S3917 SCS

An Act concerning school financing and amending and supplementing P.L.2007, c.260 (C.18A:7F-43 et al.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, the Department of Education shall annually, within two days following the transmittal of the State budget message to the Legislature by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), make publicly available on the department’s Internet website the calculation of each category of aid payable to each school district in the succeeding year pursuant to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.). The calculations shall be written in a user-friendly manner and shall include, at a minimum, explanations of the variables used to determine the district’s aid.

2. Section 4 of P.L.2007, c.260 (C.18A:7F-46) is amended to read as follows:

4. a. The State Board of Education shall review and update the core curriculum content standards every five years. The standards shall ensure that all children are provided the educational opportunity needed to equip them for the role of citizen and labor market competitor.

The Commissioner of Education shall develop and establish, through the report issued pursuant to subsection b. of this section, efficiency standards which define the types of programs, services, activities, and materials necessary to achieve a thorough and efficient education.

b. By September 1 of 2010 and by September 1 every three years thereafter, the Governor, after consultation with the commissioner, shall recommend to the Legislature through the issuance of the Educational Adequacy Report for the three school years to which the report is applicable revisions to:

(1) the base per pupil amount based upon the core curriculum content standards established pursuant to subsection a. of this section;

(2) the per pupil amounts for full-day preschool;

(3) the weights for grade level, county vocational school districts, at-risk pupils, bilingual pupils, and combination pupils;

(4) the cost coefficients for security aid and transportation aid;

(5) the State average classification rate for general special education services pupils and for speech-only pupils;

(6) the excess cost for general special education services pupils and for speech-only pupils; [and]

(7) the extraordinary special education aid thresholds established pursuant to subsection b. of section 13 of P.L.2007, c.260 (C.18A:7F-55);

(8) the equalized total tax rate and adequacy spending thresholds to be used for the purposes of determining whether a school district shall be exempt from a reduction in State school aid pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

(9) if deemed appropriate, the use of inflationary measures, other than the CPI, to adjust the base per pupil amount, the per pupil amounts for full-day preschool, the excess costs for general special education services pupils and for speech-only pupils, or the cost-coefficients for security aid and transportation aid, provided that the recommended inflationary measures are equal to or greater than the CPI, are recognized, evidence-based measures of cost change for the type of good or service, and have been disclosed in the Educational Adequacy Report.

The base per pupil amount, the per pupil amounts for full-day preschool, the excess costs for general special education services pupils and for speech-only pupils, and the cost-coefficients for security aid and transportation aid shall be adjusted by the CPI, or other inflationary measures disclosed in the most recently issued Educational Adequacy Report, for each of the two school years following the first school year to which the report is applicable.

The amounts published in the final version of the Educational Adequacy Report issued pursuant to this subsection shall be deemed approved for the three successive fiscal years beginning from the subsequent July 1, unless between the date of transmittal and the subsequent November 30, the Legislature adopts a concurrent resolution stating that the Legislature is not in agreement with all or any specific part of the report. The concurrent resolution shall advise the Governor of the Legislature's specific objections to the report and shall direct the commissioner to submit to the Legislature a revised report which responds to those objections by January 1.

c. The Educational Adequacy Report issued pursuant to subsection b. of this section may also include a commissioner-initiated review of any other element, variable, or metric used to determine allocations of State school aid pursuant to P.L.2007, c.260 (C.18A:7F-43 et al.). The commissioner shall publicly announce the intent to conduct a review pursuant to this subsection at the time that the decision to conduct the review is made and prior to initiating the review. An element, variable, or metric that is the subject of a commissioner-initiated review pursuant to this subsection shall not be decreased pursuant to the review.

During a year in which the report required pursuant subsection b. of this section is to be issued, the commissioner shall make a draft of the report available for public comment for a period of no less than 30 days.

During the public comment period, the commissioner shall ensure that members of the public are afforded the opportunity to provide remarks on, and recommend revisions to, the draft report at public hearings to be held at various locations across the State, as well as through the submission of written and electronic testimony.

After consideration of comments received through the public comment period, the commissioner shall issue a final version of the report.

(cf: P.L.2007, c.260, s.4)

3. Section 13 of P.L.2007, c.260 (C.18A:7F-55) is amended to read as follows:

13. a. Special education categorical aid for each school district and county vocational school district shall be calculated as follows:

SE = (RE x SEACR x AEC x 1/3) x GCA

where

RE is the resident enrollment of the school district or county vocational school district;

SEACR is the State average classification rate for general special education services pupils;

AEC is the excess cost for general special education services pupils; and

GCA is the geographic cost adjustment as developed by the commissioner.

