Steve Fulop: Flippant and Thankless Again

What is it about Steve Fulop that prevents him from treating state aid as a serious issue?

I don't like running negative posts about Steve Fulop, but time and time again, whenever Fulop has been questioned about the fairness of Jersey City's state aid he has either ignored the question or insulted the person asking the question.

Ciattarelli Asks, Fulop Insults (Again)

Lately, Steve Fulop has been bragging about how Jersey City has been able to go three years without increasing taxes while still dramatically increasing spending.  Since this is the exact opposite of what happens in most other New Jersey towns, Fulop's been boasting about it and implying that he could perform the same increase spending/cut taxes magic for the rest of New Jersey if he became governor.

‘Without increasing taxes, we have been able to hire 150 additional police officers, increase the city’s open space by 10%, implement the state’s first paid sick leave policy, increase minimum wage for all city employees, and construct housing for homeless veterans. We have also been able to lead the state in the number of construction starts, and have created more jobs than any other large city in New Jersey.’

This isn't Fulop's only recent in-your-face bragging about Jersey City becoming an "economic powerhouse."

After S&P increased Jersey City's credit rating Fulop sent out a similar press release where he boasted of Jersey City's economy and took all the credit for it:

Driven by strong local leadership, Jersey City has become an economic powerhouse. S&P’s report notes per-capita effective buying power of more than 120% of the national level and a total property value for the city that’s risen nearly 10% over the past year alone. With 450 new small businesses opening, more than 6,000 jobs created, and median household income and property values on the rise, Jersey City’s middle class is stronger than ever – and growing....

This boasting was too much for Assemblyman Jack Ciattarelli, who used Fulop's boasting about Jersey City's economic strength as an opportunity to question the fairness of Jersey City's state education aid and say, yet again, that Jersey City epitomized the need to redistribute state aid.

“What the mayor never boasts, despite Jersey City’s economic fortunes, is weaning his school district off a state subsidy paid for by the taxpayers of New Jersey. 

“Of Jersey City’s annual $665 million school budget, $420 $490 million million or 63 74 percent is paid for by citizens around the state – citizens who pay exorbitantly high property taxes because they’re subsidizing Jersey City’s school system. After all subsidies, Jersey City pays less than 20 cents on the dollar for its schools. 

“The mayor’s boasts, which only add insult to injury to taxpayers across the state, call attention to just how terribly flawed and blatantly unfair the current distribution of state school aid is. And it is exactly the reason we desperately need school funding reforms that are fair to taxpayers across the state.” [edits are mine]

This is part of a long-running line of criticism against Fulop from Ciattarelli:

“It’s easy for local policy makers to achieve tax reductions when the state subsidizes their services,” said the Assemblyman. “The fact is, fiscally speaking, we’re experiencing a very painful squeeze or crowding out effect with our state budget. Overly generous property tax abatements are one of the reasons why. These abatement are not only an exploitation of our state school funding formula, they are an injustice to property owners in places like Jersey City. In trying to solve the state’s problems, we need policy makers at all levels of government to take these issues seriously. In that respect, the statement issued by the Fulop camp is an embarrassment and a disservice – a disservice to the taxpayers of this state who fund Fulop’s school system.”

Indeed.

While the median district in New Jersey gets $550 less per student than SFRA says it needs, Jersey City gets $4,272 per student more per student from the state than SFRA says it needs.  Because of massive state aid, Jersey City only pays for 19% of the cost of its K-12 public schools.

That $4,272 per student is $130 million total in excess money that allows Jersey City to have a minimal school tax rate of 0.5, meaning someone with a $1 million property (if the assessment were accurate) would only pay $5,000 a year in school taxes.  The low school taxes enable Jersey Cityans to have spending power than people in most of the rest of the state don't have.

And because Jersey City's school taxes are so low, the municipal government can cannibalize its school system's tax base through PILOTing since property in Jersey City pays so little in school taxes anyway.  

And because Jersey City is an Abbott district, all parents there, no matter how high their income is, get two-years of "free" state-funded Pre-K for their children.  This $70 million a year subsidy injects spending power into Jersey City's economy that most other NJ towns don't get.

Ciattarelli has also criticized Fulop and Jersey City for granting tax abatements profusely. The granting of PILOTs also makes Jersey City's tax base appear smaller than it actually is and thereby sustains the elevated school aid level:

“This [Jersey City municipal report] reveals the tip of an iceberg that is vast and mostly underwater.  Short-term property tax abatements, under very special circumstances, may have their place. What’s happening in Jersey City and elsewhere is crony capitalism at its worst and an injustice to all New Jersey taxpayers. 

“Jersey City can afford to siphon property tax revenues from their schools because the state provides such large subsidies.  In Jersey City, the state contributes 60 74 percent of its [K-12] school funding. This subsidy is so overly generous that local taxpayers pay only 15 19 cents on the dollar for their [K-12] schools.”  [my edits]

It is new PILOTed buildings being built and putting more money into the municipal government that is the major reason Steve Fulop can increase spending and keep taxes flat.  Brigid D'Souza of Civic Parent has demonstrated this repeatedly.

