Makes various changes to school funding law and Educational Adequacy Report; establishes Special Education Funding Review Task Force.

S3620

SENATE, No. 3620

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Senator� VIN GOPAL

District 11 (Monmouth)

SYNOPSIS

���� Makes various changes to school funding law and
Educational Adequacy Report; establishes Special Education Funding Review Task
Force.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning school financing
, amending
P.L.2018, c.67,
and amending and supplementing
P.L.1996, c.138 and
P.L.2007, c.260.

����
Be It Enacted

by the Senate and General Assembly of the State of New Jersey:

����� 1.�
Section 5 of P.L.1996, c.138 (C.18A:7F-5) is amended to read as follows:

����� 5.�� As
used in this section, "cost of living" means the CPI as defined in
section 3 of P.L.2007, c.260 (C.18A:7F-45).

����� a.�� Within
30 days following the approval of the Educational Adequacy Report, the
commissioner shall notify each district of the base per pupil amount, the per
pupil amounts for full-day preschool, the weights for grade level, county
vocational school districts, at-risk pupils, bilingual pupils, and combination
pupils, the cost coefficients for security aid and for transportation aid,
[
the State average classification rate and
]
the excess cost for general special education
services pupils,
[
the State average classification rate and
]
the excess cost for speech-only pupils, and the
geographic cost adjustment for each of the school years to which the report is
applicable.

����� Annually,
within two days following the transmittal of the State budget message to the
Legislature by the Governor pursuant to section 11 of P.L.1944, c.112
(C.52:27B-20), the commissioner shall notify each district of the maximum
amount of aid payable to the district in the succeeding school year pursuant to
the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), and shall notify each
district of the district's adequacy budget for the succeeding school year.

����� For
the 2008-2009 school year and thereafter, unless otherwise specified within
P.L.2007, c.260 (C.18A:7F-43 et al.), aid amounts payable for the budget year
shall be based on budget year pupil counts, which shall be projected by the
commissioner using data from prior years.� Adjustments for the actual pupil
counts of the budget year shall be made to State aid amounts payable during the
school year succeeding the budget year.� Additional amounts payable shall be
reflected as revenue and an account receivable for the budget year.

����� Notwithstanding
any other provision of this act to the contrary, each district's State aid
payable for the 2008-2009 school year, with the exception of aid for school
facilities projects, shall be based on simulations employing the various
formulas and State aid amounts contained in P.L.2007, c.260 (C.18A:7F-43 et
al.).� The commissioner shall prepare a report dated December 12, 2007
reflecting the State aid amounts payable by category for each district and
shall submit the report to the Legislature prior to the adoption of P.L.2007,
c.260 (C.18A:7F-43 et al.).� Except as otherwise provided pursuant to this
subsection and paragraph (3) of subsection d. of section 5 of P.L.2007, c.260
(C.18A:7F-47), the amounts contained in the commissioner's report shall be the
final amounts payable and shall not be subsequently adjusted other than to
reflect the phase-in of the required general fund local levy pursuant to
paragraph (4) of subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58)
and to reflect school choice aid to which a district may be entitled pursuant
to section 20 of that act. The projected pupil counts and equalized valuations
used for the calculation of State aid shall also be used for the calculation of
adequacy budget, local share, and required local share.� For 2008-2009,
extraordinary special education State aid shall be included as a projected
amount in the commissioner's report dated December 12, 2007 pending the final
approval of applications for the aid.� If the actual award of extraordinary
special education State aid is greater than the projected amount, the district
shall receive the increase in the aid payable in the subsequent school year
pursuant to the provisions of subsection c. of section 13 of P.L.2007, c.260
(C.18A:7F-55).� If the actual award of extraordinary special education State
aid is less than the projected amount, other State aid categories shall be
adjusted accordingly so that the district shall not receive less State aid than
as provided in accordance with the provisions of sections 5 and 16 of P.L.2007,
c.260 (C.18A:7F-47 and C.18A:7F-58).

����� In
the event that the commissioner determines, following the enactment of
P.L.2007, c.260 (C.18A:7F-43 et al.) but prior to the issuance of State aid
notices for the 2008-2009 school year, that a significant district-specific
change in data warrants an increase in State aid for that district, the
commissioner may adjust the State aid amount provided for the district in the
December 12, 2007 report to reflect the increase.

����� b.�� Each
district shall have a required local share.� For districts that receive
educational adequacy aid pursuant to subsection b. of section 16 of P.L.2007,
c.260 (C.18A:7F-58), the required local share shall be calculated in accordance
with the provisions of that subsection.

����� For
all other districts, the required local share shall equal the lesser of the
local share calculated at the district's adequacy budget pursuant to section 9
of P.L.2007, c.260 (C.18A:7F-51), or the district's budgeted local share for
the prebudget year.

����� In
order to meet this requirement, each district shall raise a general fund tax
levy which equals its required local share.

����� No
municipal governing body or bodies or board of school estimate, as appropriate,
shall certify a general fund tax levy which does not meet the required local
share provisions of this section.

����� c.�� Annually,
on or before March 4, or on or before March 20 in the case of a school district
with an annual school election in November, each district board of education
shall adopt, and submit to the commissioner for approval, together with such
supporting documentation as the commissioner may prescribe, a budget that
provides for a thorough and efficient education. Notwithstanding the provisions
of this subsection to the contrary, the commissioner may adjust the date for
the submission of district budgets if the commissioner determines that the
availability of preliminary aid numbers for the subsequent school year warrants
such adjustment.

