Revising NJ’s School Revising NJ’s School Funding Formula: A Tale Funding Formula: A Tale

of 3 Schoolsof 3 Schools

Kristi Schoppe, Mark Willis, Mike Diorio, Edwin WargoKristi Schoppe, Mark Willis, Mike Diorio, Edwin WargoMED 7201, School Finance & FacilitiesMED 7201, School Finance & Facilities

Professor Karen ThorpeProfessor Karen ThorpeWilmington UniversityWilmington University

Essential QuestionsEssential Questions

What is NJ’s new funding formula?What is NJ’s new funding formula? How does the new funding formula impact How does the new funding formula impact

schools?schools? How is the funding formula calculated?How is the funding formula calculated? How does the funding formula look in 3 How does the funding formula look in 3

District Factor Groups (Abbott, CD, and I)District Factor Groups (Abbott, CD, and I) How does the new funding formula How does the new funding formula

compare among District Factor Groups compare among District Factor Groups (Abbott, CD, and I).(Abbott, CD, and I).

What is the first line of What is the first line of Tale of Two CitiesTale of Two Cities??

The Purpose:The Purpose: The current model leaves too many children The current model leaves too many children

out of luck simply because they live in the out of luck simply because they live in the wrong ZIP code.wrong ZIP code. (49% of all low-income (49% of all low-income students in NJ live outside of the Abbott students in NJ live outside of the Abbott districts)districts)

To replace the current unpredictable system of To replace the current unpredictable system of distributing state aid. The new formula distributing state aid. The new formula minimizes 26 aid categories into 10.minimizes 26 aid categories into 10.

This is an equalization system like we discussed in class

This new formula expands the definition of “needy” students, This new formula expands the definition of “needy” students, making sure those children who face multiple obstacles are fully making sure those children who face multiple obstacles are fully funded and ensuring that aid is distributed to middle-income funded and ensuring that aid is distributed to middle-income districts accordingly. districts accordingly.

Equalization Aid = Adequacy Budget - Local Fair Share

Adequacy BudgetAdequacy Budget represents the sufficient represents the sufficient level of resourceslevel of resourcesto ensure the NJ’s to ensure the NJ’s educational standards educational standards are met.are met.

Local Fair ShareLocal Fair Share represents what a represents what a community community should be able to should be able to contribute in local property contribute in local property taxes.taxes.

Funding NotesFunding Notes

•No district will see a decrease in state aid from the No district will see a decrease in state aid from the 2008 school year for the first three years of the new 2008 school year for the first three years of the new formula. formula.

•All districts will receive at least a 2% increase in state All districts will receive at least a 2% increase in state aid in the first year. aid in the first year.

•In later years, decreases in aid would occur if districts In later years, decreases in aid would occur if districts experience declines in overall enrollment or in experience declines in overall enrollment or in enrollment categories. enrollment categories.

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.

Equalization Aid = Adequacy Budget - Local Fair Share

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

Base CostBase Cost

Base Cost CalculatedBase Cost Calculated SalariesSalaries Benefits (current spending not 20% to Benefits (current spending not 20% to

differentiated between certified & non- differentiated between certified & non- certified staff) certified staff)

Capital Improvements Capital Improvements ($175/student) ($175/student)

Professional DevelopmentProfessional Development Utilities (NJ’s Consumer Price Index)Utilities (NJ’s Consumer Price Index)

0.94240.9613

0.8818

0.9463

0.9189

0.9189

0.8762

0.9452

1.0087 1.0170

1.01701.0156

1.02981.0608

0.9467

0.8966

1.0633

1.0312

0.9987

1.03931.0432

GeographicCost

Adjustment

(GCA)

Calculation to

compensate for

differences in wage markets

across the state

District Factor Groups (DFG)District Factor Groups (DFG)DGF FactorsDGF Factors

1.% of adults with no high school diploma

2.% of adults with some college education

3. Occupational status4. Unemployment rate5. % of individuals in poverty6. Median family income

DFG’s are updated every 10 yearsDFG’s are updated every 10 years2004 was the last year; 2014 is next year2004 was the last year; 2014 is next year

State Aid/DFG CorrelationState Aid/DFG Correlation

• The Non-Abbott District Factor Group A districts, which The Non-Abbott District Factor Group A districts, which are the least affluent,  will see on average a 10.3 are the least affluent,  will see on average a 10.3 percent increase in state aid; percent increase in state aid;

• B districts will get on average a 9.1 percent increase in B districts will get on average a 9.1 percent increase in state aid; state aid;

• CD districts will see on average an 8 percent increase in CD districts will see on average an 8 percent increase in state aid; state aid;

• DE districts will see on average a 5.4 percent increase in DE districts will see on average a 5.4 percent increase in state aid; 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; GH districts will see on average a 4.1 percent increase;

and and • I and J districts will see on average increases of 3.3 and I and J districts will see on average increases of 3.3 and

3 percent, respectively.3 percent, respectively.

www.enlightennj.blogspot.com/2006/10/new-funding-formula-for-new-jerseys

Bridgeton

Hamilton

Medford

The formula will benefit districts:

•who currently spend under adequacy.

