Dear NJ Journalists, Vincent Prieto DOESN'T Represent Jersey City (He just acts like he does)

I was bemused by a recent story on PolitickerNJ by JT Aregood about the the politics of state aid reform. The article contrasted Steve Sweeney's plan, which is prescriptive and is clearly an attempt to redistribute Adjustment Aid to underaided districts, with Speaker Vincent Prieto's vague plan for yet another legislative committee "without predetermined outcomes or politics."

In attempting to explain Prieto's frosty attitude towards redistributing state aid, the article made a very telling, very blatant error.

Prieto, whose home district encompasses Jersey City, opposes Sweeney’s plan. 

Jersey City and other districts in Hudson County would stand to lose under Sweeney’s plan to phase out state Adjustment Aid and funding caps for districts with significant enrollment changes over five years. 

Those protections for individual districts were put in place in 2008, the last time lawmakers revised the school funding formula. Sweeney holds that removing Adjustment Aid and funding caps would bring every district in the state to 88 percent funding.

John Reitmeyer made the same error in a piece on NJ Spotlight:

But so far, Prieto is not onboard with Sweeney’s proposal, which could significantly cut funding for school districts in some of the communities Prieto represents, including Jersey City.

wrong Wrong WRONG!!!



Vincent Prieto does NOT represent Jersey City!

Vincent Prieto represents District 32, which includes East Newark, Edgewater, Fairview, Guttenberg, Harrison, Kearny, North Bergen, Secaucus, and West New York.

Jersey City is in legislative Districts 31 and 33. Its Assembly members are Nicholas Chiaravalloti, Angela McKnight, Annette Chaparro, and Raj Mukherji, NOT  Vincent Prieto.

Every single district in District 32 is underaided, with East Newark, Fairview, Guttenberg, and Kearny being severely so.

East Newark, in fact, is the third most underaided district in New Jersey, with an aid deficit of $7782 per student.  East Newark's school spending is barely $10,000 per student and its students attend school built in the 1890s.

Fairview is NJ's fifth most underaided district too, with a deficit of $7,118 per student.

(See: "Will Vincent Prieto Put Hudson County First")

I wouldn't be surprised if Jersey City's four Assemblymembers are urging Prieto to preserve Legalized Aid Hoarding "Adjustment Aid."  Raj Mukherji, for one, has made public statements defending Jersey City's state aid.  But, Vincent Prieto does not have a single Jersey Cityan or Hobokener among his actual constituents.

Then again, maybe Vincent Prieto's most important constituent is just Jersey City Mayor Steve Fulop?

It was Steve Fulop himself who told PolitickerNJ:

“We’re lucky to have the speaker here,” he said, a reference to Assembly Speaker Vinny Prieto (D-32). “I have significant clout with Speaker Prieto.”

Indeed. Steve Fulop has tipped off his influence over Prieto and the Assembly in his statement it would be a "long road" before any state aid changes happened.

Based on Prieto own constituents' interests as well as the state-interests he is supposed to act in as Speaker of the Assembly, Speaker Prieto should be in the vanguard of state aid reform.  His indifference to this issue and clear attempts at stalling reform is hard to understand unless it is an attempt to benefit Jersey City, Weehawken, Hoboken, and Jersey City's mayor, Steve Fulop, at the expense of poor districts.

Why is this?

The 8th Congressional
district does include the
Gold Coast.

Agusten Torres reports that Vincent Prieto wants to represent the 8th Congressional district, after Rep. Albio Sires retires, and the 8th district does include Jersey City and Hoboken.

Prieto's residence in Secaucus is not in the 8th district, but since Prieto is originally from Union City, his personal relocation to a town in the 8th district would not be a major move.

If Prieto does have designs on Sires' seat, then Steve Fulop's support would be critical in the Democratic Party.

-----------

Finally:

Not Everyone from Jersey City is Against Justice

I do not think that every Jersey City politician is opposed to state aid reform.

Sens Sandra Cunningham and Brian Stack actually abstained from voting on Steve Sweeney's aid bill. Councilman Michael Yun has said Jersey City's state aid "doesn't make sense."  Mayoral challenger Bill Matsikoudis seems resigned to, not opposed to, having Jersey City's state aid cut, a position I believe a few Jersey City BOE members also share.

There are also many ordinary Jersey Cityans who recognize that Jersey City has become wealthier and can pay for more than 17% of its school budget.  Many Jersey Cityans warn City Hall to reduce its promiscuous PILOTing due to the inevitability of state aid losses.

The people in Jersey City who are operating contrary to progressive values are Steve Fulop and a clique around him.

Is Steve Sweeney Overselling His State Aid Proposal?

Readers know that I'm a fan of Steve Sweeney's "Formula4Success" proposal and, because of his stance on state aid, I'm a fan of Steve Sweeney himself.

I see Sweeney's proposal as the progressive, pragmatic, and fair plan for state aid that New Jersey needs. By combining $100 million annual boosts in K-12 education funding with at least $500 million in redistribution from overaided districts, Sweeney's plan could finally be the pathway to fair school funding that New Jersey has been waiting forty years for.  I also am thrilled that Sweeney's proposal will address the distortions of state aid that result from PILOTed property being "invisible" to the formula for state aid and amend the tax cap law too.

