The administration of Governor Christopher Christie has signaled it may propose cutting school funding in FY2011 to those districts currently receiving transition or "adjustment aid" under the new school funding formula.

In addition, the Christie administration has suggested that some portion of the cut in adjustment aid may be "redistributed" to give other districts a small aid increase.

Exactly what the Governor's plan is for funding New Jersey's public schools will become clear when he gives his March 16 address on the FY11 State Budget. However, any proposal to cut adjustment aid in transition districts would run afoul of the State funding law -- the School Funding Reform Act of 2008 (SFRA). It would also create a scenario where a select group of districts would be forced to shoulder the burden of arbitrary school aid reductions.

Under the SFRA formula, numerous districts are currently receiving a form of state funding called "adjustment aid." This aid is designed to ease the transition as overall budgets in these districts are brought down to the "adequacy" cost levels established in the formula. "Adequacy" is what the NJ Department of Education has determined to be the level of spending necessary to provide NJ students with a "thorough and efficient" education.

Adjustment aid is formula-driven. When the SFRA was first proposed, it was dubbed "hold harmless" aid, since it was designed to prevent a "cliff effect," or a sudden and sizable drop in state aid that would trigger significant cuts in educational programs and staff by districts as they transition to adequacy. With adjustment aid, these transition districts will be "flat funded" -- or receive no increase in state aid -- until their overall budget is lowered to the adequacy level. Most importantly, adjustment aid protects these districts from having their total state aid cut below the prior year's level.

In FY10, the 222 transition districts received $502 million in adjustment aid. If Governor Christie proposes to cut adjustment aid in the amount necessary to immediately drop each district to its adequacy level under the formula, the total aid cut would be $343 million statewide, for an average of $1,105 per pupil. A summary of this cut in adjustment aid, by district grouping, is below:

For a district by district listing of the adjustment aid cut, by county, click here .

Any cuts in adjustment aid would likely disproportionately fall on "High Needs" districts serving significant concentrations of low-income students and Black and Latino students.

In addition to a potential $343 million cut in adjustment aid, the Christie administration has also hinted that some of that cut may be redistributed to give other districts a slight aid increase.

It is crucial to underscore that adjustment aid was included by the Legislature as an integral component of the SFRA funding formula. In addition, the Supreme Court, in upholding the constitutionality of the formula in the May 2009 Abbott XX ruling, recognized the importance of adjustment aid, finding that the aid "is provided as transition assistance to SFRA's funding methodology. It is designed to enable districts that are spending above their Adequacy Budget to maintain their existing level of spending without significant tax levy increases."

As a recent ELC analysis shows, the SFRA formula, if followed and funded by the Legislature, would provide a small aid increase to 347 districts across the state, while holding aid flat in the other 226 districts. The formula does not allow aid to be cut to any district, even those where aid does not go up, and does not permit aid within the formula to be shifted from one group of districts to another.

Contact:
Sharon Krengel,
Policy & Outreach Coordinator
skrengel@edlawcenter.org
973.624.1815 ext 24

Prepared: March 5, 2010

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