•who cover more than their local fair share.

•who experienced increased enrollment

Tale of Three Schools:Impact of NJ’s Revised School

Funding Formula

DFG: I

DFG: CDDFG: Abbott

Hamilton Township ProfileHamilton Township Profile

PropertyProperty IncomeIncome

DistrictDistrict $597,588$597,588 $116,343$116,343

AverageAverage $977,893$977,893 $190,499$190,499

SummarySummary Below Below Property Property

ValueValue

Below Income Below Income AverageAverage

District Factor Group: CDDistrict Factor Group: CD

PropertyProperty +8%+8%

IncomeIncome +17%+17%

Hamilton TownshipHamilton Township

20% increase for Hamilton Township20% increase for Hamilton Township

1. $ 4 Million Dollars in extra money in 1. $ 4 Million Dollars in extra money in state aid state aid

2. This will allow the district to hire 2. This will allow the district to hire new teachers, install new new teachers, install new programs, and more money for programs, and more money for special education program special education program

Hamilton TownshipHamilton Township FY 08FY 08 TOTAL 07-08* $18,032,125TOTAL 07-08* $18,032,125 FY09FY09 EQUALIZATION AID $18,051,576EQUALIZATION AID $18,051,576 SPEC ED CAT** $1,570,650SPEC ED CAT** $1,570,650 EXORD*** $89,213EXORD*** $89,213 TRANSP $1,324,892TRANSP $1,324,892 SECURITY $602,219SECURITY $602,219 ADJUSTMENT AID $0ADJUSTMENT AID $0 TOTAL 08-09 $21,638,550TOTAL 08-09 $21,638,550 STATE AID DIFFERENCE: $ 3,606,425STATE AID DIFFERENCE: $ 3,606,425 % STATE AID GROWTH: 20.00%% STATE AID GROWTH: 20.00%

Hamilton TownshipHamilton 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): 52COMBINATION PUPILS (2008): 52 LIMITED ENGLISH PUPILS (2008) : 27LIMITED ENGLISH PUPILS (2008) : 27 % FREE and REDUCED (2008) : 36.416185 %% FREE and REDUCED (2008) : 36.416185 % ENROLL GROWTH(7 Yrs)- (relative to state ENROLL GROWTH(7 Yrs)- (relative to state

average) 7%average) 7%

Hamilton TownshipHamilton Township

20% Increase in State Aid= 20% Increase in State Aid= $4,000,000$4,000,000

If not for the new formula, only 2-9% If not for the new formula, only 2-9% increaseincrease

Wouldn’t been able to hire new staff, Wouldn’t been able to hire new staff, new programs for student(s), and new programs for student(s), and less money for special educationless money for special education

Bridgeton ProfileBridgeton Profile

PropertyProperty IncomeIncome

DistrictDistrict $124,757$124,757 $43,956$43,956

AverageAverage $977,893$977,893 $190,499$190,499

SummarySummary Below Below Property Property

ValueValue

Below Income Below Income AverageAverage

District Factor Group: AbbottDistrict Factor Group: Abbott

PropertyProperty -36%-36%

IncomeIncome -22%-22%

Bridgeton Public SchoolsBridgeton 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

Bridgeton Public SchoolsBridgeton 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

Bridgeton Public SchoolsBridgeton Public Schools

Special Ed & Speech• Total Enrollment = 4438

Bridgeton Public SchoolsBridgeton 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

Bridgeton Public SchoolsBridgeton 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

Bridgeton Public SchoolsBridgeton 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

Bridgeton Public SchoolsBridgeton 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

Bridgeton Public SchoolsBridgeton Public Schools

Equalized Value * Property Value Rate + Aggregate Income * Income Rate * 50%

Total $7,000,813

Bridgeton Public SchoolsBridgeton Public Schools

Adequacy Budget Plus Categoricals – Local Fair Share

$67,559,891 – $7,000,813 = $60,700,078

Medford ProfileMedford Profile

PropertyProperty IncomeIncome

DistrictDistrict $793,502$793,502 $259,948$259,948

AverageAverage $977,893$977,893 $190,499$190,499

SummarySummary Below Below Property Property

ValueValue

Above Income Above Income AverageAverage

District Factor Group: IDistrict Factor Group: I

Property (7 years)Property (7 years) -14%-14%

Income (7 years)Income (7 years) -1%-1%

Medford Township SchoolsMedford Township Schools

EnrollmentEnrollment20002000

28372837

EnrollmentEnrollment20072007

30673067

Projected EnrollmentProjected Enrollment20082008

29592959

Enrollment Growth (7 years): 8.1%

Enrollment Growth (7 years) relative to state average: 4%

Medford Township SchoolsMedford Township Schools

Free & Reduced PupilsFree & Reduced Pupils 9696

Combination Pupils Combination Pupils (LEP & F/R Lunch)(LEP & F/R Lunch)

00

Limited English Limited English Students (LEP)Students (LEP)