And yet, I worry that Steve Sweeney is slightly overselling his aid plan and that it won't bring every district up to 100% of its SFRA recommendation, nor will it end the disparities that vex the state.

To be brief, here's why:
1.  The amount of money being discussed is not enough.
2.  The aid targets may be for Capped Aid, not Uncapped Aid.

So, this is how Sweeney characterizes his plan:

That is why I joined with Senator Ruiz, Assemblywoman Joann Downey and Assemblyman Eric Houghtaling to introduce legislation to establish the State School Funding Fairness Commission.
By June, the panel will recommend revisions to the 2008 law to ensure that state aid is distributed on a fair and equitable basis to all districts, and that fast-growing school districts receive the additional funding they need to compensate for enrollment growth.
We have pledged to add $500 million in additional school aid over the next five years to guarantee that every school district receives 100 percent funding and that the commission’s recommendations are implemented.

I hate to say this, but something is wrong here. $500 million in new aid plus about about $500 million in redistributed aid is only about $1 billion.

According to data I received from the Department of Education, NJ's underaided districts have a deficit of $1,946,380,097 for 2016-17.  Since Steve Sweeney is unambiguously for redistribution, it's the net deficit that matters, which is only $1,378,606,184 (for non-vo-techs). (Hereinafter approximated at "$1.4 billion."  See the chart here to see the numbers)

So the total amount of excess aid is $567,773,913, but some of that is Interdistrict Choice money, which is not subject to redistribution under Sweeney's proposal.

However, that $1.4 billion deficit figure is a moving target since the DOE is supposed to make periodic inflation adjustments to districts' Base Per Pupil amounts, ie, their aid targets.  Although the Christie administration hasn't made these adjustments, the next Democratic Department of Education may do so.  As inflationary adjustments are made, the deficit will grow and the amount of Adjustment Aid to redistribute will (usually) shrink, since the Adequacy Budgets of Adjustment Aid districts will grow.

In any case, $568 million in excess aid, even with another $500 million thrown in, is less than $1.4 billion, even before inflationary increases are factored in and even before excesses from Interdistrict Choice are roped off from redistribution.

So what are Steve Sweeney and his coauthors talking about when they say "100 percent funding"?

The cap is 10% if the district is above Adequacy or
20% if the district is below Adequacy.

It appears they are talking about Capped Aid, with which NJ has a deficit of about $1 billion ($864 million according to Senator Ruiz) and Capped Aid full funding is not real full funding and the distribution of aid under full Capped Aid would still be unfair.

Capped Aid and Uncapped Aid are not aid streams like Equalization Aid, Special Education Aid, and Adjustment Aid are; Capped Aid and Uncapped Aid are aid amounts.

Capped Aid is just an incremental step on the way to Uncapped Aid.

Capped Aid's origins are in SFRA itself:

For the 2009-2010 school year and thereafter, total stabilized aid shall include Equalization aid, Special Education categorical aid, Security Aid, and Transportation aid. 

d. For the purposes of this section, “State aid growth limit” means 10% in the case of a district spending above adequacy and 20% in the case of a district spending below adequacy. 

SFRA also contains a section here ordering the Commission to "adjust" (ie, cut) a district's aid if it somehow exceeded the State Aid Growth Limit.

a. Notwithstanding any provision of this Act to the contrary, the total stabilized aid for each district shall not be increased by more than the district’s State aid growth limit. In the event that total stabilized aid exceeds the prebudget year total by a rate greater than the State aid growth limit, the commissioner shall adjust the components of total stabilized aid so that they total exactly the prebudget year total increased by the State aid growth limit.

So, if a district was getting $50 million pre-SFRA (ie, 2007-08) and SFRA said it should get $90 million (ie, $90 million is its Uncapped Aid),the biggest boost the district would get is 10% or 20% of what it got previously, so $5 or $10 million, depending on whether or not the budget was above or below Adequacy.

So calling "Capped Aid" "100 percent funding" is inaccurate.

SFRA never envisioned that districts would lose aid in the Great Recession, so the calculation of Capped Aid is now very opaque, but the basic point is that Capped Aid is tied to what a district got in the past and its own spending relative to Adequacy, not what a district's economic-demographic needs are at the present.

(See Also:
"The Long Wait for Full Funding Under Capped Aid")

Steve Sweeney knows the difference between Capped Aid and Uncapped Aid and his proposal has always contained a clause to correct the unfairness of Capped Aid, but Capped Aid targets appear on the Formula4Success website. (see Edison for example)

If a district is brought up to its Capped Aid the gain is often just trivial.  For Edison to gain only $2.5 million over five years is pathetic.  Edison has a $226 million operating budget, so $2.5 million is 1% of that.  Edison already increases taxes by $5-$10 million per year, so what does an additional $2.5 million do?  

$2.5 million is only $160 per student for Edison.  

