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Current Funding Formula

Current Funding Formula. By: Erica Martucci, Marcy Paturzo, Gina Petrozelli, Natalie Nigro, and Robert Morris. School Funding Reform Act of 2008. On January 7, 2008 the New Jersey State Legislature passed the School Funding Reform Act of 2008

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Current Funding Formula

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  1. Current Funding Formula By: Erica Martucci, Marcy Paturzo, Gina Petrozelli, Natalie Nigro, and Robert Morris

  2. School Funding Reform Act of 2008 • On January 7, 2008 the New Jersey State Legislature passed the School Funding Reform Act of 2008 • This legislation established a new system for funding public school districts in New Jersey • The New Jersey Supreme Court determined in its 1997 Abbott v. Burke decision (“Abbott IV”) that the previous funding formula, known as the “Comprehensive Education Improvement and Financing Act” (CEIFA), was unconstitutional for children in 31 of the state’s poorest urban communities http://www.njea.org

  3. Adequacy Budget • The State determines the “adequate” base amount per pupil that is necessary to meet the Core Curriculum Content Standards • Must meet the requirements of the educational clause of the State Constitution • Is calculated by multiplying the base amount per pupil times the student enrollment of the district • Is then weighted to reflect the costs of various specialized student populations such as special education, at-risk, Limited English Proficiency (LEP), and combined at-risk/LEP pupils http://www.njea.org

  4. SPECIAL EDUCATION FUNDING • Shift to flat amount per student based on average classification and average cost • Special education aid will be paid partly from equalization aid and partly form categorical aid • Updated thresholds— • $40,000./ in district • $55,000./ out of district

  5. Increase in State Support • $10,897. average excess cost of special education students • 14.69% assumed classification rate • Funding increase for costs over the new threshold amounts • 75% excess cap for amounts over threshold for out of district students and in district special education programs • 90% excess cap for amounts over threshold for in district programs where students are placed with their non-disabled peers

  6. Summary of Adequacy Budget Amounts • Elementary--- $20,546. • Middle school--- $20,932. • High school--- $22,186. Special Education = (Total Enrollment x 0.1469 x $10,897. x 0.67) (Main Component) + (Total Enrollment x 0.019 x $1,082.) (Speech Students)

  7. Additional Noted Changes • Districts will need to demonstrate that students’ IEP require intensive services • Provides funds to districts for students with more expensive needs • May deduct funds from old school district and credit new district when there is a mid-year change

  8. Implications for Students and Districts Goal is to “provide greater equity and predictability to state funding.” www.state.nj.us/education/stateaid/0809 www.njsba.org/sb_notes/200801124/faq.html

  9. STATE AID • State Aid Increases will range from 2% to 20% in formula. • 1/3 will receive 10% or more. • 25% will receive 20% increase. • Minimum 2% guaranteed.

  10. District’s Aid Based On: • Enrollment figures. • District’s comparative wealth. • The number of special education and at-risk students. • Spending level vs. Adequacy budget. • Is property tax level above or below the fair share calculation by the state?

  11. Unified Formula • Applies to both Abbott and Non-Abbott Districts alike. • If district spends above its adequacy budget there will be no state aid toward that amount. • Approx. 120 districts will have to spend a portion of their state aid to reduce property tax rates.

  12. Major Concerns • Special education funds will now be allocated on a wealth basis. Previously figured on a per student basis regardless of wealth. • Voters may not be able to defeat and reduce school budget and tax rate on a local level if the decrease would fall below state-mandated minimum level. www.njcommunity.wordpress.com/2008/04/21/doherty

  13. Examples of State Aid Increases • Rumson-Fair Haven (Monmouth) 10% increase • Stafford (Ocean) 8.24% increase • Southern Regional (Ocean) 3.74 % increase • Lakehurst (Ocean) 11.59% increase • Asbury Park (Monmouth) 2.17% increase (former Abbott district) www.state.nj.us/education/stateaid/0809

  14. State aid is distributed through a foundation formula and calculated on a per-pupil adequacy budget which recognizes the challenges in meeting needs in high poverty districts. • State trying to meet its constitutional obligation of providing a “thorough and efficient” system of education.

  15. Implications of the New Jersey Funding Formula for Local & State Taxpayers

  16. “The Concept”Local & State Taxpayers….overview An Adequate Budget is supported by both state and local share. Local fair share represents what a community should be able to contribute in local property taxes. Local fair share is based on property value & income and is the same calculation as under current law. For ½ of the local fair share, everyone pays the same equalized tax rate (tax levy divided by market value of property)….for other ½ - everyone pays the same % of income

  17. School Funding/Property Tax Issues • Both are inextricably linked • Funding Formula can reduce property taxes • Funding Formula can help community plan better to meet their educational expenses.

  18. Fairness to Taxpayers(How the NJ Funding Formula will assist taxpayers) • Requires all constituents of the state – individuals, businesses and community to pay a fair share, but no more than a fair share. • Increase the state share of the total cost of Public Education to at least 50% to reduce the local share of Public Education costs. • Establish and maintain a certain level of state support behind every student. • No district should be required to support itself locally in excess of a reasonable, established percentage. This excludes provisions that exceed the amount the state has determined is adequate.

  19. Fairness to Taxpayers…cont’ • Includes a procedure to define and measure the fiscal capacity obligations of each school district and distribute aid in a way that is sensitive to each municipality’s own ability to pay for its schools. • Ensure that tax dollars are used efficiently and effectively to help all students achieve state content and performance standards

  20. “Parents and Educators want more for students…the Funding Formula gives all children the opportunity to succeed, while providing a balanced, unified & equitable relief to local property taxpayers who have shouldered the important yet growing cost of education.”John Corzine

  21. REFERENCES Emerging Issues in State level School Finance. Retrieved on October 15, 2008, from: http://www.ericdigests.org/pre-9217/finance.htmState of New Jersey State Department of Education (2008). www.state.nj.us/education.State of New Jersey Department of Education (2008). Division of Finance. Retrieved October 14, 2008, http://www.nj.gov/education/finance/fp/dwb/calendar

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