Interdistrict Choice is a program where state taxpayers pay tuition for students to attend public schools outside of the district they reside in. The average tuition payment is $11,000 per Choice student, but the Interdistrict Choice formula is designed so that there is a great deal of variation in payment per Choice student.
The amount of money a Choice district gets is usually equal to its Local Fair Share Per student. A low-resource Choice district like Phillipsburg might get only $3200 per student; a high-resource Choice district like Hoboken would get $16,000 per student. If a Choice district's Local Fair Share per student is higher than its Adequacy Budget, as Hoboken's is, the amount is capped at Adequacy Budget per student, hence Hoboken getting $16,000 per student instead of the $70,000 per student which is its Local Fair Share.
Since low-wealth Choice districts have Lower Local Fair shares, they are supposed to get regular formula aid for Choice students, ie Equalization Aid, Sped Aid etc. However, in the era of frozen state aid they are not receiving their formula aid equivalents.
A Choice district can use its Choice money for anything it wants. Some districts, like Englewood, have created innovative and unique programming. Other districts have used the money to offset tax increases, like Brooklawn, which has not raised taxes since 2001.
I've addressed some of the significant defects of Interdistrict Choice before, such as its academic skimming and how the Choice payment per student is much greater than the marginal costs of taking new students in.
Rather than go over that ground again, this blog post will examine the regional, population size, and district wealth skews of Interdistrict Choice.
Interdistrict Choice districts tend to be that have seen falling residential student enrollment in the last few years. Choice districts are thus often rural and at the Jersey Shore.
As Interdistrict Choice begins to disrupt student enrollment in sending districts, these districts develop their own spare capacity, and are thus incentivized to participate in Interdistrict Choice as well.
The swapping of students can generate significant sums of new state aid for districts that have no net increase in student enrollment. For instance, Cape May districts have gained $7 million in state aid since 2011 but their total student population has fallen by 350.
Most of NJ's suburban counties, Bergen, Essex, Middlesex, Somerset, and Union have no or few participating districts. The districts in these counties would like to participate and trigger additional state aid, but their own residential enrollments tend to be too high to allow it.
As Superintendent Frank Alvarez of Montclair said:
Schools Superintendent Frank Alvarez said the recently enacted Interdistrict Public School Choice Program might make sense for other districts with lots of unused classroom capacity, but it may not be beneficial option for Montclair.
"I don't think we would opt to participate in the program," Alvarez told The Times Monday night following the Board of Education's public meeting.
Camden is a suburban county and appears to be an exception to this rule, but Camden has a large number of districts (38) relative to its population and a rural section as well. These small districts are the Camden districts that usually participate.
"The issue for us is limited school space, even with the new Bullock School," Alvarez explained. ""We don't have excess capacity, and the capacity we do have can be utilized better by bringing our district's special needs students back to Montclair."
This rural/Shore bias is only a skew, I acknowledge that there are many exceptions.
District Size Skews:
There are 128 Choice districts that get $52 million in Choice money, but these districts only educate 155,000 students.
The average Choice district only has 1,200 students (that counts non-residential Choice students)
There are 416 districts that do not/cannot participate in Interdistrict Choice. (not counting vo-techs and non-operating districts) The non-participating districts educate 1.2 million students.
The average non-participating district has 2,800 students.
|District Name||Student Pop.||Choice Aid||Choice Aid Per Student|
|SEASIDE HEIGHTS BORO||226||$139,930||$619|
|WOODBURY HEIGHTS BORO||208||$0||$0|
|LAUREL SPRINGS BORO||207||$165,792||$801|
|LOWER ALLOWAYS CREEK||200||$0||$0|
|SADDLE RIVER BORO||193||$0||$0|
|NEW HANOVER TWP||191||$0||$0|
|ESTELL MANOR CITY||180||$247,240||$1,374|
|SEA GIRT BORO||178||$0||$0|
|CAPE MAY CITY||163||$152,251||$934|
|OCEAN GATE BORO||144||$0||$0|
|ISLAND HEIGHTS BORO||135||$178,010||$1,319|
|BASS RIVER TWP||135||$0||$0|
|BAY HEAD BORO||135||$0||$0|
|PORT REPUBLIC CITY||128||$159,168||$1,244|
|STOW CREEK TWP||114||$0||$0|
|SEA ISLE CITY||88||$0||$0|
|WEST CAPE MAY BORO||85||$428,064||$5,036|
|STONE HARBOR BORO||82||$0||$0|
|BEACH HAVEN BORO||80||$164,983||$2,062|
In an era when NJ is supposed to favor district consolidation Interdistrict Choice is an obstacle to consolidation since districts get money whenever a student crosses a district line. If small districts were to merge with their neighbors they could no longer qualify for Choice money from students who live outside of their town.
