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Revising NJ’s School Funding Formula: A Tale of 3 Schools

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. Essential Questions. What is NJ’s new funding formula?

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Revising NJ’s School Funding Formula: A Tale of 3 Schools

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  1. Revising NJ’s School Funding Formula: A Tale of 3 Schools Kristi Schoppe, Mark Willis, Mike Diorio, Edwin WargoMED 7201, School Finance & FacilitiesProfessor Karen ThorpeWilmington University

  2. Essential Questions • What is NJ’s new funding formula? • How does the new funding formula impact schools? • How is the funding formula calculated? • 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). • 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) • 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. Adequacy Budget represents the sufficient level of resourcesto ensure the NJ’s educational standards are met. Local Fair Sharerepresents 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. • 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.

  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 FundingAmounts 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 • Benefits (current spending not 20% to differentiated between certified & non- certified staff) • Capital Improvements ($175/student) • Professional Development • Utilities (NJ’s Consumer Price Index)

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

  10. District Factor Groups (DFG) • DGF Factors • % of adults with no high school diploma • % of adults with some college education • Occupational status • Unemployment rate • % of individuals in poverty • Median family income • DFG’s are updated every 10 years2004 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; • 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; • 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, • GH 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.

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

  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: Abbott DFG: CD

  15. Hamilton Township Profile District Factor Group: CD

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

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

  19. Hamilton Township • 20% Increase in State Aid= $4,000,000 • 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

  20. Bridgeton Profile District Factor Group: Abbott

  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 District Factor Group: I

  31. Medford Township Schools Enrollment Growth (7 years): 8.1% Enrollment Growth (7 years) relative to state average: 4%

  32. Medford Township Schools 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

  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

  36. Medford Township Schools

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

  43. Thanks!

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