For the 2008-2009 school year the excess cost shall be $10,898 for general special education services pupils. The excess cost amount shall be adjusted by the CPI in the 2009-2010 and 2010-2011 school years as required pursuant to subsection b. of section 4 of [this act] P.L.2007, c.260 (C.18A:7F-46). For subsequent school years, the excess cost amount shall be established in the Educational Adequacy Report, with the amount adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.

b. Extraordinary special education aid for an individual classified pupil shall be available when the student is educated in a general education classroom, special education program, including but not limited to a resource program or special class program, or any combination of general education and special education programs and services, subject to the requirements and thresholds set forth in this section.

(1) In those instances in which a pupil is educated in an in-district public school program with non-disabled peers, whether run by a public school or by a private school for the disabled, and the cost of providing direct instructional and support services for an individual classified pupil exceeds $40,000, for those direct instructional and support services costs in excess of $40,000 a district shall receive extraordinary special education State aid equal to [90%] 90 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.

(2) In those instances in which a pupil is educated in a separate public school program for students with disabilities and the cost of providing direct instructional and support services for an individual classified pupil exceeds $40,000, for those direct instructional and support services costs in excess of $40,000 a district shall receive extraordinary special education State aid equal to [75%] 75 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.

(3) In those instances in which a pupil is educated in a separate private school for students with disabilities and the tuition for an individual classified pupil exceeds $55,000, for tuition costs in excess of $55,000 a district shall receive extraordinary special education State aid equal to [75%] 75 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.

(4) Extraordinary special education State aid for an individual classified pupil shall be calculated as follows:

EA = ((ADC - $40,000) x .90) + (((AIC - $40,000) + (ASC - $55,000)) x .75)

where

ADC equals the district's actual cost for the direct instructional and support services in an in-district public school program as set forth in paragraph (1) of this subsection;

AIC equals the district's actual cost for direct instructional and support services in a separate public school program as set forth in paragraph (2) of this subsection; and

ASC equals the district's actual cost for tuition paid to a separate private school as set forth in paragraph (3) of this subsection.

(5) The receipt of extraordinary special education State aid for an individual classified pupil shall be conditioned upon a demonstration by the district that the pupil's Individualized Education Plan requires the provision of intensive services, pursuant to factors determined by the commissioner.

c. In order to receive funding pursuant to this section, a district shall file an application with the department that details the expenses incurred on behalf of the particular classified pupil for which the district is seeking reimbursement. Additional State aid awarded for extraordinary special education costs shall be recorded by the district as revenue in the current school year and paid to the district in the subsequent school year.

d. A school district may apply to the commissioner to receive emergency special education aid for any classified pupil who enrolls in the district prior to March of the budget year and who is in a placement with a cost in excess of [$40,000 or $55,000, as applicable] the applicable extraordinary special education aid thresholds enumerated in subsection b. of this section. The commissioner may debit from the student's former district of residence any special education aid which was paid to that district on behalf of the student.

e. The department shall review expenditures of federal and State special education aid by a district in every instance in which special education monitoring identifies a failure on the part of the district to provide services consistent with a pupil's Individualized Education Plan.

f. The commissioner shall commission an independent study of the special education census funding methodology to determine if adjustments in the special education funding formulas are needed in future years to address the variations in incidence of students with severe disabilities requiring high cost programs and to make recommendations for any such adjustments. The study and recommendations shall be completed by June 30, 2010.

g. A school district may apply to the commissioner to receive additional special education categorical aid if the district has an unusually high rate of low-incidence disabilities, such as autism, deaf/blindness, severe cognitive impairment, and medically fragile. In applying for the aid the district shall: demonstrate the impact of the unusually high rate of low-incidence disabilities on the school district budget and the extent to which the costs to the district are not sufficiently addressed through special education aid and extraordinary special education aid; and provide details of all special education expenditures, including details on the use of federal funds to support those expenditures.

h. Notwithstanding the provisions of any other law, rule, or regulation to the contrary, the amount of extraordinary special education aid appropriated in the annual appropriations act shall increase compared to the amount appropriated in the previous fiscal year or otherwise be appropriated in a manner to ensure that the percentage of a school district’s costs reimbursed through extraordinary special education aid increases compared to the previous fiscal year.

i. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the amount of extraordinary special education aid received by a district pursuant to this section shall not be included in the calculation of a district’s tax levy growth limitation pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38).

