School funding has erupted into a major issue with many districts around the state facing massive budget shortfalls. When the state is questioned about additional aid, many local boards of education are told to “raise taxes.” To most, this is not an option. The disastrous S2 funding formula has created wildly disproportionate funding where a growing number of districts are struggling to just maintain staffing and programs while there are some districts that are awash in money.
The Newark school district gets $1.33 billion with a graduation rate of around 85%, which is skewed by charter schools and tech schools with graduation rates over 90%. Absent the latter, graduation rates hover around 40%. Meanwhile, across Newark traditional public and charter schools the proficiency rate was 39.3% for English language arts and 23.8% for math in 2024 – hardly a glowing ROI. To make matters worse, Newark has one, if not the largest commercial tax ratable bases in the state and still managed an additional $75 million increase in state aid.
Some of the expenditures of that very generous state funding can only be described as outrageous. One of the most egregious is spending $4.5 million on a museum dedicated to the history of the Newark school system. Other expenditures in the same vein include $17.5 million for professional development, $2.9 million for catering for “Back to School” night $33,000 for an off site “Fun Day” event with alcohol and a nearly $300,000 superintendent salary. Yet there are entire grades of students who are not performing up to grade level.
Given all these troubling conditions, if there was ever an entity ripe for a DOGE type investigation in New Jersey, this is it. A case in point also involves the Newark school system – the 2010 $100 million gift from Mark Zuckerberg. An analysis of how the money was spent found that more than half went to outside consulting firms and backpay for the unions. Fifteen years later, there are no visible improvements that can definitively be attributed to the Zuckerberg gift.
While some school districts have benefitted under S2, a substantial number around the state have been impacted by severe cuts in state aid resulting in significant budget shortfalls. Since much of their spending is locked in statutorily or contractually, they are forced to pick their poison – either enact Draconian cuts with layoffs, the elimination of programs, etc. or raise taxes beyond the 2% cap. The Murphy administration has cut about $800 million to 173 school districts under S2, while costs have skyrocketed, and their local share has drastically increased because of property values:
- The higher property values mean the local share is larger, property taxes must be raised even more, and districts receive less state aid or larger cuts than they can afford.
- There are 299 school districts that will not receive any equalization aid this year because their local share is greater than their adequacy budget.
- Governor Murphy proposed $20 million for a Tax Levy Incentive Aid program, which will give aid to towns that raise their property taxes as much as possible but still won’t reach their formula-calculated local share.
If this all sounds convoluted and confusing, it is. There is an alternative, however. Assembly bill 1125 known as the “Fully Funding Schools and Cutting Property Taxes Act” prime-sponsored by Minority Leader John DiMaio with 27 additional co-sponsors would insert fairness into school funding, while cutting property taxes for New Jerseyans. It’s time for a completely new and fair way to distribute school funding – one that doesn’t benefit a few at the expense of many.
