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Reason Foundation

Out of Control Policy Blog

New Jersey Supreme Court Backs Statewide Student-Based Budgeting

Lisa Snell
May 29, 2009, 10:55am


As the Philadelphia Inquirer reports:

The New Jersey Supreme Court has upheld Gov. Corzine's school-aid system, backing his plan to reshape education funding in the state and redirect the flow of billions of dollars in aid.

Yesterday's 5-0 decision effectively throws off a series of court mandates that had required enhanced funding to 31 historically poor areas while tight budgets squeezed the state's 585 other school districts. . . .

When Corzine took on the formula, he said many communities with similar needs had been left behind as state aid increases flowed almost exclusively to the districts covered by the court.

By 2006, Abbott school systems got 55 percent of state support while educating 23 percent of the student body. Other schools had become home to half the state's "at-risk" students, but lawmakers and governors facing tight budgets largely shut off aid to communities without court protection.

Corzine's plan directs aid to all districts under a formula based on enrollment and their shares of needy students - those who are poor or have limited English skills.

This ruling essentially gives New Jersey a statewide weighted student formula funding system. Weighted student formula is a policy tool and financing mechanism that can be implemented by Governors, within the confines of existing state education budgets and economic constraints, to create more efficient, transparent, and equitable funding systems across all schools in a state. Weighted student formula is a student-driven rather than a program-driven budgeting process.

It is also an equitable funding system to help support the emergent charter school movement. Because dollars follow students and not programs, it puts every public school, including charter schools, on a level playing field.

For example, in New Jersey in 2008, after years of court-driven, ad-hoc approaches to school funding, Governor Corzine pushed through a weighted student formula school financing reform to create an equitable and predictable mechanism to distribute funding to all children in New Jersey based on individual student characteristics. Governor Corzine’s weighted student funding formula was equitably applied to all school districts and charter schools beginning in fiscal year 2009. In New Jersey charter schools will greatly benefit from the legislation. Under the old system, charter schools received as little as half as much funding as their public school neighbors. Now they will be funded based on the number and type of student that enrolls in the charter school just like every other public school in New Jersey.

New Jersey still needs to work towards other characteristics of school empowerment including local control of funding by school principals and more school choice. However, changing the statewide funding formula to be based on student characteristics and enrollment is a good first step.

Reason's Weighted Student Formula Yearbook and research is here.


Lisa Snell is Director of Education


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