The NJ Department of Education is rewriting the State’s school funding formula based on new cost figures derived from a "costing out" study conducted in 2003. However, recently released documents and other information show the study did not meet established professional standards for conducting such research.

Details about the DOE effort were also revealed by Education Commissioner Lucille Davy and John Augenblick, a Denver consultant, at an October 24th hearing of the Joint Legislative Committee on School Funding. Mr. Augenblick was hired to advise DOE officials on the study.

In 2003, the DOE analyzed education costs using two commonly accepted methods – professional judgment and successful schools. The professional judgment approach uses "panels" of educators, business officials and others to determine the resource inputs needed for a high quality education, and then uses independent experts to cost those inputs out and fix an adequate funding level. The successful schools, or "lighthouse district" approach seeks to identify districts performing at high levels, and identify the inputs, best practices and costs that make up their recipe for success.

According to Molly A. Hunter, Managing Director of the National Access Network at Teachers College, Columbia University, who has reviewed studies across the nation, "over 50 education cost studies have been commissioned in over 35 states. Almost all are based on a transparent process, and the results are usually presented in reports that are easy to understand and widely circulated." She added that "an open, rigorous process helps legislators and the public because they are being asked to rely on the studies."

Based on standards used in other states, and what we now know about how the New Jersey study was conducted, it appears there are serious problems. For example,

• DOE never shared their methods or calculations for determining needed resources and costs with professional panels, stakeholders, legislators and advocates, nor did the agency actively solicit public comment on their work. In addition, DOE never disseminated a final report on the resource inputs, cost methods and funding determinations.
• DOE did not conduct further research and study to compare its base cost results with the 128 suburban District Factor Group "I&J" districts, which currently comprise New Jersey’s successful school districts under the landmark Abbott v. Burke rulings. Nor did DOE study the extent to which its extra inputs for poor or "at-risk" students conforms with the preschool, full-day kindergarten and other K-12 supplemental programs ordered in Abbott for students in the urban districts.

According to Dr. Margaret Goertz, a school finance expert and professor at the University of Pennsylvania, "based on the information made public so far, it appears that the DOE did not follow established procedures for costing-out studies, and the process falls short of those used in New York, Maryland and other states where such studies have been completed. Verifiable results, obtained through an independent, unbiased and transparent process, are the essential building blocks for an adequate and equitable school funding formula," she added.

"When compared to costing-out in other states, the DOE study is seriously flawed," said David Sciarra, ELC Executive Director. ELC is calling on the Joint Legislative Committee to obtain a much more rigorous costing out study that meets accepted research standards and procedures before working on a new school funding formula.

ELC is asking the Committee, in its report due on November 15th, to propose that the Legislature quickly enact Assembly Bill 3195 co-sponsored by Assemblyman Craig Stanley and Assembywomen Jennifer Beck and Joan Voss. This bill, which was approved by the Assembly Education Committee on March 9, 2006, would authorize a rigorous, independent study modeled on the successful approach used in Maryland.

Prepared: November 8, 2006

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