N.J. school districts worry about losing out in latest Trenton funding fight

Advanced Placement courses at Kingsway Regional High School are in short supply, but study halls are plentiful. Superintendent James Lavender depends on them to fill scheduling gaps.

In the growing Gloucester County school district, it is not uncommon for a physical education class to have one teacher for 40 students or for middle school class sizes to be at capacity. Beyond the classroom, the high school's track has been deemed too hazardous for meets.

"We are spread so thin, it is very difficult to keep our heads above water," said Lavender, whose district for years has received millions of dollars less than it was entitled to under a state formula. "It's a problem that has absolutely been ignored by the state of New Jersey."

No longer. Lawmakers in both houses are reconsidering how New Jersey funds schools, a decades-old debate involving court battles over aid to poor districts, perennial grief over property taxes, and political battles over money.

Although the state has a formula for distributing the money, it is not being followed. Funding has largely been flat for years, prompting widespread complaints.

Some districts, meanwhile, are still getting state aid that was intended to be phased out. The money — "adjustment" or "hold harmless" aid — was part of the deal to pass the funding formula in 2008, to ensure that no district got less money under the new formula than it had the year before.

Now Senate President Stephen Sweeney (D., Gloucester) wants to start drawing down aid from districts he says are overfunded and shifting money to those such as Kingsway, where a newly formed Senate committee will hold its first public hearing this week.

Sweeney also wants to change the formula to allow greater aid increases for growing districts.

Not everyone has endorsed his approach, including Assembly Speaker Vincent Prieto (D., Hudson), who is holding separate hearings.

The New Jersey Education Association, which represents the state's teachers, called Sweeney's plan "divisive." And districts that would stand to lose money don't consider themselves overfunded.

"It's like going into a room of hungry people with one loaf of bread. Some get a bigger piece than other people, but everyone leaves the room hungry," said Ginny Murphy, school board president in Washington Township, a Gloucester County district that could lose $2 million a year if Sweeney's proposals are enacted.

Gov. Christie proposed his own plan last year, which would scrap the current practice of giving districts extra aid for poor students and English language learners, which would result in increases for suburban districts and deep cuts to urban schools.

Passed by the Legislature in 2008, the current funding formula is rooted in the landmark Abbott v. Burke case, in which the New Jersey Supreme Court directed additional resources to special-needs districts based on test scores and socioeconomic factors such as residents' income.

Christie, who opposes the Abbott decisions, recently asked the court to reopen the case, seeking power to break collective-bargaining contracts and to freeze school funding levels. The court has not ruled on the request.

The current formula, which was found constitutional in 2009,  calculates a base cost of educating a student and allots extra money to districts for students with additional needs.

"It is the strongest funding formula in the nation, if not in the history of school finance generally," said David Sciarra, executive director of the Education Law Center, who argued the Abbott cases on behalf of the poor, mostly urban districts.

Apart from Christie's plan, he said, "nobody is really talking about undoing the formula."

The biggest problem, Sciarra said, is that the 2008 formula was fully funded for only one year.

Confronted with a budget gap when he took office in 2010, Christie cut $1.1 billion in school aid. The Education Law Center sued, and the administration was forced to restore $500 million in aid, but that applied only to the 31 Abbott districts, Sciarra said.

Kingsway is a grade 7-12 district of close to 2,700 students, serving Swedesboro, South Harrison, East Greenwich and Woolwich; it also has students from Logan Township. The district, which received more state aid under the new formula in 2008 and 2009, only to lose the money in 2010, has "never been able to catch up," said Lavender, the superintendent.

Enrollment has grown 38 percent since 2006. While the district received a boost in 2012 to account for some of its growth, it is still getting less than half of what it should be receiving from the state, Lavender said.

The district, which has a budget of $33.7 million, is projecting a $2 million budget gap for the coming year, meaning layoffs and program cuts, Lavender said. At the same time, he says he expects enrollment will grow an additional 5 percent.

"We are drowning. There are school districts like Kingsway throughout the state who are also drowning. And it's not fair for these students," he said. He called on Prieto to "get off that dais and fix this problem."

In a recent interview, Prieto said, "We're trying to see how we can help everybody and not devastate other municipalities."

The state would need to spend an extra $1 billion to fully fund the formula. Given other budget pressures — including costs of public-worker pensions — Sweeney has proposed spending an extra $500 million, phased in over five years.

But redistributing adjustment aid, which is about $600 million, is also necessary, he says.

Without changes, "the districts that are underfunded fall even further underfunded and the other districts stay whole, pretty much, because they're being overfunded," Sweeney told reporters earlier this month.

In the current fiscal year, 379 districts are receiving less state aid than they should be getting, while 212 districts are receiving more, according to the New Jersey Association of School Administrators.

Not all districts receiving adjustment aid, however, are spending an adequate amount, Sciarra said.

Jersey City, recently singled out by two Camden County Democrats in a letter to Sweeney and Prieto as an "egregious example of a community that has manipulated its tax base" to receive extra aid, receives $114 million in adjustment aid. But the district is still $100 million below its "adequacy" budget, as determined by the formula, Sciarra said.

"If you take that money away, there are going to be substantial cuts to a district that already is below where it needs to be," he said.

For districts that would lose state aid under Sweeney's plan but are not spending at "adequacy" levels, the state may have to require that they raise local taxes, or "at least create some kind of penalty" if they do not, Sciarra said.

A district such as Washington Township, by contrast, is already above "adequacy" under the formula  and getting $14 million in adjustment aid, Sciarra said. But it would still hurt to lose it, school officials say.

The Gloucester County district, which has a budget of $150 million, lost $8 million when the state cut school aid in 2010, which led to teacher layoffs and cuts to music programs.

And while the district's enrollment has been declining, local taxpayers carried the burden when the district was growing, paying for new schools and expansions in the 1990s and early 2000s, said Superintendent Joseph Bollendorf.

If the district loses aid from the state, "it will absolutely have a direct impact on kids in our community," Bollendorf said.