New Jersey schools face 3% aid-cut limit amid rising costs for special education and transportation

The New Jersey Department of Education has announced that school districts will not face more than a 3% reduction in state aid for the 2024-2025 school year, as communicated in a broadcast memo last week. While district leaders welcome this cap, they express concerns about rising educational costs and the broader challenges of maintaining quality education with limited resources.
According to a report by local media outlet, northjersey.com, the state's memo, issued on February 18, aims to help districts plan their upcoming budgets by providing clarity on potential aid reductions. The 3% limit applies to four primary aid categories: equalization, special education, security, and transportation.
School districts rely heavily on state aid combined with residential property taxes and federal aid dollars to determine their budgets. The state uses a complex formula considering various factors, including enrollment, to calculate aid packages.
However, the total reduction in state aid could exceed 3% since the limit doesn't apply to certain categories such as choice funding, military impact aid, county vocational stabilization aid, and educational adequacy aid. These categories are determined by annual participation or enrollment factors.
"School districts can anticipate that total K-12 state aid will not decrease by an amount greater than 3% of their K-12 state aid for the 2024-2025 school year," stated the state memo to districts, according to the report.
Jefferson Township Public Schools in Lake Hopatcong exemplifies the challenges districts face. The district is closing Cozy Lake Elementary and selling its central office building after losing $45 million in state funding over seven years. Despite a 29% enrollment decline since 2011, the district has experienced a disproportionate 60% cut in state funding.
"The 3% cap on the loss of state aid is very welcome, and is good news for all districts," said Schools Superintendent Jeanne Howe, adding that the state should revise its aid calculation methods for fairer outcomes.
"What we really need here in Jefferson is an increase in the per-pupil allocation that we receive from the state," Howe stated, noting that special education aid should be based on census data rather than state averages.
The district serves a student population with higher special education needs than the state average, with 20% requiring special education services compared to the state's 16%. Out-of-district placement costs for special needs students continue to rise.
"We appreciate the state is hearing our concerns to help districts at least make some predictions toward balancing their budgets for next year, but I think there are more demands today on a school district than there were many years ago - for example, safety and security," Howe explained. "We do get aid in that category, but that is not enough."
Districts like Jefferson Township face unique challenges due to their size and geography. Transportation costs are particularly high due to buses navigating winding roads and hilly routes.
"The demands of a school district's budget are not what they were. Technology needs are not what they used to be. We need to purchase laptops, smartboards and more. And we need to be academically competitive as well," Howe noted.
Many districts lost aid through the recently phased-out S2 law, which redistributed funding over seven years based on factors like falling enrollment. Districts affected by these cuts argue that funding reductions were disproportionate to their enrollment decreases.
Jefferson Township, with 2,700 students spread across a large area, has explored cost-reduction options, including merging with neighboring districts, but hasn't found a viable solution due to its geographical constraints.