For 2019-20 school year Phil Murphy proposed to increase overall K-12 opex aid by $206 million and redistribute another $90 million of Adjustment Aid, for an all-in increase of $296 million for underaided districts, with the bulk of that new money going to districts who are severely underaided.
However, despite the increase in state aid, the deficit for the underaided districts rose from $1.75 billion to $1.78 billion.
Although $296 million increase is very large and appreciated by the recipient districts, since the deficit constantly grows, the increase is only sufficient to prevent further backsliding into
Indeed, inflation's contribution to the growth of the funding target in 2019-20 is particularly large due to the FY2020 Education Adequacy Report and the $566 per student increase in the base cost per student.
This post is a first look at state aid disparities in 2019-20 and emphasize that SFRA funding targets are dynamic. In 2018-19 it would have cost $9,562,210,757 to fully fund SFRA, but in 2019-20 it would cost $9,801,544,588 to fully fund SFRA. The increase in costs is disproportionately in underaided districts, hence the constant growth of their aid deficit.
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| Note, the deficits reflected above would be the _net_ deficit if every district was funded at exactly 100% (implying that all Adjustment Aid were eliminated). The more meaningful deficit is that for the underaided districts, which is $1.787 billion for 2019-20. |
Thus, the number of underaided districts slightly grew, and so did the deficit itself, which rose from $1.75 billion to $1.8 billion.
Despite the size of the $90 million reduction in surplus aid (ie, "Adjustment Aid"), the total amount of excess aid is only falling by $10 million, from $651.9 million to $641.7 million aid surplus, which simultaneously grew due to continued enrollment loss, tax base growth, and the DOE's changes to the formula for Local Fair Share. The stability of Adjustment Aid is due to continuing enrollment loss and tax base growth, although the contribution of tax base growth is disproportionately from Jersey City alone. (discussion below).
Lakewood, despite being overaided in 2018-19, gained $14.9 million in SFRA-non compliant aid, which the DOE is listing in its normal state aid releases. Lakewood's increase also appears to increase the statewide amount of excess aid.
This blog post is based on state aid information from the Department of Education which I received after an OPRA request. The calculations of state aid deficits, percentage overaiding/underaiding, dollars per student overaiding/underaiding and tax stress are done by me. The 2019-20 State Aid Disparities information is available online here.
Statewide, the median district has a deficit of $383 per student and gets 86% of its Uncapped Aid. The median deficit is smaller than in 2018-19, when it was $417 per student and the median percentage is slightly better than 2018-19, when it was 86%.
There are 383 underaided districts, with a total deficit of $1.8 billion and 209 overaided districts with a total surplus of $641 million.
There are zero districts who get exactly 100% of their state aid, which is a contrast from 2018-19, when 16 districts got 100%. The slippage of any districts getting 100% is the reason there are apparent increases in the number of overaided and underaided districts. (the lack of 100% funded districts is due to S2)
The Underaided
There are 96 districts who are underaided by more than $2,000 per student for 2019-20, versus 109 districts with deficits over $2,000 per student in 2018-19. In 2019-20 there will be 30 districts are underaided by more than $4,000 per student, versus 35 in 2018-19.
So this is incremental reduction in severe underaiding.
The district with the largest state aid deficit is Atlantic City, whose deficit is -$56 million, or -$8,534 per student. (this deficit includes AC's $20 million in "Commercial Valuation Stabilization Aid,"
After Atlantic City, the districts with the biggest deficits are:
These deficits are unacceptable, and yet an improvement from 2018-19, when there were 109
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| Bound Brook, NJ. Still one of NJ's most underaided school districts. |
Bound Brook also shows improvement. The -$6,776 deficit is huge, but it is smaller than in 2017-18, when Bound Brook's deficit was -$9,546 per student or 2016-17 when Bound Brook's deficit was -$9,836.
The reason the increase for Bound Brook hasn't been larger is significant loss of tax base there and corresponding increase in the Uncapped Aid target. Although tax base erosion is the rarest cause of severe underaiding
In order to demonstrate the decline in severe underaiding, the following table shows the most underaided districts starting with 2016-17, the rock bottom year of state aid injustice, and how Steve Sweeney's fight for fairness (now supported by Phil Murphy) has brought results, although equity is still years away (and perhaps unattainable).
Although I consider deficits in dollars-per-student more significant than percentage deficits, something encouraging about 2019-20 is that there will be only three districts who get less than 50% of their Uncapped Aid: North Brunswick and Cumberland Co Vocational at 48%, and Woodbridge at 46%.
Since in 2016-17 Chesterfield only got 9% of its Uncapped Aid, let it also be marked as an improvement too that the bottom has risen from 9% to 46%.
There are also only 55 districts getting 60% of their Uncapped Aid. In 2018-19 there were 151.
HOWEVER, some districts are becoming more underaided, especially ones who already receive high percentages of their state aid, but whose state aid targets are so high that even getting 80% of their state aid translates into a large deficit. For a district already getting a high percentage of its state aid, the gain under S2 will be proportionally small.
The Biggest Gainers
Newark grabbed headlines for gaining $24.7 million, but Newark is a district of 52,000 students, and that only is $469 per student.
Lakewood gained the most in percentage terms at 64%, but Lakewood is sui generis and much of that money will not go to support public education. Atlantic City gained the second most in percentage terms at 39%, but Atlantic City also seemingly lost $12 million in Commercial Valuation Aid and its net increase is small.
Of normal districts, the biggest gain in percentage terms was Woodbridge, at 22% (+$7.4 million), but that is $531 per student.
The real biggest gainers, in dollars per student are:
The Overaided Districts
There are 209 districts who are receiving more state aid than the SFRA formula says they should
receive, with a total surplus of $641 million.
Of those districts:
In percentage terms, Washington Township in Burlington County is the most overaided, getting $435,110 more for its 55 students than SFRA recommends, or 545% of its SFRA target.
Many Overaided Districts Became More Overaided
Despite the loss of $90 million in Adjustment Aid (13%), a large number of overaided districts became more overaided, the most important of which is Jersey City.
The following 15 districts had the largest Adjustment Aid totals in New Jersey. Altogether they represent 60% of the 2018-19 total.
As you can see, six of the fifteen districts with the most Adjustment Aid gained Adjustment Aid for 2019-20, despite the 13% Adjustment Aid cuts they experienced.
The causes of the increases are different for each district, but the usual factors are enrollment loss and tax base growth, plus the tweaking of the Local Fair Share multipliers.
Jersey City merits special discussion here:
Jersey City's Local Fair Share grew from $399 million to $474 million (+$75 million). Although Jersey City's Adequacy Budget grew from $590 million to $622 million (+$32 million), which all-else-being-equal would increase Jersey City's Equalization Aid, the increase in Local Fair Share was so much larger than the increase in the Adequacy Budget and then the cut of $27 million in Adjustment Aid that Jersey City's state aid surplus actually grew by the $11 million you see above. (See Note 1)
Aside from the usual enrollment loss and/or tax base growth, the Murphy administration also increased the Local Fair Share multipliers by 6% and that drive increases in Local Fair Share that were larger than the increases for Adequacy Budgets.
The 2018-19 Local Fair Share formula was:
HOWEVER, some districts are becoming more underaided, especially ones who already receive high percentages of their state aid, but whose state aid targets are so high that even getting 80% of their state aid translates into a large deficit. For a district already getting a high percentage of its state aid, the gain under S2 will be proportionally small.
This scenario is true of many of the Abbotts. Paterson, Elizabeth, and Newark all gained state aid, but saw their state aid deficits increase. (A future post will examine the Abbotts in detail)
The Biggest Gainers
Newark grabbed headlines for gaining $24.7 million, but Newark is a district of 52,000 students, and that only is $469 per student.
Lakewood gained the most in percentage terms at 64%, but Lakewood is sui generis and much of that money will not go to support public education. Atlantic City gained the second most in percentage terms at 39%, but Atlantic City also seemingly lost $12 million in Commercial Valuation Aid and its net increase is small.
Of normal districts, the biggest gain in percentage terms was Woodbridge, at 22% (+$7.4 million), but that is $531 per student.
The real biggest gainers, in dollars per student are:
The Overaided Districts
There are 209 districts who are receiving more state aid than the SFRA formula says they should
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| Asbury Park AP Lost $3 million in Adjustment Aid But Actually Became MORE Overaided Due to Tax Base Growth, Enrollment Loss, and the increase in the LFS formula. |
Of those districts:
- 130 are overaided by more than $1,000 per student.
- 75 are overaided by more than $2,000 per student.
- 37 are overaided by more than $3,000 per student.
- 13 are overaided by more than $4,000 per student.
In percentage terms, Washington Township in Burlington County is the most overaided, getting $435,110 more for its 55 students than SFRA recommends, or 545% of its SFRA target.
Many Overaided Districts Became More Overaided
Despite the loss of $90 million in Adjustment Aid (13%), a large number of overaided districts became more overaided, the most important of which is Jersey City.
The following 15 districts had the largest Adjustment Aid totals in New Jersey. Altogether they represent 60% of the 2018-19 total.
As you can see, six of the fifteen districts with the most Adjustment Aid gained Adjustment Aid for 2019-20, despite the 13% Adjustment Aid cuts they experienced.
The causes of the increases are different for each district, but the usual factors are enrollment loss and tax base growth, plus the tweaking of the Local Fair Share multipliers.
Jersey City merits special discussion here:
Jersey City's Local Fair Share grew from $399 million to $474 million (+$75 million). Although Jersey City's Adequacy Budget grew from $590 million to $622 million (+$32 million), which all-else-being-equal would increase Jersey City's Equalization Aid, the increase in Local Fair Share was so much larger than the increase in the Adequacy Budget and then the cut of $27 million in Adjustment Aid that Jersey City's state aid surplus actually grew by the $11 million you see above. (See Note 1)
Aside from the usual enrollment loss and/or tax base growth, the Murphy administration also increased the Local Fair Share multipliers by 6% and that drive increases in Local Fair Share that were larger than the increases for Adequacy Budgets.
The 2018-19 Local Fair Share formula was:
(Equalized Valuation x 0.013828828) / 2 + (Aggregate Income x 0.046200477) / 2
Which looks complex, but was really 0.69% of Equalized Valuation plus 2.3% of Income.
(Equalized Valuation x 0.014523812) / 2 + (Aggregate Income x 0.049819447) / 2
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(1) This refers to Jersey City's Adequacy Budget for Equalization Aid.
See Also:
- 2021-22 Brings $1.7 Billion to Education, More State Aid Equity
- 2020-21 State Aid Closer to Equality
- 2019-20 State Aid Gets Fairer, but the Deficit Grows
- 2018-19 Disparities Narrow, but Remain Stark
- Updated State Aid Disparities for 2017-18
- Christie Underfunded SFRA by Almost $15 Billion
- SFRA Was Never Fully Funded
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