����� Notwithstanding
any provision of this section to the contrary, for the 2005-2006 school year
each district board of education shall submit a proposed budget in which the
advertised per pupil administrative costs do not exceed the lower of the
following:

����� (1)� the
district's advertised per pupil administrative costs for the 2004-2005 school
year inflated by the cost of living or 2.5 percent, whichever is greater; or

����� (2)� the
per pupil administrative cost limits for the district's region as determined by
the commissioner based on audited expenditures for the 2003-2004 school year.

����� The
executive county superintendent of schools may disapprove the school district's
2005-2006 proposed budget if he determines that the district has not
implemented all potential efficiencies in the administrative operations of the
district.� The executive county superintendent shall work with each school
district in the county during the 2004-2005 school year to identify
administrative inefficiencies in the operations of the district that might
cause the superintendent to reject the district's proposed 2005-2006 school
year budget.

����� For
the 2006-2007 school year and each school year thereafter, each district board
of education shall submit a proposed budget in which the advertised per pupil
administrative costs do not exceed the lower of the following:

����� (1)� the
district's prior year per pupil administrative costs; except that the district
may submit a request to the commissioner for approval to exceed the district's
prior year per pupil administrative costs due to increases in enrollment,
administrative positions necessary as a result of mandated programs,
administrative vacancies, nondiscretionary fixed costs, and such other items as
defined in accordance with regulations adopted pursuant to section 7 of
P.L.2004, c.73.� In the event that the commissioner approves a district's
request to exceed its prior year per pupil administrative costs, the increase
authorized by the commissioner shall not exceed the cost of living or 2.5
percent, whichever is greater; or

����� (2)� the
prior year per pupil administrative cost limits for the district's region
inflated by the cost of living or 2.5 percent, whichever is greater.

����� d.�� (1)
A district's general fund tax levy shall not exceed the district's adjusted tax
levy as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38
and 18A:7F-39).

����� (2)� (Deleted
by amendment, P.L.2007, c.260).

����� (3)� (Deleted
by amendment, P.L.2007, c.260).

����� (4)� Any
debt service payment made by a school district during the budget year shall not
be included in the calculation of the district's adjusted tax levy.

����� (5)� (Deleted
by amendment, P.L.2007, c.260).

����� (6)� (Deleted
by amendment, P.L.2007, c.260).

����� (7)� (Deleted
by amendment, P.L.2004, c.73).

����� (8)� (Deleted
by amendment, P.L.2010, c.44)

����� (9)� Any
district may submit at the annual school budget election, in accordance with
subsection c. of section 4 of P.L.2007, c.62 (C.18A:7F-39), a separate proposal
or proposals for additional funds, including interpretive statements,
specifically identifying the program purposes for which the proposed funds
shall be used, to the voters, who may, by voter approval, authorize the raising
of an additional general fund tax levy for such purposes.� In the case of a
district with a board of school estimate, one proposal for the additional
spending shall be submitted to the board of school estimate. Any proposal or
proposals submitted to the voters or the board of school estimate shall not:
include any programs and services that were included in the district's prebudget
year net budget unless the proposal is approved by the commissioner upon
submission by the district of sufficient reason for an exemption to this
requirement; or include any new programs and services necessary for students to
achieve the thoroughness standards established pursuant to subsection a. of
section 4 of P.L.2007, c.260 (C.18A:7F-46).

����� A
district without a board of school estimate may also submit to the voters at a
special election authorized pursuant to section 2 of P.L.1995, c.278
(C.19:60-2), a separate proposal or proposals for additional funds for the
subsequent budget year, including interpretive statements, specifically
identifying the program purposes for which the proposed funds shall be used.� A
proposal submitted at a special election shall comply with the requirements of
this paragraph and section 4 of P.L.2007, c.62 (C.18A:7F-39).� A separate
proposal or proposals for additional funds may only be submitted on a date of a
special election once during a school year.� Nothing in this paragraph shall be
construed to prohibit the submission to the voters of a question or questions
for the approval of a capital project or projects on the same special election
date as the submission of a separate proposal or proposals for additional
funds.

����� The
executive county superintendent of schools may prohibit the submission of a
separate proposal or proposals to the voters or board of school estimate if he
determines that the district has not implemented all potential efficiencies in
the administrative operations of the district, which efficiencies would
eliminate the need for the raising of an additional general fund tax levy.

����� (10)
Notwithstanding any provision of law to the contrary, if a district proposes a
budget with a general fund tax levy and equalization aid which exceed the
adequacy budget, the following statement shall be published in the legal notice
of public hearing on the budget pursuant to N.J.S.18A:22-28, and posted at the
public hearing held on the budget pursuant to N.J.S.18A:22-29:

����� "Your
school district has proposed programs and services in addition to the core
curriculum content standards adopted by the State Board of Education.�
Information on this budget and the programs and services it provides is
available from your local school district."

����� (11)
Any reduction that may be required to be made to programs and services included
in a district's prebudget year net budget in order for the district to limit
the growth in its budget between the prebudget and budget years by its tax levy
growth limitation as calculated pursuant to sections 3 and 4 of P.L.2007, c.62
(C.18A:7F-38 and 18A:7F-39), shall only include reductions to excessive
administration or programs and services that are inefficient or ineffective.

����� e.
(1)� In the case of a district having a board of school estimate, other than a
Type II district with a board of school estimate, which has a proposed budget
that includes a general fund tax levy and equalization aid in excess of the
adequacy budget, the general fund tax levy shall be submitted to the board for
determination of the amount that should be expended.� If the board of school
estimate reduces the district's proposed budget, the district may appeal any of
the reductions to the commissioner on the grounds that the reductions will
negatively impact on the stability of the district given the need for long term
planning and budgeting.� In considering the appeal, the commissioner shall
consider enrollment increases or decreases within the district; the impact on
the local levy; and whether the reductions will impact on the ability of the
district to fulfill its contractual obligations.� A district may not appeal any
reductions on the grounds that the amount is necessary for a thorough and
efficient education.

