ASSEMBLY EDUCATION COMMITTEE

STATEMENT TO

ASSEMBLY, No. 4161

STATE OF NEW JERSEY

DATED:  APRIL 5, 2024

      The Assembly Education committee reports favorably Assembly Bill No. 4161.

      This bill establishes in the Department of Education a Stabilized School Budget Aid Grant Program.  The purpose of the program is to provide aid grants to eligible school districts of up to two-thirds of the amount of the districts’ State school aid reductions for the 2024-2025 school year.  A school district would be eligible to apply for an aid grant under the program if the district is subject to a State school aid reduction in the 2024-2025 school year. 

      In order to receive an aid grant under the program, an eligible district is required to apply to the commissioner and meet certain conditions related to raising its local tax levy.  As a condition of the receipt of an aid grant, an eligible district is to fully exhaust: 1)  all tax authority that is available to the school district pursuant to current law that establishes a two percent tax levy growth limitation and certain allowable adjustments above the two percent cap; and 2)  the total amount of the district’s “banked cap.”  Under current law, a school district may add to its adjusted tax levy in any one of the next three succeeding budget years, the amount of the difference between the maximum allowable amount to be raised by taxation for the current school budget year and the actual amount to be raised by taxation for the current school budget year.  In addition, an eligible district receiving aid under the bill is to not reduce the total number of school district employees compared to the prior school year, unless the commissioner approves reductions that are being made due to an anticipated decline in enrollment in the 2024-2025 school year compared to the prior year.

      Under the bill, an otherwise eligible school district is not eligible for an aid grant in the event that the district’s full exhaustion of current law tax authority results in the raising of additional funds that are greater than the amount of the school district’s State school aid reduction. 

      The bill appropriates $71.4 million to fund the Stabilized School Budget Aid Grant Program.

      An eligible school district that is awarded an aid grant may implement increases to its general fund tax levy up to one-third of the amount of the districts’ State school aid reductions, in the event that there is a difference that remains after the district’s receipt of aid under the bill.  The bill provides, however, that no school district receiving an aid grant under the bill can raise a general fund tax levy that is greater than 9.9 percent of the prebudget year adjusted tax levy, unless the full exhaustion of tax authority required under the bill is otherwise greater than 9.9 percent of the prior year tax levy.