S3620

An Act concerning school financing, amending P.L.2018, c.67, and amending and supplementing P.L.1996, c.138 and P.L.2007, c.260.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 5 of P.L.1996, c.138 (C.18A:7F-5) is amended to read as follows:

5. As used in this section, "cost of living" means the CPI as defined in section 3 of P.L.2007, c.260 (C.18A:7F-45).

a. Within 30 days following the approval of the Educational Adequacy Report, the commissioner shall notify each district of the base per pupil amount, the per pupil amounts for full-day preschool, the weights for grade level, county vocational school districts, at-risk pupils, bilingual pupils, and combination pupils, the cost coefficients for security aid and for transportation aid, [the State average classification rate and] the excess cost for general special education services pupils, [the State average classification rate and] the excess cost for speech-only pupils, and the geographic cost adjustment for each of the school years to which the report is applicable.

Annually, within two days following the transmittal of the State budget message to the Legislature by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), the commissioner shall notify each district of the maximum amount of aid payable to the district in the succeeding school year pursuant to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), and shall notify each district of the district's adequacy budget for the succeeding school year.

For the 2008-2009 school year and thereafter, unless otherwise specified within P.L.2007, c.260 (C.18A:7F-43 et al.), aid amounts payable for the budget year shall be based on budget year pupil counts, which shall be projected by the commissioner using data from prior years. Adjustments for the actual pupil counts of the budget year shall be made to State aid amounts payable during the school year succeeding the budget year. Additional amounts payable shall be reflected as revenue and an account receivable for the budget year.

Notwithstanding any other provision of this act to the contrary, each district's State aid payable for the 2008-2009 school year, with the exception of aid for school facilities projects, shall be based on simulations employing the various formulas and State aid amounts contained in P.L.2007, c.260 (C.18A:7F-43 et al.). The commissioner shall prepare a report dated December 12, 2007 reflecting the State aid amounts payable by category for each district and shall submit the report to the Legislature prior to the adoption of P.L.2007, c.260 (C.18A:7F-43 et al.). Except as otherwise provided pursuant to this subsection and paragraph (3) of subsection d. of section 5 of P.L.2007, c.260 (C.18A:7F-47), the amounts contained in the commissioner's report shall be the final amounts payable and shall not be subsequently adjusted other than to reflect the phase-in of the required general fund local levy pursuant to paragraph (4) of subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58) and to reflect school choice aid to which a district may be entitled pursuant to section 20 of that act. The projected pupil counts and equalized valuations used for the calculation of State aid shall also be used for the calculation of adequacy budget, local share, and required local share. For 2008-2009, extraordinary special education State aid shall be included as a projected amount in the commissioner's report dated December 12, 2007 pending the final approval of applications for the aid. If the actual award of extraordinary special education State aid is greater than the projected amount, the district shall receive the increase in the aid payable in the subsequent school year pursuant to the provisions of subsection c. of section 13 of P.L.2007, c.260 (C.18A:7F-55). If the actual award of extraordinary special education State aid is less than the projected amount, other State aid categories shall be adjusted accordingly so that the district shall not receive less State aid than as provided in accordance with the provisions of sections 5 and 16 of P.L.2007, c.260 (C.18A:7F-47 and C.18A:7F-58).

In the event that the commissioner determines, following the enactment of P.L.2007, c.260 (C.18A:7F-43 et al.) but prior to the issuance of State aid notices for the 2008-2009 school year, that a significant district-specific change in data warrants an increase in State aid for that district, the commissioner may adjust the State aid amount provided for the district in the December 12, 2007 report to reflect the increase.

b. Each district shall have a required local share. For districts that receive educational adequacy aid pursuant to subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58), the required local share shall be calculated in accordance with the provisions of that subsection.

For all other districts, the required local share shall equal the lesser of the local share calculated at the district's adequacy budget pursuant to section 9 of P.L.2007, c.260 (C.18A:7F-51), or the district's budgeted local share for the prebudget year.

In order to meet this requirement, each district shall raise a general fund tax levy which equals its required local share.

No municipal governing body or bodies or board of school estimate, as appropriate, shall certify a general fund tax levy which does not meet the required local share provisions of this section.

c. Annually, on or before March 4, or on or before March 20 in the case of a school district with an annual school election in November, each district board of education shall adopt, and submit to the commissioner for approval, together with such supporting documentation as the commissioner may prescribe, a budget that provides for a thorough and efficient education. Notwithstanding the provisions of this subsection to the contrary, the commissioner may adjust the date for the submission of district budgets if the commissioner determines that the availability of preliminary aid numbers for the subsequent school year warrants such adjustment.

Notwithstanding any provision of this section to the contrary, for the 2005-2006 school year each district board of education shall submit a proposed budget in which the advertised per pupil administrative costs do not exceed the lower of the following:

(1) the district's advertised per pupil administrative costs for the 2004-2005 school year inflated by the cost of living or 2.5 percent, whichever is greater; or

(2) the per pupil administrative cost limits for the district's region as determined by the commissioner based on audited expenditures for the 2003-2004 school year.

The executive county superintendent of schools may disapprove the school district's 2005-2006 proposed budget if he determines that the district has not implemented all potential efficiencies in the administrative operations of the district. The executive county superintendent shall work with each school district in the county during the 2004-2005 school year to identify administrative inefficiencies in the operations of the district that might cause the superintendent to reject the district's proposed 2005-2006 school year budget.

For the 2006-2007 school year and each school year thereafter, each district board of education shall submit a proposed budget in which the advertised per pupil administrative costs do not exceed the lower of the following:

(1) the district's prior year per pupil administrative costs; except that the district may submit a request to the commissioner for approval to exceed the district's prior year per pupil administrative costs due to increases in enrollment, administrative positions necessary as a result of mandated programs, administrative vacancies, nondiscretionary fixed costs, and such other items as defined in accordance with regulations adopted pursuant to section 7 of P.L.2004, c.73. In the event that the commissioner approves a district's request to exceed its prior year per pupil administrative costs, the increase authorized by the commissioner shall not exceed the cost of living or 2.5 percent, whichever is greater; or

(2) the prior year per pupil administrative cost limits for the district's region inflated by the cost of living or 2.5 percent, whichever is greater.

d. (1) A district's general fund tax levy shall not exceed the district's adjusted tax levy as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39).

