific data will come out two days later, on Thursday, March 15th.  Murphy's speech is, by necessity, light on details, but more information is available in the FY2019 "Budget in Brief."

The budget assumes $1.7 billion from various tax increases that the legislature may not approve.  These tax increases of uncertain fate include raising the top income tax bracket to 10.75% (+$765 million), raising the sales tax to 7.0% and broadening it (+$581 million), "modernizing" corporate taxes (+$110 million), and taxing marijuana (+$80 million).  It also assumes savings from various health benefits reforms (- $118.7 million).

Despite the large increase from natural revenue growth and tax increases, Phil Murphy only proposes increasing K-12 aid by $283 million, saying that this will bring New Jersey to "full funding" in four years.

Update: Uncapped Aid is available here.

Murphy Spreads Confusion Over the Size of the Deficit
As before, Murphy is pretending in public that SFRA's deficit is only $1 billion, despite the existence of the State Aid Growth Limits that reduce the amount of aid a district can gain in a year.

Buried in the "Budget in Brief" is a tacit admittance that there is a difference between the statutory deficit (using that term) and the real, Uncapped Aid deficit, "This budget represents year one of a four-year ramp-up to full statutory funding that will ensure every public school district has the resources needed to provide all of New Jersey’s children with the excellent education they deserve." (see page 9)

As welcome as this (obscure, tacit) concession is, the statute of SFRA itself is extremely flawed, since new aid is based on a district's existing aid, not the district's deficit, thereby giving the most underaided districts the smallest increases.

Moreover, Capped Aid is itself supposed to be an incremental target, so by setting a four-year ramp up to that, Murphy is creating a series of incremental steps to what is supposed to be an incremental target.

It would be extremely unfair to make districts who are getting less than 50% of their Uncapped Aid to wait four years just to get a 10% or 20% increase in what they get now.

Also, Murphy's FY2019 budget depends on new revenue from various tax increases and uses additional revenue from a temporary income tax surge NJ is enjoying. Since Murphy cannot pass a tax increase every year, and the income tax surge will taper off, this means that Murphy will not have enough money to increase K-12 aid by ~$280 million per year for the next three years.

This means that it is all the more important to phase-out Adjustment Aid and start doing it NOW.

A Wide Distribution of New Aid = Less Help for the Severely Underaided

If 94% of districts are indeed gaining state aid and only 65% of NJ's districts are underaided, then Murphy is increasing state aid for numerous districts who are already overaided.  We won't know until Thursday what exactly he is doing, but it may be that he is undoing the cuts to Adjustment Aid that occurred in 2010, 2013, and 2017.

More of the State's Money is Going to Education Than Ever Before

The percentage of the state's budget going to education is at an all time high of 40% - $14.95 billion out of $37.4 billion.  (that includes lottery money)

In FY2018 education spending was 39.6% of the budget. In 2001 education spending was only 30% of the budget.

$14.95 billion for New Jersey's 1,373,267 students works out to $10,886 per student, an amount that is nearly equal to the national local+state+federal school spending average of $11,392 per student.

Municipal aid is being flat-funded, with a $12 million increase, from $1.524.2 billion to $1.536.2 billion. That is a 0.8% increase, which is much less than inflation. (see page 17 of the BIB)

Huge Increase for School Construction (Probably for the Abbotts)

The $148.3 million increase in school construction money is much larger than the previous two years. For FY2018 school construction debt service only increased by $20.5 million; for FY2017 school construction debt service increased by $52.1 million.

I don't know exactly why there is going to be a tremendous increase in construction debt service. It was not predicted in recent State Debt Reports, so it is likely that Phil Murphy plans another round of Abbott construction bonding.

Tens of Millions for PreK and "Free" Community College, Flat Funding of Extraordinary Aid

There is no increase in Extraordinary Aid. Extraordinary Aid is being flat-funded at $195 million.  (Extraordinary Aid is the state's reimbursement for Out Of District tuition for students with special needs)

Flat-funding of Extraordinary Aid will be devastating for Lakewood.

Flat Funding, in Per Student Terms, for Higher Ed
This budget continues the long process of abandoning NJ's middle class by neglecting higher ed.

Higher Ed funding (outside of communities colleges) is only increasing by 3%. In per student and inflation-adjusted terms, that's flat funding at best.

NJ's higher ed funding as a percentage of the budget is probably falling to new low.


See Also

Tuesday, March 6, 2018

Maryland State aid

This is Part 2 of my two-part series comparing Maryland and New Jersey school taxes and spending.