After these latest criticisms of Jersey City's state aid Steve Fulop has been flippant and attacked Jack Ciattarelli.

First, Fulop rubbed Jersey City's flat taxes and economic growth in the rest of the state's face

“Jersey City had a tax reduction last year and just today we will adopt a budget without a tax increase.  Jersey City has led the state in job creation just as we had a credit upgrade last year.

Then Fulop insulted Jack Ciattarelli:

Nevertheless, we are excited that after 25 years in elected office, Ciattarelli finally decided to speak up on an issue. We look forward to hearing about his next policy stance in the year 2040 as directed by a new generation of Republican officials.

And after the latest criticism, City spokeswoman Jennifer Morrill said Ciattrelli should "do his homework and look in the mirror."

Fulop then blamed Jack Ciattarelli for something that happened decades before Ciattarelli entered the legislature and has nothing to do with state aid anyway.

"Jersey City schools have been under state control for the last 30 years of which he has been part of the Trenton establishment"

The Fulop counterattack is preposterous. It is Steve Fulop and Jersey City who "haven't done their homework."

First, Jack Ciattarelli has been in the Assembly since 2011, so that's 5.5 years, not 30.

Second, state aid and state control of the Jersey City Public Schools have zero to do with each other. Jersey City gets a lot of state aid because it was poor in the 1980s and the NJ Supreme Court forced the state to fund the Jersey City Public Schools ABOVE the level of DFG I and J districts. Jersey City was put under state control because of systematic corruption and patronage in the administration of the schools.

Bridgeton gets a huge amount of state aid, but Bridgeton isn't under state control because it hasn't had any scandals; Lakewood gets relatively little state aid, but it is under state monitoring because it has had scandals.

Get it??  And now that Jersey City is an "economic powerhouse," there is no justification for it to only carry 19% of its K-12 education system.  As Jersey City Councilman Michael Yun has admitted, Jersey City's state aid "doesn't make sense."  

Corporate Tax Subsidies: Jersey City's Other Megasubsidy

Yet Ciattarelli actually understates his case against Jersey City because he misses the other half of New Jersey's oversubsidization of Jersey City, which are tax subsidies for corporations who relocate to Jersey City or for real estate development there.

Although New Jersey has a large tax subsidy program, most towns in the state is not qualifying locations for (re)location subsidies because the towns are not considered "urban transit hubs," "distressed cities," or the handful of other qualifications for corporate subsidization.

You don't hear about it often, but
Chris Christie
has done a lot maybe too much for
Jersey City.

Under the Grow NJ and Economic Development & Growth tax-incentive programs, Jersey City is considered both a "Distressed City" and an "Urban Transit Hub."

Because Jersey City meets two of the major qualifications for subsidies,  businesses qualify for tax breaks there they couldn't get elsewhere. These state subsidies allow Jersey City to outcompete the rest of New Jersey because of state policy not because Jersey City has a fantastic mayor.  

The Goya relocation illustrates the unfairness of the tax subsidy situation to other towns in New Jersey.

Goya had been headquartered in Secaucus since 1974, but after it got an offer for tax subsidies from New York State, it used the threat of relocation to extract tax subsidies from New Jersey.

Goya's New HQ/warehouse in JC got an
$82 million "Urban Transit Hub"
Tax Credit Even Though it isn't realistically
transit-accessible.

To keep Goya in New Jersey, in 2012 the Economic Development Authority in 2012 approved $81.9 million in tax credits to stay in New Jersey and build a headquarters on the western edge of Jersey City.  The tax credits were through the "Urban Transit Hub" program, even though the Goya site is nowhere near viable public transit and contains at least 7 acres of parking.  (Jersey City also threw in a $8 million tax abatement.)

Although Goya's new headquarters was literally just one mile from its old headquarters, the Jersey City location counted as a transit-hub and the Secaucus location didn't.

I accept that the state has to give out corporate tax subsidies to be competitive, but Steve Fulop needs to give the rest of New Jersey credit for Jersey City's growth.

Here are all subsidy approvals worth over $5 million for corporations and law firms in Jersey City from 2014 and 2015.

Note: the subsidy awards are paid out over a number of years upon certain investment benchmarks being reached; there are often retained jobs to go along with new jobs. I have not listed retained jobs, nor construction jobs.