(2) (Deleted by amendment, P.L.2007, c.260).

(3) (Deleted by amendment, P.L.2007, c.260).

(4) Any debt service payment made by a school district during the budget year shall not be included in the calculation of the district's adjusted tax levy.

(5) (Deleted by amendment, P.L.2007, c.260).

(6) (Deleted by amendment, P.L.2007, c.260).

(7) (Deleted by amendment, P.L.2004, c.73).

(8) (Deleted by amendment, P.L.2010, c.44)

(9) Any district may submit at the annual school budget election, in accordance with subsection c. of section 4 of P.L.2007, c.62 (C.18A:7F-39), a separate proposal or proposals for additional funds, including interpretive statements, specifically identifying the program purposes for which the proposed funds shall be used, to the voters, who may, by voter approval, authorize the raising of an additional general fund tax levy for such purposes. In the case of a district with a board of school estimate, one proposal for the additional spending shall be submitted to the board of school estimate. Any proposal or proposals submitted to the voters or the board of school estimate shall not: include any programs and services that were included in the district's prebudget year net budget unless the proposal is approved by the commissioner upon submission by the district of sufficient reason for an exemption to this requirement; or include any new programs and services necessary for students to achieve the thoroughness standards established pursuant to subsection a. of section 4 of P.L.2007, c.260 (C.18A:7F-46).

A district without a board of school estimate may also submit to the voters at a special election authorized pursuant to section 2 of P.L.1995, c.278 (C.19:60-2), a separate proposal or proposals for additional funds for the subsequent budget year, including interpretive statements, specifically identifying the program purposes for which the proposed funds shall be used. A proposal submitted at a special election shall comply with the requirements of this paragraph and section 4 of P.L.2007, c.62 (C.18A:7F-39). A separate proposal or proposals for additional funds may only be submitted on a date of a special election once during a school year. Nothing in this paragraph shall be construed to prohibit the submission to the voters of a question or questions for the approval of a capital project or projects on the same special election date as the submission of a separate proposal or proposals for additional funds.

The executive county superintendent of schools may prohibit the submission of a separate proposal or proposals to the voters or board of school estimate if he determines that the district has not implemented all potential efficiencies in the administrative operations of the district, which efficiencies would eliminate the need for the raising of an additional general fund tax levy.

(10) Notwithstanding any provision of law to the contrary, if a district proposes a budget with a general fund tax levy and equalization aid which exceed the adequacy budget, the following statement shall be published in the legal notice of public hearing on the budget pursuant to N.J.S.18A:22-28, and posted at the public hearing held on the budget pursuant to N.J.S.18A:22-29:

"Your school district has proposed programs and services in addition to the core curriculum content standards adopted by the State Board of Education. Information on this budget and the programs and services it provides is available from your local school district."

(11) Any reduction that may be required to be made to programs and services included in a district's prebudget year net budget in order for the district to limit the growth in its budget between the prebudget and budget years by its tax levy growth limitation as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39), shall only include reductions to excessive administration or programs and services that are inefficient or ineffective.

e. (1) In the case of a district having a board of school estimate, other than a Type II district with a board of school estimate, which has a proposed budget that includes a general fund tax levy and equalization aid in excess of the adequacy budget, the general fund tax levy shall be submitted to the board for determination of the amount that should be expended. If the board of school estimate reduces the district's proposed budget, the district may appeal any of the reductions to the commissioner on the grounds that the reductions will negatively impact on the stability of the district given the need for long term planning and budgeting. In considering the appeal, the commissioner shall consider enrollment increases or decreases within the district; the impact on the local levy; and whether the reductions will impact on the ability of the district to fulfill its contractual obligations. A district may not appeal any reductions on the grounds that the amount is necessary for a thorough and efficient education.

(2) In the case of a district having a board of school estimate, other than a Type II district with a board of school estimate, which has a proposed budget that includes a general fund tax levy and equalization aid at or below the adequacy budget, the general fund tax levy shall be submitted to the board for determination. Any reductions may be appealed to the commissioner on the grounds that the amount is necessary for a thorough and efficient education or that the reductions will negatively impact on the stability of the district given the need for long term planning and budgeting. In considering the appeal, the commissioner shall also consider the factors outlined in paragraph (1) of this subsection.

In addition, the board of school estimate shall be required to demonstrate clearly to the commissioner that the proposed budget reductions shall not adversely affect the ability of the school district to provide a thorough and efficient education or the stability of the district given the need for long term planning and budgeting.

(3) In lieu of any budget reduction appeal provided for pursuant to paragraphs (1) and (2) of this subsection, the State board may establish pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an expedited budget review process based on a district's application to the commissioner for an order to restore a budget reduction.

(4) When the board of education or the board of school estimate authorize the general fund tax levy, the district shall submit the resulting budget to the commissioner within 15 days of the authorization.

f. (Deleted by amendment, P.L.2007, c.260).

g. (Deleted by amendment, P.L.2007, c.260).

(cf: P.L.2024, c.60, s.1)

2. (New section) Beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, the Department of Education shall annually, within two days following the transmittal of the State budget message to the Legislature by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), make publicly available on the department’s Internet website the calculation of each category of aid payable to each school district in the succeeding year pursuant to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.). The calculations shall be written in a user-friendly manner and shall include, at a minimum, explanations of the variables used to determine the district’s aid.