����� (2)� �
In the case of a district having a board of school estimate, other than a Type
II district with a board of school estimate, which has a proposed budget that
includes a general fund tax levy and equalization aid at or below the adequacy
budget, the general fund tax levy shall be submitted to the board for
determination.� Any reductions may be appealed to the commissioner on the
grounds that the amount is necessary for a thorough and efficient education or
that the reductions will negatively impact on the stability of the district
given the need for long term planning and budgeting.� In considering the
appeal, the commissioner shall also consider the factors outlined in paragraph
(1) of this subsection.

����� In
addition, the board of school estimate shall be required to demonstrate clearly
to the commissioner that the proposed budget reductions shall not adversely
affect the ability of the school district to provide a thorough and efficient
education or the stability of the district given the need for long term
planning and budgeting.

����� (3)� In
lieu of any budget reduction appeal provided for pursuant to paragraphs (1) and
(2) of this subsection, the State board may establish pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.),
an expedited budget review process based on a district's application to the
commissioner for an order to restore a budget reduction.

����� (4)� When
the board of education or the board of school estimate authorize the general
fund tax levy, the district shall submit the resulting budget to the
commissioner within 15 days of the authorization.

����� f.��� (Deleted
by amendment, P.L.2007, c.260).

����� g.�� (Deleted
by amendment, P.L.2007, c.260).

(cf:
P.L.2024, c.60, s.1)

���� 2.��� (New section) Beginning
with the first full school year following the date of enactment of P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill) and each
school year thereafter, the Department of Education shall annually, within two
days following the transmittal of the State budget message to the Legislature
by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), make
publicly available on the department�s Internet website the calculation of each
category of aid payable to each school district in the succeeding year pursuant
to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.).� The calculations
shall be written in a user-friendly manner and shall include, at a minimum,
explanations of the variables used to determine the district�s aid.

����� 3.� Section 2 of P.L.2007, c.260 (C.18A:7F-44)
is amended to read as follows:

����� 2.�� The
Legislature finds and declares that:

����� a.�� The
Constitution of the State of New Jersey states that the Legislature shall
provide for the maintenance and support of a thorough and efficient system of
free public schools for the instruction of all children in the State between
the ages of five and eighteen years.� (N.J. Const. art. VIII, sec. 4, par.1).

����� b.�� The
State, in addition to any constitutional mandates, has a moral obligation to
ensure that New Jersey's children, wherever they reside, are provided the
skills and knowledge necessary to succeed.� Any school funding formula should
provide resources in a manner that optimizes the likelihood that children will
receive an education that will make them productive members of society.

����� c.�� Although
the Supreme Court of New Jersey has held that prior school funding statutes did
not establish a system of public education that was thorough and efficient as
to certain districts, the Court has consistently held that the Legislature has
the responsibility to substantively define what constitutes a thorough and
efficient system of education responsive to that constitutional requirement.

����� d.�� Every
child in New Jersey must have an opportunity for an education based on academic
standards that satisfy constitutional requirements regardless of where the
child resides, and public funds allocated to this purpose must be expended to
support schools that are thorough and efficient in delivering those educational
standards.� In turn, school districts must be assured the financial support
necessary to provide those constitutionally compelled educational standards.�
Any school funding formula should provide State aid for every school district
based on the characteristics of the student population and up-to-date measures
of the individual district's ability to pay.

����� e.�� New
Jersey's current public school funding formula, established under the
provisions of the "Comprehensive Educational Improvement and Financing Act
of 1996," (CEIFA) P.L.1996, c.138, has not been used to calculate State
aid for public schools since the 2001-02 school year.� Any new school funding
formula should account for changes in enrollment and other significant
developments, providing relief to those districts that have experienced
substantial enrollment increases.

����� f.��� The
decisions in the Abbott cases have resulted in frequent litigation and a
fragmented system of funding under which limited resources cannot be
distributed equitably to all districts where at-risk children reside, instead
dividing the districts sharply into Abbott and non-Abbott categories for
funding purposes without regard to a district's particular pupil
characteristics and leading to needlessly adversarial relationships among
school districts and between districts and the State.�

����� g.�� In
the absence of a clear, unitary, enforceable statutory formula to govern
appropriations for education, crucial funding decisions are made annually, in
competition for limited State resources with other needs and requirements as
part of the annual budget negotiation process, utilizing many different classes
and categories of aid, leading to an uncertain, unpredictable, and untenable
funding situation for the State and school districts alike.�

����� h.�� This
act represents the culmination of five years of diligent efforts by both the
Executive and Legislative branches of State government to develop an equitable
and predictable way to distribute State aid that addresses the deficiencies
found in past formulas as identified by the Supreme Court.� Working together
toward this common goal, the Department of Education and the Legislature
engaged nationally recognized experts in education funding and provided
significant opportunities for stakeholder involvement and public input to
assist in formulating and refining a comprehensive school funding model that
has been validated by experts.� The formula accounts for the individual
characteristics of school districts and the realities of their surroundings,
including the need for additional resources to address the increased
disadvantages created by high concentrations of children at-risk.

����� i.��� The
formula established under this act is the product of a careful and deliberative
process that first involved determining the educational inputs necessary to
provide a high-quality education, including specifically addressing the
supplemental needs of at-risk students and those with limited English
proficiency (LEP), and a determination of the actual cost of providing those
programs.� The formula provides adequate funding that is realistically geared
to the core curriculum content standards, thus linking those standards to the
actual funding needed to deliver that content.

