The Importance of Education Funding Efficiency in New Jersey - Garden State Initiative

The Importance of Education Funding Efficiency in New Jersey


The Importance of Education Funding Efficiency in New Jersey

Emaan Kazmi, GSI Summer Intern   |   August 3, 2023


New Jersey’s school funding formula allocates three types of aid to school districts annually: equalization aid, categorical aid, and grants designated for specific districts and purposes. In 2018, the school funding formula underwent amendments known as the S2 bill, aimed at redistributing funds through budget cuts and surpluses to promote equity between historically overfunded and underfunded districts. A key objective of the S2 bill and the education funding formula was to avoid relying on one-time aid solutions for districts facing future budget cuts. However, this goal is currently being undermined in Trenton.

In April of this year, Governor Murphy signed bill S3732, which provides $103 million in funding to over 170 school districts that are projected to face budget cuts in FY 2024 due to logistical challenges in the S2 school aid funding formula. S3732 aims to restore approximately two-thirds of the cuts these districts would otherwise experience in the coming years. However, the bill’s one-time allocation of $103 million to these 170 school districts highlights a broader issue in New Jersey: inefficient education funding and budgeting.

While it is crucial to establish equity and equal opportunities for students across New Jersey, it is equally vital to ensure effectiveness in achieving these goals. Although New Jersey is recognized for its highly achieving public education system, the costs are increasingly outweighing the benefits. Based on metrics regarding graduation rates of low income students, math and reading scores, SAT and ACT scores, and pupil-teacher ratio, the World Population Review deemed New Jersey third in overall quality of public education, trailing behind Massachusetts and Connecticut. However, when it comes to spending per pupil, New Jersey takes the cake by spending roughly 15 percent more than Massachusetts. On average, New Jersey is spending $20,021 per student, while Massachusetts is at $17,052 annually. The implementation of S3732 further underscores the inefficiencies in providing equitable and high-quality education throughout the state. Funding distributions from the bill and the overall budget passed for FY2024 indicate that certain districts continue to face over- or underfunding. For instance, Wallkill Valley Regional High School in Sussex County has raised concerns about state aid budget cuts severely impacting the school, leading to discussions by the Board of Education about potential cuts to foreign language faculty in order to save money. Meanwhile, the Atlantic City School District is experiencing an excess of resources. The district has lost roughly 1000 students in the past 8 years while also seeing increases in their annual education spending. There seems to be a lack of translation between high spending and results.

Some policy recommendations that could be put in place to simplify the school budget  in New Jersey include: Performance-based funding. The state can tie a portion of funding to the academic performance and outcomes of schools. Schools that demonstrate improved student achievement should be rewarded, while those consistently underperforming may receive additional support and oversight. Additionally, NJ can try to mimic Massachusetts school foundation budget known as Chapter 70 which is designed to represent the minimum funding needed for a school district to provide an adequate education to its students. The foundation budget takes into account factors such as the number of students, student demographics, and regional cost differences.

Education funding and efficiency is incredibly important for the future of New Jersey and should be on the forefront of lawmakers priorities. Every student should have access to quality education, but the current funding formulas and one time subsidy payments are preventing long term solutions to providing equitable education to students in New Jersey. Younger generations value the importance of education and understand that inefficient education spending will drive up the costs of settling in New Jersey through property taxes, while also making it harder for their future families to receive the quality education that New Jersey has had in the past. Younger generations of New Jerseyans and New Jersey residents in general should not have to sacrifice the security of quality education for high price tags and misplaced budget cuts to their home districts.

The author is a member of GSI’s Summer Inernship program and is a student at George Washington University majoring in Political Science and Business Analytics. She is a resident of Parsippany, New Jersey. 

Emaan Kazmi, GSI Summer Intern