School districts continue to face funding challenges

State Assemblywoman Aura Dunn is working on legislation that would establish a new category of school state aid called Highlands Region Support Aid to compensate for losses in property tax revenue due to development restrictions.

“The Highlands Water Protection and Planning Act of 2004 restricts development in 88 municipalities to protect the abundant natural resources of the region that supplies clean drinking water throughout the state,” Dunn said. “The School Funding Reform Act of 2008, amended a decade later by S2, promised to adequately fund the nearly 600 school districts in New Jersey. Together, the laws have created what local families call a ‘death spiral’ for districts, which have resorted to program and staff cuts and above-cap tax increases.”

Dunn also has a resolution calling for the 2008 school funding law to be revised to eliminate significant school aid reductions, especially in Highlands districts and other areas where development is restricted.

Two area school districts are among the hardest hit by the state’s school funding policy.

Vernon Township School District

Since 2016-17, Vernon has lost a cumulative state aid amount of approximately $45,930,277, according to Vernon Township school officials.

“[We support Highlands Region Support Aid] since it will basically create a type of supplemental state aid for school districts under the Highlands Water Protection and Planning Act, which puts development restrictions in place to protect drinking water but can adversely affect rateables and lower district enrollment,” a district representative said via email. “The supplemental state aid is meant as a way to provide more equitable state aid funding to these areas.”

The district also supports Dunn’s resolution to revise the 2008 school funding law.

“S2 has led to many districts experiencing significant state aid cuts at a time when districts are also experiencing costs that increase more than the allowable 2 percent tax levy cap. These challenges are compounded by the fact that the school tax levy makes up approximately 68 percent of Vernon’s revenue. So, essentially, 68 percent of our revenue can increase by 2 percent at a time when expenses are increasing by more than 2 percent (i.e., transportation - CPI 3.58 percent, health benefits – 25 percent). Significant cuts that had to be made to Vernon’s 2023-2024 budget, which included: a reduction of approximately 52 positions, reductions in available student activities/sports and removal of after-school transportation that year. This resulted in higher classroom sizes, fewer supports and larger impacts on local taxpayers in subsequent budgets as the district works to bring classroom sizes back down and student supports back.”

West Milford Township School District

With budget season upon us, West Milford Township School District Superintendent Brian Kitchin recently sent an open letter to the governor, commissioner of education and the legislature outlining the funding challenges in the district.

“West Milford Township Public Schools serves a geographically large and environmentally protected community,” Kitchin wrote. “Our district spans 88 square miles and is the only K-12 district in New Jersey located 100 percent within the Highland Preservation Area. While we are proud to safeguard critical drinking water resources for millions of New Jersey residents, this designation severely restricts our ability to broaden our tax base through commercial or residential development. This result is a structural imbalance that places a disproportionate financial burden on our residents.”

According to Kitchin’s letter, the district has experienced millions in cumulative state aid losses under S2 as operational costs increase, resulting in reduced staff, the closing of an elementary school, deferred maintenance and delayed program expansion.

He further outlined the situation:

• Since 2015, the district has lost over 60 percent of state funding, totaling $8.74 million annually.

• During that span the district has increased the local tax levy by $8.9 million annually.

• The district funds 84 percent of budget through local tax levy, ranking near the very top of the state in local burden.

• State funding accounts for only 8 to 9 percent of operating budget, ranking near the very bottom in state-level support.

• The state aid per student average is $8,811 with some districts receiving as much as $15k to $20k per student.

• The district receives about $1,842 per student (approximately 80 percent below average).

• Unlike other districts, West Milford cannot respond to funding losses by expanding ratables because 100 percent of the municipality lies within the Highlands Preservation Area – a constraint imposed by state policy for the benefit of the region.

Vernon and West Milford are working on next year’s school budget but will not be able to finalize anything until they receive state aid information.