Thursday, December 29, 2022

New Jersey Births and Enrollment Trends

Considering how major a change it is, I'm surprised I don't see more journalistic coverage of New Jersey's shrinking population of young people and looming decline in school enrollment.

From a peak of 123,125 births in 1990, New Jersey's births have fallen by 17.7% by 2021

YearGeneral Fertility Rate per 1,000# of Women Aged 15-44 in the Pop.Births
199067.21,831,359123,125
199166.41,831,264121,545
199266.31,817,468120,570
1993651,813,222117,940
199465.11,810,478117,812
199563.51,811,528115,098
1996631,814,247114,335
199762.31,819,084113,332
199862.51,820,881113,850
199962.61,817,611113,810
200063.71,814,676115,542
200163.81,813,484115,769
200263.31,810,150114,642
200364.71,804,537116,823
200463.71,795,884114,443
200563.61,786,210113,652
200664.61,774,669114,665
200765.81,762,512115,920
200864.21,752,652112,428
200962.81,743,799109,543
201061.41,736,441106,571
2011611,727,886105,474
201260.41,717,924103,778
201359.91,709,340102,326
201460.51,699,690102,813
201560.51,690,423102,200
2016611,680,546102,473
201760.21,679,419101,159
201860.41,676,422101,172
201959.31,675,68099,305
202055.71,745,104*97,146
202157.91,749,003*101,321
Possibly a recalculation based on the 2020 Census


For most of New Jersey's history into the 1990s (with a few exceptions, like the fade-out of the Baby Boom), there was a gradual increase in births, which produced a picture of public school enrollment that looked like this:


which evolved to looking like this during the mid-2010s plateau of enrollment:


which became the following in 2021-22:


Given how 2021-22 kindergarteners were mostly born in 2015, when 102,200 babies were born, and NJ's birthcount fell as low as 97,146 in 2020, there should be at least another four years ahead of us of shrinking kindergarteners before stabilization when 2021's babies reach kindergarten in 2026, and even the kindergarten of 2026 will be very small by historical standards.

After 2026 is beyond my crystal ball.  Future birthcounts are unknowable, I believe they will stay low because of a general of pessimism in the country, fears of global warming, inflation putting further strain on family budgets, secularization, and a growing cultural orientation that children are just another lifestyle option.  

I don't have firm proof of this, but I believe enrollment will also fall because of an increase in the percentage of kids coming from religious households who will not use the public schools.  Lakewood stands out in this respect.  In 2021 there were 4,908 babies born to white, non-Hispanic women in Lakewood, presumably almost all of whom are Orthodox Jewish.  

On the other hand, Catholic school enrollment in New Jersey has not been good, despite the Covid uptick, so it is possible thousands more students will enter the public school system as the Catholic school sector shrinks.

Having a smaller enrollment isn't directly a problem for school budgets.  If anything, per pupil spending can increase, districts can pay teachers better and provide more extras for their students.  I predict many districts will adapt to shrinking K-12 enrollment by creating PreK programs and bringing those PreKs into district buildings.

Enrollment loss did play a role in districts losing Adjustment Aid, but that was an unusual circumstance that was necessary due to the severe underaiding of three-fifths of NJ's districts, different calculations for state aid in SFRA versus the previous CEIFA-Abbott system.  Now that New Jersey has almost completed the wrenching process of Adjustment Aid phase-out, most districts should gain state aid after the 2023-24 school year, except the ones with the most rapid enrollment losses.

The fact that New Jersey's enrollment is shrinking is essential context to arguments Mark Weber (aka Jersey Jazzman) makes that New Jersey's education spending is best measured by Fiscal Effort (which they use because it obscures how NJ’s spending has increased in power student terms).  Fiscal Effort per Student might be relevant, but not raw Fiscal Effort alone.


In any case, NJ is going to have fewer students in the foreseeable future.  We are not going to resemble South Korea or Italy any time soon, or Children of Men, but smaller enrollments are something the state should plan for and maybe take advantage of.


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Thursday, December 8, 2022

Equalized Valuation Changes for FY2023

New Jersey's 2023 Equalized Valuations are out again.  Changes in Equalized Valuation allow us to track changes in real estate growth and is a rough proxy for economic and population growth.