(cf: P.L.2007, c.260, s.13)

4. (New section) a. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, a school district, other than a regional school district, shall not be subject to a reduction in State school aid in any school year, beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, if:

(1) in the case of an SDA district, the district 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 recent available calendar year and the district is spending below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70); or

(2) in the case of a school district other than an SDA district, the district 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 recent available calendar year and is spending at least 10 percent below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70).

b. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, a regional school district shall not be subject to a reduction in State school aid in any school year, beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, if 50 percent or more of the constituent districts or municipalities of the regional school district meet either of the following criteria:

c. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, an SDA district that is spending above adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid that exceeds the amount by which the district is spending above adequacy.

5. (New section) In developing the Educational Adequacy Report to be issued next following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the Commissioner of Education shall engage a diverse group of stakeholders to review:

a. the calculation of local share pursuant to section 10 of P.L.2007, c.260 (C.18A:7F-52) and whether the metrics used in that calculation are best able to estimate a district’s ability to pay for the costs of education through local revenue, in addition to ensuring that the calculation of local share accurately assesses a district’s ability to levy funds on the basis of residents’ purchasing power;

b. the impact and feasibility of using multi-year averages in the calculation of local share pursuant to section 10 of P.L.2007, c.260 (C.18A:7F-52) in place of single-year values of equalized valuation and district income;

c. the abilities of the Department of Education and school districts to predict and anticipate State school aid amounts from year to year;

d. possible methods of improving upon the existing preschool funding methodology; and

e. possible adjustments to deadlines pertaining to the development, submission, and adoption of school district budgets.

The commissioner shall publish a summary of the findings and recommendations resulting from the reviews in the Educational Adequacy Report.

6. (New section) a. There is established the Special Education Funding Review Task Force. The purpose of the task force shall be to assess the effectiveness of State aid provided to support special education costs, examine the possibility of a tier-based model for special education funding, make recommendations regarding the implementation of a tier-based funding model, and provide recommendations for responses to changes in revenues for special education purposes, including federal revenues.

b. The task force shall consist of 11 members, each of whom shall have a background in, or special knowledge of, the legal, policy, and administrative aspects of special education in New Jersey, as follows:

(1) one member appointed by the President of the Senate;

(2) one member appointed by the Speaker of the General Assembly;

(3) one member appointed by the Governor;

(4) one representative from the New Jersey Education Association;

(5) one representative from the New Jersey Principals and Supervisors Association;

(6) one representative from the New Jersey School Boards Association;

(7) one representative from the New Jersey Association of School Administrators;

(8) one representative from the Garden State Coalition of Schools;

(9) one representative from the American Federation of Teachers;

(10) one representative from Great Schools of New Jersey; and

(11) one representative from the New Jersey Association of School Business Officials.

c. The appointments to the task force shall be made within 30 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill). Vacancies in the membership of the task force shall be filled in the same manner as the original appointments were made. Members of the task force shall serve without compensation but shall be reimbursed for necessary expenditures incurred in the performance of their duties as members of the task force within the limits of funds appropriated or otherwise made available to the task force for its purposes.

d. The task force shall organize as soon as practicable, but no later than 30 days following the appointment of its members. The task force shall choose a chairperson from among its members and shall appoint a secretary who need not be a member of the task force.

e. The task force shall hold meetings at the request of the chairperson and shall hold a minimum of three public meetings, which shall each be held in the northern, central, and southern regions of the State. The meetings may take place in-person or through remote means. It shall be the purpose of the public meetings to seek input and gather testimony on the effects of the State’s current method of funding the costs of special education from education stakeholders including, but not limited to, education finance experts, special education experts, school leaders, school business officials, school board members, and members of the public.

f. The Department of Education shall provide stenographic, clerical, and other administrative assistants, and such professional staff as the task force requires to carry out its work. The task force also shall be entitled to call to its assistance and avail itself of the services of the employees of any State, county, or municipal department, board, bureau, commission, or agency as it may require and as may be available for its purposes.

7. (New section) The Special Education Funding Review Task Force established pursuant to section 6 of P.L. c. (pending before the Legislature as this bill) shall issue a final report detailing its findings and recommendations to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no later than one year after the organization of the task force. The report shall be posted in a prominent location on the Internet website of the Department of Education.

8. Sections 1 and 5 through 7 of this act shall take effect immediately. The Special Education Funding Review Task Force shall expire 30 days after the issuance of the report required pursuant to section 7 of this act. Section 2 of this act shall take effect immediately and shall first apply to the Educational Adequacy Report to be issued next following the date of enactment. Sections 3 and 4 of this act shall take effect immediately and shall first apply to the first full school year following the date of enactment.