3. Section 2 of P.L.2007, c.260 (C.18A:7F-44) is amended to read as follows:

2. The Legislature finds and declares that:

a. The Constitution of the State of New Jersey states that the Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all children in the State between the ages of five and eighteen years. (N.J. Const. art. VIII, sec. 4, par.1).

b. The State, in addition to any constitutional mandates, has a moral obligation to ensure that New Jersey's children, wherever they reside, are provided the skills and knowledge necessary to succeed. Any school funding formula should provide resources in a manner that optimizes the likelihood that children will receive an education that will make them productive members of society.

c. Although the Supreme Court of New Jersey has held that prior school funding statutes did not establish a system of public education that was thorough and efficient as to certain districts, the Court has consistently held that the Legislature has the responsibility to substantively define what constitutes a thorough and efficient system of education responsive to that constitutional requirement.

d. Every child in New Jersey must have an opportunity for an education based on academic standards that satisfy constitutional requirements regardless of where the child resides, and public funds allocated to this purpose must be expended to support schools that are thorough and efficient in delivering those educational standards. In turn, school districts must be assured the financial support necessary to provide those constitutionally compelled educational standards. Any school funding formula should provide State aid for every school district based on the characteristics of the student population and up-to-date measures of the individual district's ability to pay.

e. New Jersey's current public school funding formula, established under the provisions of the "Comprehensive Educational Improvement and Financing Act of 1996," (CEIFA) P.L.1996, c.138, has not been used to calculate State aid for public schools since the 2001-02 school year. Any new school funding formula should account for changes in enrollment and other significant developments, providing relief to those districts that have experienced substantial enrollment increases.

f. The decisions in the Abbott cases have resulted in frequent litigation and a fragmented system of funding under which limited resources cannot be distributed equitably to all districts where at-risk children reside, instead dividing the districts sharply into Abbott and non-Abbott categories for funding purposes without regard to a district's particular pupil characteristics and leading to needlessly adversarial relationships among school districts and between districts and the State.

g. In the absence of a clear, unitary, enforceable statutory formula to govern appropriations for education, crucial funding decisions are made annually, in competition for limited State resources with other needs and requirements as part of the annual budget negotiation process, utilizing many different classes and categories of aid, leading to an uncertain, unpredictable, and untenable funding situation for the State and school districts alike.

h. This act represents the culmination of five years of diligent efforts by both the Executive and Legislative branches of State government to develop an equitable and predictable way to distribute State aid that addresses the deficiencies found in past formulas as identified by the Supreme Court. Working together toward this common goal, the Department of Education and the Legislature engaged nationally recognized experts in education funding and provided significant opportunities for stakeholder involvement and public input to assist in formulating and refining a comprehensive school funding model that has been validated by experts. The formula accounts for the individual characteristics of school districts and the realities of their surroundings, including the need for additional resources to address the increased disadvantages created by high concentrations of children at-risk.

i. The formula established under this act is the product of a careful and deliberative process that first involved determining the educational inputs necessary to provide a high-quality education, including specifically addressing the supplemental needs of at-risk students and those with limited English proficiency (LEP), and a determination of the actual cost of providing those programs. The formula provides adequate funding that is realistically geared to the core curriculum content standards, thus linking those standards to the actual funding needed to deliver that content.

j. In recognition of the unique problems and cost disadvantages faced by districts with high concentrations of at-risk students, it is appropriate to reflect in the formula a greater weight as the district's proportion of at-risk students increases. In addition, the new formula recognizes the disadvantages of an expanded group of students by including in the definition of at-risk those students who qualify for free or reduced-price lunch. Expanding the definition of at-risk students in this manner will significantly increase the resources flowing to districts with high concentrations of these low-income students.

k. In light of the demonstrable, beneficial results and success of the current Abbott preschool program, it is appropriate to build upon this success by incorporating in the formula an expanded high-quality preschool program for all children who qualify for free and reduced price meals in all districts. It is appropriate for the formula to acknowledge that at-risk children do not always receive the same educational exposure at an early age as their peers and to provide the additional resources necessary through high-quality preschool to prepare every child to learn and succeed.

l. It is appropriate to reflect in this formula the inherent value of educating a child in the least restrictive environment and, whenever possible, in that child's neighborhood school alongside his peers. The new funding formula should provide incentives for keeping classified students in district.

m. It is also appropriate to recognize in the formula the need for all schools to incorporate effective security measures, which may vary from district to district depending upon the at-risk student population and other factors, and to provide categorical funding to address these important requirements.

n. [In recognition of the potentially wide variability in special education costs, even for the same category of disability, from district to district, it is appropriate for the new funding formula to mitigate the impact of that variability by establishing a census model based on the actual Statewide average excess cost of educating special education students and by providing for an increase in State aid for extraordinary costs incurred by districts.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

o. It is imperative that any new school funding formula work in conjunction with the key school accountability measures that have been enacted in recent years to promote greater oversight, transparency, and efficiency in the delivery of educational services. These accountability measures include the New Jersey Quality Single Accountability Continuum, the "School District Fiscal Accountability Act," P.L.2006, c.15 (C.18A:7A-54 et seq.), P.L.2007, c.63 (C.40A:65-1 et al.) which established the duties and responsibilities of the executive county superintendent of schools, and P.L.2007, c.53 (C.18A:55-3 et al.).

p. Together with a renewed legislative focus on and commitment to providing sufficient means to maintain and support a high-quality system of free public schools in the State, a new funding formula supported by significantly increased State resources will ensure compliance with all statutory and constitutional mandates. Districts that were formerly designated as Abbott districts will be provided sufficient resources to continue those Court-identified programs, positions, and services that have proven effective while being provided the flexibility to shift resources and programmatic focus based on the needs of their students and current research.

q. The time has come for the State to resolve the question of the level of funding required to provide a thorough and efficient system of education for all New Jersey school children. The development and implementation of an equitable and adequate school funding formula will not only ensure that the State's students have access to a constitutional education as defined by the core curriculum content standards, but also may help to reduce property taxes and assist communities in planning to meet their educational expenses. The development of a predictable, transparent school funding formula is essential for school districts to plan effectively and deliver the quality education that our citizens expect and our Constitution requires.