����� j.��� In
recognition of the unique problems and cost disadvantages faced by districts
with high concentrations of at-risk students, it is appropriate to reflect in
the formula a greater weight as the district's proportion of at-risk students
increases.� In addition, the new formula recognizes the disadvantages of an
expanded group of students by including in the definition of at-risk those
students who qualify for free or reduced-price lunch.� Expanding the definition
of at-risk students in this manner will significantly increase the resources
flowing to districts with high concentrations of these low-income students.

����� k.�� In
light of the demonstrable, beneficial results and success of the current Abbott
preschool program, it is appropriate to build upon this success by
incorporating in the formula an expanded high-quality preschool program for all
children who qualify for free and reduced price meals in all districts.� It is
appropriate for the formula to acknowledge that at-risk children do not always
receive the same educational exposure at an early age as their peers and to
provide the additional resources necessary through high-quality preschool to
prepare every child to learn and succeed.

����� l.��� It
is appropriate to reflect in this formula the inherent value of educating a
child in the least restrictive environment and, whenever possible, in that
child's neighborhood school alongside his peers.� The new funding formula
should provide incentives for keeping classified students in district.

����� m.� It
is also appropriate to recognize in the formula the need for all schools to
incorporate effective security measures, which may vary from district to
district depending upon the at-risk student population and other factors, and
to provide categorical funding to address these important requirements.

����� n.��
[
In recognition of the potentially wide variability
in special education costs, even for the same category of disability, from
district to district, it is appropriate for the new funding formula to mitigate
the impact of that variability by establishing a census model based on the
actual Statewide average excess cost of educating special education students
and by providing for an increase in State aid for extraordinary costs incurred
by districts.
]

(Deleted
by amendment, P.L.��� , c.�� ) (pending before the Legislature as this bill)

����� o.�� It
is imperative that any new school funding formula work in conjunction with the
key school accountability measures that have been enacted in recent years to
promote greater oversight, transparency, and efficiency in the delivery of
educational services.� These accountability measures include the New Jersey
Quality Single Accountability Continuum, the "School District Fiscal
Accountability Act," P.L.2006, c.15 (C.18A:7A-54 et seq.), P.L.2007, c.63
(C.40A:65-1 et al.) which established the duties and responsibilities of the
executive county superintendent of schools, and P.L.2007, c.53 (C.18A:55-3 et
al.).

����� p.�� Together
with a renewed legislative focus on and commitment to providing sufficient
means to maintain and support a high-quality system of free public schools in
the State, a new funding formula supported by significantly increased State
resources will ensure compliance with all statutory and constitutional
mandates.� Districts that were formerly designated as Abbott districts will be
provided sufficient resources to continue those Court-identified programs,
positions, and services that have proven effective while being provided the
flexibility to shift resources and programmatic focus based on the needs of
their students and current research.�

����� q.�� The
time has come for the State to resolve the question of the level of funding
required to provide a thorough and efficient system of education for all New
Jersey school children.� The development and implementation of an equitable and
adequate school funding formula will not only ensure that the State's students
have access to a constitutional education as defined by the core curriculum
content standards, but also may help to reduce property taxes and assist
communities in planning to meet their educational expenses.� The development of
a predictable, transparent school funding formula is essential for school
districts to plan effectively and deliver the quality education that our
citizens expect and our Constitution requires.

(cf:
P.L.2007, c.260, s.2)

����� 4.�� Section 4 of P.L.2007, c.260
(C.18A:7F-46) is amended to read as follows:

����� 4.�� a.�
The State Board of Education shall review and update the core curriculum
content standards every five years.� The standards shall ensure that all
children are provided the educational opportunity needed to equip them for the
role of citizen and labor market competitor.

����� The
Commissioner of Education shall develop and establish, through the report
issued pursuant to subsection b. of this section, efficiency standards which
define the types of programs, services, activities, and materials necessary to
achieve a thorough and efficient education.

����� b.�� By
September 1 of 2010 and by September 1 every three years thereafter, the
Governor, after consultation with the commissioner, shall recommend to the
Legislature through the issuance of the Educational Adequacy Report for the
three school years to which the report is applicable
revisions to
:

����� (1)� the
base per pupil amount based upon the core curriculum content standards
established pursuant to subsection a. of this section;

����� (2)� the
per pupil amounts for full-day preschool;

����� (3)� the
weights for grade level, county vocational school districts, at-risk pupils,
bilingual pupils, and combination pupils;

����� (4)� the
cost coefficients for security aid and transportation aid;

����� (5)�
[
the State average classification rate for general
special education services pupils and for speech-only pupils;
]

(Deleted by amendment, P.L.��� , c.�� ) (pending
before the Legislature as this bill)

����� (6)� the
excess cost for general special education services pupils and for speech-only
pupils;
[
and
]

����� (7)� the
extraordinary special education aid thresholds
established pursuant to
subsection b. of section 13 of P.L.2007, c.260 (C.18A:7F-55);

�����
(8)� the
equalized total tax rate and adequacy spending thresholds to be used for the
purposes of determining whether� a school district shall be exempt from a
reduction in State school aid pursuant to section 10 of P.L.��� , c.����
(C.������� ) (pending before the Legislature as this bill); and

�����
(9)� if
deemed appropriate, the use of inflationary measures, other than the CPI, to
adjust the base per pupil amount, the per pupil amounts for full-day preschool,
the excess costs for general special education services pupils and for
speech-only pupils, or the cost-coefficients for security aid and
transportation aid, provided that the recommended inflationary measures are
equal to or greater than the CPI, are recognized, evidence-based measures of
cost change for the type of good or service, and have been disclosed in the
Educational Adequacy Report
.