• JP Morgan Chase, $188 million, 2150 new jobs. 
• Forbes Media, $27 million subsidy, 350 jobs.
• JP Morgan Chase, $225 million, 1000 new jobs.  (this is separate from the subsidy above)
• RBC Capital Markets, $79 million subsidy, 900 new jobs.
• Eltman, Eltman, Cooper, $5.6 million subsidy, 80 jobs.
• First Data Corporation, $5.9 million subsidy, 74 jobs.
• Northern Leasing Systems, $7.1 million subsidy, 92 jobs.
• VF Sportswear, $13 million subsidy, 175 jobs.
• Charles Komar and Sons, $37 million subsidy, 480 new jobs.
• Insurance Services Office, $17 million subsidy, retained jobs only.
• Rajbhog Foods, $6.8 million, 75 new jobs.
• Brown Brothers Harriman, $19 million, 110 new jobs.
• New York Life, $34 million, 300 new jobs.
• Fidelity Global Brokerage, $17 million, 200 new jobs.
• GBT III, $11 million, 130 new jobs.
• SunGard Data Systems, $8 million, 75 new jobs.
• WWI Journal Square, $59 million, 723 new jobs.
• C2 Imaging, $12 million, 110 new jobs.
• FX Direct, $9 million, 121 new jobs.
• W&W Jewelers, $5.4 million, 45 new jobs.
• World Business Lenders, $17 million, 225 new jobs.
• US Fire Insurance Comp., $8 million, 100 new jobs.
• Tokio Marine, $18 million, 215 new jobs.
• Clover Health, LLC, $6.2 million, 62 new jobs.
• Omnicon, $33 million, 415 new jobs.
• RVM Enterprises, Inc, $8 million, 112 new jobs.
• Zurich American insurance Company, $28 million, 314 new jobs. 

Why Can't Steve Fulop Admit State Aid is Unfair?

Steve Fulop likes to present Jersey City as an example of a city that is both very progressive and very high growth.  Fulop uses Jersey City as an argument that there is no tension between growth and progressivity.

Some people believe it:

“Time and again we’ve heard from New Jersey conservatives that government must take the low road of austerity, but Jersey City’s success shows that progressive policies and fiscal responsibility go hand in hand,” said Analilia Mejia, executive director of New Jersey Working Families.

But Jersey City isn't this proof because its progressivism and spending increases haven't required tax increases.  Fulop has been able to have progressivism without paying for it.

Through massive state subsidies, Jersey City can have progressivism without increasing its own taxes because other taxpayers already pay for so much its services.  Jersey City can attract businesses galore because a business in Jersey City would pay lower state taxes and lower property taxes than it would elsewhere in New Jersey.

Hey, Steve Fulop has been dealt a strong hand in Jersey City, but rhetorically, he can't have it both ways: he can't brag about Jersey City becoming an "economic powerhouse" and still support Jersey City's $420 million in K-12 aid.

I don't understand what Steve Fulop is thinking politically.  How fatal could it be for him as mayor of Jersey City to admit that Jersey City gets more state aid than it economically and morally is entitled to?  As gubernatorial candidate, how can Steve Fulop not admit that Jersey City gets more than its fair share?

Fulop owes it to New Jersey to treat the issue with respect.  He owes Jack Ciattarelli an apology too.

At a certain point, the mayors of other towns where development wouldn't be subsidized will feel insulted that Steve Fulop doesn't acknowledge that the design of NJ's corporate subsidy program is tilted in favor of Jersey City and that Jersey City's growth is not simply amazing municipal government.  In the meantime, can't Steve Fulop say "thanks"?

Between Fulop's opposition to a Jersey City reval and flippancy on state aid, I see him as politically tone-deaf.  He's young.  He has years of political viability ahead of him.  But I see him less and less as New Jersey's next governor.

---

See Also,
"The Phantom Budgetary Salvation: Cutting Tax Subsidies."  (about Phil Murphy)

Abbott Ineffectiveness, Elementary School Edition

Hey Education Law Center +
NJ Supreme Court!

A meme about Abbott academic performance I've occasionally seen concedes that by high school that all the effects of Abbott spending have faded out, but in elementary school the Abbotts do well.

An example of this occurs in Deborah Yaffe's 2007 history of the Abbott cases, Other People's Children, where she writes:

The picture is mixed. Look at elementary school scores, and it is difficult not to feel optimistic; look at middle and high school scores, and it is difficult not to feel discouraged.  (324)

I don't know if this statement correct in 2007 or what research it was based on, but the claim that the Abbotts do well on the elementary level isn't correct today.

If you compare the elementary school scores of the over-Adequacy and near-Adequacy Abbott districts with the most severely under-Adequacy non-Abbotts the non-Abbotts do slightly better.

Lest this post be construed as a "money doesn't matter," argument.  Again, let me clarify once again my premises on school spending and Abbott.

1. Money matters in education.
2. NJ's debt and economic stagnation are among the worst in the United States.
3. State Aid is therefore zero-sum.
4. Abbott "Parity Plus" spending and the superhigh Adequacy Budgets embedded in SFRA are beyond the point of Diminishing Returns
5. Sustaining superhigh state aid for the Abbotts thereby deprives equally needy districts of the money they need.  

The point of this post and related posts I've written to demonstrate #4, which is Abbott spending is beyond the point of effectiveness.

According to the Education Law Center itself, the eight highest spending Abbott districts (relative to their Adequacy Budgets) are Asbury Park, Hoboken, Gloucester City, Pemberton, Keansburg, Phillipsburg, who are all above Adequacy, and Burlington City and Pleasantville, who spend over $17,000 per student, but are slightly below Adequacy.  Asbury Park is the most over Adequacy, exceeding its Adequacy Budget by $5,617 per student.

