Thursday, March 3, 2016

Help for the Needless: New Jersey's Richest Districts and Their State Aid


This post is the first in a series where I examine tax and Local Fair Share data for 2016-17.  This post will identify New Jersey's richest school districts, based on total Local Fair Share and Local Fair Share per student and demonstrate that most of these districts receive considerable state aid that they have no economic need for.  The conclusion is that these ultra-high resource districts' aid should be redistributed to truly disadvantaged districts.

Local Fair Share is the state's way of evaluating what taxes a district should be capable of paying in order to support its schools.  Local Fair Share is half of the calculation of Equalization Aid, the state's major stream of aid.

The formula for Local Fair Share depends on Equalized Valuation and on Aggregate Income.

The exact formula for 2016-17 is:

(Equalized Valuation x 0.013156218 + Aggregate Income x 0.046185507)/2

Equalized Valuation is the market value of all the taxable real property in a town.  Aggregate Income is the total income of the residents, although there is a three year lag in what year aggregate income is from.  For FY2017 the state is using Aggregate Income from 2013.

Local Fair Share is not confidential, but it is not published either.  I got these data by making an OPRA request of the DOE.

The definition of "richest" I am using in this post is "tax base per student."  I don't mean that these districts have New Jersey's highest average incomes, nor lowest FRL-eligible rates, nor highest school spending.  By using the word "richest," I'm intentionally being provocative, but it's high time that some high-FRL districts like Hoboken accept that they are in fact rich on a per student basis.

New Jersey's richest school districts are only sometimes wealthy in a conventional sense.  New Jersey's highest-resource districts tend to be demographically unusual places like Hoboken and Jersey Shore microdistricts that have very high property valuations and very few children.  The few conventionally affluent districts among the richest are Alpine, Harding, and Bedminster.

As usual, I will look at state aid for these districts and show that state aid for these districts is unneeded and must be redistributed in the era of the pension crisis.

Without further ado, here goes:

These 38 districts are all the districts with more than $35,000 in Local Fair Share per student.



Avalon Boro, with $1.3 million in Local Fair Share per student, is the highest resource in New Jersey.  It only taxes itself at 6% of Local Fair Share, but still yields over $70,000 per student.

If you examine the chart, you'll see that these are mostly tiny districts.  Of these districts, only Franklin Lakes (1,083 students), Ocean City (1,447), and Hoboken (2,596) have more than 1,000 students.  According to the figures I got from the Department of Education for estimated 2016 population, these 38 districts in total only have 12,258 students.



Helping the Needless

Unevenness of economic resources is to be expected, but what is outrageous about the situation in New Jersey is that these ultra-high resource districts get considerable state aid. The 38 richest districts get $28,555,176 in K-12 state aid, plus another $11.3 million for Pre-K in Hoboken.

23 of NJ's 38 districts with more than $35,000 per student in Local Fair Share get over $1,000 per student.

Seven of NJ's districts with more than $35,000 in Local Fair Share per student get over $3,646 per student state aid median.



I've said numerous times on this blog that New Jersey must redistribute aid.  I believe that the fairest method to redistribute aid is to take aid from overaided districts, and I make no exceptions for overaided districts with high FRL-eligibility, such as Jersey City, Pemberton, and Asbury Park.

However, another source of aid to responsibly redistribute is to take all aid away from New Jersey's wealthiest districts.  The amount of aid NJ's highest-resource districts get is in the tens of millions of dollars.  When for 2016-17 the state can only find $19 million for Equalization Aid we have to look at the money the least-needy districts are getting and put it where the need is the most acute and it will do the most good.

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See Also:


Helping the Needless: New Jersey's Richest Districts and Their State Aid

The Robbers and the Robbed: State Aid Disparities for 2016-17

Choice Districts, Charterized Districts Are Big Winners for 2016-17 State Aid

More on 2016-17 State Aid: Where the Money's Going



















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