What's even more annoying is that since SFRA sets increases according to a percentage of what a district got previously, and not a set amount per student, a high-aid/moderately underaided district would gain more than a low-aid/severely underaided district.

Compare Newark and Red Bank Boro.  Red Bank Boro is underaided by almost $5000 per student.  Newark is underaided by $1800 per student, but Newark would gain the full $1800 (since its existing aid is $14,700 per student) whereas Red Bank Boro would gain not even $400 per student, since its existing aid is only $2100 per student.  

People have brought up the problems of Capped Aid versus Uncapped Aid and the legislation may have been changed to directly the Commissioners to consider Uncapped Aid needs.  

Originally the legislation said:

2. a. It shall be the duty of the commission to study: (1) the adjustment aid and State aid growth limit provisions of the “School Funding Reform Act of 2008” (SFRA), P.L.2007, c.260 (C.18A:7F-43 et al.), to determine recommendations for revising those provisions in order to bring all school districts to their adequacy budgets as calculated pursuant to section 9 of that act over a period of five school years; 

But now it says:

     (1)   the impact of the adjustment aid and State aid growth limit provisions of the “School Funding Reform Act of 2008” (SFRA), P.L.2007, c.260 (C.18A:7F-43 et al.), on the fairness of the school funding formula, to make recommendations for revising those provisions in order to provide full funding of the “School Funding Reform Act of 2008” over a five-year period, and to bring fair and equitable funding to all school districts for enrollment growth over a multi-year period;

"Fair and equitable manner" can mean absolutely anything, but it is an addition to the text and the Commissioners could read it to prioritize districts with the largest deficits relative to Uncapped Aid.

And even if Sweeney's plan is affirmed by the legislature in 2017 and Christie signs it, an additional problem with Sweeney's approach is that it depends on NJ's next governor being pro-reform.

Chris Christie has proven that a governor can ignore the state's funding law if he doesn't like it and the state's revenue is adequate.  If NJ's next governor doesn't like redistribution, wants to do something outside of SFRA, such as give extra aid to charterized districts, or conflates being below Adequacy with being underaided, he can ignore NJ's new state aid law and allow more aid hoarding.

NJ's overaided districts have been passive so far in the face of losing state aid, but once it actually begins to happen and their taxes increase way beyond inflation, they'll howl.

Steve Sweeney or a pro-reform Republican like Jack Ciattarelli may be NJ's next governor, but the governor could also be Phil Murphy or Steve Fulop.

State aid is not a priority for Phil Murphy and Steve Fulop.  They rarely comment on aid to begin with, but when they do, their views are uninformed.  Phil Murphy says he wants to "implement that formula," but is evasive on the subject of redistributing state aid, has made billions in non-education promises, takes inaccurate cheap shots at Chris Christie, and does not recognize that fully funding SFRA without redistribution would cost $2 billion a year.  Steve Fulop is even worse.  He has never admitted the unfairness of Jersey City's state aid level and his strenuous opposition to a tax reval for Jersey City indicates a contempt to fair taxation altogether.

Yet, Steve Sweeney is still just a politician and he has exaggerated what his plan would do.  I still support Sweeney's plan and like Steve Sweeney very much, but aid-activists should clarify with Steve Sweeney about the need to focus on Uncapped Aid, not Capped Aid.  Journalists should also investigate what the true costs to fully fund SFRA would be.

Sweeney, Beck Propose Help for NJ's Neediest Districts

Senators Stephen Sweeney and Jennifer Beck continue to work on legislation that would redistribute state aid away from overaided districts to districts that are underaided and truly needy.

In an article by Adam Clark that appeared on the cover of the Sunday, March 27th Star-Ledger, Beck and Sweeney explained:

"The hold harmless provision [Adjustment Aid] was meant to make sure there was no losers," state Senate President Stephen Sweeney said. "It absolutely created losers." [my emphasis]

Sweeney (D-Gloucester) and Sen. Jenifer Beck (R-Monmouth) are finalizing a plan that they say would make school funding more equitable. Beginning in 2017-18, the proposal would gradually phase out hold harmless aid [ie, Adjustment Aid] for districts that don't need it and reallocate that money to growing districts that are underfunded, Beck said.

Political Courage

This is truly a brave move on both senators' parts. Both Sweeney and Beck have some overaided districts among their constituents who may oppose any redistribution and this bill faces an uphill struggle through ignorance, selfishness, and parochialism of the legislature.  Remember, SFRA barely passed in 2008 and it was an aid increase (even overaided districts were supposed to gain 2%), not an aid redistribution.

Not to overpraise Sweeney (who I criticized here for talking Pre-K expansion without having a way to pay for it), but I see him as a truly bold politician.  Between being the primary Democratic backer of pension reform, supporting the consolidation of K-8s with their regional high schools, and now state aid reform, Sweeney is someone who is willing to take stances that offend interest groups and some of his own constituents if he believes they are correct.  A sincere bravo to him on this.

Conditioning Aid Distribution on Adequacy = Inadequate Redistribution

Sweeney and Beck haven't released any details of their plan yet, but there are hints that they will consider where districts are relative to their Adequacy budgets.