The 18 elementary schools of these Abbott districts have an average FRL-eligibility of 70%.

The eight lowest spending non-Abbott districts (relative to their Adequacy Budgets) are Bayonne, East Newark, Guttenberg, Fairview, Red Bank Boro, Freehold Boro, Bound Brook, and Prospect Park.  East Newark is the most under Adequacy, with a 2014-15 Adequacy Budget gap of -$10,097 per student.  Red Bank Boro has the smallest Adequacy gap in this cluster, but it is still -$6,759 per student.

The 19 elementary schools of these non-Abbott districts have an average FRL-eligibility of 71%.

ETA: I don't have data on school level Free-lunch eligibility, but if you go by district data, the non-Abbotts have much higher Free-lunch eligibility and significantly higher LEP-percentages.

ABBOTTS
District	Total	FL	RL	LEP
Asbury Park	1,993.50	1,790.50	69	185
Keansburg	1,543.00	972	160.5	36
Phillipsburg	3,681.00	1,652.00	299	106
Burlington City	1,735.00	952	111	74
Pemberton	5,035.00	1,791.00	562	56
Gloucester City	2,055.00	1,168.00	240	47
Hoboken	1,970.00	902	66	21
Pleasantville	3,769.00	2,937.00	279	542
TOTAL	21,781.50	12,164.50	1786.5	1067
Weighted Percentages		56%	8%	5%
NON-ABBOTTS
District	Total	FL	RL	LEP
East newark	254	194	29	46
Guttenberg	1,022.00	727	72	56
Fairview	1,269.00	885	93	174
Prospect Park	878	682	61	20
Bayonne	9,555.00	5,325.50	870.5	329
Freehold Boro	1,563.00	1,101.00	98	222
Red Bank Boro	1,159.00	953	80	396
Bound Brook	1,713.50	1,048.00	210	210
TOTAL	17413.5	10915.5	1513.5	1453
Weighted Percentages		63%	9%	8%

Although in terms of student economic disadvantage these districts are very similar, they are worlds apart budgetarily.

The eight Abbotts have an average Total Budgetary Cost Per Pupil of $19,843.

The eight non-Abbotts have an average Total Budgetary Cost Per Pupil of $11,356.

Not even counting Pre-K and construction money, the Abbotts spend $8,500 more per student.

So with clear-cut budgetary superiority there should be at least a palpable academic superiority, right?

NO.

The eighteen high-spending Abbott elementary schools with tested students on average are, at the 18th percentile in statewide performance.

The eighteen low-spending non-Abbott elementary schools with tested students are, on average, at the 35th percentile in statewide performance.   (all averages in this post are unweighted)

When you hone in on 4th grade scores on the old NJASK (which I consider the last valid year for scores due to PARCC-era opt-outs), the disadvantaged non-Abbotts do better.

On English Language Arts,  the 50th percentile for kids in the Abbott districts is 190 (the state average was 202.)  

For non-Abbotts the 50th percentile for kids in the non-Abbotts is 198.  

On math, the 50th percentile is for kids in the Abbott districts is 212.

Grade 4 Science scores are broken out by Advanced Proficient, Proficient, and Below Proficient status, not percentiles, but the result is the same: the severely underfunded non-Abbotts doing better, with 85% of the students in the severely under-budget non-Abbott schools getting Advanced Proficient or Proficient scores compared to only 81% of the students in the Abbotts.

At for Advanced Proficient scores the gap is even wider: the non-Abbott schools averaged 40% Advanced Proficient compared to 25% in the Abbotts.



Even if you look at absenteeism the non-Abbotts do better.   The Abbotts have chronic absenteeism at 14%.  The non-Abbotts have a chronic absenteeism rate of 8%.   

One of the justifications for Abbott superspending and superlative facilities was that you had to have schools so beautiful and light-filled that kids wouldn't want to be absent.  It seems to be yet another incorrect theory.




There are claims out there that Abbott spending is effective. The Education Law Center just came out with a press release, "THE GOVERNOR IS WRONG ON STUDENT ACHIEVEMENT," which

summarizes research that suggests that Abbott was working and cherry-picks Union City to argue that superspending is academically necessary and beneficial.

The ELC's press release begins:

Governor Chris Christie attempts to justify his proposal to take massive amounts of school aid away from NJ districts educating the most disadvantaged students by making claims about student achievement that simply aren’t true.

The Governor says districts with high student need “get a big check from the state every year, [but] they are not making any changes in the way they educate children and they are not showing any increase in success."

The Governor is just plain wrong. The facts show NJ's most disadvantaged students making substantial gains over the last 15 years, and studies have documented the positive connection between increased funding and improved student outcomes.

But the governor is not "just plain wrong" about Abbott ineffectiveness, but he makes a foolish mistake in comparing Abbotts to their charter schools and not poor non-Abbotts.

