TRENTON, N.J. – Some New Jersey school districts are bracing for permanent closures heading into the 2026-2027 academic year. Meanwhile, the state’s largest school districts are presently receiving an outsized share of state education funding in Fiscal Year 2026, with the top ten aid recipients collectively taking in approximately $4.4 billion in taxpayer support. Scrutiny is increasing amid reports of highly questionable spending in Newark, the state’s most highly-subsidized district in raw dollars which just introduced a $1.67 billion budget.
$4.4 billion represents more than 7% of the entire $58.8 billion state budget enacted for FY 2026. It also amounts to more than one-third of all statewide K-12 formula aid, which totals approximately $12.09 billion this year.
According to figures released by the New Jersey Department of Education, the state is distributing about $12.055 billion in school aid excluding debt service. The funding covers equalization aid, special education, transportation, school security, and other programs intended to support local districts.
As in previous years, the largest awards are concentrated in New Jersey’s biggest urban systems, where student enrollment is high and local property wealth is comparatively low:
|
Rank
|
District
|
County
|
FY26 Aid
|
|---|---|---|---|
|
1
|
Newark City
|
Essex
|
$1,326,144,594
|
|
2
|
Paterson City
|
Passaic
|
$618,588,888
|
|
3
|
Elizabeth City
|
Union
|
$597,391,649
|
|
4
|
Trenton City
|
Mercer
|
$399,745,515
|
|
5
|
Camden City
|
Camden
|
$369,671,151
|
|
6
|
Plainfield City
|
Union
|
$288,083,712
|
|
7
|
Passaic City
|
Passaic
|
$271,208,732
|
|
8
|
Union City
|
Hudson
|
$239,219,148
|
|
9
|
Perth Amboy City
|
Middlesex
|
$226,194,666
|
|
10
|
New Brunswick City
|
Middlesex
|
$210,683,283
|
Newark once again tops the list by a wide margin, receiving approximately $1.33 billion in aid. More than $1.2 billion of that comes through equalization aid alone, underscoring the district’s dependence on state funding.
Paterson and Elizabeth follow with allocations in the $600 million range. The remaining districts in the top ten each receive well over $200 million in state support.
The formula driving those allocations is designed to steer larger amounts of aid toward districts with – allegedly – greater financial “need.” Equalization aid makes up the largest share of funding, while additional dollars are distributed for special education, transportation, and security costs. Urban districts serving large numbers of low-income students, English learners, and children with disabilities often receive substantial supplemental aid through those categories.
But is more money truly what districts with poorer residents “need”? The disparity between the state’s largest recipients and smaller districts remains significant especially at a time when suburban schools are closing due to aid cuts. While the top urban systems receive hundreds of millions—or in Newark’s case, more than a billion dollars—many suburban and rural districts receive less than $10 million annually. Some districts collect under $1 million in total state aid.
Supporters of the current funding structure argue the state has a constitutional obligation to provide every child with a “thorough and efficient” education, regardless of ZIP code or local tax base.
Critics compelling counter that New Jersey taxpayers deserve stronger accountability measures, especially as education spending continues to climb. They also appropriately question whether the largest aid increases are translating into measurable academic improvement, safer schools, or better long-term outcomes for students.
With the FY2027 budget debate now well underway, billions of dollars are now on the line as lawmakers, parents, and taxpayers watch closely to see whether record aid levels – and correspondingly record high propery tax burdens – produce meaningful results in the classroom.