According to the Adam Clark Star Ledger article:

The districts that would receive less hold harmless money are already "above adequacy," meaning they spend more money per student than the state's funding formula says is needed for a thorough and efficient education, Beck said. Those districts should be able to adjust their budgets, especially if their enrollment has dropped, she said.

Any redistribution of Adjustment Aid is a good thing, but if New Jersey only takes Adjustment Aid away from districts that are above Adequacy the amount of Adjustment Aid that could be redistributed is greatly reduced because 71 Adjustment Aid districts undertax so significantly that they actually below Adequacy.  Important examples of Adjustment Aid districts that are below Adequacy are Jersey City, Brick, and Toms River.

According to the Education Law Center Policy Brief on Adjustment Aid, for 2015-16:

• The above Adequacy Adjustment Aid districts get $174,024,179 in Adjustment Aid.
• The below Adequacy Adjustment Aid districts get $381,745,553 in Adjustment Aid.

So, if Adequacy is considered then the potential amount of Adjustment Aid that could be redistributed is only $174 million, not the full $550 million that the state labels as "Adjustment Aid."
(NJ hasn't run the SFRA formula in several years and the amount of money that districts get that is labeled "Adjustment Aid" is divorced from the amount of Adjustment Aid they should get.  For instance, Newark and Atlantic City both get something called "Adjustment Aid," but both are underaided and the Adjustment Aid should be converted into Equalization Aid.  Conversely, since Jersey City increasingly becomes richer and its student population grows slowly, more of its Equalization Aid should be converted to Adjustment Aid.)

Also, the Adjustment Aid districts that are above Adequacy are often only slightly above Adequacy, meaning that because they undertax, their aid excesses are greater than their surpluses above Adequacy.

For instance, even though Pemberton gets $32 million in Adjustment Aid, it is only above Adequacy by $14 million.

• Asbury Park gets $24.2 million in Adjustment Aid, but is only $13.9 million above Adequacy.  
• Keansburg gets $8.6 million in Adjustment Aid, but is only $5.9 million above Adequacy.  
• Phillipsburg is gets $10 million in Adjustment Aid, but is only $125,000 above Adequacy.  

Adam Clark writes about this as a "bipartisan plan to change how that money — more than $500 million — is allocated" but if only Adjustment Aid districts that are above Adequacy lose aid, the amount that could be redistributed would be nowhere near $500 million.

Population Change isn't the Only Factor in Overaiding and Underaiding

Another concern I have is that redistribution will be overly conditioned on population changes.  Although Sweeney and Beck haven't released any details yet, Jennifer Beck has talked often about aid being taken from districts that have lost population and giving it to districts that have gained population.

"The bottom line is that we as a state have not allowed our methodology for funding to keep up with what's actually happening at a district," Beck said. "If you've lost 100 students and the state of New Jersey is giving you the same state aid as you had five years ago... there should be some cost savings along the way."

And, in a statement at a recent Senate budget hearing Beck said:

"According to Beck, school funding needs to be redistributed throughout the state so that districts that have lost enrollment are not getting funding above the adequacy standard at the expense of schools where enrollment has increased. She said that that issue is not only central to the discussion in Paterson, but in a number of schools statewide including those in Asbury Park and Freehold, both of which fall in her district."

I'm a fan of Jennifer Beck, but I do not think she has it totally right about the causation of overaiding and underaiding.

Some districts in New Jersey have always been overaided or always been underaided, even before any recent population shifts.  For many districts, it is difficult to say why they have always been privileged or always been victimized, but it's not like NJ ever was "on formula" for a lot of districts who are now underaided.  

What logic was there ever in giving Marlboro twice as much aid per student as Bloomfield? What on earth justified giving Hillsborough more money than Belleville? Why did Randolph get more money than Hackensack?

Freehold Boro (then DFG CD), whose population growth has been often cited in its underaiding, only got $3,153 per student in 1998-1999, which is not significantly more than what Hillsborough got.

The aid distribution has been unjust for a very long time.  

I am worried that Beck neglects causes of overaiding and underaiding other than population change. Although Asbury Park and Pemberton's extraordinary overaiding are partly due to population loss and the zombie power the Abbott "Parity Plus" Doctrine, there are other districts that are overaided because they have had increases in wealth.

Hoboken and Jersey City represent two districts that are overaided despite gaining population.

Increase in wealth is difficult to quantify because historic Local Fair Share data is not available and even if it were available I would have to adjust it for inflation, but I can use Equalized Valuation (as a percentage of statewide EV) to show that Hoboken (an extreme, but illustrative example) has become overaided because of an increase in wealth, not because it has lost student population (on the contrary, it's slightly growing.)

Were I to go back even farther the effect would be more dramatic.  In the late 1990s Hoboken had only 0.3% of the state's total Equalized Valuation.   (see Divergent Fates of NJ's Big Cities.)

Likewise, some underaided districts haven't had much population change either.  Perhaps they were always underaided, or their population has stayed constant but become poorer.  They could also have seen a decline in ratables.

