School funding in New Jersey back at 1994 levels

State funding for New Jersey schools has not only failed to recover from the Great Recession of 2008, but has retreated to 1994 levels.

That is among a series of findings in a report released Tuesday by New Jersey Policy Perspective. In their second annual report examining the School Funding Reform Act, first implemented in 2008, the nonpartisan think tank said New Jersey still has yet to fully fund its school aid formula.

The report comes as school districts in the Garden State, and across the country, face economic pressures due to the COVID-19 pandemic.

“We need to start thinking now about how we’re going to fund schools now and in the future,” said Dr. Mark Weber, special analyst for education policy at NJPP and one of the co-authors of the report. “There’s just no way this state is going to have a meaningful recovery without well-funded and vibrant schools.”

Among the report’s other findings is that New Jersey has made less of an effort to fund schools after the recession of 2009 than before. “Consequently, New Jersey school districts are in a worse fiscal position now than they were before the last recession,” the authors wrote.

“For the first time in decades, New Jersey’s highest-poverty schools are spending less than its lowest-poverty schools,” they add, while stating that the state’s underlying school funding formula is more progressive than many other states.

The report also found that school districts that are spending below their funding targets have higher concentrations of Black and Latino students.

“We’ve actually reverted to that kind of inequitable distribution of funding that existed in New Jersey before even the most aggressive kind of Abbott court responses in 1997 and 98,” said Dr. Bruce Baker, the study’s other co-author and a professor at the Graduate School of Education at Rutgers University. “Abbott” references a series of court decisions that have shaped how the lowest-income school districts in the state are funded.

Among the recommendations in the report, NJPP says those with a stake in education “must unite and press for federal aid.” The state must also consider “raising additional revenues from its wealthiest residents, who pay less in taxes proportionally than middle-class residents.”

The Legislature passed a millionaire’s tax as part of an abbreviated 2021 budget that Gov. Phil Murphy signed in September. Baker said the fruits of that tax will be seen in the short term but it is difficult to know how much will be received in the recovery.

“Ideally, the way that plays out is it starts to cover a larger and larger margin during the recovery,” he said, adding that there is room to increase taxes. “Whether there’s additional room above what’s been passed, I’ve not had a chance to look at that in great detail yet.”