(cf: P.L.2007, c.260, s.2)

4. Section 4 of P.L.2007, c.260 (C.18A:7F-46) is amended to read as follows:

4. a. The State Board of Education shall review and update the core curriculum content standards every five years. The standards shall ensure that all children are provided the educational opportunity needed to equip them for the role of citizen and labor market competitor.

The Commissioner of Education shall develop and establish, through the report issued pursuant to subsection b. of this section, efficiency standards which define the types of programs, services, activities, and materials necessary to achieve a thorough and efficient education.

b. By September 1 of 2010 and by September 1 every three years thereafter, the Governor, after consultation with the commissioner, shall recommend to the Legislature through the issuance of the Educational Adequacy Report for the three school years to which the report is applicable revisions to:

(1) the base per pupil amount based upon the core curriculum content standards established pursuant to subsection a. of this section;

(2) the per pupil amounts for full-day preschool;

(3) the weights for grade level, county vocational school districts, at-risk pupils, bilingual pupils, and combination pupils;

(4) the cost coefficients for security aid and transportation aid;

(5) [the State average classification rate for general special education services pupils and for speech-only pupils;] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

(6) the excess cost for general special education services pupils and for speech-only pupils; [and]

(7) the extraordinary special education aid thresholds established pursuant to subsection b. of section 13 of P.L.2007, c.260 (C.18A:7F-55);

(8) the equalized total tax rate and adequacy spending thresholds to be used for the purposes of determining whether a school district shall be exempt from a reduction in State school aid pursuant to section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

(9) if deemed appropriate, the use of inflationary measures, other than the CPI, to adjust the base per pupil amount, the per pupil amounts for full-day preschool, the excess costs for general special education services pupils and for speech-only pupils, or the cost-coefficients for security aid and transportation aid, provided that the recommended inflationary measures are equal to or greater than the CPI, are recognized, evidence-based measures of cost change for the type of good or service, and have been disclosed in the Educational Adequacy Report.

The base per pupil amount, the per pupil amounts for full-day preschool, the excess costs for general special education services pupils and for speech-only pupils, and the cost-coefficients for security aid and transportation aid shall be adjusted by the CPI, or other inflationary measures disclosed in the most recently issued Educational Adequacy Report, for each of the two school years following the first school year to which the report is applicable.

The amounts published in the final version of the Educational Adequacy Report issued pursuant to this subsection shall be deemed approved for the three successive fiscal years beginning from the subsequent July 1, unless between the date of transmittal and the subsequent November 30, the Legislature adopts a concurrent resolution stating that the Legislature is not in agreement with all or any specific part of the report. The concurrent resolution shall advise the Governor of the Legislature's specific objections to the report and shall direct the commissioner to submit to the Legislature a revised report which responds to those objections by January 1.

c. The Educational Adequacy Report issued pursuant to subsection b. of this section may also include a commissioner-initiated review of any other element, variable, or metric used to determine allocations of State school aid pursuant to P.L.2007, c.260 (C.18A:7F-43 et al.). The commissioner shall publicly announce the intent to conduct a review pursuant to this subsection at the time that the decision to conduct the review is made and prior to initiating the review. An element, variable, or metric that is the subject of a commissioner-initiated review pursuant to this subsection shall not be decreased pursuant to the review.

During a year in which the report required pursuant subsection b. of this section is to be issued, the commissioner shall make a draft of the report available for public comment for a period of no less than 30 days.

During the public comment period, the commissioner shall ensure that members of the public are afforded the opportunity to provide remarks on, and recommend revisions to, the draft report at public hearings to be held at various locations across the State, as well as through the submission of written and electronic testimony.

After consideration of comments received through the public comment period, the commissioner shall issue a final version of the report.

(cf: P.L.2007, c.260, s.4)

5. Section 9 of P.L.2007, c.260 (C.18A:7F-51) is amended to read as follows:

9. a. The adequacy budget for each school district and county vocational school district shall be calculated as follows:

AB = (BC + AR Cost + LEP Cost + COMB Cost + [SE Census] SE Cost) x GCA

where

BC is the district's or county vocational school district's base cost as calculated pursuant to section 8 of this act;

AR Cost is the cost of providing educational and other services for at-risk pupils as calculated pursuant to subsection b. of this section;

LEP Cost is the cost of providing educational and other services for bilingual education pupils as calculated pursuant to subsection c. of this section;

COMB Cost is the cost of providing educational and other services for pupils who are both at-risk and bilingual as calculated pursuant to subsection d. of this section;

[SE Census] SE Cost is the cost of providing programs and services to general special education services pupils and speech-only pupils as calculated pursuant to subsection e. of this section; and

GCA is geographic cost adjustment.

The GCA shall be the geographic cost adjustment developed by the commissioner and revised by the commissioner every five years in accordance with receipt of census data.

b. AR Cost shall be calculated as follows:

AR Cost = BPA x ARWENR x AR Weight

where

BPA is the base per pupil amount;

ARWENR is the weighted enrollment for at-risk pupils of the school district or county vocational school district, which shall not include combination pupils; and

AR Weight is the at-risk weight.

For the 2008-2009 through 2010-2011 school years the at-risk weight shall be as follows:

for a district in which the concentration of at-risk pupils is less than [20%] 20 percent of resident enrollment, the at-risk weight shall equal 0.47;

for a district in which the concentration of at-risk pupils is equal to [20%] 20 percent but less than [60%] 60 percent of resident enrollment, the at-risk weight shall equal the district's ((at-risk % - 0.20) x 0.25)) + 0.47; and

for a district in which the concentration of at-risk pupils is equal to or greater than [60%] 60 percent of resident enrollment, the at-risk weight shall equal 0.57.