Atlantic City would be a prime (if extreme) example of a district who was once overaided (hence the Adjustment Aid artifact) and whose population has actually fallen, but has become deeply underaided (-$6,770 per student) because it has had an enormous decrease in wealth.

Will Anything Change?

Sweeney and Beck themselves have said that their proposal will be controversial, but the moral arguments for redistribution are so strong that I have some hope that this legislation will at least pass the State Senate.

The big question marks are the Education Law Center, Vincent Prieto, and Chris Christie.

The Education Law Center, led by lawyer David Sciarra, has opposed redistribution in the past and I consider it to be reactionary and economically blind, but in the fall of 2015 it softened its opposition to cutting Adjustment Aid for districts that were above Adequacy.  The ELC is influential among Democratic legislators and NJ's education activist community, so its support would help tip the scales in favor of justice.

As recently as 2012, Christie, through Chris Cerf's Education Funding Report, supported cutting Adjustment Aid too for districts that are above Adequacy.  Christie actually followed through on this for two years before setting into a flat-aid policy.  Christie, obviously, has become erratic and no one knows what he would think of redistribution.  He even created "Additional Adjustment Aid" to protect Interdistrict Choice districts from ever losing aid.

Prieto is a big unknown. All of Prieto's constituents - East Newark, Edgewater, Fairview, Guttenberg, Harrison, Kearny, North Bergen, Secaucus, and West New York - are underaided, but Prieto is also a close ally of Jersey City and Hoboken politicians whose districts are overaided.  Prieto is known to be a backer of Steve Fulop too and may not want to do Steve Sweeney any favors.

Anyway, I appreciate what Sweeney and Back are trying to do and look forward to learning more about their proposal.

---

See Will Vincent Prieto Put Hudson County First?

Jersey City's Property Reassessment Won't Change State Aid

The State Treasury may force Jersey City, Elizabeth, and Dunellen to do property reassessments.

"Jersey City could be forced to perform its first citywide property revaluation since 1988, with state treasury officials announcing today they are investigating whether the city's properties are uniformly and fairly assessed. 

Because Jersey City hasn't performed a reval in 27 years, the city's total true value exceeds its assessed value by $15.6 billion, a ratio of 24.6 percent, according to treasury officials, who announced the move in a press release today. 

A ratio of 85 percent or lower generally denotes noncompliance with state regulations, Dennis Shilling, acting director of the state Division of Taxation said in a statement."

"Tax redistribution? Tax hike? What's the difference?"

Indeed. Jersey City has not done a property reassessment since 1988 and this means that tens of thousands of Jersey City property owners are paying property taxes that are either unfairly low or unfairly high. The residents paying unfairly low taxes are people who live in areas that have seen the biggest gains in real estate prices since 1988 -- ie, usually downtown residents. The residents paying disproportionately high property taxes are those who live in less gentrified areas. Thus, the poor in Jersey City pay disproportionate property taxes.

Towns in New Jersey are supposed to reassess whenever general assessment falls under 85% of Equalized Valuation (ie, market value) of real estate, but this is supposed to be enforced by county tax boards and Hudson County's tax board has not fulfilled this duty.

"The Division of Taxation is reluctantly taking this action because the Hudson, Middlesex and Union county tax boards have failed to do what they are supposed to do," Treasury spokesman Joe Perone said. "The state has been more than patient in trying to convince the county tax boards to meet obligations, but they have been lax in enforcement because revaluations are unpopular."....

This would be the first time in four decades that the division is invoking its authority to force a municipality to reassess its property "because it's clear that the county tax boards and the three municipalities have no interest in complying with the law," he said.

Jersey City had started to do a reassessment in 2013 but Mayor Steve Fulop cancelled the reassessment in one of his first acts as mayor, falsely calling it a "back-door tax hike."

Steve Fulop is flat-out wrong about reassessment being a "tax hike." A reassessment is a tax redistribution, it shifts the tax burden away from property whose value has been flat or decreased towards property whose value has increased. Equal taxation based on value of property is a bedrock principle of good governance and Jersey City has scoffed at this. Unless a town increases its tax levy, the effect of a reassessment is neutral, not revenue-positive.

Because of Jersey City's lack of a property assessment, Steve Fulop's house is assessed at only $104,000, even though he he paid $845,000 for it in the summer of 2015.  Fulop's own personal taxes are thus only $7,700. (see this for more corroboration.)

Jersey City isn't alone in not reassessing and the Department of Treasury said that Dunellen and Elizabeth may also be forced to reassess, plus a few other towns at a later date. All of the non-compliant towns are in Hudson, Middlesex, and Union counties.

