Budget Guide

What will Gov. Murphy’s budget mean for Newark schools? Here’s what you need to know.

PHOTO: Phil Murphy for Governor
Gov. Phil Murphy, shown here in a photo from 2014, will release his first-ever budget plan on Tuesday.

Gov. Phil Murphy campaigned on a pledge to ramp up education spending, and Newark school leaders are watching closely to see if he’ll keep that promise – or if they might have to slash their budgets.

Murphy is set to unveil his first-ever budget plan Tuesday. While districts will not get detailed aid figures for a few more days, Murphy’s budget proposal should give them a sense of how much of a boost — if any — to expect.

Expectations are high in Newark, where flat state funding and rapid charter school growth has left district officials scrambling to plug gaping budget holes. They’re hoping Murphy will give them some portion of the $140 million in additional aid that the city is owed under state law.

“This budget season is very, very important for us,” Interim Superintendent Robert Gregory told Chalkbeat earlier this year.

To help you understand what’s at stake for the city’s schools, Chalkbeat Newark created a state budget guide. It explains how school funding is set and what that means for Newark’s district and charter schools, whose financial fate is controlled by politicians in Trenton.

How are New Jersey schools funded?

New Jersey schools are funded according to a formula that was adopted in 2008 and has been touted as a national model for distributing school aid according to need.

The formula calculates two things: How much money each district needs to adequately educate its students (its “adequacy budget”), and what portion of the budget should be paid by the district (its “fair share”). The budget amount is determined by how many students a district enrolls, with extra money allocated for each student who is poor, still learning English, or has a disability. The share each district must chip in is based on its wealth and taxing capacity.

That’s how things are supposed to work, anyway.

Due to budget cuts that followed the Great Recession, the formula has not been properly enacted since 2009. Today, about 31 percent of the state’s nearly 600 school districts receive less school aid than the formula says they’re owed, according to the Education Law Center. To fully fund the formula, the state would need to boost its school spending by nearly $1 billion.

What might change this year?

If the governor keeps his promise, schools will get a lot more money.

On the campaign trail, Murphy, a Democrat, vowed to fully fund the school-aid formula “immediately.” However, he recently appeared to waver on that timeline — and few observers consider it realistic.

Still, any serious funding boost will be costly. To raise the additional revenue, Murphy has proposed hiking income taxes on households making more than $1 million, among other measures.

But Murphy’s “millionaire’s tax” has become a harder sell following the Republican federal tax overhaul, which capped the amount people can deduct on their taxes. Last week, the state’s top Democratic lawmaker, Senate President Stephen Sweeney, unveiled an alternative proposal: a tax on corporations earning more than $1 million in net annual income. Either plan would generate more than $600 million in new revenue for the state — though it remains to be seen how much of that would go toward education.

While Murphy and lawmakers have until June 30 to hash out the state budget, districts are on the hook to set their own preliminary budgets by the end of March. That means they must rely on Murphy’s spending plan for now, then make adjustments once a final compromise is reached.

“It’s totally crazy,” said Danielle Farrie, the Education Law Center’s research director.

What will the budget mean for Newark Public Schools?

Newark’s limited tax base leaves it at the mercy of the state, which provides about 80 percent of its school funding.

This school year, the state sent Newark about $750 million — about $140 million less than what it’s entitled to under the school-funding formula. Gregory told Chalkbeat in January that if the district gets even a fraction of what it’s owed, “we’ll be in a better place.”

The Newark school system has faced whopping budget gaps in recent years. Two factors have driven the deficits: the rapid growth of charter schools and flat state funding.

Because charter school funding comes out of district budgets, Newark spending on charters has soared as those schools enroll ever more students. This school year, the district will transfer about $237 million — or a quarter of its budget — to charter schools, up from $60 million in the 2008-09 school year.

Meanwhile, state aid to Newark has not kept up with its rising expenses. The result is that the district’s per-pupil spending shrank by nearly $2,000 from 2008-09 to 2016-17, according to an Education Law Center analysis that adjusted for inflation. (The state boosted Newark’s budget each of the past two years.)

To balance the budget, Newark officials have had to sell off school buildings, switch employee insurance providers, and raise local taxes, among other measures. The district has mostly avoided cutting school budgets — though it did recently shift some funds from high schools to elementary schools. But if state funding is flat this year, officials worry they will be left with few other options.

“The last place to go is in school buildings,” Gregory said. However, “if we face flat funding again, that could lead to an immediate impact on students.”