The Abbotts have a clear cut, immense budgetary advantage. For Abbott Theory to be correct, a clear-cut advantage in spending should drive clear-cut higher academic performance than in districts that don't have Abbott money, but not only is there no clear-cut superiority, there's not even ambiguous superiority. In fact, the Abbotts appear to be doing worse.

And what if my sample isn't statistically valid enough to prove to Abbottists that Abbott superspending isn't effective?  So what.  If the Abbotts have 5% academic superiority for 50% spending advantage, that isn't a strong argument to sustain Abbott.

And finally, what was affordable in the 1990s isn't affordable today.  New Jersey's economy has been stagnant for years and we are one of the country's most indebted states.  

State aid is zero-sum and more money for the Abbotts means less money for every other district including many districts who are just as poor as the Abbotts.

Abbott: Ineffective, Unaffordable, Unfair.

---

See Also

Abbott Spending Has Been Ineffective

The Unsung Excellence of Dover

The Transformation of State Aid Since 1990

This post is about the transformation of the state aid distribution in New Jersey from the 1989-90 school year up to the present and how the Abbott II decision of 1990 has upended the state's relationship with middle-class school districts.

This is a lengthy post, so I will begin with a few bullet points.

1. Prior to the Abbott II decision, NJ already had a progressive aid distribution where poor districts got more aid.
2. Among poor districts, NJ already had a bias in favor of poor urban districts (the future Abbotts) over poor rural and poor suburban districts.
3. NJ's aid increase has doubled the rate of inflation even though student population growth since 1989-90 has only been about one-third.
4. From 1990 to 2002 NJ's pension contributions fell from $750 million to $0.  During that time state aid increased by $3 billion, from $2.5 billion to $5.5 billion. 
5. In per student and inflation-adjusted terms, most New Jersey districts get less aid than they did before Abbott. 
6. The districts who have lost the most state aid per student are not wealthy districts who could easily fund education with local money; the biggest "losers" are districts who have gained the most population.

Chris Christie was wrong to propose that every district get equal state aid per student, but he is 100% correct that the Abbott System is a major cause of New Jersey's property tax crisis.  ("Major" does not mean "sole").

The Education Law Center says that any attempt to link Abbott to New Jersey's property tax crisis is "scapegoating" the Abbotts, but this is just the Education Law Center insulting the intelligence of the state.

The word "scapegoat," as a verb, means to cast blame onto something that is blameless. People may believe that Abbott funding still has educational merit, but to deny that Abbott funding is a major cause of high property taxes is preposterous because the enormous money given to the Abbotts has been diverted from middle-class, working class, and poor non-Abbotts.

The early 1990s state aid data in this post have not been available online previously.  I got the state aid and enrollment data from the Department of Education via an OPRA request.  I've put everything online here.  See the conclusion of this post for more information about the data.

State Aid in 1989-1990

In 1990, when the landmark Abbott II decision came out, New Jersey's K-12 state aid total was $2,536,074,465, divided amongst 1,076,005 students, so $2,356 per student.

This amount would be $4,330 per student adjusted for inflation.

In terms of a per student average, K-12 state aid in 1989-90 was thus significantly less than it is today.  For 2016-17, $8,031,337,334 in K-12 aid is divided amongst 1.3 million K-12 students, or $6,177 per student.
 
The increase in state aid from 1989-90 to today has vastly exceeded inflation and student population growth.

As you can see, as New Jersey increased state aid in the 1990s we first diminished and then completely eliminated pension contributions.  Thus, in discussing the origins of the Pension Crisis, the surge in state aid must be cited in addition to the sales tax cut of 1992 and Whitman's income tax cut of 1994.

Although the Education Law Center implicitly demands that New Jersey continue the pace state aid increases that occurred in the 1990s and 2000s, the pace of increase was not sustainable.

A Flatter Distribution, but Still Progressive

Aside from being a significantly lower "aid effort," state aid before the Abbott II decision had a flatter distribution than today, meaning poor towns got less and middle-class towns got more.

Yet, contrary to what is sometimes said, the pre-Abbott distribution was clearly progressive and there was already a bias in favor of "urban" districts due to the Kean Administration's attempt to give more aid to districts on the Department of Community Affairs' list of "urban municipalities."

For instance, even before the Abbott II decision came out, Newark got $263.8 million, which was more than all of Bergen County and all of non-Newark Essex combined.  Most future Abbotts got significantly less than Newark did, but they got more money than towns you might call working class and more than non-urban DFG A and B districts.

For example, in 1989-90, Millburn got $476 per student ($875 per student with inflation).  Newark got $5,519 per student ($10,155 per student with inflation), so the ratio of Millburn:Newark state aid was 1:11.  Today Millburn gets $416 per student and Newark gets $14,647, so a ratio of 1:35.

A reasonable person might consider the 1989-90 distribution to be unfair since affluent districts had vastly superior tax bases and could more than compensate for inferior state aid, but the state was still trying to give more to poor districts.

The same pattern exists for Mercer County, where state aid was progressive but flatter than it is now.



