Middle-Income Districts Laud Revised Aid Plan in N.J.

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A $341-million technical change in New Jersey's $4.4-billion school finance system has triggered an entire reshuffling of state aid, casting moderate-wealth school districts as big winners and potentially shifting the balance of political and lobbying power on the eve of the legislature's expected debate this session over changes in the funding system.

The changes launched by Gov. James J. Florio late last month have won praise from middle-income districts that had become vocal critics of the Quality Education Act, the finance-reform law passed in 1990.

But the new plan, which could significantly reduce public pressure to alter the Q.E.A., has brought a questioning response from Republican lawmakers, who won strong majorities in both legislative chambers last fall in large part because of their strident opposition to the law and the tax increases that accompanied it.

"A lot of people are skeptical about why this money just appeared," a Senate aide said. Doubts among top Republicans were so great that they asked Commissioner of Education John Ellis not to release the state aid figures to school districts, which will use the estimates to set their 1992-93 budgets.

The Jan. 28 school-formula forecast, which indicates state-aid levels for fiscal 1993, contrasts sharply with figures released to school officials on Dec. 20. In the Belleville district, for example, administrators were told that state foundation aid would drop from this years $6.9 million to $4.8 million for the 1992-93 school year. Under Mr. Florio's revised plan, however, the district was told to expect $8.5 million next year--a 74 percent turnaround in less than one month.

Further, the new plan is expected to provide aid to 359 of the state's 592 districts, rather than the 278 included prior to the change. Officials said the redistribution increased state-aid projections for all but 22 low-wealth districts.

Pensions Savings Eyed

State officials said last week that the rise in aid projections came after Mr. Florio determined that the state was contributing more than necessary to its teacher-pension system. The revisions freed up $341 million within the Q.E.A., Which first funds pension and categorical programs before distributing the remainder under the foundation program.

But instead of simply allocating the extra funds under the existing formula, state officials combined the funds with the $2 billion already in the foundation program and ran it through the formula all over again, according to Judith Savage, director of planning and research in the education department's finance division.

The increased pool of funds caused variables within the formula to change, setting off a chain reaction that focused more money on the moderate-wealth districts, she said. "Where there were some districts that were very disturbed because they were seeing decreases they had not anticipated, this is very welcome news," Ms. Savage said.

Lawmakers, however, have grown more cautious and are beginning to raise questions about the plan's longterm impact on the pension system.

"We're going to have to scrutinize the numbers and make sure it's accurate," added Assemblyman John A. Rocco, chairman of the Assembly Education Committee.

School districts, meanwhile, are using the revised projections to set next years spending plans and are generally pleased with the Governors efforts, said James A. Moran, executive director of the New Jersey Association of School Administrators.

"We are encouraged, and we would hope that these numbers won't be tampered with," he said. "But that cannot be guaranteed."

Vol. 11, Issue 21, Page 20

Published in Print: February 12, 1992, as Middle-Income Districts Laud Revised Aid Plan in N.J.
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