Bill Summary – FastDemocracy

LEGISLATIVE FISCAL ESTIMATE
                 SENATE COMMITTEE SUBSTITUTE FOR
                                SENATE, No. 3081
                             STATE OF NEW JERSEY
                               221st LEGISLATURE
                                             DATED: MAY 16, 2024
                                                  SUMMARY
    Synopsis:                   Establishes Stabilized School Budget Aid Grant Program to restore
                                certain portions of State school aid reductions; permits certain school
                                districts to exceed tax levy growth limitation in 2024-2025 school
                                year; appropriates $44.7 million.
    Type of Impact:             State expenditure increase from the Property Tax Relief Fund. Local
                                school district revenue increase.
    Agencies Affected:          Department of Education. Local school districts.
                                       Office of Legislative Services Estimate
    Fiscal Impact                                        2024-2025 School Year
    State Expenditure Increase                             Up to $48.2 million
    Local Revenue from Increased
    Property Tax Levies                                    Up to $221.4 million
    The Office of Legislative Services (OLS) concludes that this bill may cost the State up to $48.2
     million to provide aid grants equal to 45 percent of proposed State school aid reductions in the
     2024-2025 school year. Information contained in the State aid notices for the 2024-2025
     school year distributed by the Department of Education in February 2024 indicate total
     Statewide reductions of $107.2 million.
    The OLS also estimates that, pursuant to the bill, a total of 159 school districts may request
     increases to their tax levies. The OLS estimates that if all 159 districts received approval for
     the maximum levy increase permitted by the bill, local school districts may realize a revenue
     increase of up to $221.4 million in the 2024-2025 school year. The OLS notes that the bill
     does not require school districts to implement the tax levy increases authorized by the bill;
     therefore, the estimated amount of school district tax levy increases is a maximum.
      Office of Legislative Services                                    Legislative Budget and Finance Office
           State House Annex                                                    Phone (609) 847-3105
              P.O. Box 068                                                       Fax (609) 777-2442
      Trenton, New Jersey 08625                                                  www.njleg.state.nj.us
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                                        BILL DESCRIPTION
    This bill establishes in the Department of Education a Stabilized School Budget Aid Grant
Program. The purpose of the program is to provide aid grants to eligible school districts equal to
45 percent of the amount of the school districts’ State school aid reductions, as calculated under
current law for the 2024-2025 school year. The bill appropriates $44.7 million to fund the
program.
    The bill also permits school districts, which experienced reductions in State school aid in the
2024-2025 school year compared to the 2020-2021 school year, to request certain increases in their
adjusted property tax levies above the amounts permitted under current law. The maximum
amount of the adjusted tax levy increase pursuant to the bill is the difference between the amount
of State school aid allocated to a school district in the 2020-2021 school year and the amount of
State school aid allocated to the district in the 2024-2025 school year. However, the bill prohibits
a school district from increasing its adjusted tax levy by more than 9.9 percent of the prior year’s
tax levy. The authorization to increase the adjusted tax levy pursuant to the provisions of the bill
would not apply to SDA districts.
                                        FISCAL ANALYSIS
EXECUTIVE BRANCH
   None received.
OFFICE OF LEGISLATIVE SERVICES
    The OLS concludes that this bill may cost the State up to $48.2 million to provide aid grants
equal to 45 percent of proposed State school aid reductions in the 2024-2025 school year.
Information contained in the State aid notices for the 2024-2025 school year, which were
distributed by the Department of Education in February 2024, indicate total Statewide reductions
of $107.2 million. The OLS estimates that 152 school districts will be eligible for aid grants
pursuant to the bill.
    The OLS also estimates that, pursuant to the bill, a total of 159 school districts may request
increases to their tax levies. The OLS estimates that if all 159 districts received approval for the
maximum levy increase permitted by the bill, local school districts may realize a revenue increase
of up to $221.4 million in the 2024-2025 school year. The OLS notes that the bill does not require
school districts to implement the tax levy increases authorized by the bill; therefore, the estimated
amount of school district tax levy increases is a maximum.
  Section:      Education
  Analyst:      Abigail Chambers
                Associate Fiscal Analyst
                Christopher Myles
                Senior Fiscal Analyst
  Approved:     Thomas Koenig
                Legislative Budget and Finance Officer
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This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).