Sign up for Chalkbeat Newark’s free newsletter to get the latest news about the city’s public school system delivered to your inbox.
In New Jersey Gov. Phil Murphy’s proposed $58.1 billion spending plan for 2026, Newark schools would get a record-high $1.3 billion — a 6% bump in state aid over the current year — under an updated school funding formula meant to provide more stability for districts than the current one.
About $22.2 billion — or one-third — of the proposed budget for the next fiscal year that begins July 1, would go toward funding pre-K-12 education in the state, the governor said in his budget address earlier this week. From that hefty portion, $12.1 billion would cover state school aid, a $386 million increase in aid over the current fiscal year, according to the governor’s budget-in-brief.
“Over the last eight years, Gov. Murphy has ensured that the public education system remains at the forefront of his priorities for New Jersey and this budget is no different,” Education Commissioner Kevin Dehmer said in a call with reporters on Thursday.
The state Education Department released school aid estimates for the 2025-26 school year on Thursday and held a press call to discuss the proposed changes to the school funding formula.
The updated formula would cap year-to-year increases and cuts to state funding, change the way special education enrollment is calculated, and allow districts to increase the school tax levy above the current 2% cap.
“Those adjustments reflect the most common and significant themes we heard from educators and advocates over the years,” Dehmer said, adding that over the past year the department held regional public hearings statewide to discuss updating the 17-year-old formula.
Some basic changes included adjustments for actual costs, such as updated teacher salaries, health benefits costs, and the cost of utilities to account for inflation, Dehmer said. The updated formula would also account for the cost of schools’ mental health programs and newer security practices.
These changes, however, would only apply to the next fiscal year. Should lawmakers move to keep the updated formula, it would need to be codified in separate legislation.
This year marked the first time that historically underfunded districts, including Newark, received their full share of state aid under the current formula since the School Funding Reform Act was enacted in 2008. While some districts saw an upward swing in funding, others experienced significant cuts that made it difficult to balance a budget.
In an effort to create more stability, the proposal limits cuts in aid this year to 3% and places a cap on increases at 6% across four main state aid categories: transportation, special education, equalization, and security aid.
The updated formula would also calculate special education aid using a district’s most recent special education enrollment figures, instead of the current approach of using a census-based estimate.
“It’s clear from overwhelming feedback that the shift to using special education enrollment is the preferred approach,” Dehmer said on Thursday.
Another significant change in the proposal would allow “some districts” to increase the school tax levy by more than the current 2% cap — but how the department will determine which districts would be granted that opportunity has yet to be released, Dehmer said. Some districts, including Newark, for example, are not raising their local fair share per the current formula because of the tax cap, but this flexibility would allow them to do that.
“We’re still planning the details of exactly what that will look like,” Dehmer said. “In general, we’re going to be targeting those districts that are taxing below local fair share to give them the opportunity to get up to that level of local revenue.”
In his budget address, Murphy said the state would need to take a different path if anticipated federal funding cuts cause a disruption, but he didn’t share exactly what that would mean for budget priorities, including education.
Dehmer said the state education department has advised school districts to plan for a slight reduction in federal funding as they prepare their budgets for next school year, which has been customary practice.
“We really don’t know exactly what’s going to shake out at the federal level so we’re keeping a close eye on that,” Dehmer said. “Districts already plan for a slight reduction year-over-year and we have advised districts to plan for potentially even a little bit less, just to be conservative.”
Catherine Carrera is the bureau chief for Chalkbeat Newark. Contact Catherine at ccarrera@chalkbeat.org.