For subsequent school years, the AR weight shall be established in the Educational Adequacy Report.

c. LEP Cost shall be calculated as follows:

LEP Cost = BPA x LWENR x LEP Weight

where

BPA is the base per pupil amount;

LWENR is the weighted enrollment for the bilingual education pupils of the school district or county vocational school district, which shall not include combination pupils; and

LEP Weight is the bilingual pupil weight.

For the 2008-2009 through 2010-2011 school years the LEP weight shall be 0.5. For subsequent school years, the LEP weight shall be established in the Educational Adequacy Report.

d. COMB Cost shall be calculated as follows:

COMB Cost = BPA x CWENR x (AR Weight + COMB Weight)

where

BPA is the base per pupil amount;

CWENR is the weighted enrollment for pupils who are both at-risk and bilingual;

AR Weight is the at-risk weight; and

COMB Weight is the combination pupil weight.

For the 2008-2009 through 2010-2011 school years the COMB weight shall be 0.125. For subsequent school years, the COMB weight shall be established in the Educational Adequacy Report.

e. [SE Census] SE Cost shall be calculated as follows:

[SE Census] SE Cost = ([RE x SEACR] SEENR x AEC x 2/3) + ([RE x SACR] SPEONLY x SEC)

where

[RE is the resident enrollment of the school district or county vocational school district;

SEACR is the State average classification rate for general special education services pupils]

SEENR is the number of general special education services pupils included in the school district’s or county vocational school district’s resident enrollment;

AEC is the excess cost for general special education services pupils;

[SACR is the State average classification rate for speech-only pupils]

SPEONLY is the number of speech-only pupils included in the school district’s or county vocational school district’s resident enrollment; and

SEC is the excess cost for speech-only pupils.

[For the 2008-2009 through 2010-2011 school years the State average classification rate shall be 14.69% for general special education services pupils and 1.897% for speech-only pupils. For subsequent school years, the State average classification rates shall be established in the Educational Adequacy Report.]

For the 2008-2009 school year the excess cost shall be $10,898 for general special education services pupils and $1,082 for speech-only pupils. The excess cost amounts shall be adjusted by the CPI in the 2009-2010 and 2010-2011 school years as required pursuant to subsection b. of section 4 of this act. For subsequent school years, the excess cost amounts shall be established in the Educational Adequacy Report, with the amounts adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.

(cf: P.L.2007, c.260, s.9)

6. Section 13 of P.L.2007, c.260 (C.18A:7F-55) is amended to read as follows:

13. a. Special education categorical aid for each school district and county vocational school district shall be calculated as follows:

SE = ([RE x SEACR] SEENR x AEC x 1/3) x GCA

where

[RE is the resident enrollment of the school district or county vocational school district;

SEACR is the State average classification rate for general special education services pupils]

SEENR is the number of general special education services pupils included in the school district’s or county vocational school district’s resident enrollment;

AEC is the excess cost for general special education services pupils; and

GCA is the geographic cost adjustment as developed by the commissioner.

For the 2008-2009 school year the excess cost shall be $10,898 for general special education services pupils. The excess cost amount shall be adjusted by the CPI in the 2009-2010 and 2010-2011 school years as required pursuant to subsection b. of section 4 of [this act] P.L.2007, c.260 (C.18A:7F-46). For subsequent school years, the excess cost amount shall be established in the Educational Adequacy Report, with the amount adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.

b. Extraordinary special education aid for an individual classified pupil shall be available when the student is educated in a general education classroom, special education program, including but not limited to a resource program or special class program, or any combination of general education and special education programs and services, subject to the requirements and thresholds set forth in this section.

(1) In those instances in which a pupil is educated in an in-district public school program with non-disabled peers, whether run by a public school or by a private school for the disabled, and the cost of providing direct instructional and support services for an individual classified pupil exceeds $40,000, for those direct instructional and support services costs in excess of $40,000 a district shall receive extraordinary special education State aid equal to [90%] 90 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.

(2) In those instances in which a pupil is educated in a separate public school program for students with disabilities and the cost of providing direct instructional and support services for an individual classified pupil exceeds $40,000, for those direct instructional and support services costs in excess of $40,000 a district shall receive extraordinary special education State aid equal to [75%] 75 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.

(3) In those instances in which a pupil is educated in a separate private school for students with disabilities and the tuition for an individual classified pupil exceeds $55,000, for tuition costs in excess of $55,000 a district shall receive extraordinary special education State aid equal to [75%] 75 percent of the amount of that excess in accordance with the provisions of paragraph (4) of this subsection.

(4) Extraordinary special education State aid for an individual classified pupil shall be calculated as follows:

EA = ((ADC - $40,000) x .90) + (((AIC - $40,000) + (ASC - $55,000)) x .75)

where

ADC equals the district's actual cost for the direct instructional and support services in an in-district public school program as set forth in paragraph (1) of this subsection;

AIC equals the district's actual cost for direct instructional and support services in a separate public school program as set forth in paragraph (2) of this subsection; and

ASC equals the district's actual cost for tuition paid to a separate private school as set forth in paragraph (3) of this subsection.

(5) The receipt of extraordinary special education State aid for an individual classified pupil shall be conditioned upon a demonstration by the district that the pupil's Individualized Education Plan requires the provision of intensive services, pursuant to factors determined by the commissioner.

c. In order to receive funding pursuant to this section, a district shall file an application with the department that details the expenses incurred on behalf of the particular classified pupil for which the district is seeking reimbursement. Additional State aid awarded for extraordinary special education costs shall be recorded by the district as revenue in the current school year and paid to the district in the subsequent school year.

d. A school district may apply to the commissioner to receive emergency special education aid for any classified pupil who enrolls in the district prior to March of the budget year and who is in a placement with a cost in excess of [$40,000 or $55,000, as applicable] the applicable extraordinary special education aid thresholds enumerated in subsection b. of this section. The commissioner may debit from the student's former district of residence any special education aid which was paid to that district on behalf of the student.

e. The department shall review expenditures of federal and State special education aid by a district in every instance in which special education monitoring identifies a failure on the part of the district to provide services consistent with a pupil's Individualized Education Plan.

f. [The commissioner shall commission an independent study of the special education census funding methodology to determine if adjustments in the special education funding formulas are needed in future years to address the variations in incidence of students with severe disabilities requiring high cost programs and to make recommendations for any such adjustments. The study and recommendations shall be completed by June 30, 2010.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

g. [A school district may apply to the commissioner to receive additional special education categorical aid if the district has an unusually high rate of low-incidence disabilities, such as autism, deaf/blindness, severe cognitive impairment, and medically fragile. In applying for the aid the district shall: demonstrate the impact of the unusually high rate of low-incidence disabilities on the school district budget and the extent to which the costs to the district are not sufficiently addressed through special education aid and extraordinary special education aid; and provide details of all special education expenditures, including details on the use of federal funds to support those expenditures.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

h. Notwithstanding the provisions of any other law, rule, or regulation to the contrary, the amount of extraordinary special education aid appropriated in the annual appropriations act shall increase compared to the amount appropriated in the previous fiscal year or otherwise be appropriated in a manner to ensure that the percentage of a school district’s costs reimbursed through extraordinary special education aid increases compared to the previous fiscal year.

i. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the amount of extraordinary special education aid received by a district pursuant to this section shall not be included in the calculation of a district’s tax levy growth limitation pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38).

(cf: P.L.2007, c.260, s.13)

7. Section 4 of P.L.2018, c.67 (C.18A:7F-68) is amended to read as follows:

4. a. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the contrary, in the 2019-2020 through 2024-2025 school years, a school district or county vocational school district in which the State aid differential calculated is negative shall receive State school aid in an amount equal to the sum of the district's State aid in the prior school year plus the district's proportionate share of the sum of any increase in State aid included in the annual appropriations act for that fiscal year and the total State aid reduction pursuant to subsection b. of this section based on the district's State aid differential as a percent of the Statewide total State aid differential among all school districts and county vocational school districts for which the State aid differential is negative. Any increase in State aid pursuant to this subsection shall first be allocated to equalization aid, followed by special education categorical aid, security categorical aid, and transportation aid, except that no category shall exceed the total amount as calculated in accordance with the provisions of sections 11, 13, 14, and 15 of P.L.2007, c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57), respectively.

b. Except as provided pursuant to subsection c. of this section, and notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the contrary, in the 2019-2020 through 2024-2025 school years, a school district or county vocational school district in which the State aid differential is positive shall receive State school aid in an amount equal to the district's State aid in the prior school year minus a percent of the State aid differential according to the following schedule:

(1) 13 percent in the 2019-2020 school year;

(2) 23 percent in the 2020-2021 school year;

(3) 37 percent in the 2021-2022 school year;

(4) 55 percent in the 2022-2023 school year;

(5) 76 percent in the 2023-2024 school year; and

(6) 100 percent in the 2024-2025 school year.

c. (1) An SDA district that is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid pursuant to subsection b. of this section.

(2) An SDA district that is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending above adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall be subject to a reduction not to exceed the amount by which the district is spending above adequacy multiplied by the corresponding percentage included in subsection b. of this section.

(3) A school district, other than an SDA district, that is located in a municipality in which the equalized total tax rate is at least 10 percent greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending at least 10 percent below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid pursuant to subsection b. of this section.

(4) [A] Except as provided in section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), a school district that is a participating district under an application that is approved for a grant pursuant to subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or a school district that is a participating district under an application that receives preliminary approval pursuant to subsection b. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) and that has a State aid differential that is positive may elect to receive State school aid in an amount equal to the district's State aid in the prior school year minus a percent of the State aid differential according to the following schedule:

(a) 30 percent in the 2021-2022 school year;

(b) 37 percent in the 2022-2023 school year;

(d) 55 percent in the 2024-2025 school year;

(e) 65.5 percent in the 2025-2026 school year;

(f) 76 percent in the 2026-2027 school year;

(g) 88 percent in the 2027-2028 school year; and

(h) 100 percent in the 2028-2029 school year.

A school district with a State aid differential that is positive, which is a participating district under an application that is approved for a grant pursuant to subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or that receives preliminary approval under subsection b. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) but has not created or joined a limited purpose or all purpose regional school district within two years following the grant application approval or preliminary approval shall not be eligible to receive State aid according to the schedule enumerated in this paragraph.

As used in this paragraph, "participating district" means a school district whose board of education by resolution certifies a commitment to participate in a feasibility study submitted as part of an application under the grant program established pursuant to section 2 of P.L.2021, c.402 (C.18A:13-47.2).

(5) Notwithstanding the provisions of section 32 of P.L.1996, c.138 (C.18A:7F-32) or any other law, rule, or regulation to the contrary, a school district that is a regional school district created following the approval of a grant application pursuant to section 4 of P.L.2021, c.402 (C.18A:13-47.4) shall, from the first full school year following the creation of the regional school district through the 2028-2029 school year, receive State school aid in an amount that is the greater of:

(a) the amount of State school aid that the newly created regional school district would receive as a regional school district; or

(b) the sum of the amount of State school aid received by each school district constituting the newly created regional school district prior to the creation of such regional school district.

(6) A school district shall not be not be subject to a reduction in State aid pursuant to this section provided that:

(a) the district is a regional school district consisting of at least five constituent school districts;

(b) the district has mitigated costs of regionalization, as determined by the Commissioner of Education;

(c) for the most recent school year for which data is available, the district's administrative costs per pupil are 15 percent lower than the Statewide average administrative costs per pupil for regional school districts; and

(d) the district's general fund tax levy has been increased by the maximum amount permitted pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38) in each of the last five school years.

