1. Revising NJ’s School Funding Formula: A Tale of 3 Schools Kristi Schoppe, Mark Willis, Mike Diorio, Edwin Wargo MED 7201, School Finance & Facilities Professor Karen Thorpe Wilmington University

2. Essential Questions What is NJ’s new funding formula? What is NJ’s new funding formula? How does the new funding formula impact schools? How does the new funding formula impact schools? How is the funding formula calculated? How is the funding formula calculated? How does the funding formula look in 3 District Factor Groups (Abbott, CD, and I) How does the funding formula look in 3 District Factor Groups (Abbott, CD, and I) How does the new funding formula compare among District Factor Groups (Abbott, CD, and I). How does the new funding formula compare among District Factor Groups (Abbott, CD, and I). What is the first line of Tale of Two Cities? What is the first line of Tale of Two Cities?

3. The Purpose: The current model leaves too many children out of luck simply because they live in the wrong ZIP code. (49% of all low-income students in NJ live outside of the Abbott districts) The current model leaves too many children out of luck simply because they live in the wrong ZIP code. (49% of all low-income students in NJ live outside of the Abbott districts) To replace the current unpredictable system of distributing state aid. The new formula minimizes 26 aid categories into 10. To replace the current unpredictable system of distributing state aid. The new formula minimizes 26 aid categories into 10. This is an equalization system like we discussed in class

4. This new formula expands the definition of “needy” students, making sure those children who face multiple obstacles are fully funded and ensuring that aid is distributed to middle-income districts accordingly. This new formula expands the definition of “needy” students, making sure those children who face multiple obstacles are fully funded and ensuring that aid is distributed to middle-income districts accordingly. Adequacy Budget represents the sufficient level of resources to ensure the NJ’s educational standards are met. Local Fair Share represents what a community should be able to contribute in local property taxes.

5. Funding Notes No district will see a decrease in state aid from the 2008 school year for the first three years of the new formula.No district will see a decrease in state aid from the 2008 school year for the first three years of the new formula. All districts will receive at least a 2% increase in state aid in the first year.All districts will receive at least a 2% increase in state aid in the first year. In later years, decreases in aid would occur if districts experience declines in overall enrollment or in enrollment categories.In later years, decreases in aid would occur if districts experience declines in overall enrollment or in enrollment categories.

6. Aid will be distributed through a foundation formula. Calculations are based on a per-pupil adequacy budget, which represents what each district should be spending to allow each student to attain New Jersey’s educational standards. The base amount is set for elementary school students and is increased for middle school students, high school students and vocational school students because it grows more expensive to meet students’ needs as they progress through school. Additional weights are added to the basic formula for at-risk students (those eligible for free or reduced lunch), students with limited English proficiency (LEP) and special education students. A combination weight is calculated for students who are both at-risk and LEP.

7. Summary of Base Level Funding Amounts Elementary Middle School High School Base Amount $9,649 $10,035 $11,289 At-Risk $14,184-$15,149 $14,751-$15,755 $16,595-$17,724 LEP $14,474 $15,052 $16,934 At-Risk/LEP $15,390-$16,355 $16,006-$17,009 $18,006-$19,135 Spec. Ed. $20,546 $20,932 $22,186 Speech $10,731 $11,117 $12,371 Voc. Ed. n/a n/a $14,789

8. Base Cost Base Cost Calculated Salaries Salaries Benefits (current spending not 20% to differentiated between certified & non- certified staff) Benefits (current spending not 20% to differentiated between certified & non- certified staff) Capital Improvements ($175/student) Capital Improvements ($175/student) Professional Development Professional Development Utilities (NJ’s Consumer Price Index) Utilities (NJ’s Consumer Price Index)

9. 0.9424 0.9613 0.8818 0.9463 0.9189 0.8762 0.9452 1.0087 1.0170 1.0156 1.0298 1.0608 0.9467 0.8966 1.0633 1.0312 0.9987 1.0393 1.0432 Geographic Cost Adjustment (GCA) Calculation to compensate for differences in wage markets across the state

10. District Factor Groups (DFG) DGF Factors 1.% of adults with no high school diploma 2.% of adults with some college education 3. Occupational status 4. Unemployment rate 5. % of individuals in poverty 6. Median family income DFG’s are updated every 10 years 2004 was the last year; 2014 is next year