����� The
base per pupil amount, the per pupil amounts for full-day preschool, the excess
costs for general special education services pupils and for speech-only pupils,
and the cost-coefficients for security aid and transportation aid shall be
adjusted by the CPI
, or other inflationary measures disclosed in the most
recently issued Educational Adequacy Report,
for each of the two school
years following the first school year to which the report is applicable.

����� The
amounts
published in the final version of the Educational Adequacy Report
issued pursuant to this subsection
shall be deemed approved for the three
successive fiscal years beginning from the subsequent July 1, unless between
the date of transmittal and the subsequent November 30, the Legislature adopts
a concurrent resolution stating that the Legislature is not in agreement with
all or any specific part of the report.� The concurrent resolution shall advise
the Governor of the Legislature's specific objections to the report and shall
direct the commissioner to submit to the Legislature a revised report which
responds to those objections by January 1.

�����
c.�� The
Educational Adequacy Report issued pursuant to subsection b. of this section
may also include a commissioner-initiated review of any other element,
variable, or metric used to determine allocations of State school aid pursuant
to P.L.2007, c.260 (C.18A:7F-43 et al.).� The commissioner shall publicly
announce the intent to conduct a review pursuant to this subsection at the time
that the decision to conduct the review is made and prior to initiating the
review.� An element, variable, or metric that is the subject of a
commissioner-initiated review pursuant to this subsection shall not be
decreased pursuant to the review.

�����
During
a year in which the report required pursuant subsection b. of this section is
to be issued, the commissioner shall make a draft of the report available for
public comment for a period of no less than 30 days.�

�����
During
the public comment period, the commissioner shall ensure that members of the
public are afforded the opportunity to provide remarks on, and recommend
revisions to, the draft report at public hearings to be held at various
locations across the State, as well as through the submission of written and
electronic testimony.���

�����
After
consideration of comments received through the public comment period, the
commissioner shall issue a final version of the report.
�

(cf:
P.L.2007, c.260, s.4)

����� 5.
� Section 9 of P.L.2007, c.260 (C.18A:7F-51) is amended to read as follows:

����� 9.�� a.�
The adequacy budget for each school district and county vocational school
district shall be calculated as follows:

����� AB
= (BC + AR Cost + LEP Cost + COMB Cost +
[
SE Census
]
SE Cost
) x GCA

where

����� BC
is the district's or county vocational school district's base cost as
calculated pursuant to section 8 of this act;

����� AR
Cost is the cost of providing educational and other services for at-risk pupils
as calculated pursuant to subsection b. of this section;

����� LEP
Cost is the cost of providing educational and other services for bilingual
education pupils as calculated pursuant to subsection c. of this section;

����� COMB
Cost is the cost of providing educational and other services for pupils who are
both at-risk and bilingual as calculated pursuant to subsection d. of this
section;

�����
[
SE Census
]

SE Cost

is the cost of providing programs and services to general special education
services pupils and speech-only pupils as calculated pursuant to subsection e.
of this section; and

����� GCA
is geographic cost adjustment.

����� The
GCA shall be the geographic cost adjustment developed by the commissioner and
revised by the commissioner every five years in accordance with receipt of
census data.

����� b.�� AR
Cost shall be calculated as follows:

����� AR
Cost = BPA x ARWENR x AR Weight

where�

����� BPA
is the base per pupil amount;

����� ARWENR
is the weighted enrollment for at-risk pupils of the school district or county
vocational school district, which shall not include combination pupils; and

����� AR
Weight is the at-risk weight.

����� For
the 2008-2009 through 2010-2011 school years the at-risk weight shall be as
follows:

����� for
a district in which the concentration of at-risk pupils is less than
[
20%
]

20 percent
of resident enrollment, the
at-risk weight shall equal 0.47;

����� for
a district in which the concentration of at-risk pupils is equal to
[
20%
]

20 percent
but less than
[
60%
]

60 percent
of resident enrollment, the
at-risk weight shall equal the district's ((at-risk % - 0.20) x 0.25)) + 0.47;
and

����� for
a district in which the concentration of at-risk pupils is equal to or greater
than
[
60%
]

60 percent
of resident enrollment, the
at-risk weight shall equal 0.57.

����� For
subsequent school years, the AR weight shall be established in the Educational
Adequacy Report.

����� c.�� LEP
Cost shall be calculated as follows:

����� LEP
Cost = BPA x LWENR x LEP Weight

where

����� BPA
is the base per pupil amount;

����� LWENR
is the weighted enrollment for the bilingual education pupils of the school
district or county vocational school district, which shall not include
combination pupils; and

����� LEP
Weight is the bilingual pupil weight.

For
the 2008-2009 through 2010-2011 school years the LEP weight shall be 0.5.� For
subsequent school years, the LEP weight shall be established in the Educational
Adequacy Report.

����� d.�� COMB
Cost shall be calculated as follows:

����� COMB
Cost = BPA x CWENR x (AR Weight + COMB Weight)

where

����� BPA
is the base per pupil amount;

����� CWENR
is the weighted enrollment for pupils who are both at-risk and bilingual;

����� AR
Weight is the at-risk weight; and

����� COMB
Weight is the combination pupil weight.

����� For
the 2008-2009 through 2010-2011 school years the COMB weight shall be 0.125.�
For subsequent school years, the COMB weight shall be established in the
Educational Adequacy Report.