Based on the ratio of official assessment compared to Equalized Valuation, Jersey City is the twelth most underassessed town in New Jersey. (Source, Table of Equalized Valuations 2016)

Town	County	Ave. Ratio Assessed to True Value	Agg. Assessed Valuation	Equalized Valuation
South River Borough	Middlesex	30.82	$412,491,700	$1,338,389,682
Clark Township	Union	29.72	$736,384,800	$2,478,042,490
Kearny Town	Hudson	29.66	$1,053,180,040	$3,553,397,416
Garwood Borough	Union	29.63	$186,595,900	$629,887,717
Jersey City City	Hudson	27.63	$5,980,096,344	$21,661,162,459
Woodbridge Township	Middlesex	27.51	$3,134,845,150	$11,399,418,958
Mountainside Borough	Union	27.28	$477,364,200	$1,750,299,915
East Brunswick Township	Middlesex	26.64	$1,893,167,400	$7,108,627,682
Roselle Park Borough	Union	25.99	$283,238,410	$1,089,986,053
Scotch Plains Township	Union	24.71	$987,259,600	$3,996,246,076
Westfield Town	Union	24.62	$1,844,511,900	$7,493,429,972
Dunellen Borough	Middlesex	24.61	$144,355,200	$586,571,338
Fanwood Borough	Union	19.97	$228,392,700	$1,143,774,259
Union Township	Union	17.21	$1,032,808,600	$6,001,212,086
Elizabeth City	Union	13.40	$895,804,300	$6,686,841,431
Winfield Township	Union	8.36	$1,382,200	$16,539,043

Jersey City's property taxes are the state's most unfair based on the Coefficient of Deviation.  This means that property taxes in Jersey City diverge wildly from a common ratio whereas in other underassessed towns property sales tend to diverge by closer ratios.  (see ".")Jersey City's Property Taxes are the State's Most Unfair

Reassessments in other towns are important too, but reassessments of the other towns is less interesting because none of the other non-compliant towns are aid hoarders like Jersey City (and none has a gubernatorial candidate for mayor), therefore there is some hope that this could mean a reduction in Jersey City's state aid.

Sadly.  Not so fast.

No Effects on State Aid

Sen. Mike Doherty is correct about how internally unfair (ie, within Jersey City) the lack of a reassessment is

"Despite a booming real estate market that has enriched homeowners, many Jersey City residents continue to pay taxes as if they couldn't give their homes away."

But he is incorrect when he says this affects the rest of New Jersey.

"Even worse, the rest of New Jersey has been forced to pick up the tab while city officials have resisted efforts to be held accountable for their own spending."

And again:

"For years, I’ve worked to highlight the fact that some towns have massively gamed the system to shift their property tax burden to others and collect state aid they don’t deserve,” said Doherty. “Today’s announcement is recognition that they should no longer be given a free ride at everyone else’s expense.”

Jersey City's state aid would be unaffected by a reassessment for two reasons:

1.  State aid is linked to Equalized Valuation (ie, market value), not general assessment.

2.  Jersey City's state aid is protected by Adjustment Aid anyway.  

Equalized Valuation is independent of general assessment.  It is calculated by the county tax assessor by creating a ratio of sales prices to the official assessments on the sales.

Let's say that the whole town has a general assessment of $1 billion.  

Let's say that they sell in a given year sale prices exceed official assessments by 8.5 on average. (so properties that are assessed at $100,000 really sell for $850,000 and properties assessed at $2 million sell for $17 million ) (this is a badly underassesssed town, like Jersey City is)

Therefore the $1 billion general assessment is multiplied by 8.5 to get the Equalized Valuation, in this case $8.5 billion.  If the next year sales prices exceed assessed values by a factor of nine the general assessment would be multiplied by nine and the Equalized Valuation would be $9 billion.

Therefore it doesn't matter for Equalized Valuation if a town reassesses or not.  The sales ratio would change, but the product of general assessment x sales ratio would not be affected.

For instance, Paterson did a reevaluation in 2015. The new reevaluation dropped Paterson's general assessment to about $5.7 billion (from over $8 billion based on a 2007 reevaluation.)

The Passaic County tax assessor still did its own calculation and determined that Paterson's Equalized Valuation was $6.3 billion.

The lack of a reassessment has not prevented Jersey City's Equalized Valuation from climbing to $21 billion despite its general assessment only rising from about $5 billion to $6 billion from 1998 to 2015.

Adjustment Aid Protects Jersey City's Aid No Matter What

There are many people in New Jersey who observe Jersey City's increase in wealth and believe that Jersey City should lose state aid.

I believe this too.  Jersey City gets $111 million more in K-12 aid than SFRA says it demographically and economically needs and I think this should go to poorer districts.

But unless the law on Adjustment Aid is changed (or ignored) Jersey City's state aid will stay at $417 million forever.  

Unless SFRA is changed, as Jersey City's wealth increases all that will happen is that Jersey City's Equalization Aid will diminish to zero but be replaced dollar for dollar with Adjustment Aid.

Thus, no matter how much wealthier Jersey City becomes, it'll always be the same down-on-its-luck former port and industrial city in the eyes of SFRA.

Many people (Comptroller Matthew Boxer, conservatives Sen. Mike Doherty and Paul Mulshine, liberals like the New Jersey Policy Perspective, pragmatists like me) have criticized Jersey City's PILOTing because of how it deceptively lowers Jersey City's Equalized Valuation and sustains an artificially high aid level.  All of us assume that Jersey City's aid should be reduced, but we have been negligent in not saying that a reform of PILOTing would not be enough to free up Jersey City's aid for other districts.  What needs to happen in addition to PILOT reform is a reform of Adjustment Aid.  SFRA is the problem here, not only Jersey City's exploitation of the PILOT law.

Back to the property reassessment Jersey City is going to have to do.

Hooray! This is good for Jersey City!  

BLAH!  This has no effect on the rest of New Jersey.

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See Also "Jersey City's Property Taxes are the State's Most Unfair (Is Anyone Surprised?)"

February 2019 Update:
Here is the current balance between JC's General Assessment and EV.

Abbott and Adjustment Aid at Their Most Extreme: The Overaiding of Asbury Park

Greetings from Asbury Park!  Where the boardwalk is cool, the beach is wide, rock & roll history is everywhere, the restaurants hip, and the schools are tops in New Jersey in state aid, getting $55.4 million for 2350 K-12 kids, a record setting $23,567 per student! 

Asbury Park represents Abbott funding and Adjustment Aid at their most extreme and unjust.  I often criticize the disparities between Abbotts and equally poor (or poorer) non-Abbotts, but the case of Asbury Park is an example of disparities between Abbotts themselves.  

Yes, I am going to criticize the amount of aid Asbury Park gets, but this doesn't mean that I think Asbury Park shouldn't have an above-average amount of money.  The percentage of Asbury Park's students who are Free & Reduced Lunch eligible is 93%, the fifth highest in New Jersey. Additionally, 9% of Asbury Park's students are classified as having "Limited English," which is significantly above the state's 5% average (although below the average for DFG A)  

However, even given these facts about its challenging demographics, it is difficult to how Asbury Park's state aid is fair when its demographic peers get nowhere near as much money.  The next highest aided Abbott district, Camden, "only" gets $17,768 per student, nearly $6,000 per student less than Asbury Park! 

A couple of these districts, like Seaside Heights, Wildwood City, and Atlantic City have good tax bases and can use local revenue to produce adequate spending, but most cannot do this, especially Red Bank Boro, East Newark, Woodlynne, Lakewood, and Prospect Park.

To add to the unfairness of Asbury Park's exceptional state aid, it actually has a better tax base than most of its peers.

Asbury Park has an Equalized Valuation of $1,424,689,394, or a little over $600,000 per student, a figure which is below average, but above what Belleville and many non-Abbotts have.

Asbury Park Local Fair Share equals $16,502,549, or about $7,000 per student, again, below the state's average, but not that far below average that it justifies $23,567 per student in state aid.

Almost none of the Abbotts tax themselves anywhere near their Local Fair Share,  butAsbury Park taps less than a third of its Local Fair Share for a Local Tax Levy of $6,505,623, or $2,768 per student, which is low even compared to the other Abbotts.  Asbury Park recently had a three year streak of not raising taxes at all.

Though Asbury Park is below the state's average for tax base, Asbury Park is above most of its demographic peers in local resources.  If New Jersey's state aid were rational, Asbury Park would get less money than most of the other Abbotts, not significantly more.

(The above chart shows how strong a claim Woodlynne, Prospect Park, and possibly East Newark have to Abbott status.)

How Did Asbury Park Get Here?
I admit I am not completely sure how Asbury Park's aid became so high. The rampup of Asbury Park's spending came during the Big Abbott Decade of 1996-2006, when Asbury Park increased by 243%, compared to an Abbott average of 202%.  However, Asbury Park did not get the largest increase among the Abbott districts.  

One reason for Asbury Park's aid becoming so high in per pupil terms is that it has lost student population.  Unfortunately information on student enrollment is not available online prior to 2006-2007, but since 2006-2007 Asbury Park's student population has fallen from 2,700 to 2,350, or 13% and I know the decline goes back much farther than that. As that decline has occurred, Asbury Park has not lost state aid proportionally, thereby driving up per pupil aid levels and its spending.  

Yet another reason Asbury Park's aid is so high is that prior to SFRA the Abbott districts could request/demand supplemental funds from the state that were outside of the aid formula.  Asbury Park may have been more aggressive than most of the other Abbotts in pursuing this supplemental money.  

Asbury Park was involved in litigation against the state even outside of the neverending Abbott lawsuit.

Adjustment Aid = "Hold Harmless" money = Aid Hoarding

SFRA ended the Abbott privilege of being able to seek supplemental funds, but the funds Abbott districts already had were baked into Adjustment Aid, which is the major cause of Asbury Park's aid remaining so high.

If Asbury Park got only the amount of Equalization Aid, Special Education Aid, Security Aid, and Transportation Aid that SFRA recommended for it, Asbury Park's aid would be about $13,000 per pupil.  

The huge Adjustment Aid that Asbury Park gets, $24,422,872, puts Asbury Park in the #1 position for Most Overaided District in New Jersey.

Asbury Park's Adjustment Aid alone is higher than the aid high-FRL non-Abbotts Freehold Boro, Red Bank Boro, East Newark, and Woodlynne get combined.

District	County	Excess Aid, Compared to Uncapped Aid Per Student
Asbury Park	Monmouth	$9,995
Cape May Point	Cape May	$8,349
Dennis Township	Cape May	$8,165
Keansburg	Monmouth	$7,008
Ocean Township	Ocean	$6,203
Pemberton Township	Burlington	$6,188
Washington Township	Burlington	$6,188
Greenwich Township	Cumberland	$5,667
Hopatcong	Sussex	$5,429
Estell Manor City	Atlantic	$5,043
Woodbine Boro	Cape May	$4,680
Lower Cape May Regional	Cape May	$4,607
Allenhurst	Monmouth	$4,387
Weymouth Township	Atlantic	$4,031
Seaside Park Boro	Ocean	$4,020
Hampton Boro	Hunterdon	$3,957
Jersey City	Hudson	$3,551
Corbin City	Atlantic	$3,448
Lower Alloways Creek	Salem	$3,321
Tabernacle Township	Burlington	$3,182
Bass River Township	Burlington	$3,144
Lakeland Regional	Passaic	$3,085
Frankford Township	Sussex	$3,006

Despite its unbelievably high school spending, Asbury Park's schools are very low performing.  Asbury Park High School is at the 3rd percentile statewide.  Its other schools are at the 3rd, 3rd, and 1st percentage statewide.  

Even compared to their demographic peers Asbury Park's schools do very badly.  Asbury Park High School underperforms all but 8% of its peers, all of whom are lower spending than Asbury Park.  Asbury Park's other schools do just as badly.  

Asbury Park's schools do poorly by other measures too.

[The high school] has a 49 percent graduation rate. Only 2 percent of the senior class scored higher than 1550 on their SAT's, a measure of college and career readiness. This systemic failure doesn't start in high school: 87 percent of third graders can't read at grade level and 47 percent fail the basic skills test in math.

Asbury Park underperforms even Lakewood, whose schools spend less than half as much in the classroom as Asbury Park, where few kids get Pre-K, and whose system is notorious for bad management.  

Asbury Park dramatically underperforms East Newark, whose Total Budgetary Cost per pupil is under $10,000 per student, only one third of Asbury Park's.

When Asbury Park does this badly compared to significantly less well financed peers, I conclude that there comes a limit to how much good more money can do, especially when more money falls into an inefficiently run school district.

Yes, in 1990 when the Abbott II decision was handed down the Abbott districts needed more money - just like many poor districts now need more money - but NJ Supreme Court's "Parity Plus" doctrine where the Abbott plaintiffs had a constitutional right to be funded above the level of the most affluent districts has not been good policy.  In the case of Asbury Park it's been insane.

Glaring Injustice in Monmouth County

What is glaringly wrong about Asbury Park is that it is so close to Red Bank Boro and Freehold Boro, two of New Jersey's most rapidly growing and thus underfunded and underaided districts. 

The Freehold Borough school district is emblematic of the many districts across New Jersey that are struggling to meet the academic and social needs of their students as a result of years of underfunding by the State. Rapid population growth has the district facing severe overcrowding without the resources to increase staff and facilities to appropriately serve all students. 

The district currently has class sizes that exceed the minimums required for “high need” districts at all early elementary grades. For example, there are 25 students in kindergarten and first grade classes and one second grade class with 30 students, far above the 21 student threshold.

Freehold Borough students are also deprived of many of the supports, including reading interventionists and special education staff, that are necessary to ensure they read on grade level, a skill that is critical to their success in school.... 

Freehold Borough in Monmouth County is a preschool-8th grade district with a current enrollment of just over 1,580 students. Enrollment has increased 43% since 1998-99. Student demographics have also changed dramatically, with a doubling of the number of at-risk (low-income) students and a fourfold increase in Hispanic students. Over three-quarters of the district’s students are now low-income, up from 51% in 1998-99.

Freehold Boro's business administrator states: 

"We are educating an increased number of students with the same amount of money," Howe said. "I don't want to say our students aren't doing well... but certainly they could benefit if we got more money in state aid."

Asbury Park gets over 18 times more state money than Red Bank Boro and over six times more money than Freehold Boro.

Will the state stand for that even if Red Bank Boro and Freehold Boro equal Asbury Park in size?

It looks like it.  The populations of Red Bank Boro and Freehold Boro have already converged with Asbury Park's and there is no Democrat that I know of who supports redistribution.  Since leading Democrats have now given up on fully funding SFRA and the caucus would rather give $1 million to Montclair than any of New Jersey's most underaided districts, it seems that there is not much hope for Red Bank Boro and Freehold Boro.

How is it that a Republican, Caroline Casagrande, who seems to have an economically viable proposal to help?

“The children (in Freehold) are grossly under adequacy,” said Casagrande. She called it "maddening" that 31 urban districts, formerly known as Abbott districts, absorb 60 percent of all school funding. “Our school dollars are still fully locked up in who was impoverished in 1986; leadership in both the Senate and Assembly have blocked reforms to redistribute those funds. It’s such an injustice.”

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See Also:

• PILOTed Chic: How Asbury Park Hides its Wealth