The rising power of state government (Fusarelli and Cooper, 2009) has grown from the states’ increasing domination of school finance and, therefore, policy making because of the strings the states attached to funding. Legal challenges to funding inequities and disparities led to court decisions such as Serrano v. Priest establishing financial neutrality as the basis for school funding. States remedied the disparities among districts with the infusion of incremental state funds and regulation. Subsequent rulings focused on adequacy and required state governments to provide resources to disadvantaged districts such that the provision of education adequately met their constitutional requirements. New Jersey’s state constitution was deemed to go even further because of its provisions guaranteeing a thorough and efficient education especially in the Abbott v. Burke court decision.
Although the state’s flawed approach to education is exemplified by the new funding formula contained in the New Jersey School Funding Reform Act (SFRA) of 2008, it is manifested in its predecessor, the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA.) Dr. Reock studied the financial impact on school districts of the state’s failure not only to not fully enact CEIFA but also to freeze most CEIFA funding beginning with the 2002-03 school year (Reock, 2007.) Based on his study (Sciarra, 2008), Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state.”
Instead of fully funding CEIFA’s school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs as well as state and federal unfunded mandates. The shortfall was hardest on those districts that were most dependent upon state aid. During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of $1,627 in non-Abbott DFG A and B districts, $758 in DFG C through H districts, $386 DFG I and J districts and $188 in Abbott districts.
The impact of the CEIFA funding shortfall was minimized on the Abbott districts largely due to their “parity-plus” court mandated protection. State law forbids the budget of an Abbott district from falling below its level of the prior school year (Hu, 2006.) Furthermore, under state law, if an Abbott district increases local property taxes without a state directive to do so, it will lose a similar amount of state aid.
The CEIFA funding shortfall caused serious imbalances between local school districts. During the 2005-06 school year, Abbott districts received approximately 58% of all state financial aid while educating only 23% of New Jersey’s K to 12 student enrollment. This meant non-Abbott districts were educating 77% of New Jersey’s students with only 42% of state aid. This imbalance has continued to widen under SFRA with Abbott aid increasing to approximately 60% of all state aid or $4.64 billion. State aid reductions and the ever increasing unfunded state mandates force non-Abbott districts to balance their budgets by raising property taxes, increasing class sizes as well as cutting regular education programs and services.
As part of his statement of New Jersey Supreme Court certification in support of the Plaintiffs’ opposition to the School Funding Reform Act (SFRA) of 2008, Dr. Reock concluded (Sciarra, 2008) that “the State’s failure to fund CEIFA for the past six years directly resulted in an enormous shortfall of funding in districts across New Jersey.” He went further to state, “By 2007-08, the sixth year of the CEIFA “freeze,” the total under-funding of state aid had reached $1.326 billion annually, despite the introduction of several new, smaller aid programs.” The result was a state-driven increase in local property taxes within non-Abbott districts to make up for the shortfall.
By passing through the majority of the cost of state mandates to local school districts, the State of New Jersey forces local schools to divert resources to bureaucratic regulatory compliance. As a result, disproportionate amounts of a typical school district’s scarce financial and human resources are not invested in the classroom where they are needed most. Local school districts would be able to operate more cost-effectively, earn a higher rate of return on their educational investment and provide greater accountability if they were free to concentrate on improving every student’s performance with the maximum possible level of local public support for the public funding of its public schools.
Fusarelli, B. C., & Cooper, B. S., Editors. (2009) The Rising State: How State Power is Transforming our Nation’s Schools, Albany, New York: SUNY Press.
Hu, W. (2008) In New Jersey, System to help Poorest Schools Faces Criticism, New York Times, October 30, 2006.
Reock, E. C. Jr., (2007) Paper, Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06, Institute on Education Law and Policy, Rutgers University, Newark, http:// ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf.
Sciarra, D. G., (2008) Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the Plaintiffs’ opposition to the School Funding Reform Act of 2008, Education Law Center, Newark New Jersey, http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf