Dramatic swings in state aid to schools should abate in future years, education chief says

New Jersey’s top education official told lawmakers Wednesday that schools will no longer experience dramatic shifts in state aid under the state’s school funding formula, though he warned that other factors could continue to affect aid levels.

Acting Education Commissioner Kevin Dehmer’s comments to the Assembly Budget Committee came as lawmakers on both sides of the aisle grumble about how the funding formula has led to lower state aid for some districts. The committee has been hearing from administration officials about Gov. Phil Murphy’s $56 billion proposed budget for the coming fiscal year.

“This is a huge moment for us as a state to have fully funded this formula because now we’re moving into a period where it’s just those year-to-year changes that we need to focus on,” said Dehmer, who acknowledged the funding formula may still require tweaks.

Dehmer’s department is seeking $22.2 billion, a 5.4% hike from the current fiscal year, with most of the increase set aside for local school aid. The proposed $908 million hike to state school aid would be the final piece of a seven-year phase-in under a 2018 bill, called S2, that sought to shift funds from historically overfunded districts to underfunded ones.

Legislators are exploring changes to the school funding formula that would see it pay for costs not covered under the current system, like transportation. They are also weighing other changes that would allow districts facing state aid cuts to exceed New Jersey’s 2% cap on property tax hikes, plus other measures to defray the impact of steep aid cuts seen in some districts.

In New Jersey, local districts are responsible for a portion of school funding based on property valuations and income, an amount called the local fair share. State aid is meant to fill what portion of school budgets local fair share does not.

But some districts have seen outsized cuts in recent years as a result of an overheated housing market that pumped up valuations, inflationary pressures, and S2. In some cases, the cuts were too deep for districts to fill by raising levies in a single year, leaving districts further and further behind after consecutive years of compounding cuts.

Dehmer defended the formula when pressed by Assemblywomen Nancy Muñoz (R-Union) and Aura Dunn (R-Morris) on the formula’s reliance on property valuations — and, by extension, property taxes.

The commissioner said he believes the formula appropriately divides school funding between state and local sources.

Property taxes are “one of our three revenue streams we have available,” he said. “I think it’s a necessary component of our shared cost model.’

Typically, local property taxes fill between 40% and 50% of a district’s budget, with federal funds accounting for roughly 10% and state aid filling out the rest, Dehmer said, adding there are some exceptions.

Teacher shortage

Dehmer also detailed in broad terms the state plans to address New Jersey’s longstanding teacher shortage.

For years, New Jersey has lacked enough educators in subject areas like math and science, and the trend appears to be growing worse as fewer and fewer candidates seek careers in education.

“Just as an example, when somebody retired, we used to have three incoming teachers,” Dehmer said. “Now it’s pretty much one-to-one.”

Dehmer said state officials are creating a system to certify teachers without requiring they complete the state praxis exam in line with a law Murphy signed in November. That track would join a pilot program created in the previous school year that allows candidates to obtain a limited teaching certificate if any one of the following applies to them: they lack enough course credits; their grade point average is too low; they failed to reach the minimum score on a state basics skills course; or they did not pass the Praxis exam.

Dehmer said he hopes a forthcoming public relations campaign will boost teacher recruitment, though he added that ensuring New Jersey teachers stay on in their roles is just as crucial.

“We spend a lot of time focusing on the new pipeline of incoming teacher candidates, and that is important, don’t get me wrong,” he said. “But just as important is retaining our current teachers.”

Pay is a factor in teacher retention, Dehmer said, but the stressors teachers face are more pressing.

Multiple committee members praised Dehmer’s candor and knowledge during the hearing, contrasting it to hearings held with his predecessor, Angelica Allen-McMillan, who stepped down earlier this year.

Education advocates and lawmakers had privately chaffed at Allen-McMillan’s leadership, calling the department chaotic. Her exchanges with lawmakers at budget hearings were frequently tense.

“I don’t necessarily like to talk about what happened previously, but it’s really refreshing to have a commissioner, finally, from the Department of Education that really has come before us and has answered the questions that we’re asking,” said Assemblywoman Eliana Pintor Marin (D-Essex), the committee’s chair. “We really haven’t gotten that in the last couple of years.”