SENATE EDUCATION COMMITTEE
STATEMENT TO
SENATE, No. 3917
with committee amendments
STATE OF NEW JERSEY
DATED: JANUARY 30, 2025
The Senate Education Committee favorably reports Senate Bill No. 3917 with committee amendments.
As amended, this bill makes various changes to State school aid, including extraordinary special education aid and vocational expansion stabilization aid, and establishes a new category of State school aid known as reduction adjustment aid. The amended bill also includes certain additional requirements for the issuance of the Educational Adequacy Report.
The amended bill requires the Department of Education to make available on the department’s Internet website the calculation of aid payable to each school district in the succeeding year in a user-friendly manner, including explanations of the variables used to determine the district’s aid. The information is required to be posted each year within two days of the Governor’s Budget Message.
Under current law, a school district is reimbursed for certain special education costs in the form of extraordinary special education aid. However, in recent years the State’s appropriation for extraordinary special education aid has covered only a portion of eligible costs provided in state, with the percentage covered fluctuating from year to year. The amended bill requires the State to increase the appropriation from year to year, or otherwise ensure that the percentage of a school district’s costs reimbursed through extraordinary special education aid increases compared to the previous fiscal year.
Additionally, the amended bill provides that the amount of vocational expansion stabilization aid received by a county vocational school district is to be adjusted to allow for increases in resident enrollment. The adjustment is to equal the number of additional students enrolled in the district multiplied by the additional cost per pupil for county vocational school districts and the geographic cost adjustment.
The amended bill also establishes certain municipal overburden protections to prevent a school district from receiving a reduction in State school aid. Pursuant to the amended bill, an SDA district would not be subject to a reduction in State school aid if it is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recently available calendar year and if the district is spending below adequacy. In the case of a school district other than an SDA district, the district would not be subject to a reduction in State school aid if it is located in a municipality in which the equalized total tax rate is at least 10 percent greater than the Statewide average equalized total tax rate for the most recently available calendar year and is spending at least 10 percent below adequacy. These municipal overburden protections would also apply to a regional school district if 50 percent or more of the district’s constituent districts or municipalities met either of the aforementioned qualifying criteria. An SDA district that is spending above adequacy would not be subject to a reduction in State school aid that exceeds the amount by which the district is spending above adequacy.
As amended, the bill also establishes reduction adjustment aid to ensure that the amount of State school aid provided to a school district is not decreased by more than two percent of the district’s prebudget year total operating budget. The total operating budget is defined as the sum of a district’s general fund revenues from local sources, State sources, federal sources, and other sources, less any withdrawals from reserve accounts and reimbursements for extraordinary special education aid.
Additionally, the amended bill makes certain changes to the Educational Adequacy Report, which is submitted to the Legislature every three years to update the various parameters used to calculate State aid to school districts. Pursuant to the amended bill, the Commissioner of Education may initiate a review of certain elements of the school funding formula, including the metrics for adjusting costs in intervening years between reports. Additionally, the amended bill requires that a draft of the Educational Adequacy Report be made available for public comment for at least 30 days, during which time members of the public may provide remarks on the draft report at public hearings to be held at various locations across the State and through the submission of written and electronic testimony.
During the development of the next Educational Adequacy Report following enactment of this amended bill, the commissioner is to engage a diverse group of stakeholders to review and make recommendations concerning: the calculation of a district’s local share and whether the metrics used are best able to estimate a district’s potential adjusted tax levy; the impact and feasibility of using multi-year averages in the calculation of local share; the abilities of the Department of Education and school districts to predict and anticipate State school aid amounts from year to year; and possible methods of improving upon the existing preschool funding methodology.
Finally, the amended bill establishes the Special Education Funding Review Task Force for the purpose of assessing the effectiveness of State aid provided to support special education costs, examining the possibility of a tier-based model for special education funding, and making recommendations regarding the implementation of a tier-based funding model. The task force is to consist of 11 members, each of whom is to have a background in, or special knowledge of, the legal, policy, and administrative aspects of special education in New Jersey. The task force is to issue a final report detailing its findings and recommendations to the Governor and the Legislature no later than one year after the organization of the task force.
COMMITTEE AMENDMENTS:
The committee amended the bill to:
· remove sections of the bill that would have amended laws related to the school district general fund tax levy cap and banked cap;
· remove changes to the eligibility thresholds for extraordinary special education aid, which were included in the bill as introduced;
· broadly stipulate that the amount of extraordinary special education aid is to increase in each year instead of prescribing a schedule for increasing aid as provided in the bill as introduced;
· establish the Special Education Funding Review Task Force; and
· shift responsibility for exploring the feasibility of implementing a tiered system of funding extraordinary special education from the Educational Adequacy Report to the task force.