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The Newark Board of Education has approved a $1.57 billion budget for the upcoming school year with increased funding in salaries, school renovations, and charter school payments while budgeting conservatively in light of potential changes to federal funding.
The 2025-26 school year budget approved Wednesday is a slight increase from last year’s $1.51 billion budget. It includes a $33.12 yearly tax increase to the average homeowner and $498 million allocated directly to schools and controlled by principals. Similar to the 2024-25 school year budget, next year’s spending plan for Newark Public Schools also includes more money in state aid, school grade level expansions, and new teaching positions to support the district’s growing enrollment.
State aid for the upcoming school year bumped up to a record-high $1.3 billion contribution, an increase from this school year’s $1.25 billion in state aid. That funding comes as the district – the largest in New Jersey – will no longer receive federal COVID relief funding that supported summer programs, tutoring efforts, and the district’s AI cameras project.
It also comes after President Donald Trump signed an executive order designed to close the U.S. Department of Education. The district is aware of potential setbacks in federal funding but will make modifications and pivot as needed, Superintendent Roger León said on Wednesday.
In past years, residents also cast their vote for the budget during the annual April school board election, but a new state law eliminated that requirement for the first time last year. Residents would vote on the budget if the district proposed a more than 2% increase in property taxes.
León had previously suggested a bond for school construction projects but ruled out that option after meeting with stakeholders, including parents, teachers, and union members, who said they would be unlikely to approve the measure. In January, León said the bond would have supplemented the cost of repairing Newark’s aging school buildings.
Newark’s budget is designed to support León’s 10-year plan known as “The Next Decade,” which enters its sixth year this coming school year. Next school year’s main challenge will be supporting the growing needs of schools as student enrollment increases, León said.
Decrease in savings, more money in state aid, local taxes
At the beginning of this school year, the district started with $116 million in fund balance, the total amount of money remaining at the end of the previous fiscal year, typically used for emerging expenses such as fixing schools. Next school year, the district has budgeted $90.7 million in fund balance after reallocating funds.
The district also receives funding through federal and state grants, IDEA funds that support students with disabilities, and Title I funds that provide financial assistance to school districts with a high number of children from low-income families. But as the Trump administration takes steps to close the Department of Education, it’s unclear how Newark’s funding will be affected.
School business administrator Valerie Wilson, who presented the budget on Wednesday, said the district is being conservative with its spending, specifically in using its Title I funding, ahead of potential changes in federal funding. Next school year, the district anticipates $15.2 million in Title I funding, an increase from last year’s $14.8 million.
“We are being conservative here because we know that there are a number of things happening at the federal level,” Wilson said. “We’re not quite sure what’s happening, how we’re going to deal with that, and you can’t assume that you’re going to have all the money you had in the past. But we are depending, hopefully, that we can retain a large sum of it.”
Next school year, Newark Public Schools will also receive an additional $75 million in funding from New Jersey, making up 84.2% of the district’s budget. City taxes make up 9.1%, an excess fund balance makes up 5.8%, and other local and federal aid makes up the remaining 0.9%.
Newark has historically been one of the most underfunded school districts based on the state’s school funding formula, which uses a weighted student formula to give districts financial support in addition to local taxes. For the upcoming school year, the state has increased funding by 6% but remains $34.2 million under state adequacy according to the state’s funding formula.
Locally, the school district can raise the tax levy up to 2% without requiring voter approval, which it has done for the last 12 years. This upcoming school year, Newark homeowners will contribute $143.9 million in property taxes to the district. But according to the funding formula, Newark remains $149.1 million below its local fair share adequacy, Wilson said.
Charter school payments rise despite low enrollment, district says
Payments to charter schools are rising by $24.8 million, totalling $416 million for the upcoming year. Newark school and community leaders have long raised issues about the payments, but under New Jersey law, school districts must provide charter schools with at least 90% of per-pupil funds for students who live in the district. The publicly funded but privately managed charter schools educate roughly 18,000 students.
Aside from the $416 million to city charter schools, Newark Public Schools is also providing them with roughly $7 million for transportation costs, and nearly $4 million for students attending schools outside of the district.
Despite increased payments to charter schools, Wilson said charter school enrollment is not increasing and in some schools, it’s decreasing. The increased charter payment was a result of an increase in the rate of educating general education students that also impacted the district, Wilson added.
“The programs we are offering are in fact attracting students back to our schools,” Wilson said.
North Star Academy, Team Academy, and Great Oaks Legacy receive the district’s three highest payments to charter schools, according to Wednesday’s budget presentation.
This school year, charter school payments made up the district’s largest expenditure, totaling $401 million, a $47.2 million increase from the 2024-25 school year.
Growing schools and updating aging facilities
District leaders project an increase in enrollment next school year, and as a result, the district has budgeted for 53 new positions consisting of 20 teachers, 11 aides, and 23 school support staff. The district will also lose an administrative role next school year following Wilson’s retirement at the end of this school year.
Next school year’s budget also includes a $15.5 million salary increase, the district’s largest expenditure, following contract renewals with district unions. The budget also adds $18.8 million to support academic initiatives, district renovations, security projects, and rising lease payments. The district is allocating an additional $1.4 million to support the expansion of schools and an extra $8.1 million to accommodate an additional 1,600 students in the upcoming school year, Wilson added.
Starting this fall, Nelson Mandela Elementary School will expand to grade 5, Michelle Obama and Sir Isaac Newton Elementary schools will expand to grade 6, Ironbound Academy will expand to grade 7, and East Ward Elementary School will expand to grade 8, according to the district.
After a three-year delay, the district will also open the Newark School of Architecture and Interior Design this fall in the city’s East Ward. The school will focus on three trades – plumbing, electricity, and HVAC – and allow students to study architecture and interior design. The district will enroll ninth grade students first and add a grade level each year.
District leaders are also working with the state’s School Development Authority to replace 13 school buildings built before the 1920s, but the deal leaves out 20 schools that need to be replaced, district officials said. León estimated that roughly $2.5 billion is needed to fix Newark’s dilapidated school buildings, and after ruling out a bond to supplement the cost, for the first time this year, district officials used some of their capital reserve funds to finance renovations for Newark Schools Stadium and the cafeteria at Sussex Avenue.
Newark expects an increase in vulnerable students
The district enrolls more than 11,000 English language learners and roughly 7,000 students with disabilities who require special education services such as speech and language therapy, occupational therapy, and assistance in the classroom. The district is also expecting an increase in vulnerable students next year.
The district also saw a reduction in its Special Education Medicare Initiative, or SEMI, an initiative required by the state that allows school districts to receive reimbursements for special education services for students, such as speech therapy, medical services, and transportation for students requiring an ambulance or other medical transport to get to school. Wilson said the district was able to claim reimbursement for services at a rate of $16.57 but dropped down to $3.50.
“That simple reduction results in a $2.6 million loss in the district’s budget,” Wilson added.
The district has struggled to implement programs and support for students with disabilities. At the beginning of this school year, some students with disabilities missed class due to enrollment issues that left parents scrambling to find solutions. Students with disabilities also face greater learning challenges as they have been some of the hardest hit by the fallout from the COVID-19 pandemic.
District leaders did not provide details on additional funding for the district’s bilingual or special education programs, but are budgeting 11 new positions for teacher aides.
This school year’s budget, approved last March, included an additional $4.2 million to grow the bilingual education programs in elementary schools and high schools. The district launched a new bilingual education program at Malcolm X Shabazz High School this school year.
Jessie Gómez is a reporter for Chalkbeat Newark, covering public education in the city. Contact Jessie at jgomez@chalkbeat.org.
