Audit: NJ School Funding System is Flawed

By Erin Delmore

As legislators debate how to fund New Jersey’s public schools, a state audit shows what they say they already know: the current system is flawed.

“When we’re looking at the math, we’re feeling like the actual dollars per the formula are not making its way to where the actual students are now,” said State Auditor Stephen Eells.

Instead, those dollars are flowing to districts with fewer students than they’ve reported at the expense of growing districts. The report highlighted the issue among pre-K programs, which chronically overestimate their number of incoming students, then keep the surplus funding.

“Everybody’s kind of on board. I mean, everybody’s over-projecting, and some significantly. I mean our numbers are talking about $25 million and $32 million in over payments based on those projections. I don’t think we’re very close in our numbers,” Eells said.

“One district receiving over $20 million that it shouldn’t have received. Now, that amount of money is more than I think my entire legislative district receives for all of the public schools other than one vocational school put together for 23 communities,” said Assemblywoman Holly Schepisi.

The report found school funding isn’t based on current enrollment and demographics data. That gap is particularly wide among special education students. The state makes an assumption that 15 percent of a district’s student body is made up of kids with special needs, but the audit says that estimate is off — way off — in around half of the state’s school districts.

“There is something to be said about average cost — the mindset that if a district has five special education students out of 100, or 15 out of 100, they still require a teacher. They require a classroom. Average cost for the five is going to be much higher than the 15,” Eells said. “That brings together their thought that an average works. And we would agree if there weren’t such outliers.”

In one of the report’s examples, an unnamed district received around $8 million to serve a student body with nearly 20 percent special needs kids. But another district with only 11 percent special needs kids took home $13 million while another — with no such students — got almost $3,000.

“I think the money needs to be tied to the child, just not a pot of money thrown at the school,” said Senate President Steve Sweeney.

Sweeney says New Jersey’s 2008 school funding formula was a national landmark, corrupted by enrollment caps and hold harmless agreements imposed by the Legislature.

“You should be funding the children that you have, not the children that you don’t have because we need to make sure we use our dollars wisely and dispense them as wide as we possibly can,” Sweeney said.

The Senate voted last week to approve his school funding reform plan — a counterpoint Sweeney’s offering to Gov. Chris Christie’s set-dollar-per-pupil proposal.

The Department of Education wouldn’t discuss the audit with NJTV News, but it made clear in a written response that the department must act in line with state’s appropriations act, which supersedes the school funding law.