2. It is very important for the community to express their support or opposition to the referendum and its impact on the school district and taxpayer by voting on Tuesday, March 12, 2019.
3. This is my personal assessment of the referendum and should not be construed as instructing the community on how to vote.
In addition to being a member of the Hillsborough Township School Board, I also volunteer as an officer of the Somerset County School Boards Association (SCSBA) and serve on the New Jersey School Boards Association (NJSBA) Delegate Assembly, Legislative Committee, Strategic Planning Committee and was invited to join the Finance Committee.
On Saturday, March 9, 2019, I spent the morning and early afternoon learning more about school funding (aka state aid) from the NJSBA Governmental Relations staff.
The top 3 factors influencing a district's state aid are: a) number of students b) make-up of the district (i.e. English as a second language, free/reduced lunch, etc) c) wealth of the district.
The state uses these factors to calculate the "adequacy budget" (*1) which is the minimum amount a district would need to spend to provide an adequate education for every pupil in the district.
Then, the state calculates what the local district can afford and state aid is supposed to cover the remainder. Except the state does not fully fund the formula and is about $600M to $1B short.
That means, while the state's goal is to give each district its calculated state aid, in reality, each district is getting funds on a pro-rated basis of the total available school aid. That is why I said, while implementing FDK is a creative idea to lose less state aid, it is not a guarantee from the state and could wind up being a very expensive mistake.
Hillsborough is losing state aid because of part c) - the state says our income has increased by ~33% over the last ~ 7 years. In fact, ~ seven years ago, Hillsborough was considered $13M underfunded! This volatility is difficult to react to, and my colleague Gregory Gillette suggested proposing to NJSBA that they advocate for a different formula that takes a rolling average over the last 5-10 years when considering a district's wealth. I brought this up at Saturday's Legislative Committee and the idea was well received.
According to the district's projections, Hillsborough was supposed to lose $695,046 for the 2019-20 school year. Based on Governor Murphy's proposed state aid numbers, Hillsborough will lose $526,434 (*2). The proposed loss is less than the estimated loss, at a difference of $168,612, which is a good thing. But it further shows that our estimates are just estimates and not guarantees.
Finally, I also proposed at Legislative Committee that NJSBA advocate that any district that is losing state aid and has the desire to increase the tax levy beyond the 2% cap be allowed to take a waiver to increase the levy for the amount of decreased state aid. The governmental relations team said they have been talking to Senator Sweeney's office and Sweeney's staff recognize parts of S-2 in light of the tax cap had unintended consequences. NJSBA staff said it’s possible there could be movement this session, so that is hopeful, but they couldn’t guess how realistic.
Hopefully this explains why Hillsborough gets the aid it does compared to neighboring towns. If you would like to know even more, check out the NJ Spotlight article on the subject (*3).
Footnotes:
(*1) Adequacy Budget (AB) = (BC + AR Cost + LEP Cost + COMB Cost + SE Census) x GCA where
- Base Cost (BC) is per pupil amounts weighted by grade level
- At Risk (AR) is at or below 185% of poverty guidelines
- Limited English Proficiency (LEP)
- Combined Cost (AR and LEP)
- Special Education Census (SE) - 2/3
- Geographic Cost Adjustment (GCA)
Local Share Calculation = (EQVAL x PVR x 50%) + (INC x INR x 50%)
(N.J.S.A. 18A:7F-52)
where
- EQVAL is the district's equalized property valuation
- PVR is the statewide property value rate
- INC is the district's income
- INR is the statewide income rate
Equalization Aid = Adequacy Budget - Local Fair Share
There are other areas of state aid such as special ed, transportation, etc.
(*2) NJ DOE 2019-20 State Aid Summaries:
https://www.state.nj.us/education/stateaid/1920/
(*3) NJ Spotlight article on School Funding:
https://www.njspotlight.com/stories/18/07/25/explainer-everything-you-need-to-know-about-school-funding-in-nj/
In addition to being a member of the Hillsborough Township School Board, I also volunteer as an officer of the Somerset County School Boards Association (SCSBA) and serve on the New Jersey School Boards Association (NJSBA) Delegate Assembly, Legislative Committee, Strategic Planning Committee and was invited to join the Finance Committee.
On Saturday, March 9, 2019, I spent the morning and early afternoon learning more about school funding (aka state aid) from the NJSBA Governmental Relations staff.
The top 3 factors influencing a district's state aid are: a) number of students b) make-up of the district (i.e. English as a second language, free/reduced lunch, etc) c) wealth of the district.
The state uses these factors to calculate the "adequacy budget" (*1) which is the minimum amount a district would need to spend to provide an adequate education for every pupil in the district.
Then, the state calculates what the local district can afford and state aid is supposed to cover the remainder. Except the state does not fully fund the formula and is about $600M to $1B short.
That means, while the state's goal is to give each district its calculated state aid, in reality, each district is getting funds on a pro-rated basis of the total available school aid. That is why I said, while implementing FDK is a creative idea to lose less state aid, it is not a guarantee from the state and could wind up being a very expensive mistake.
Hillsborough is losing state aid because of part c) - the state says our income has increased by ~33% over the last ~ 7 years. In fact, ~ seven years ago, Hillsborough was considered $13M underfunded! This volatility is difficult to react to, and my colleague Gregory Gillette suggested proposing to NJSBA that they advocate for a different formula that takes a rolling average over the last 5-10 years when considering a district's wealth. I brought this up at Saturday's Legislative Committee and the idea was well received.
According to the district's projections, Hillsborough was supposed to lose $695,046 for the 2019-20 school year. Based on Governor Murphy's proposed state aid numbers, Hillsborough will lose $526,434 (*2). The proposed loss is less than the estimated loss, at a difference of $168,612, which is a good thing. But it further shows that our estimates are just estimates and not guarantees.
Finally, I also proposed at Legislative Committee that NJSBA advocate that any district that is losing state aid and has the desire to increase the tax levy beyond the 2% cap be allowed to take a waiver to increase the levy for the amount of decreased state aid. The governmental relations team said they have been talking to Senator Sweeney's office and Sweeney's staff recognize parts of S-2 in light of the tax cap had unintended consequences. NJSBA staff said it’s possible there could be movement this session, so that is hopeful, but they couldn’t guess how realistic.
Hopefully this explains why Hillsborough gets the aid it does compared to neighboring towns. If you would like to know even more, check out the NJ Spotlight article on the subject (*3).
Footnotes:
(*1) Adequacy Budget (AB) = (BC + AR Cost + LEP Cost + COMB Cost + SE Census) x GCA where
- Base Cost (BC) is per pupil amounts weighted by grade level
- At Risk (AR) is at or below 185% of poverty guidelines
- Limited English Proficiency (LEP)
- Combined Cost (AR and LEP)
- Special Education Census (SE) - 2/3
- Geographic Cost Adjustment (GCA)
Local Share Calculation = (EQVAL x PVR x 50%) + (INC x INR x 50%)
(N.J.S.A. 18A:7F-52)
where
- EQVAL is the district's equalized property valuation
- PVR is the statewide property value rate
- INC is the district's income
- INR is the statewide income rate
Equalization Aid = Adequacy Budget - Local Fair Share
There are other areas of state aid such as special ed, transportation, etc.
(*2) NJ DOE 2019-20 State Aid Summaries:
https://www.state.nj.us/education/stateaid/1920/
(*3) NJ Spotlight article on School Funding:
https://www.njspotlight.com/stories/18/07/25/explainer-everything-you-need-to-know-about-school-funding-in-nj/
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