Saturday, October 23, 2021

2022 Equalized Valuations are Out


New Jersey's 2022-23 state aid numbers will not come out until the governor's FY2023 budget speech and state aid surpluses and deficits in 2022-23 will be strongly affected by the new Education Adequacy Report, but we can get a sneak peak at some changes in NJ State Aid by analyzing changes in Equalized Valuation.

Analyzing changes in Equalized Valuation also gives us a view into the state's ever swirling economic currents and what towns are thriving, holding their own, stagnating, and declining.  

Source for Data: NJ Table of Equalized Values.

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New Jersey's total Equalized Valuation increased from $1,353,490,784,661 to $1,430,600,617,782, a 5.7% increase.  5.7% is larger than most recent years, but it is not much larger than inflation, which was 5.4%.  (No, housing prices are NOT calculated as part of inflation.)

In contrast to previous years when Hudson County grew by more than 10% and had growth equal to 25% of the state's total, Hudson County was in last place for 2020-21.  In fact, South Jersey and the Jersey Shore led the state.


Ocean County had another good year at 9.3% growth (+$2.7 billion).  30% of that growth came from Lakewood, which grew from $12 billion to $12.8 billion.  (The Lakewood Public Schools continue to be ineligible for Equalization Aid, contrary to what some judges think.)


The trend could be a state manifestation of the nationwide boom in car-dependent places enabled by remote-working..




In NJ we hear constantly about an "urban renaissance," but NJ's big cities are wildly divergent in their
 economic fates and it's impossible to generalize about them.  Jersey City and Hoboken have boomed,  but the other cities have tended to lag state averages. Newark's renaissance is part reality, but also exaggeration.



Changes in Equalized Valuation also allow us to estimate changes to each district's Local Fair Share, although since Local Fair Share is based on Aggregate Income and depends on the statewide Adequacy Budget which will surely increase as a result of the Education Adequacy Report, I can only estimate what will happen.  

The 2021-22 Local Fair Share multipliers were:


Equalized Val.  x  0.013767998

District Income  x  0.051821204

Which is really 0.724% of Equalized Valuation plus 2.64% of Aggregate Income.

Hence, I get the following estimates for Local Fair Share changes for NJ's largest school districts.

FY2021 Equalized ValuationFY2022 Equalized ValuationGrowth or LossEstimate of LFS Change from 2021-22 LFS Real Estate Multiplier
NEWARK$14,982,559,801$14,465,468,748-$517,091,053-$3,559,654
JERSEY CITY$44,232,603,821$45,362,027,053$1,129,423,232$7,774,948
PATERSON$8,357,271,633$8,998,986,504$641,714,871$4,417,565
ELIZABETH$9,205,643,641$10,418,709,083$1,213,065,442$8,350,741
EDISON18,032,657,681$19,057,739,251$1,025,081,570$7,056,661
TRENTON$2,353,253,026$2,582,977,552$229,724,526$1,581,423
CAMDEN CITY$1,831,881,725$1,924,025,009$92,143,284$634,314
TOMS RIVER REGIONAL16,548,612,072$17,900,054,286$1,351,442,214$9,303,327
PASSAIC CITY4,112,963,610$4,293,101,153$180,137,543$1,240,067
WOODBRIDGE12,596,646,914$12,857,998,640$261,351,726$1,799,145
UNION CITY4,661,686,444$4,727,594,311$65,907,867$453,710
HAMILTON TWP9,262,658,564$9,530,775,475$268,116,911$1,845,717
CLIFTON CITY10,616,935,162$11,331,152,347$714,217,185$4,916,670
CHERRY HILL TWP9,092,288,643$9,553,839,001$461,550,358$3,177,312



Factoring in Jersey City's income growth and the increase in the LFS multipliers from the Education Adequacy Report, Jersey City's Local Fair Share will likely increase by a few tens of millions, but probably not enough to eliminate its Equalization Aid, which was $84 million in 2021-22.


(See Education Adequacy Report Drives Big Changes to State Aid)

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