One persistent myth about New Jersey state aid is that SFRA was "fully funded" in 2008-09.
This myth contains the kernel of truth that SFRA was funded at Capped Aid that year, but it is essentially untrue because Capped Aid is not real full funding, and the deficit for 2008-09 against Uncapped Aid was $1.05 billion.
The idea that SFRA was fully funded in 2008-09 (implicitly) denies the existence of the State Aid Growth Limits that reduce a district's aid growth to 10% or 20% of what it got previously. The "SFRA was fully funded its first year" concept does not take into account that "statutory full funding" and "real full funding" are not the same amount.
The notion that SFRA was fully funded in 2008-09 is dangerous because it undermines the case for redistributing Adjustment Aid, since if someone believes that SFRA was fully funded its first year under Jon Corzine, then that person is liable to believe that SFRA can be fully funded once again, if only we have a governor who is committed to it.
Although there are some severely underaided districts of 2017-18 who truly fully funded back in 2008-09, the large majority of today's most underaided districts were also underaided in 2008-09.
Here is the evidence:
The following are New Jersey's most underaided districtsfor 2017-18, with their deficits per student in 2008-09, and then the inflationary adjustment to September 2017 dollars.
As you can see in the above table, deficits did get significantly worse under Christie and yes, a handful of today's most underaided districts were properly funded in 2008-09, but the majority of 2017-18's most underaided districts began the SFRA era significantly or severely underaided.
The same reality of pre-Christie underaiding is clear if you go by underaiding in percentage terms too.
Implicit to the myth that SFRA was fully funded under Jon Corzine is the myth Chris Christie was the first governor to underfund state aid.
The Education Law Center is the biggest culprit in spreading the myth that funding was fair and full before Christie, for instance, headlining a recent press release "Governor Murphy begins to fill the school funding hole left by his predecessor," (notice that 'predecessor' is in the singular) and then writing:
The [Murphy] proposed budget does not fully fund districts in the first year, a recognition of the extraordinary funding gaps created by former Governor Chris Christie’s combination of aid cuts and flat funding over the last eight years.And
The bottom line: Governor Murphy’s budget begins to tackle the enormous deficits left by his predecessor [sic], putting New Jersey back on the road to fair funding for all schoolchildren.
Governor Murphy’s budget is a breath of fresh air after years of disinvestment in New Jersey students and schools."
The Education Law Center's faith in Phil Murphy is an opinion, but only the statement "Governor Murphy begins to fill the school funding hole left by his predecessorS" (plural!) would be factually accurate.
We Cannot Ignore the *Why* of Christie's Flat-Funding
If you factor in those three aid streams listed above, plus the TPAF portion of the Whitman-Era Pension Obligation Bonds, the School Construction debt service, plus other aid streams that are not debt-related, Christie actually increased education spending by $2.9 billion, which exceeds inflation and the growth of the rest of NJ's budget.
Were Christie able to put just two thirds of that $2.9 billion increase for non-operating aid into operating aid, all districts would be at least fully funded at Uncapped Aid, without the need to redistribute Adjustment Aid.
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| Sources, http://www.state.nj.us/treasury/omb/publications/19bib/BIB.pdf http://www.state.nj.us/treasury/omb/publications//10bib/BIB.pdf |
Spending on the four major debt streams --TPAF, post-retirement medical, POBs, and school construction debt service -- increased by $3.1 billion from Corzine's last budget (2009-10) to Christie's last budget (2017-18). Granted, Corzine had to reduce the FY2010 TPAF payment because of the start of the Great Recession, but if you went back one year to FY2009, the TPAF payment was only $693.3 million, so no matter what year you start your evaluation from, it's the same basic story of large increases for education spending but not K-12 operating aid.
If in 2010 Christie had renewed the Corzine-era income taxes on high-earners he could have kept a few hundred million more in K-12 operating aid, but most districts would not have been anywhere near full-funding and fiscal conditions would have still tightened towards the end of the second term as increased debt payments devoured more and more of New Jersey's revenue.
If Christie had renewed Corzine's "Millionaire's Taxes," it's likely that not all of that money would have gone into K-12 operating aid either, since pensions and property-tax rebates would have had strong claims on that money.
Had Christie also not signed Chapter 78 and fought off Burgos v. New Jersey (over the pace of the pensions rampup) and Berg v. Christie (over the constitutionality of suspending COLAs), it's likely that K-12 operating aid would have been cut again.
So it seems like the "woulda coulda" hypothetical comparison between Christie and a hypothetical second-term for Corzine is a wash. Personally I think Christie should have put even more into TPAF to forestall the depletion of the pension funds.
Anyway, Because spending on education-related debt streams must increase throughout the 2020s, it is not possible for Phil Murphy to fully fund education without redistribution, or, to be honest, even with redistribution. Without redistributing Adjustment Aid, I do not think Murphy would even be able to reach Capped Aid in FY2022.
And back to my original point, SFRA was never fully funded. CEIFA was increasingly underfunded.
New Jersey is never going to be able to appropriately fund every district without redistribution.
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- "SFRA Was Never Fully Funded"
- "The Skews of Capped Aid"
- "The Long Wait for Full Funding Under Capped Aid"
- "Christie Underfunded State Aid by Almost $15 Billion"
* Atlantic City is the recipient of over $30 million in Commercial Valuation Stabilization Aid that is outside of SFRA and is not included in the data that the Department of Education lists publicly or sends to me.