Part 1 of my series looked at Maryland's county income taxes and discussed that Maryland's school spending is 22% per student lower than New Jersey's.  (NJ's per student spending is $21,243 compared to Maryland's $16,985).

In counterpoint to the frequently-asserted notion that Maryland's school spending is lower because of less administration, my post showed that Maryland's spending is lower across-the-board, with the exception of school-level administration.

Maryland's lower spending is due to several factors, like less union power, less interdistrict competition, less empowered special-education parents, and control over taxes being in the hands of county councils, not Boards of Education.

The point of this series is to show that Maryland's having large, countywide school districts is just the tip of the iceberg when it comes to why Maryland's taxes are more moderate than New Jersey's.

This post looks at another major reason for Maryland's lower school taxes and how state aid is more broadly distributed there than in New Jersey.

The Same Constitutional Language

First, the Maryland and New Jersey constitutions have nearly identical constitutional language on education:

The General Assembly, at its First Session after the adoption of this Constitution, shall by Law establish throughout the State a thorough and efficient System of Free Public Schools; and shall provide by taxation, or otherwise, for their maintenance.
New Jersey:
1. The Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all the children in the State between the ages of five and eighteen years.

Many people say that NJ's Abbott-dominated state aid distribution is a "constitutional requirement," but really it is a "NJ Supreme Court requirement," because Maryland's constitution says almost the exact same thing about education and yet the Maryland Supreme Court has never interpreted its constitution like the NJ Supreme Court has.  Hence, in Maryland, there is no 100% state funding for school construction in any district, nor two years of state-funded PreK, nor de facto permission for the urban districts never to raise their school taxes.  (see "The Great Abbott Tax Freeze")

Different State Aid Formulas

Despite the virtually identical constitutional language, Maryland's state aid formula is quite different from New Jersey's.

Maryland's state aid formula contains minimum state funding requirements for every district's general education program and then its special needs programs.

The general education program is called the "foundation program" and the state minimum is 15%.  The special needs programs are Compensatory Education, Special Education, and Limited English Proficiency Education.  The state minimum funding for the special needs programs is 40%.  (see page iii)

Due to these minima, every district in Maryland other than property-rich Worchester gets at least 32% of its budget from the state.  (see page 87)

New Jersey has had no official state minimum funding rule since the Abbott II decision of 1990.  SFRA, theoretically, would give every district at least $1,000 per student, but SFRA is non-operating and some districts get half of that amount.  (all districts get considerable "indirect aid," see below.)

Maryland's formulas give high-need districts considerably more than the 15% and 40% minima, but the existence of those minima keeps the distribution of state aid flatter there than in New Jersey.

Adequacy is Calculated Differently

Maryland also uses a concept of an "Adequacy Budget," to calculate its equivalent to Equalization Aid.  Maryland's calculation is also "weighted," so that districts with more at-risk students get more state aid.  However, Maryland's calculation of an Adequacy Budget is "linear, not "exponential" and does not concentrate aid in high-FRL districts as much as New Jersey's does.

What "exponential weighting" means is that NJ's weights for FRL-eligibility themselves increase the higher the concentration of FRL-eligible students gets. NJ has one weight if a district is 0-39% FRL eligible, a higher weight if a district is 40-59% FRL-eligible, and then a higher weight still if a district is 60%+ FRL-eligible.

Specifically, the weight is 0.47 if a district is 0-20% FRL-eligible, 0.52 if the district is 40-59%, and then 0.57 if the district is over 60% FRL-eligible. (see page 7)

NJ also has an additional weight if students are FRL-eligible AND LEP-classified, rather than just adding the two weights together.

Maryland also has an extra weight if a student is FRL-eligible, but the weights do not increase as FRL-eligibility increases. For "Compensatory Education" Maryland calculates Adequacy on a constant 0.35, regardless of the district's concentration of disadvantaged students (see page 92)

This means that if one district in Maryland is 20% FRL-eligible and another is 80% FRL-eligible, each Maryland district will get the same amount of extra aid for its FRL-eligible students. The two districts wouldn't get the same aid per student, but they would get the same aid per FRL-eligible student.

Whereas in New Jersey the district with higher FRL-eligibility would have extra multipliers applied in the calculation of the Adequacy Budget and thereby qualify for even more aid per student and per FRL-eligible student.

Maryland's Local Taxes are Lower because the Middle-Class Gets More State Aid

Most Marylanders pay less in local taxes is because the distribution of state aid in Maryland is more favorable to middle-income districts than New Jersey's distribution is.  As we will see, the richest district in Maryland, Howard County, gets more state aid than the majority of New Jersey districts.

