To enable our public school districts to have the authority to improve education consistent with the needs of their local schools as well as have the necessary flexibility to innovate rather than march in lock-step to the state’s one size fits all mandates, local school districts should be empowered to opt out of the state system. Public schools choosing to opt out would become independent public schools free of all state mandates except for perhaps reporting test results but they would also forgo all state aid. Opting out of the state system would restore decision-making to the local school district level. Because decisions guiding the operations of these schools would no longer be made largely at the county or state level, parents, teachers, school administrators and local taxpayers would be better able to shape the quality of education which their students receive in their local schools.
Because the State of New Jersey forces most of its school districts to spend disproportionately more to meet the requirements of the state’s unfunded and under funded mandates than these districts receive in total state financial aid, if local districts opted out they would eliminate the excessive financial and administrative burdens imposed by the state. This also would increase the financial resources available for the classroom because it would be much more cost effective for local school districts to provide educational programs and services without the administrative burden of state requirements. The funds that are currently used for regulatory compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools. Changing our state’s educational system in this way would not only improve the quality of education but also increase property taxpayers’ return on investment.
Rather than taking responsibility for its role in helping to create and foster the fundamental financial problems facing our educational system, Trenton seems to blame school districts for driving up property taxes. Instead of fully funding their mandates driving up the cost of public education, their proposals to reduce the property tax burden focus largely on constricting school district funding, budgets, operations and the independence of local school districts.
The state’s flawed approach is demonstrated in the new funding formula as contained in the New Jersey School Funding Reform Act (SFRA) of 2008 and its predecessor the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA,) which caused higher property taxes and cuts in regular education. Dr. Reock, Rutgers University Professor Emeritus, 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 and reached a profound conclusion (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 the CEIFA 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 also 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 state 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.
The fact that Trenton continues to force local school districts to pay for its under-funded and unfunded mandates that unnecessarily increase the cost of providing education and drive up property taxes is rather incomprehensible. It is even more difficult to understand considering how our schools are suffering disproportionately from one of greatest financial crises ever to confront our nation. Also, the State of New Jersey’s mandates harm the quality of education because they divert necessary resources to paying for the mandates’ costs rather than investing these scarce resources in the classroom where they are needed most. Local school districts, therefore, would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on their educational investment if they opted out of the state system with its unfunded mandates.
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