����� e.��
[
SE Census
]

SE Cost

shall be calculated as follows:

�����
[
SE Census
]

SE Cost

= (
[
RE x SEACR
]

SEENR
x AEC x 2/3) + (
[
RE x SACR
]

SPEONLY

x SEC)

where

�����
[
RE is the resident enrollment of the school district
or county vocational school district;

����� SEACR
is the State average classification rate for general special education services
pupils
]

�����
SEENR
is the number of general special education services pupils included in the
school district�s or county vocational school district�s resident enrollment
;

����� AEC
is the excess cost for general special education services pupils;

�����
[
SACR is the State average classification rate for
speech-only pupils
]

�����
SPEONLY
is the number of speech-only pupils included in the school district�s or county
vocational school district�s resident enrollment
; and

����� SEC
is the excess cost for speech-only pupils.

�����
[
For the 2008-2009 through 2010-2011 school years the
State average classification rate shall be 14.69% for general special education
services pupils and 1.897% for speech-only pupils.� For subsequent school
years, the State average classification rates shall be established in the
Educational Adequacy Report.
]

����� For
the 2008-2009 school year the excess cost shall be $10,898 for general special
education services pupils and $1,082 for speech-only pupils.� The excess cost
amounts shall be adjusted by the CPI in the 2009-2010 and 2010-2011 school
years as required pursuant to subsection b. of section 4 of this act.� For
subsequent school years, the excess cost amounts shall be established in the
Educational Adequacy Report, with the amounts adjusted by the CPI for each of
the two school years following the first school year to which the report is
applicable.

(cf:
P.L.2007, c.260, s.9)

����� 6.�� Section
13 of P.L.2007, c.260 (C.18A:7F-55) is amended to read as follows:

����� 13. a.�
Special education categorical aid for each school district and county
vocational school district shall be calculated as follows:�

����� SE
= (
[
RE x SEACR
]

SEENR
x AEC x 1/3) x GCA

where

�����
[
RE is the resident enrollment of the school district
or county vocational school district;

����� SEACR
is the State average classification rate for general special education services
pupils
]

�����
SEENR
is the number of general special education services pupils included in the
school district�s or county vocational school district�s resident enrollment
;

����� AEC
is the excess cost for general special education services pupils; and

����� GCA
is the geographic cost adjustment as developed by the commissioner.

For
the 2008-2009 school year the excess cost shall be $10,898 for general special
education services pupils.� The excess cost amount shall be adjusted by the CPI
in the 2009-2010 and 2010-2011 school years as required pursuant to subsection
b. of section 4 of
[
this act
]

P.L.2007, c.260 (C.18A:7F-46)
.� For
subsequent school years, the excess cost amount shall be established in the
Educational Adequacy Report, with the amount adjusted by the CPI for each of
the two school years following the first school year to which the report is
applicable.

����� b.�� Extraordinary
special education aid for an individual classified pupil shall be available
when the student is educated in a general education classroom, special
education program, including but not limited to a resource program or special
class program, or any combination of general education and special education
programs and services, subject to the requirements and thresholds set forth in
this section.

����� (1)� In
those instances in which a pupil is educated in an in-district public school
program with non-disabled peers, whether run by a public school or by a private
school for the disabled, and the cost of providing direct instructional and
support services for an individual classified pupil exceeds $40,000, for those
direct instructional and support services costs in excess of $40,000 a district
shall receive extraordinary special education State aid equal to
[
90%
]

90 percent

of the amount of that excess in accordance with the provisions of paragraph (4)
of this subsection.

����� (2)� In
those instances in which a pupil is educated in a separate public school
program for students with disabilities and the cost of providing direct
instructional and support services for an individual classified pupil exceeds
$40,000, for those direct instructional and support services costs in excess of
$40,000 a district shall receive extraordinary special education State aid
equal to
[
75%
]

75 percent
of the amount of that excess in
accordance with the provisions of paragraph (4) of this subsection.

����� (3)� In
those instances in which a pupil is educated in a separate private school for
students with disabilities and the tuition for an individual classified pupil
exceeds $55,000, for tuition costs in excess of $55,000 a district shall
receive extraordinary special education State aid equal to
[
75%
]

75 percent

of the amount of that excess in accordance with the provisions of paragraph (4)
of this subsection.

����� (4)� Extraordinary
special education State aid for an individual classified pupil shall be
calculated as follows:

����� EA
= ((ADC -

$40,000) x
.90) + (((AIC - $40,000) + (ASC - $55,000)) x .75)

where

����� ADC
equals the district's actual cost for the direct instructional and support
services in an in-district public school program as set forth in paragraph (1)
of this subsection;

����� AIC
equals the district's actual cost for direct instructional and support services
in a separate public school program as set forth in paragraph (2) of this
subsection; and

����� ASC
equals the district's actual cost for tuition paid to a separate private school
as set forth in paragraph (3) of this subsection.

����� (5)� The
receipt of extraordinary special education State aid for an individual
classified pupil shall be conditioned upon a demonstration by the district that
the pupil's Individualized Education Plan requires the provision of intensive
services, pursuant to factors determined by the commissioner.

����� c.�� In
order to receive funding pursuant to this section, a district shall file an
application with the department that details the expenses incurred on behalf of
the particular classified pupil for which the district is seeking
reimbursement.� Additional State aid awarded for extraordinary special
education costs shall be recorded by the district as revenue in the current
school year and paid to the district in the subsequent school year.

����� d.�� A
school district may apply to the commissioner to receive emergency special
education aid for any classified pupil who enrolls in the district prior to
March of the budget year and who is in a placement with a cost in excess of
[
$40,000 or $55,000, as applicable
]
the applicable extraordinary special education aid
thresholds enumerated in subsection b. of this section
.� The commissioner may debit from the student's
former district of residence any special education aid which was paid to that
district on behalf of the student.