A tradeoff of the Maryland model is that Baltimore City gets much less state aid than it would if it
were in New Jersey, a topic this post will examine.

HOWEVER, before I can actually show how much money Maryland's middle-class districts get, I have to point that there are several major differences between how many expenses each state government pays on behalf of districts.

Direct State Aid and Indirect State Aid:

Another major difference between Maryland and New Jersey is that a higher proportion of Maryland's state aid is direct state aid that goes to districts, whereas New Jersey's state government makes more payments on behalf of districts.

The only major indirect aid that the State of Maryland pays for is the unfunded liability of teacher pensions.  For FY2018 this cost was $734 million, or $860 per student on average.  Districts themselves pay the "normal cost" of pensions, but this is not that much money.  For Baltimore County BCPS  pension costs are only $32.2 million, which is 1.7% of a $1.89 billion budget.

The State of New Jersey's  assumptions for indirect aid are much broader and more expensive than Maryland's.  New Jersey pays for all pension costs, all Social Security costs, all post-retirement healthcare costs, and then Whitman-era Pension Obligation Bonds.  I call these streams of aid "hidden aid" because they are infrequently acknowledged by the NJ education community and journalists.

For FY2018 NJ's costs for pensions were $1.5 billion, then $758 million for Social Security, then $1.2 billion for post-retirement medical, and then $226 million for the Whitman-era Pension Obligation Bonds.  Those four costs have a combined cost of $3.7 billion, or $2,700 per student on average.

In addition to the above indirect state aids above, New Jersey also spends $918 million on construction debt per year, of which the Abbotts get 70%.

For approximately 235 New Jersey districts - 40% of the total - "hidden" state aid is greater than direct aid.  (see note below on why this is an approximation)

In neither state do districts ever possess this indirect state aid; it is just spent on their behalfs. Instead, each state government deposits the money directly in the relevant state account, bypassing local education providers.

After you subtract the "hidden aid" streams, Maryland's direct state aid is a little lower than New Jersey's, $5.6 billion for 874,514 students, or $6,403 per student versus New Jersey's $8.8 billion for 1,347,166 students, or $6,532 per student.
(NJ's figures include PreK and Extraordinary Aid, since the equivalents are integrated into Maryland's regular state aid formula.)

Both New Jersey and Maryland let residents calculate taxable income after deducting up to $10,000 in property taxes.  Maryland does not allow residents to deduct local income taxes.  Since Maryland's property taxes are so much lower than NJ's, and its state income taxes are lower too for people with above-average incomes, Maryland's deduction is worth less than New Jersey's are.

Note on Data 1. The source for my Maryland data is this Overview of Maryland Local Governments done by its legislative research service. The source for the inclusive state aid data for New Jersey is the Taxpayer Guide to Education Spending, with support from OPRA'ed information from the DOE, the User Friendly Budgets, and the DOE Enrollment Files The TGES shows how much of a district's budget comes from state aid and what the Total Spending Per Student is, thereby allowing one to determine state aid. The convenient way to do this is in the Zipped files containing statewide data.

Note on Data 2: Since New Jersey's indirect state aid does not appear in State Aid Summaries or the User Friendly Budgets, it is not possible to say exactly how much aid a district gets.  The Taxpayer Guide to Education Spending does break down revenue sources by federal, state, and local percentages, but total revenue sources is not exactly the same thing as total spending, so applying those revenue percentages to total spending, to get spending per student, is not quite an exact exercise.  (sorry)

Despite Spending Less Overall, Maryland Gives Middle-Class Districts More

Despite spending less overall per student, Maryland's distribution of state aid is more favorable to middle-class districts than New Jersey's is.

The distribution of state aid in Maryland ranges from $4091 per student for Talbot County to $12,091 per student in Baltimore City.

Maryland's wealthiest district by income is Howard County, whose median income is $110,238, and which gets $5,499 per student for opex and pensions.  On top of the $5,499, Howard County has averaged $517 per student in construction aid for the last five years, giving it a grand total of $6,016 per student in state funds.

There are 302 districts in New Jersey that get less than that (and those districts educate 526,000 students). (again, this is an approximation due to the slight non-identity of revenue and spending)

When the highest-income district in Maryland gets more state aid than 52% of New Jersey districts, something is wrong with the Garden State.