If NJ is serious about promoting district consolidation, something regarding Interdistrict Choice must be changed.
District Wealth Skews:
The 128 Choice districts receive a grand total of $52 million, but half of that money goes to only fifteen districts!!!
|District Name||Choice Aid||Local Fair Share||Local Fair Share Per Student (Counting Choice students in the denominator)|
|MORRIS HILLS REGIONAL||$1,765,632||$41,800,451||$16,227|
|S HUNTERDON REGIONAL||$1,310,050||$19,042,272||$19,815|
|UPPER FREEHOLD REGIONAL||$1,151,850||$22,047,107||$9,470|
|MINE HILL TWP||$1,056,060||$6,151,467||$14,895|
Ten of the "Big Fifteen" Choice districts are above average or significantly above average in district wealth per student. Of these ten, three are ultra-high resource: Hoboken, Ocean City, and Deal. These three districts, all of whom are richer on a per pupil basis than Millburn and Princeton, pull in a combined $7.1 million, over 13% of the total. Other Choice districts in the Big Fifteen, such as Englewood, Morris Hills, South Hunterdon, and Central Regional are also significantly above average.
The situation in Deal is ridiculous. Deal, which has $2 billion in valuation for fewer than 200 students, gets almost $12,000 in state aid per student for 2015-16, of which over $10,000 per student is from Interdistrict Choice. Interdistrict Choice thus makes Deal better aided than Freehold Boro, Red Bank Boro, and most of the Monmouth County Abbotts. Due to Choice Aid, Deal's school tax rate is only 0.0920, meaning someone with a $1 million property only pays $920 a year in school taxes.
The Choice districts that get the most Choice money per student also tend to be higher resource than average, although there is a great deal of variation. Overall, Choice districts are only slightly higher resource than the average New Jersey district.
|District Name||Choice Aid Per Student||Local Fair Share Per Student|
|WEST CAPE MAY BORO||$5,036||$30,067|
|MINE HILL TWP||$2,557||$14,895|
|BEACH HAVEN BORO||$2,062||$101,311|
|LONG BEACH ISLAND||$2,029||$178,478|
|WASHINGTON TWP (Burlington)||$1,711||$44,191|
|ESTELL MANOR CITY||$1,374||$13,533|
|S HUNTERDON REGIONAL||$1,363||$19,815|
|ISLAND HEIGHTS BORO||$1,319||$20,738|
|PORT REPUBLIC CITY||$1,244||$15,201|
There are numerous problems with Interdistrict Choice not examined in this blog post. The biggest problem is that Interdistrict Choice is a blank check to underenrolled districts. The amount of money Choice districts get per student is out of proportion to the marginal costs of their taking new students in, meaning that Interdistrict Choice is just a gold mine for participating districts. Choice districts are paid on the raw number of Choice students they accept and not the net change in their student bodies due to Interdistrict Choice, meaning that a Choice district's aid can increase while its population even decreases, as West Cape May demonstrates.
There is also the problem that the Christie Administration and legislature are giving Choice districts the same amount of state aid even as their Choice student populations decline, with the lost Choice Aid being rechannelled through "Additional Adjustment Aid." This is money for non-existent students and is one of the most unfair aspects of NJ's aid distribution.
Anecdotally Interdistrict Choice students are good students and better off economically than most of the other students in their residential districts. Unfortunately no comprehensive study of the demographics and academic profiles of Choice students has been done.
Interdistrict Choice has the potential to allow students to find a learning environment that better suits their needs, but the program's costs need to be scaled back and capped in the era of the Pension Crisis. Using Local Fair Share to calculate Choice Aid is a significant mistake because it makes Interdistrict Choice internally unfair to low-wealth Choice districts and results in fruther overaiding of high-wealth districts.
There are reforms to Interdistrict Choice I would like to see, but Interdistrict Choice also may be a program whose inherent flaws are too fatal. In the era of the Pension Crisis, when NJ cannot increase funding for districts with growing residential enrollment, how can we divert desperately needed money to Choice districts that may not be undergoing a net increase in student population at all?