This bill proposes significant amendments to New Jersey's school funding laws, particularly regarding the calculation of tax levy growth limitations and the components of the Educational Adequacy Report. It mandates the Department of Education to publicly disclose the calculation of aid for each school district within two days of the Governor's budget message, ensuring the information is accessible and includes explanations of the variables used. The bill modifies the method for determining tax levy growth limitations, introducing criteria based on the relationship between a district's prebudget year adjusted tax levy and its budget year local share. New provisions allow for adjustments in the tax levy to accommodate increases in enrollment, healthcare costs, and pension contributions. Additionally, the Educational Adequacy Report will be updated every three years, reflecting inflationary measures and current educational needs, with a draft available for public comment before finalization.

Moreover, the bill revises the extraordinary special education State aid calculation, lowering the threshold from $40,000 to $35,000 and implementing a phased funding model that starts at 80% in the first year and reaches 100% by the fifth year. It also establishes reduction adjustment aid to ensure that no school district's State aid decreases by more than 2% of its prebudget year total operating budget, particularly protecting districts in municipalities with higher tax rates. The bill allows school districts to increase their tax levies up to the lesser of their local share or a seven percent increase from the previous year, while also requiring stakeholder engagement in reviewing the Educational Adequacy Report. Overall, these changes aim to enhance transparency, stability, and fairness in school funding, particularly for districts facing financial challenges.

Statutes affected:
Introduced: 18A:7F-38, 18A:7F-39, 18A:7F-46, 18A:7F-55, 18A:7F-68, 18A:7F-69