A school district that is exempt from a reduction in State aid pursuant to paragraph (6) of subsection c. of this section shall provide courtesy busing to pupils who reside in the district, provided that the district was providing courtesy busing prior to the school year in which it is exempt from a reduction in State aid.

d. Any decrease in State aid pursuant to subsection b. or c. of this section shall first be deducted from a school district's or county vocational school district's allotment of adjustment aid. Any additional reduction shall be deducted from the school district's or county vocational school district's allotment of non-SFRA aids, followed by equalization aid, special education categorical aid, security aid, and transportation aid.

e. Any remaining adjustment aid or non-SFRA aids shall be reallocated to other State aid categories in a manner to be determined by the commissioner.

(cf: P.L.2023, c.140, s.1)

8. (New section) a. As used in this section, “total operating budget” means the sum of a district’s general fund revenues from local sources, State sources, federal sources, and other sources. Total operating budget shall not include withdrawals made by the district from any reserve account established pursuant to section 6 of P.L.2007, c.62 (C.18A:7F-41) or reimbursements paid to the district for extraordinary special education aid pursuant to section 13 of P.L.2007, c.260 (C.18A:7F-55).

b. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other provision of law, rule, or regulation to the contrary, and beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, a school district shall receive an allocation of reduction adjustment aid to ensure that the amount of State school aid provided to a school district shall not be decreased by more than two percent of the district’s prebudget year total operating budget. In no school year shall a school district receive an amount of State school aid that has been reduced from the amount of aid disbursed in the prebudget year by an amount that exceeds two percent of the district’s prebudget year total operating budget.

9. Section 5 of P.L.2018, c.67 (C.18A:7F-69) is amended to read as follows:

5. a. In the 2019-2020 school year, and in each school year thereafter, a county vocational school district shall receive vocational expansion stabilization aid in such an amount to ensure that the district receives the greater of the amount of State aid calculated pursuant to the provisions of P.L.2018, c.67 (C.18A:7F-67 et al.) or the sum of the district's State aid received in the 2017-2018 school year.

b. In the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, the amount of vocational expansion stabilization aid (VESA) received by a county vocational school district shall be adjusted to accommodate growth in resident enrollment. Provided that the difference between the projectedresident enrollment forthe budget year and the resident enrollment in the prebudget year is positive, the adjustment for resident enrollment shall be calculated as follows:

VESA adjustment = ENRG x VA x GCA

where

ENRG means the difference between the projected resident enrollment for the budget year and the resident enrollment in the prebudget year;

VA means the base per pupil amount established pursuant to section 7 of P.L.2007, c.260 (C.18A:7F-49) multiplied by 0.31; and

GCA is the geographic cost adjustment as developed by the commissioner.

A county vocational school district for which the difference between the projectedresident enrollment for the budget year and the resident enrollment in the prebudget year is less than or equal to zero shall receive the amount of vocational expansion stabilization aid determined pursuant to subsection a. of this section. Nothing in this section shall be construed as allowing a district’s allocation of vocational expansion stabilization aid to be decreased from the amount of vocational expansion stabilization aid received in the prebudget year.

(cf: P.L.2018, c.67, s.5)

10. (New section) a. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, a school district, other than a regional school district, shall not be subject to a reduction in State school aid in any school year, beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, if:

(1) in the case of an SDA district, the district is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recent available calendar year and the district is spending below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70); or

(2) in the case of a school district other than an SDA district, the district is located in a municipality in which the equalized total tax rate is at least 10 percent greater than the Statewide average equalized total tax rate for the most recent available calendar year and is spending at least 10 percent below adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70).

b. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, a regional school district shall not be subject to a reduction in State school aid in any school year, beginning with the first full school year following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each school year thereafter, if 50 percent or more of the constituent districts or municipalities of the regional school district meet either of the following criteria:

c. Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to the contrary, an SDA district that is spending above adequacy as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid that exceeds the amount by which the district is spending above adequacy.

11. (New section) In developing the Educational Adequacy Report to be issued next following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the Commissioner of Education shall engage a diverse group of stakeholders to review:

a. the calculation of local share pursuant to section 10 of P.L.2007, c.260 (C.18A:7F-52) and whether the metrics used in that calculation are best able to estimate a district’s ability to pay for the costs of education through local revenue, in addition to ensuring that the calculation of local share accurately assesses a district’s ability to levy funds on the basis of residents’ purchasing power;

b. the abilities of the Department of Education and school districts to predict and anticipate State school aid amounts from year to year;

c. possible methods of improving upon the existing preschool funding methodology; and

d. possible adjustments to deadlines pertaining to the development, submission, and adoption of school district budgets.

The commissioner shall publish a summary of the findings and recommendations resulting from the reviews in the Educational Adequacy Report.

12. (New section) a. There is established the Special Education Funding Review Task Force. The purpose of the task force shall be to assess the effectiveness of State aid provided to support special education costs, examine the possibility of a tier-based model for special education funding, make recommendations regarding the implementation of a tier-based funding model, and provide recommendations for responses to changes in revenues for special education purposes, including federal revenues.

b. The task force shall consist of 11 members, each of whom shall have a background in, or special knowledge of, the legal, policy, and administrative aspects of special education in New Jersey, as follows:

(1) one member appointed by the President of the Senate;

(2) one member appointed by the Speaker of the General Assembly;

(3) one member appointed by the Governor;

(4) one representative from the New Jersey Education Association;

(5) one representative from the New Jersey Principals and Supervisors Association;

(6) one representative from the New Jersey School Boards Association;

(7) one representative from the New Jersey Association of School Administrators;

(8) one representative from the Garden State Coalition of Schools;

(9) one representative from the American Federation of Teachers;

(10) one representative from Great Schools of New Jersey; and

(11) one representative from the New Jersey Association of School Business Officials.

c. The appointments to the task force shall be made within 30 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill). Vacancies in the membership of the task force shall be filled in the same manner as the original appointments were made. Members of the task force shall serve without compensation but shall be reimbursed for necessary expenditures incurred in the performance of their duties as members of the task force within the limits of funds appropriated or otherwise made available to the task force for its purposes.

d. The task force shall organize as soon as practicable, but no later than 30 days following the appointment of its members. The task force shall choose a chairperson from among its members and shall appoint a secretary who need not be a member of the task force.

e. The task force shall hold meetings at the request of the chairperson and shall hold a minimum of three public meetings, which shall each be held in the northern, central, and southern regions of the State. The meetings may take place in-person or through remote means. It shall be the purpose of the public meetings to seek input and gather testimony on the effects of the State’s current method of funding the costs of special education from education stakeholders including, but not limited to, education finance experts, special education experts, school leaders, school business officials, school board members, and members of the public.

f. The Department of Education shall provide stenographic, clerical, and other administrative assistants, and such professional staff as the task force requires to carry out its work. The task force also shall be entitled to call to its assistance and avail itself of the services of the employees of any State, county, or municipal department, board, bureau, commission, or agency as it may require and as may be available for its purposes.