What I have never seen discussed before is that there was already a bias in favor of districts the state considered urban.

Amounts are adjusted for inflation.

The Abbotts and Everyone Else

The future Abbott districts got $1,024,840,106 in 1989-90, or 40% of the total.  At the time the Abbotts had about 24% of NJ's students.

In crafting the Abbott decisions, the NJ Supreme Court disregarded analternative aid approach to raise spending in the Abbotts up to a threshold considered "adequate."  Instead, the NJ Supreme Court said that whatever the level of the spending in the DFG I and J districts was, the Abbotts had to be at or above that level.

Since Abbott aid was tied to spending in the DFG I and J districts, the state tried to restrain spending in DFGs I and J.  Jim Florio's original Quality Education Aid of 1990 "shot the suburbs in the kneecaps" by making them pay for pensions, post-retirement health care, and deeply slashed their aid, but suburban pension assumption was reversed and the aid cuts did not (initially) go as deep as what Florio had planned.

Although DFG I and J districts gained virtually no aid, since they were not restrained from spending their own tax dollars, they were still able to increase their budgets and Abbott aid increased more than Jim Florio had wanted.

Thus, Abbott spending more than quadrupled.

First Abbott Aid doubled from $1,024,840,106 in 1989-90 to $2,291,696,951 in 1997-1998, when the Abbotts reached parity with DFG I and J districts.  During those eight years, inflation had only been 29%.

Over the next two decades to 2016-17, Abbott funding would again more than double again, to $5.1 billion (counting Pre-K).  Whereas in 1989-90, the Abbotts got 40% of the state aid total, in the 2010s they get 60% of a much larger total.

The Abbotts got the lion's share of the increase, but poor non-Abbotts did reasonably well during the 1990s.  However, after 2001-02, non-Abbott aid began a multiyear stagnation.

Aid by '90 DFG	1989-90 Aid	2016-17 Aid (counts Pre-K)	Percentage Increase
Abbott	$1,024,840,106	$5,097,138,421	397.36%
DFG A Non-Abbott	$33,026,612	$90,616,671	174.37%
DFG B Non-Abbot	$193,413,331	$651,367,836	236.78%
DFG CD	$206,432,630	$588,105,998	184.89%
DFG DE	$305,697,001	$793,285,540	159.50%
DFG FG	$220,873,914	$488,171,679	121.02%
INFLATION			94%
DFG GH	$232,498,986	$431,780,101	85.71%
DFG I	$196,401,926	$273,268,931	39.14%
DFG J	$9,054,787	$12,979,326	43.34%

It's critical to remember that these totals conceal great variation.  Even though DFGs A through FG appear to have gained, there are districts who have lost aid in each of those DFGs, even DFGs A and B. Lawrence Township in Cumberland County was DFG A, but it has lost aid in per pupil and inflation adjusted terms.  Lakewood was in DFG B, but it has also lost aid.

In per pupil terms and inflation-adjusted terms, a majority of NJ districts have lost aid.

Of the state's $5.54 billion increase in K-12 opex aid, the Abbotts have gotten over $4 billion, or nearly two-thirds. Counting construction aid and Pre-K aid, the Abbott increase easily exceeds two-thirds.

The Biggest Losers

I hate to use the word "loser" in the context of any district, but I can't think of another antonym for "gainer" that fits.

The biggest losers in aid per student are NOT wealthy districts like Millburn, Princeton, and Mountain Lakes.  The largest losers in state aid are districts for whom aid has been flat or negative and population growth has been dramatic.

Chesterfield is NJ's biggest loser, since its population has quintupled and its aid has actually dropped. In 1989-90, Chesterfield got $523,570 for 228 students.  For 2016-17, Chesterfield will get $419,983 for 801 students.  

 Adjusted for inflation, Chesterfield has lost 87% of its state aid ($4,225 per student in '89-90, $501 per student for '16-'17)

It's possible that Chesterfield was overaided in 1989-90, but a drop of this magnitude is unacceptable unless there has been a tremendous increase in wealth.

There are in fact about 100 districts in New Jersey that have lost aid in nominal terms and these districts are not all wealthy. Cherry Hill, is the state's biggest loser in nominal dollars. It got $18,222,828 in 1989-90. Now it gets $13,110,005.

Conclusion:

The trend of state aid increases outpacing inflation was never going to be sustainable and New Jersey has to get used to a "new normal" where state aid increases are modest and often lag inflation and student population growth.

The huge surge for the Abbotts is particularly unsustainable.  Given the ineffectiveness of Abbott spending, Abbott aid should be be redistributed to other needy districts.

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Data Note:

The state aid amounts I got from the DOE were in a very easy to use Excel format, but the enrollment data had to be scanned in manually. Since the enrollment data is formatted in a way that is not machine-readable, I have had to hand copy the data myself. Please excuse any data entry errors and try to focus on the big picture.