44

% Free & Reduced % Free & Reduced Lunch Lunch

3.24%3.24%

Enrollment Growth (7 years): 8.1%

Enrollment Growth (7 years) relative to state average: 4%

Medford SchoolsMedford Schools

Equalization AidEqualization Aid

= Adequacy= Adequacy

Budget – LocalBudget – Local

Fair ShareFair Share

Adequacy Adequacy BudgetBudget

$31,374,502$31,374,502

Local Fair Local Fair ShareShare

$28,367,981$28,367,981

Equalization Equalization AidAid

$3,006,521$3,006,521

Medford TownshipMedford TownshipAdequacy BudgetAdequacy Budget - level needed to - level needed to

provide a high level of educationprovide a high level of education

Adequacy Budget = (Base Cost + At Risk Adequacy Budget = (Base Cost + At Risk Cost + LEP Cost + Comb Cost) x GCA + Cost + LEP Cost + Comb Cost) x GCA + (SPEC ED CENS + Speech)(SPEC ED CENS + Speech)

$28,958,579 + $440,986 + $19,298 + $0) $28,958,579 + $440,986 + $19,298 + $0) x 0.9613 + ($3,035,786 + $58,363) = x 0.9613 + ($3,035,786 + $58,363) = $31,374,502$31,374,502

GCA – Geographic Cost Adjustment (calculated by county) to compensate for varied wage markets across the state.

Medford Township SchoolsMedford Township Schools

AidAidCategoryCategory

Student Student EnrollmentEnrollment

AidAidAmountAmount

Base CostBase Cost 1904 1904 $28,958,579$28,958,579

At-Risk Cost At-Risk Cost 6565 $440,986$440,986

LEP CostLEP Cost 44 $19,298$19,298

COMP CostCOMP Cost 00 $0$0

SPEC ED/SpeechSPEC ED/Speech 29592959 $3,094,149$3,094,149

Total Adequacy Total Adequacy BudgetBudget

$31,374,502$31,374,502

Medford Township SchoolsMedford Township Schools

Adequacy BudgetAdequacy Budget $31,374,502$31,374,502

Security AidSecurity Aid $202,153$202,153

Spec Ed CategoricalSpec Ed Categorical $1,517,893$1,517,893

Extraordinary AidExtraordinary Aid $294,369$294,369

Transportation AidTransportation Aid $913,320$913,320

Adequacy Budget Adequacy Budget Plus CategoricalsPlus Categoricals

$34,302,237$34,302,237

Please Note: Just the Adequacy Budget Please Note: Just the Adequacy Budget is used to calculate Equalization Aidis used to calculate Equalization Aid

Medford TownshipMedford Township

Local Fair ShareLocal Fair Share – amount based on – amount based on income and property value in which income and property value in which the town is expected to contribute.the town is expected to contribute.

Local Fair Share = (EQ VAL x PROP Local Fair Share = (EQ VAL x PROP VAL RATE x 50%) + (Aggregate VAL RATE x 50%) + (Aggregate Income x Income Rate x 50%)Income x Income Rate x 50%)

Medford TownshipMedford Township

($2,347,971 x 0.0092690802 x .5) +($2,347,971 x 0.0092690802 x .5) +($769,185,297 x 0.04546684 x .5) ($769,185,297 x 0.04546684 x .5) = $= $28,367,98128,367,981 (Local Fair Share) (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

Medford Township SchoolsMedford Township SchoolsEqualization Aid = Adequacy Budget - Local Fair Share

$3,006,521$3,006,521 $31,374,502$31,374,502 $28,367,981$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

Tale of 3 Schools ComparisonTale of 3 Schools Comparison

Student Adequacy Local Fair Equalization AidDFG Enrollment Budget Share Aid Increase

Bridgeton Abbott 4438 63,378,012 7,000,813 56,077,099 2.75%Hamilton CD 3114 37,564,709 16,860,509 18,051,576 20% (cap)Medford I 2959 31,374,502 28,367,981 3,006,521 8.80%

Adequacy ComparisonAdequacy Comparison

COMB GCA SPEC TotalCost ED Speech Adequacy

3,784,361 0.8818 4,176,617 80,296 63,378,012323,060 0.9452 3,141,301 60,392 37,564,709

0 0.9613 3,035,786 58,363 31,374,502

Base At-Risk LEP COMB SPEC TotalCost Cost Cost Cost GCA ED Speech Adequacy

Bridgeton 45,075,400 17,849.80 336,364 3,784,361 0.8818 4,176,617 80,296 63,378,012Hamilton 30,484,761 5,416,045 131,419 323,060 0.9452 3,141,301 60,392 37,564,709Medford 28,958,579 440,986 19,298 0 0.9613 3,035,786 58,363 31,374,502

Tale of 2 CitiesTale of 2 Cities

What was is the 1What was is the 1stst line in Charles line in Charles Dickens, Dickens, Tale of Two CitiesTale of Two Cities??

““It was the best of times, it was the It was the best of times, it was the worst of times.”worst of times.”

Thanks!Thanks!