Maryland's conventionally affluent districts and high-tax base districts usually get more state aid than their peers would in New Jersey.  Maryland's higher wealth districts sometimes even get more than working-class districts in New Jersey

(All of the following include federal money for the calculation of state aid as a percentage of total budget)
  • Montgomery County is 33.3% FRL-eligible, it gets $5,330 per student plus an average of $287 per student in construction aid.  State funding is 32.6% of its budget.
  • Anne Arundel County is 31.3% FRL-eligible, it gets $5,277 per student plus an average of $477 per student in construction aid. State funding is 37.8% of its budget.
  • Carrol County is 19.3% FRL-eligible and gets $6,261 per student plus an average of $272 per student in construction aid. State funding is 45% of its budget. 
  • Calvert County is 21.2% FRL-eligible and gets $6,278 per student plus an average of $345 per student in construction aid. State funding is 44% of its budget.
The above are just Maryland's lowest FRL-eligible districts.  As New Jersey districts become poorer and have Abbott status, there is a crossover point where New Jersey provides MUCH more money,

Readers know that districts in NJ with equivalent wealth as the wealthiest in Maryland would get nowhere nearly as much aid.

Lest I be accused of cherry picking, here are the 15 largest non-Abbotts in New Jersey, their FRL-eligibility rates, and their state aid per student.

  • Toms River is 29% FRL-eligible, it gets $6070 per student. (it is overaided by $1376 per student)
  • Edison is 21% FRL-eligible, it get $3,197 per student. State funding is 18.3% of its budget.
  • Woodbridge is 35% FRL-eligible it gets $3,896. State funding is 23% of its budget.
  • Hamilton is 39% FRL-eligible.  it gets $8,163 per student. (it is overaided by $113 per student)
  • Clifton is 57% FRL eligible, it gets $4,157 per student. 
  • Freehold Regional is 10% FRL-eligible.  It gets  $6,730 per student.  35% of the budget.  (it is overaided by $2,329 per student)
  • Cherry Hill is 20% FRL-eligible, it gets $3,258 per student.  State funding is 17.9% of its budget.
  • West Windsor-Plainsboro is 5% FRL-eligible. It gets $2,647 per student.  14% of the budget.
  • Bayonne is 62% FRL-eligible. It gets $8,067 per student. 
  • Middletown is 13% FRL-eligible. It gets $4,264 per student. (it is overaided by ($627 per student)
  • Old Bridge is 25% FRL-eligible. It gets $7,231 per student.  (it is overaided by $737 per student)
  • South Brunswick is 12% FRL-eligible. It gets $4,498 per student.  26% of the budget.  
  • Brick is 31% FRL-eligible. It gets $6,118 per student.  34% of the budget.  (it is overaided by $2,703 per student)
  • Bridgewater-Raritan is 10% FRL-eligible. It gets $3,333 per student.  17% of the budget.  
  • Jackson Township $7,976 per student.  44% of the budget.

(amounts include Extraordinary Aid and pensions, Social Security etc)

To go with NJ districts who are around the state's FRL-eligibility average just further exposes New Jersey as the state that has neglected its middle-class.
  • Rahway is 42% FRL-eligible, it gets $7,961. State funding is 39.9% of its budget.
  • West Orange is 43% FRL-eligible, it gets $3,936. State funding is 16.3% of its budget.
  • Gloucester Township is 40% FRL-eligible, it gets $4,161. State funding is 17.7% of its budget. 
  • The Morris School District is is 34% FRL-eligible it $3,458. State funding is 17.1% of its budget. 
  • Piscataway is 32% FRL-eligible it gets $4,322 . State funding is 25.1% of its budget. 

Maryland's state aid distribution is progressive and does give more money to its poorer districts, but the extra aid isn't as high as in New Jersey.  The difference in state aid for Baltimore City and its peers in New Jersey is greater than the difference between middle-class districts.

  • Baltimore City is 86.5% FR-eligible and is its own independent county.  If it were in New Jersey it would definitely be an Abbott. It gets $12,091 per pupil.
Maryland's state aid distribution is progressive and gives more money to Baltimore City than to any other district, with Baltimore City getting $943 million out of $6.31 billion, but Baltimore City doesn't receive the kind of disproportionate state aid that New Jersey's Abbott districts do.

Baltimore City has 12.6% of Maryland's students, but that $943 million is only 14.9% of Maryland's total aid.

With its local revenue factored in, Baltimore City spends $16,942 per student, the second most in Maryland after Worchester, but significantly less than what New Jersey's Abbotts spend. 