11. State Aid/DFG Correlation The Non-Abbott District Factor Group A districts, which are the least affluent, will see on average a 10.3 percent increase in state aid;The Non-Abbott District Factor Group A districts, which are the least affluent, will see on average a 10.3 percent increase in state aid; B districts will get on average a 9.1 percent increase in state aid;B districts will get on average a 9.1 percent increase in state aid; CD districts will see on average an 8 percent increase in state aid;CD districts will see on average an 8 percent increase in state aid; DE districts will see on average a 5.4 percent increase in state aid;DE districts will see on average a 5.4 percent increase in state aid; FG districts will get on average a 4.3 percent increase,FG districts will get on average a 4.3 percent increase, GH districts will see on average a 4.1 percent increase; andGH districts will see on average a 4.1 percent increase; and I and J districts will see on average increases of 3.3 and 3 percent, respectively.I and J districts will see on average increases of 3.3 and 3 percent, respectively.

12. www.enlightennj.blogspot.com/2006/10/new-funding-formula-for-new-jerseys Bridgeton Hamilton Medford

13. The formula will benefit districts: who currently spend under adequacy. who cover more than their local fair share. who experienced increased enrollment

14. Tale of Three Schools: Impact of NJ’s Revised School Funding Formula DFG: I DFG: CD DFG: Abbott

15. Hamilton Township Profile PropertyIncome District$597,588$116,343 Average$977,893$190,499 Summary Below Property Value Below Income Average District Factor Group: CD Property+8%Income+17%

16. Hamilton Township 20% increase for Hamilton Township 1. $ 4 Million Dollars in extra money in state aid 2. This will allow the district to hire new teachers, install new programs, and more money for special education program

17. Hamilton Township FY 08 FY 08 TOTAL 07-08* $18,032,125 TOTAL 07-08* $18,032,125 FY09 FY09 EQUALIZATION AID $18,051,576 EQUALIZATION AID $18,051,576 SPEC ED CAT** $1,570,650 SPEC ED CAT** $1,570,650 EXORD*** $89,213 EXORD*** $89,213 TRANSP $1,324,892 TRANSP $1,324,892 SECURITY $602,219 SECURITY $602,219 ADJUSTMENT AID $0 ADJUSTMENT AID $0 TOTAL 08-09 $21,638,550 TOTAL 08-09 $21,638,550 STATE AID DIFFERENCE: $ 3,606,425 STATE AID DIFFERENCE: $ 3,606,425 % STATE AID GROWTH: 20.00% % STATE AID GROWTH: 20.00%

18. Hamilton Township Enrollment- 2000 (2,741) Enrollment- 2000 (2,741) Enrollment- 2007 (3062) Enrollment- 2007 (3062) Enrollment- 2008 (3114) Enrollment- 2008 (3114) ENROLL GROWTH (7 YRS): 11.7% ENROLL GROWTH (7 YRS): 11.7% % FREE and REDUCED PUPILS (2008) : 1,082 % FREE and REDUCED PUPILS (2008) : 1,082 COMBINATION PUPILS (2008): 52 COMBINATION PUPILS (2008): 52 LIMITED ENGLISH PUPILS (2008) : 27 LIMITED ENGLISH PUPILS (2008) : 27 % FREE and REDUCED (2008) : 36.416185 % % FREE and REDUCED (2008) : 36.416185 % ENROLL GROWTH(7 Yrs)- (relative to state average) 7% ENROLL GROWTH(7 Yrs)- (relative to state average) 7%

19. Hamilton Township 20% Increase in State Aid= $4,000,000 20% Increase in State Aid= $4,000,000 If not for the new formula, only 2- 9% increase If not for the new formula, only 2- 9% increase Wouldn’t been able to hire new staff, new programs for student(s), and less money for special education Wouldn’t been able to hire new staff, new programs for student(s), and less money for special education

20. Bridgeton Profile PropertyIncome District$124,757$43,956 Average$977,893$190,499 Summary Below Property Value Below Income Average District Factor Group: Abbott Property-36%Income-22%

21. Bridgeton Public Schools Base Elementary Students = 2315 Middle School Students = 980 High School Students = 1143 At-Risk Elementary Students = 1459 Middle School Students = 685 High School Students = 918

22. Bridgeton Public Schools LEP Elementary Students = 51 Middle School Students = 18 High School Students = 0 Comb (At-risk & LEP) Elementary Students = 478 Middle School Students = 83 High School Students = 0

