April 23, 2009 – Newark, NJ

Education Law Center (ELC) has informed Governor Corzine and key legislators that the proposed use of education federal stimulus funds provided to New Jersey under the American Recovery and Reinvestment Act (ARRA) appears to conflict with federal law governing use of those funds.

Federal stimulus law requires that stabilization aid for education be used to implement increases in state school funding formulas and to "allow funding for phasing in State equity and adequacy adjustments, if such increases were enacted pursuant to State law prior to October 1, 2008." The Governor’s proposed FY 2010 budget does not fully implement "equity and adequacy" increases required under the School Funding Reform Act (SFRA), enacted in January 2008.

"Last week, we issued a report detailing district by district underfunding of the SFRA in the 2010 state budget," said David Sciarra, ELC Executive Director. "The Governor’s proposed budget would not implement $303 million in increases required by the SFRA to ensure equitable and adequate school funding. This proposal may not conform with the directions in the federal stimulus law."

Equally worrisome, the Governor would use $1.057 billion, or almost $80%, of the total stabilization funds allocated to NJ in the first year – FY 2010. These funds are allocated to support school funding not just in 2010, but also 2011.

"That means only about $239 million in stabilization aid will be available to fund the SFRA in 2011, and next year the state may not have the resources to fund the formula even at the 2010 level," Sciarra said. "We need to be sure we’re planning ahead to avoid significant cuts in programs, staff and services not just this year, but next."

ELC is urging the Governor and legislative leaders to work together to craft a budget for FY 2010 that complies with federal law and fulfills the obligations under the SFRA formula to provide equitable and adequate resources to NJ school districts, especially high poverty, moderate and middle-income districts, and at-risk students, targeted under the new formula.

Read the full text of the ELC letter to Governor Corzine and the April 15 ELC news release, New School Aid Formula Underfunded by $300 Million.

For more information contact:
Sharon Krengel
Policy & Outreach Coordinator
skrengel@edlawcenter.org