Also, the state has changed how it calculates enrollment for districts that have sending-receiving relationships with high schools.  The 1989-90 enrollment numbers I got did not include send-receive kids for whom the district pays tuition, although these students counted towards state aid.  The 2016-17 enrollment figures I have do include send-receive kids.  Because the 1989-90 and 2016-17 enrollment figures for send-receive districts are calculated differently I exclude them from 1989-90/2015-16 per pupil comparisons.

The Unsung Excellence of Dover

Over the past few years, New Jersey has had two major narratives of excellence in urban education and "Beating the Odds."

The first narrative of excellence is that of charter schools.  Many people, including parents in poor cities, believe that charter schools, through their strict discipline approaches, limited employment protections for teachers, direct instruction, and extended school years present the best reform to improve urban education.  Of individual charter schools, the one most praised for "Beating the Odds" is North Star of Newark, whose supporters proudly assert that it beats state averages academically and even Millburn.  Although charter schools themselves would rather have more money anyway, since charter schools usually have lower budgets than traditional schools in their districts, charter schools are a beacon to people like Chris Christie, who oppose high spending in urban districts.

The charter narrative has gotten a great deal of scrutiny and criticism.  Critics say that not all charters outperform their demographic peers, let alone the state, that they have non-representative enrollment, and sometimes their high performance is due to heavy attrition rates.  Critics say that even when a charter school is doing well that the accomplishment isn't scalable since they aren't enough teachers out there who are willing to accept the difficulties of charter employment.

There is less of a positive counternarrative out there, but the most developed counternarrative for a regular urban district "beating the odds" is Union City, the subject of the nationally publicized book "Improbable Scholars" by David Kirp.  To Kirp and his audience, Union City is "where a strong majority of students pass the state’s tests, where inner-city education works, and where the burden of urban poverty and crime are almost always shed at the school door."

Kirp's book is explicitly anti-charter, but also pro-ample funding, especially for Pre-K.

I'm not going to assess the validity of either the charter/North Star narrative or the Union City counternarrative here, but I want to discuss a third narrative of an urban district that overcomes even steeper odds than North Star and Union City:  Dover.

Dover is another exceptionally high-performing urban school system.  Even though it has gotten some national awards from the US Department of Education and US News, it gets virtually zero journalistic attention because it is a small district away from a major media market and because it is neither a charter that performs academic miracles by dropping "excuses" nor an Abbott that is saved by lawyers who get judges to order massive spending.

Dover is in DFG A, the lowest of the eight Factor Groups. Demographically, it is easily a peer of the Abbotts.

For 2015-16, Dover was 73%

Dover MS Demographics

FRL-eligible (60% Free Lunch eligible), compared to a state average of 38% FRL-eligible and an (unweighted) Abbott average of 77% FRL eligible. 

8% of Dover's students were classified as Limited English Proficient (LEP), compared to the state's average of 5% and slightly below the Abbott average of 9%.

60% of Dover's students report speaking Spanish at home.

So why isn't Dover an Abbott?  SILLY READER! Dover was in DFG D in the 1980s and the Abbott list is based on need in the 1980s, not the present.

Yet the School Funding Reform Act sees the disadvantage of Dover's student population and calculates an extremely high Adequacy Budget for Dover, $57 million for 3,214  students, or $18,000 per student, of which about three-quarters is supposed to come from the state.

And yet since SFRA is non-operating, Dover gets only $7,725 per student in state aid, which is barely half of the Abbott (unweighted) average of $14,624 per student per student.

To make fiscal conditions even harder, Dover's tax base is actually inferior to the average Abbott.  Dover has $5,576 per student in Local Fair Share versus the Abbott average of $6,764 per student and Dover's taxpayers pay less than their Local Fair Share.

Due to inadequate state aid and a weak tax base, Dover is unfortunately one of the ten lowest spending districts in New Jersey, with a Total Budgetary Cost Per Pupil of only $10,602 per student in 2014-15, compared to an (unweighted) average of $17,969 for the 31 Abbotts and $14,600 for the state as a whole.  Union City actually gets more state money for Pre-K alone than Dover gets total.

FYI, most of the lower-spending districts do not have high schools.  K-8 children are less expensive to educate.

Dover has gotten some Pre-K, but only for 80-100 students total and only for a half day, whereas a two-year cohort in Dover has about 500 kids. In the Abbotts, Pre-K is universal for all 3s and 4s and is full-day.

Dover's Pre-K only started in 2011-12, so the tested students whose scores are discussed here didn't have it.

By Abbott Theory about the primacy of funding and even common sense, Dover should be an academically struggling district, but this is not true at all.  Despite its students being so poor and the district's underfunding, Dover is above the state's average.

In peer performance, Dover's schools perform at the 88th-96th percentiles AND four of Dover's schools are above the state's average. Dover High School was at the 65th percentile statewide for 2013-14, meaning it outperforming two of the every three high schools in New Jersey despite being in the poorest 10% demographically and the poorest 1% budgetarily.  

Dover High School also exceeds its peer group in AP course taking and AP test success.  Dover nearly equals the state average in course taking and course success.