What about Newark’s charter schools?

Today, about one third of Newark’s public-school students — or roughly 16,000 children — attend charter schools.

About 90 percent of the district’s local and state funding for each of those students follows them to their charter schools — though charters are excluded from certain funding streams. Murphy has been more skeptical of charters than his predecessor. But advocates hope that his budget will, at the very least, not leave them with less money.

“We’re just generally looking for charters to be unharmed — for us not to go backwards,” said Nicole Cole, president and CEO of the New Jersey Charter Schools Association. “The families that we serve can’t afford for us to take a step backwards.”

The New Chancellor

Tell us: What should the new chancellor, Richard Carranza, know about New York City schools?

PHOTO: Christina Veiga
A student at P.S. 69 Journey Prep in the Bronx paints a picture. The school uses a Reggio Emilia approach and is in the city's Showcase Schools program.

In a few short weeks, Richard Carranza will take over the nation’s largest school system as chancellor of New York City’s public schools.

Carranza, who has never before worked east of the Mississippi, will have to get up to speed quickly on a new city with unfamiliar challenges. The best people to guide him in this endeavor: New Yorkers who understand the city in its complexity.

So we want to hear from you: What does Carranza need to know about the city, its schools, and you to help him as he gets started April 2. Please fill out the survey below; we’ll collect your responses and share them with our readers and Carranza himself.

The deadline is March 23.

buses or bust?

Mayor Duggan says bus plan encourages cooperation. Detroit school board committee wants more details.

PHOTO: Denver Post file
Fourth-graders Kintan Surghani, left, and Rachel Anderson laugh out the school bus window at Mitchell Elementary School in Golden.

Detroit’s school superintendent is asking for more information about the mayor’s initiative to create a joint bus route for charter and district students after realizing the costs could be higher than the district anticipated.

District Superintendent Nikolai Vitti told a school board subcommittee Friday that he thought the original cost to the district was estimated to be around $25,000 total. Instead, he said it could cost the district roughly between $75,000 and a maximum of $125,000 for their five schools on the loop.

“I think there was a misunderstanding….” Vitti said. “I think this needs a deeper review…The understanding was that it would be $25,000 for all schools. Now, there are ongoing conversations about it being $15,000 to $25,000 for each individual school.”

The bus loop connecting charter and district schools was announced earlier this month by Mayor Mike Duggan as a way to draw kids back from the suburbs.

Duggan’s bus loop proposal is based on one that operates in Denver that would travel a circuit in certain neighborhoods, picking up students on designated street corners and dropping them off at both district and charter schools.

The bus routes — which Duggan said would be funded by philanthropy, the schools and the city — could even service afterschool programs that the schools on the bus route could work together to create.

In concept, the finance committee was not opposed to the idea. But despite two-thirds of the cost being covered and splitting the remaining third with charters, they were worried enough about the increased costs that they voted not to recommend approval of the agreement to the full board.  

Vitti said when he saw the draft plan, the higher price made him question whether the loop would be worth it.

“If it was $25,000, it would be an easier decision,” he said.

To better understand the costs and benefits and to ultimately decide, Vitti said he needs more data, which will take a few weeks. 

Alexis Wiley, Duggan’s chief of staff, said the district’s hesitation was a sign they were performing their due diligence before agreeing to the plan.

“I’m not at all deterred by this,” Wiley said. She said the district, charters, and city officials have met twice, and are “working in the same direction, so that we eliminate as many barriers as we can.”

Duggan told a crowd earlier this month at the State of the City address that the bus loop was an effort to grab the city’s children – some 32,500 – back from suburban schools.

Transportation is often cited as one of the reasons children leave the city’s schools and go to other districts, and charter leaders have said they support the bus loop because they believe it will make it easier for students to attend their schools.

But some board members had doubts that the bus loop would be enough to bring those kids back, and were concerned about giving charters an advantage in their competition against the district to increase enrollment.

“I don’t know if transportation would be why these parents send their kids outside of the district,” Angelique Peterson-Mayberry said. “If we could find out some of the reasons why, it would add to the validity” of implementing the bus loop.

Board member LaMar Lemmons echoed other members’ concerns on the impact of the transportation plan, and said many parents left the district because of the poor quality of schools under emergency management, not transportation.

“All those years in emergency management, that drove parents to seek alternatives, as well as charters,” he said. “I’m hesitant to form an unholy alliance with the charters for something like this.”