Other high-FRL districts in Maryland get less money than they probably would if they were in New Jersey:
  • Prince George's County is 61.2% FRL-eligible.  It gets $9,622. State funding is 59.8% of its budget.
Newark, by contrast, has only 3.5% of NJ's students but gets 9.2% of NJ's K-12 aid, or $745 million out of $8.1 billion. Its school tax levy is only $123 million, or $2,500 per student. It pays for 13.6% of its schools.

(if indirect aid were factored in, Newark's proportion of total state aid received would be lower.)

Paterson has 2% of NJ's students and yet gets 5% of NJ's state aid.  Its school tax levy is only $45 million, or $1600 per student.  It pays for 9% of its schools.
 (see pg 44)
Baltimore City is its own county.   It is the closest equivalent Maryland would have to a Newark or Paterson, but Maryland's state aid distribution is not nearly as favorable to Baltimore as New Jersey is to its poor cities due to the lack of an equivalent to Abbott.

By contrast, Montgomery County only spends $16,344 per student. Howard County only spends $16,313.


Perhaps the biggest difference between Maryland and New Jersey is that Maryland has 24 large, economically diverse districts and this fact has something to do with why Maryland's taxes are lower.

But Maryland's lower costs and taxes have little to do with less central office administration.  New Jersey's "General Administration" spending is $371 per student - Maryland's is $135 per student, but New Jersey's costs are higher across the board.

Wednesday, December 20, 2017

Mila Jasey on State Aid & the Budget

For the past several months rumors have circulated that Mila Jasey is under serious consideration 
to be Phil Murphy's Commissioner of Education.

Whether or not Jasey is named as Commissioner of Education, she has been one of the most active legislators on education since she joined the Assembly in 2007.  She also might become the chair of the Assembly Education Committee.

This post looks at her record on state aid and the budget.


In her pre-politics life, Jasey was a public health nurse and homemaker in South Orange.  Her husband was a counsel for the Prudential before becoming an Essex County judge.  Her daughter, Rhena Jasey, went to Harvard and became a teacher in South Orange-Maplewood.  Rhena Jasey was a subject of the documentary "American Teacher."

Jasey was a member of the South Orange-Maplewood Board of Education from 1999-2007, including service as president.

During her service the South Orange-Maplewood Board of Education enforced a ban on all Christmas music (including secular Christmas songs like Rudolph the Red-Nosed Reindeer).  The rule was trivial in its educational impact, but the controversy around it consumed large amounts of Board attention, including litigation that nearly went to the US Supreme Court.  The district's ban on Christmas music became part of a conservative litany that there existed a "War on Christmas."

Jasey has represented District 27 in the Assembly since November 2007, when she replaced Mims Hackett.  Jasey has served as chair of the Committee on Higher Education since 2015.

Jasey's path from the BOE to the Assembly was helped by the Essex County Democratic organization and Senator Dick Codey.

In terms of contributions to her campaigns, the NJEA was Jasey's second largest contributor in the most recently election, giving $11,500.  PreK-Our-Way funder and port tycoon Brian Maher was her largest individual donor, giving $3500.

Voting Against SFRA

Jasey joined the Assembly in November 2007.  Despite her background as a BOE member in a school district whose state aid had been flat since the early 1990s, Jasey voted AGAINST the School Funding Reform Act of 2008.

Although District 27 is now entirely suburban, back in in 2008 it included Orange and parts of Newark, so Jasey's opposition may have been motivated by a desire to protect the Abbotts.  Nonetheless, after SFRA was passed and approved by the Supreme Court, Jasey has been committed to it.

During the Corzine years and Christie years Jasey consistently supported a Millionaires' Tax, which would help with school funding, but she also opposed Chapter 78, which saved the state billions that could then go into operating aid.

Jasey did vote for the 2% tax cap in 2010.  She also voted for the Transportation Trust Fund compromise in 2016.

Jasey has also voted for various anti-outsourcing bills that would prohibit localities from subcontracting workers and create tenure-like protections for non-teachers.  These bills have been opposed by the NJSBA because they would increase costs to districts.

For Unlimited Interdistrict Choice

As a legislator, one of Jasey's signature accomplishments was the 2010 law that expanded New Jersey's Interdistrict Choice program from pilot program that capped participation at one district per county to a full-fledged state policy with unlimited district and student participation.

Under this law, the state's costs increased exponentially, going from $9.8 million a year in 2010-11 to $20 million in 2011-12 to $33 million in 2012-13 to $49 million in 2013-14.

Although by 2013-14 regular state aid was frozen and every district in District 27 was underaided, Mila Jasey attacked the Christie administration's cap on Interdistrict Choice, calling the cap "ill-advised and short-sighted."