����� e.�� The
department shall review expenditures of federal and State special education aid
by a district in every instance in which special education monitoring
identifies a failure on the part of the district to provide services consistent
with a pupil's Individualized Education Plan.

����� f.���
[
The commissioner shall commission an independent
study of the special education census funding methodology to determine if
adjustments in the special education funding formulas are needed in future
years to address the variations in incidence of students with severe
disabilities requiring high cost programs and to make recommendations for any
such adjustments.� The study and recommendations shall be completed by June 30,
2010.
]

(Deleted by amendment, P.L.��� , c.���� )
(pending before the Legislature as this bill)

����� g.��
[
A school district may apply to the commissioner to
receive additional special education categorical aid if the district has an
unusually high rate of low-incidence disabilities, such as autism,
deaf/blindness, severe cognitive impairment, and medically fragile.� In
applying for the aid the district shall: demonstrate the impact of the
unusually high rate of low-incidence disabilities on the school district budget
and the extent to which the costs to the district are not sufficiently
addressed through special education aid and extraordinary special education
aid; and provide details of all special education expenditures, including
details on the use of federal funds to support those expenditures.
]

(Deleted by amendment, P.L.��� , c.���� )
(pending before the Legislature as this bill)

�����
h.�� Notwithstanding
the provisions of any other law, rule, or regulation to the contrary, the
amount of extraordinary special education aid appropriated in the annual
appropriations act shall increase compared to the amount appropriated in the
previous fiscal year or otherwise be appropriated in a manner to ensure that
the percentage of a school district�s costs reimbursed through extraordinary
special education aid increases compared to the previous fiscal year.

�����
i.��� Notwithstanding
the provisions of any law, rule, or regulation to the contrary, the amount of
extraordinary special education aid received by a district pursuant to this
section shall not be included in the calculation of a district�s tax levy
growth limitation pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38).

(cf:
P.L.2007, c.260, s.13)

����� 7.�
Section 4 of P.L.2018, c.67 (C.18A:7F-68) is amended to read as follows:

����� 4.�
a.� Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or
any other law to the contrary, in the 2019-2020 through 2024-2025 school years,
a school district or county vocational school district in which the State aid
differential calculated is negative shall receive State school aid in an amount
equal to the sum of the district's State aid in the prior school year plus the
district's proportionate share of the sum of any increase in State aid included
in the annual appropriations act for that fiscal year and the total State aid
reduction pursuant to subsection b. of this section based on the district's
State aid differential as a percent of the Statewide total State aid
differential among all school districts and county vocational school districts
for which the State aid differential is negative.� Any increase in State aid
pursuant to this subsection shall first be allocated to equalization aid,
followed by special education categorical aid, security categorical aid, and
transportation aid, except that no category shall exceed the total amount as
calculated in accordance with the provisions of sections 11, 13, 14, and 15 of
P.L.2007, c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57),
respectively.

����� b.�� Except
as provided pursuant to subsection c. of this section, and notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the
contrary, in the 2019-2020 through 2024-2025 school years, a school district or
county vocational school district in which the State aid differential is
positive shall receive State school aid in an amount equal to the district's
State aid in the prior school year minus a percent of the State aid
differential according to the following schedule:

���� (1)� 13 percent in the
2019-2020 school year;

����� (2)�
23 percent in the 2020-2021 school year;

����� (3)�
37 percent in the 2021-2022 school year;

����� (4)�
55 percent in the 2022-2023 school year;

����� (5)�
76 percent in the 2023-2024 school year; and

����� (6)�
100 percent in the 2024-2025 school year.

����� c.�
(1)� An SDA district that is located in a municipality in which the equalized
total tax rate is greater than the Statewide average equalized total tax rate
for the most recent available calendar year and is spending below adequacy as
calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be
subject to a reduction in State aid pursuant to subsection b. of this section.

����� (2)�
An SDA district that is located in a municipality in which the equalized total
tax rate is greater than the Statewide average equalized total tax rate for the
most recent available calendar year and is spending above adequacy as
calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall be
subject to a reduction not to exceed the amount by which the district is
spending above adequacy multiplied by the corresponding percentage included in
subsection b. of this section.

����� (3)�
A school district, other than an SDA district, that is located in a
municipality in which the equalized total tax rate is at least 10 percent
greater than the Statewide average equalized total tax rate for the most recent
available calendar year and is spending at least 10 percent below adequacy as
calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be
subject to a reduction in State aid pursuant to subsection b. of this section.

����� (4)�

[
A
]

Except as provided in section 8 of P.L.��� ,
c.���� (C. ) (pending before the
Legislature as this bill), a
school district that is a participating
district under an application that is approved for a grant pursuant to
subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or a school
district that is a participating district under an application that receives
preliminary approval pursuant to subsection b. of section 4 of P.L.2021, c.402
(C.18A:13-47.4) and that has a State aid differential that is positive may
elect to receive State school aid in an amount equal to the district's State
aid in the prior school year minus a percent of the State aid differential
according to the following schedule:

����� (a)�
30 percent in the 2021-2022 school year;

����� (b)�
37 percent in the 2022-2023 school year;

����� (c)�
46 percent in the 2023-2024 school year;

����� (d)�
55 percent in the 2024-2025 school year;

����� (e)�
65.5 percent in the 2025-2026 school year;

����� (f)�
76 percent in the 2026-2027 school year;

����� (g)�
88 percent in the 2027-2028 school year; and

����� (h)�
100 percent in the 2028-2029 school year.