23. Bridgeton Public Schools Special Ed & Speech Total Enrollment = 4438

24. Bridgeton Public Schools Base Elementary Students = 2315 * $9,649 Middle School Students = 980 * 1.04 High School Students = 1143 * 1.17 Total $45,075,400 At-Risk Elementary Students = 1459 * $9,649 Middle School Students = 685 * 1.04 High School Students = 918 * 1.17 Times 0.57000 (AT-Risk Weight) Total $17,849,803

25. Bridgeton Public Schools LEP Elementary Students = 51 * $9,649 Middle School Students = 18 * 1.04 High School Students = 0 * 0.5 Total $ 336,364 Comb (At-risk & LEP) Elementary Students = 478 * $9,649 Middle School Students = 83 * 1.04 High School Students = 0 * 1.17 Times 0.570000 (At-Risk Weight) + 0.125 Total $3,784,361

26. Bridgeton Public Schools Special Ed & Speech Total Enrollment = 4438 * 14.69% * $10,897.75 *.666667 * 0.8818 + Total Enrollment = 4438 * 1.897% * $1,081.61 * 0.8818 Total $4,256,913

27. Bridgeton Public Schools Adequacy Budget + Security Aid + Special Education Categorical + Extraordinary Aid + Transportation $63,378,012 + $1,571,013 +$2,088,308 + $0 + $522,558 = $67,559,891

28. Bridgeton Public Schools Equalized Value * Property Value Rate + Aggregate Income * Income Rate * 50% Total $7,000,813

29. Bridgeton Public Schools Adequacy Budget Plus Categoricals – Local Fair Share $67,559,891 – $7,000,813 = $60,700,078

30. Medford Profile PropertyIncome District$793,502$259,948 Average$977,893$190,499 Summary Below Property Value Above Income Average District Factor Group: I Property (7 years) -14% Income (7 years) -1%

31. Medford Township Schools Enrollment 2000 2837 Enrollment 2007 3067 Projected Enrollment 2008 2959 Enrollment Growth (7 years): 8.1% Enrollment Growth (7 years) relative to state average: 4%

32. Medford Township Schools Free & Reduced Pupils 96 Combination Pupils (LEP & F/R Lunch) 0 Limited English Students (LEP) 4 % Free & Reduced Lunch 3.24% Enrollment Growth (7 years): 8.1% Enrollment Growth (7 years) relative to state average: 4%

33. Medford Schools Equalization Aid = Adequacy Budget – Local Fair Share Adequacy Budget $31,374,502 Local Fair Share $28,367,981 Equalization Aid $3,006,521

34. Medford Township Adequacy Budget - level needed to provide a high level of education Adequacy Budget = (Base Cost + At Risk Cost + LEP Cost + Comb Cost) x GCA + (SPEC ED CENS + Speech) $28,958,579 + $440,986 + $19,298 + $0) x 0.9613 + ($3,035,786 + $58,363) = $31,374,502 GCA – Geographic Cost Adjustment (calculated by county) to compensate for varied wage markets across the state.

35. Medford Township Schools Aid Category Student Enrollment Aid Amount Base Cost 1904$28,958,579 At-Risk Cost 65$440,986 LEP Cost 4$19,298 COMP Cost 0$0 SPEC ED/Speech 2959$3,094,149 Total Adequacy Budget $31,374,502

36. Medford Township Schools Adequacy Budget $31,374,502 Security Aid $202,153 Spec Ed Categorical $1,517,893 Extraordinary Aid $294,369 Transportation Aid $913,320 Adequacy Budget Plus Categoricals $34,302,237 Please Note: Just the Adequacy Budget is used to calculate Equalization Aid

37. Medford Township Local Fair Share – amount based on income and property value in which the town is expected to contribute. Local Fair Share = (EQ VAL x PROP VAL RATE x 50%) + (Aggregate Income x Income Rate x 50%)

38. Medford Township ($2,347,971 x 0.0092690802 x.5) + ($769,185,297 x 0.04546684 x.5) = $28,367,981 (Local Fair Share) Local Fair Share is relative to the wealth per pupil which includes a 7 year average of income and property value. The higher the property and income levels the greater the local fair share

39. Medford Township Schools $3,006,521$31,374,502$28,367,981=– Equalization Aid for Medford is contingent upon: Student Population (Adequacy Budget) Types of Students (Adequacy Budget) Wealth Per Pupil (Local Fair Share) Equalization Aid is likely to vary for each school fiscal year

40. Tale of 3 Schools Comparison

41. Adequacy Comparison

42. Tale of 2 Cities What was is the 1 st line in Charles Dickens, Tale of Two Cities? “It was the best of times, it was the worst of times.”

43. Thanks!