Dover's percentage of AP course takers taking the AP exam is in proportion to its peers and the state.

 On the exams, Dover's students outperform the peer group by an even wider margin than they do in AP course taking and nearly match the state average.

Dover's Peers All Outspend It And/Or Have Selective Admissions

It also must be emphasized that Dover is severely disadvantaged budgetarily relative to its peers and lacks non-representative/selective admissions.

The DOE creates peer groups by looking at FRL percentages, LEP percentages, and Special Ed percentages.  It ignores budgetary conditions.  It also treats a high-FRL school with selective admissions the same as a high-FRL school that accepts all students.  

Dover High School's peers only match it in terms of FRL and LEP percentages.  Budgetarily they are in a different league.

Dover's peers are mostly much-higher resource Abbotts, including four Abbott magnet schools: Arts High School, Bard Early College High School, Science Park High School all in Newark and the Infiniti Institute in Jersey City.  Its peers also include two charters, the Urban Leadership Academy in Perth Amboy and the Barack Obama Academy in Plainfield, who also outspend it.  

The three non-Abbotts Dover is "peered" with are higher spending too. Abraham Clark in Roselle Boro actually spends more than $16,900 per student.

Dover is in last place fiscally among its "peer group" and yet outperforms 90% of them.  That should be newsworthy.

There is a Spending Floor Districts Must Meet, But There is Also a Point of Diminishing Returns: 

When Abbott was first litigated in the 1980s the Education Law Center and the NJ Supreme Court never said that money alone would improve education performance in the Abbotts.  Instead they employed the locution that money (ie, high spending) was "necessary, but not sufficient."

I agree, money is necessary, but not at the levels that Abbott and SFRA calls for.  And even if anyone is convinced that high-FRL districts need to spend $20,000 per student, how can the state afford this? School funding isn't a question of "should," it's a question of "can."  State aid is zero-sum and more money for one district means less money for other districts.

Dover's excellence, plus strong performances from other severely under-Adequacy districts and sub-par performance in most of the Abbotts, indicate to me that the Abbottists were incorrect.  Yes, there is a certain resource floor that all districts need to be above, but superlatively high spending that the NJ Supreme Court ordered was excessive and has gone into expenditures that do not raise student performance.   I think a more accurate saying about funding should be "necessary up to bring districts up to a floor, helpful beyond that point, and wasteful beyond another point."

Where the Spending Floor should be for a district and where its Point of Diminishing Returns sets in I can't say, but the floor is higher than what Dover spends but less than what what the Abbotts are supposed to spend.

The Education Law Center evidently believes that the Point of Diminishing Returns is somewhere way above $20,000 per student, hence their 2007-2009 opposition to SFRA, but the Education Law Center fails grapple with the fact that the State of New Jersey is insolvent and that giving so much money to the 31 Abbott districts deprives equally needy districts of the resources they need and induces crushing tax burdens in middle-income and lower-income districts across New Jersey.

Dover's Severe Fiscal Situation is Worsening

I believe that money matters, which is why I maintain this blog and I am worried about Dover.

Dover's tax base is woefully insufficient and without increases in state aid it must annually make cuts. Dover's tax levy is only equal to 33% of its budget, so it can't even hold its own with the plausible 2% annual tax increases allowed under the tax cap.  (2% of 33% is only 0.6%)

To make the situation even harder, Dover's student population has grown by 10% since 2008 and the increase shows no sign of letting up, as younger cohorts are larger than older cohorts.

As a consequence of flat state aid and its inability to raise local revenue, Dover's Budgetary Cost Per Pupil has been falling:

Dover does well academically, but I'm sure that its teachers are not well paid compared to higher-spending districts and there are missing opportunities and supports for students.

Aid Reform Needed

I've written countless times on this blog that Adjustment Aid must be eliminated, Interdistrict Choice must be made less generous, and ultra-high tax base districts should lose all state aid.  However, taking these three steps would only free up about $600 million and without another $1 billion on top of that $600 million, NJ cannot meet every district's uncapped aid.  NJ can put some new revenue into state aid too, but with the prioritization of pensions, I wonder how much money we can find, especially in the next recession.

What New Jersey needs to do is even-out state aid.  The Abbott spending target is beyond the point of effectiveness or economic sustainability.  The Abbotts do not outperform non-Abbott demographic peers.  There are a few other high-FRL/high-LEP districts who spend 60% as much as the Abbotts who outperform all or most of the Abbotts.

The Abbott (and high-FRL non-Abbott) Adequacy spending targets are too high.  Comprehensive state aid reform requires realism on what works and what NJ can afford.  In the mean time, prioritization of aid increases should be for low-aid/severely underaided non-Abbotts like Dover, not high-aid/moderately underaided Abbotts like Newark and Paterson.

What is Dover Doing Right?

I don't know.

If you know a journalist, give him or her a tip about Dover and get him or her to ask.

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See Also

"Abbott Spending has been Ineffective."

"Abbott Ineffectiveness, Elementary School Edition"

"Non-Results of Abbott Funding"