Since Equalized Valuation is half of the calculation of Local Fair Share, knowing districts' Equalized Valuations allows us to make predictions about state aid for 2023-24.

The following is a rough draft of some changes in Equalized Valuation.  My time budget does not allow for a more detailed post.

The big statewide news for Equalized Valuation is that NJ as a whole was up by +11.53%, the largest single-year increase I've seen.  Inflation has been 8%, so we have to take that into consideration and the fact that high-prices are not good for anyone entering the market, but it was a good year for NJ real estate developers and incumbent property owners.

It was actually a good year for most of New Jersey's urban core, with Jersey City, Newark, Atlantic City, Elizabeth, Trenton, and Paterson up by double digits. 

City20222023Change
Atlantic City$2,752,388,675$3,186,835,40315.78%
Jersey City$45,362,027,053$53,311,025,17617.52%
Newark$14,465,468,748$16,441,726,27213.66%
Elizabeth$10,418,709,083$12,159,173,60316.71%
Paterson$8,998,986,504$10,232,169,04513.70%
Trenton$2,582,977,552$2,959,228,96014.57%
Camden$1,924,025,009$2,079,195,1008.06%
Hoboken$16,829,227,462$18,032,618,1477.15%
Statewide$1,430,600,617,782$1,595,543,344,68611.53%




 In recent years I've taken the time to point out that real estate growth in Newark was very slow and we should have nuanced reactions to stories about Newark undergoing gentrication, but 2021 to 2022 was a good year for NJ's largest city.

State Aid (with special attention to Jersey City)

The formula for Equalization Aid, the most important stream of state aid (it's 79% of all K-12 opex aid in 2022-23) is:

Equalization Aid = Adequacy Budget - Local Fair Share

The sub-formula for Local Fair Share 

(0.013089410*$7,948,998,123 x Equalized Valuation + 0.045610629 x Aggregate Income)/2

Which basically means that for every $1 million in Equalized Valuation a district gains, its Local Fair Share increases by $6,544.  If the Adequacy Budget is the same, its Equalization Aid would then decrease by $6,544.  For every $1 billion a district gains, its Local Fair Share increases by $6.5 million, with an equal decrease in its Equalization Aid.  

This is highly relevant for Jersey City because in 2022-23 Jersey City still receives $81.8 million in Equalization Aid (the Local Fair Share is $532,016,412 and the Adequacy Budget is $613,836,784).

Since Jersey City just gained $7,948,998,123 in Equalized Valuation, that increase alone will increase Jersey City's Local Fair Share by $52 million (0.013089410*$7,948,998,123 = $52 million).

Since there will be an increase in Jersey City's Aggregate Income and only a modest increase in the Adequacy Budget, it is probably that Jersey City's Equalization Aid will be $0 in 2023-24.

Counties



Ocean County's increase in EV was powered by Lakewood, which grew from $12,787,320,049 to $15,137,720,062 (+18%).


CountyFY2022FY2023Percent Change
Morris$100,371,465,846$106,672,870,3606.30%
Somerset$68,148,823,973$72,919,855,7607.00%
Middlesex$124,870,965,026$134,579,509,0607.80%
Mercer$48,441,263,992$52,492,331,8588.40%
Salem$5,291,911,739$5,753,106,4058.70%
Hunterdon$23,010,081,617$25,068,294,8448.90%
Bergen$193,321,100,266$211,489,673,8649.40%
Burlington$51,994,270,597$57,177,605,97910.00%
Essex$97,778,899,401$107,860,131,30810.30%
Sussex$18,952,106,460$21,042,879,04111.00%
Warren$11,983,166,544$13,331,611,14711.30%
Camden$42,668,255,444$47,515,984,65511.40%
Passaic$56,681,541,166$63,255,164,74711.60%
Union$82,180,500,394$92,786,150,81312.90%
Cumberland$9,238,093,282$10,483,440,08413.50%
Monmouth$145,489,775,105$165,157,472,61913.50%
Atlantic$34,633,360,265$39,388,308,32513.70%
Hudson$103,861,425,091$118,041,243,08213.70%
Gloucester$29,828,353,487$33,981,473,09613.90%
Ocean$119,022,397,054$140,368,062,14117.90%
Cape May$62,832,861,033$76,178,175,49821.20%
Statewide$1,430,600,617,782$1,595,543,344,68611.53%