The decision of the DOE to cap the program by imposing a 5 percent growth limit is very troublesome to me, and I am disappointed by the decision,” said state Assemblywoman Mila Jasey (D-Essex). 
“It circumvents the intent of the Legislature to expand the program,” she said. “Even more troubling, it thwarts the ability of interested families to follow through on their decision as to how to best meet their children's needs in a public school setting.”
Although she accepted the necessity of capping Interdistrict Choice's growth, over the next few years, Jasey did very little publicly to advance state aid fairness, despite South Orange-Maplewood's and West Orange's own appeals for greater fairness in the distribution.

After Steve Sweeney began a high-profile fight in 2016 to increase school aid, redistribute Adjustment Aid, Mila Jasey stood aloof.

In 2016 Jasey, to the applause of PreK Our Way, authored legislation, with Vincent Prieto, that would dedicate an additional $110 million a year to PreK.  The funding source would be the "Property Tax Relief Fund," ie, the same income tax money that funds K-12 education.

When Jasey was asked where the $110 million would come from she answered "budgets reflect priorities and I believe that we have to take the education of our children, beginning with the youngest ones, a priority."  She did not actually say what else would be cut to make room for the additional $110 million per year.

In March 2016 Jasey, along with district-mate John McKeon, did sponsor a bill to increase K-12 state aid by $122 million to districts whose school tax rates exceeded 135% of the state average, a policy that would benefit her home district of South Orange-Maplewell as well as West Orange, but not many severely underaided districts whose tax rates happen to not be that high.

Although Sweeney's more comprehensive plan would have brought immediate and long-term relief, Jasey and McKeon contrasted their plan with Sweeney's by saying "unlike Senate President Sweeney's proposal, our plan could be put together within a year, not five.

Jasey also did not explain where the additional $122 million per year would come from.

Jasey has said that she favors some reduction of Adjustment Aid in some informal settings and in 2016 she implied that districts with increasing property wealth should see reductions:
Based on sometimes vague parameters - some of which were not meant to be factored into the equation - the use of adjustment aid has also failed to take into account the rise in property values within certain districts.  [ibid]
Anyway, The Jasey-McKeon K-12 state aid plan attracted no co-sponsors.

Very Nuanced, Inconsistent on Charters

Jasey has also been highly nuanced stance on charter schools.  A critic could say she has been inconsistent, but a supporter might say she has evolved.

Jasey was the primary sponsor in 2010-2011 of the law that allows private schools in "failing school districts" [sic] to convert to charter schools.  (Its title was A-2806)

Under this law, the state would pay charter tuition the first year after a conversion, with sending-districts paying thereafter.

Jasey was also the author of the charter school "authorizer bill" which would have been helpful to charters by improving oversight. Yet, Jasey also supported requiring local votes to allow a charter to open.

At this time in 2011 Jasey said of charters:
Charter schools have an important role to play in the education of our state's children, but more clarification and accountability are necessary," said Assemblywoman Mila Jasey, (D-Essex), who also expressed concern about the Education Department's ability to provide proper oversight. "It is absolutely imperative that the application process be rigorous and that we review what charters are accomplishing in comparison to traditional public schools."  (source below) 

Her daughter Rhena actually left South Orange-Maplewood to teach at a high-profile charter school in the Bronx called The Equity Project.

Perhaps it was a personal ideological change, perhaps it was a response to Christie's aggressive charter school expansion policy, or perhaps it was heeding the NJEA, but, only four years later, in 2015, Jasey had become adversarial towards charters and sponsored a moratorium on charter school creation and expansion.

Jasey's demand for a charter school moratorium brought 100 protesters to her office in the normally placid suburb of Maplewood.  It also earned an angry rebuke from the Newark City Council, which voted 7-2 against a charter school moratorium, although the Newark School Advisory Board supported the moratorium.

In any case, that moratorium bill did not make it out of the Assembly Education committee.

For Prieto Until Late in the Game

Mila Jasey was a supporter of Vincent Prieto during the early stages of the Prieto-Coughlin leadership battle, but in August 2017 she switched to Coughlin along with the rest of the Essex Assembly Democratic delegation.


The above is only a state aid-focused history of Mila Jasey's positions on education, but it is also worth noting that she is strongly opposed to the PARCC exam. She also authored legislation to ban any standardized testing for students in grades K-2.

Source of Jasey quote

"N.J. charter school applications keep pouring in - State looks at 42 proposals in latest round"