13. (New section) The Special Education Funding Review Task Force established pursuant to section 12 of P.L. c. (C. ) (pending before the Legislature as this bill) shall issue a final report detailing its findings and recommendations to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no later than one year after the organization of the task force. The report shall be posted in a prominent location on the Internet website of the Department of Education.

14. Sections 1, 3, 5 through 7, and 10 of this act shall take effect immediately and shall first apply to the first full school year following the date of enactment. Sections 2, 8, 9, and 11 through 13 of this act shall take effect immediately. Section 4 of this act shall take effect immediately and shall first apply to the Educational Adequacy Report to be issued next following the date of enactment. The Special Education Funding Review Task Force shall expire 30 days after the issuance of the report required pursuant to section 13 of this act.

STATEMENT

This bill makes various changes to special education aid and the Educational Adequacy Report. The bill also establishes the Special Education Funding Review Task Force.

The bill requires the Department of Education to make available on the department’s Internet website the calculation of aid payable to each school district in the succeeding year in a user-friendly manner, including explanations of the variables used to determine the district’s aid. The information is required to be posted each year within two days of the Governor’s Budget Message.

Additionally, the bill makes certain changes to the Educational Adequacy Report, which is submitted to the Legislature every three years to update the various parameters used to calculate State aid to school districts. Pursuant to the bill, the Commissioner of Education may initiate a review of certain elements of the school funding formula, including the metrics for adjusting costs in intervening years between reports. Additionally, the bill requires that a draft of the Educational Adequacy Report be made available for public comment for at least 30 days, during which time members of the public may provide remarks on the draft report at public hearings to be held at various locations across the State and through the submission of written and electronic testimony.

During the development of the next Educational Adequacy Report following enactment of this bill, the commissioner is required to engage a diverse group of stakeholders to review and make recommendations concerning: the calculation of a district’s local share and whether the metrics used are best able to estimate a district’s potential adjusted tax levy; the abilities of the Department of Education and school districts to predict and anticipate State school aid amounts from year to year; possible methods of improving upon the existing preschool funding methodology; and possible adjustments to deadlines pertaining to the development, submission, and adoption of school district budgets. The bill requires the commissioner to publish a summary of the findings and recommendations in the Educational Adequacy Report.

Additionally, the bill establishes reduction adjustment aid to ensure that the amount of State school aid provided to a school district is not decreased by more than two percent of the district’s prebudget year total operating budget. The total operating budget is defined as the sum of a district’s general fund revenues from local sources, State sources, federal sources, and other sources, less any withdrawals from reserve accounts and reimbursements for extraordinary special education aid.

The bill also establishes certain municipal overburden protections to prevent a school district from receiving a reduction in State school aid. Pursuant to the bill, an SDA district would not be subject to a reduction in State school aid if it is located in a municipality in which the equalized total tax rate is greater than the Statewide average equalized total tax rate for the most recently available calendar year and if the district is spending below adequacy. In the case of a school district other than an SDA district, the district would not be subject to a reduction in State school aid if it is located in a municipality in which the equalized total tax rate is at least 10 percent greater than the Statewide average equalized total tax rate for the most recently available calendar year and is spending at least 10 percent below adequacy. These municipal overburden protections would also apply to a regional school district if 50 percent or more of the district’s constituent districts or municipalities met either of the aforementioned qualifying criteria. An SDA district that is spending above adequacy would not be subject to a reduction in State school aid that exceeds the amount by which the district is spending above adequacy.

Additionally, the bill provides that the amount of vocational expansion stabilization aid received by a county vocational school district would be adjusted to allow for increases in resident enrollment. The adjustment would equal the number of additional students enrolled in the district multiplied by the additional cost per pupil for county vocational school districts and the geographic cost adjustment.

The bill also changes how special education aid to school districts is calculated. Under the provisions of the “School Funding Reform Act of 2008,” the State provides special education aid to school districts using the census-based method. Under this method, districts receive funding for special education based on the assumption that a fixed percent of the total student population requires special education services, rather than using the actual number of special education students to determine the amount of State aid that school districts will receive. This bill eliminates the use of the census-based methodology and calculates State aid for special education based on the actual number of special education students included in the district’s resident enrollment.

Under current law, a school district is reimbursed for certain special education costs in the form of extraordinary special education aid. However, in recent years the State’s appropriation for extraordinary special education aid has covered only a portion of eligible costs provided in state, with the percentage covered fluctuating from year to year. The bill requires the State to increase the appropriation from year to year, or otherwise ensure that the percentage of a school district’s costs reimbursed through extraordinary special education aid increases compared to the previous fiscal year.

Finally, the bill establishes the Special Education Funding Review Task Force for the purpose of assessing the effectiveness of State aid provided to support special education costs, examining the possibility of a tier-based model for special education funding, making recommendations regarding the implementation of a tier-based funding model, and providing recommendations for responses to changes in special education revenues, including federal revenues. The task force would consist of 11 members, each of whom is to have a background in, or special knowledge of, the legal, policy, and administrative aspects of special education in New Jersey. The task force is required to issue a final report detailing its findings and recommendations to the Governor and the Legislature no later than one year after the organization of the task force.