����� A
school district with a State aid differential that is positive, which is a
participating district under an application that is approved for a grant
pursuant to subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or
that receives preliminary approval under subsection b. of section 4 of
P.L.2021, c.402 (C.18A:13-47.4) but has not created or joined a limited purpose
or all purpose regional school district within two years following the grant
application approval or preliminary approval shall not be eligible to receive
State aid according to the schedule enumerated in this paragraph.

����� As
used in this paragraph, "participating district" means a school
district whose board of education by resolution certifies a commitment to
participate in a feasibility study submitted as part of an application under
the grant program established pursuant to section 2 of P.L.2021, c.402
(C.18A:13-47.2).

����� (5)�
Notwithstanding the provisions of section 32 of P.L.1996, c.138 (C.18A:7F-32)
or any other law, rule, or regulation to the contrary, a school district that
is a regional school district created following the approval of a grant
application pursuant to section 4 of P.L.2021, c.402 (C.18A:13-47.4) shall,
from the first full school year following the creation of the regional school
district through the 2028-2029 school year, receive State school aid in an
amount that is the greater of:

����� (a)�
the amount of State school aid that the newly created regional school district
would receive as a regional school district; or

����� (b)�
the sum of the amount of State school aid received by each school district
constituting the newly created regional school district prior to the creation
of such regional school district.

����� (6)�
A school district shall not be not be subject to a reduction in State aid
pursuant to this section provided that:

����� (a)�
the district is a regional school district consisting of at least five
constituent school districts;

����� (b)�
the district has mitigated costs of regionalization, as determined by the
Commissioner of Education;

����� (c)�
for the most recent school year for which data is available, the district's
administrative costs per pupil are 15 percent lower than the Statewide average
administrative costs per pupil for regional school districts; and

����� (d)�
the district's general fund tax levy has been increased by the maximum amount
permitted pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38) in each of the
last five school years.

����� A
school district that is exempt from a reduction in State aid pursuant to
paragraph (6) of subsection c. of this section shall provide courtesy busing to
pupils who reside in the district, provided that the district was providing
courtesy busing prior to the school year in which it is exempt from a reduction
in State aid.

����� d.�� Any
decrease in State aid pursuant to subsection b. or c. of this section shall
first be deducted from a school district's or county vocational school
district's allotment of adjustment aid.� Any additional reduction shall be
deducted from the school district's or county vocational school district's
allotment of non-SFRA aids, followed by equalization aid, special education
categorical aid, security aid, and transportation aid.

����� e.�� Any
remaining adjustment aid or non-SFRA aids shall be reallocated to other State
aid categories in a manner to be determined by the commissioner.

(cf:
P.L.2023, c.140, s.1)

�����
8.�
(New section)� a.� As used in this section, �total operating budget� means the
sum of a district�s general fund revenues from local sources, State sources,
federal sources, and other sources.� Total operating budget shall not include
withdrawals made by the district from any reserve account established pursuant
to section 6 of P.L.2007, c.62 (C.18A:7F-41) or reimbursements paid to the
district for extraordinary special education aid pursuant to section 13 of
P.L.2007, c.260 (C.18A:7F-55).�

�����
b.�
Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.),
P.L.2018, c.67 (C.18A:7F-67 et al.), or any other provision of law, rule, or
regulation to the contrary, and beginning with the first full school year
following the date of enactment of P.L.��� , c.���� (C.� ) (pending before the
Legislature as this bill) and each school year thereafter, a school district
shall receive an allocation of reduction adjustment aid to ensure that the
amount of State school aid provided to a school district shall not be decreased
by more than two percent of the district�s prebudget year total operating
budget. In no school year shall a school district receive an amount of State
school aid that has been reduced from the amount of aid disbursed in the prebudget
year by an amount that exceeds two percent of the district�s prebudget year
total operating budget.

�������
9.� Section 5 of P.L.2018, c.67 (C.18A:7F-69) is
amended to read as follows:

����� 5.��
a.
�
In the 2019-2020 school year, and in each school year thereafter, a county
vocational school district shall receive vocational expansion stabilization aid
in such an amount to ensure that the district receives the greater of the
amount of State aid calculated pursuant to the provisions of P.L.2018, c.67
(C.18A:7F-67 et al.) or the sum of the district's State aid received in the
2017-2018 school year.

�����
b.�
In the first full school year following the date of enactment of P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill) and each
school year thereafter, the amount of vocational expansion stabilization aid
(VESA) received by a county vocational school district shall be adjusted to
accommodate growth in resident enrollment.� Provided that the difference
between the projected

resident enrollment
for

the budget year and
the resident enrollment in the prebudget year is positive, the adjustment for
resident enrollment shall be calculated as follows:

�����
VESA
adjustment = ENRG x VA x GCA

where

�����
ENRG
means the difference between the projected resident enrollment for the budget
year and the resident enrollment in the prebudget year;

�����
VA
means the base per pupil amount established pursuant to section 7 of P.L.2007,
c.260 (C.18A:7F-49) multiplied by 0.31; and

�����
GCA
is the geographic cost adjustment as developed by the commissioner.

A county vocational school district for which the difference between the
projected

resident enrollment
for the budget year and the resident enrollment in the prebudget year is less
than or equal to zero shall receive the amount of vocational expansion
stabilization aid determined pursuant to subsection a. of this section.�
Nothing in this section shall be construed as allowing a district�s allocation
of vocational expansion stabilization aid to be decreased from the amount of
vocational expansion stabilization aid received in the prebudget year.

(cf:
P.L.2018, c.67, s.5)

���� 10.� (New section) a.
Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.),
P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to
the contrary, a school district, other than a regional school district, shall
not be subject to a reduction in State school aid in any school year, beginning
with the first full school year following the date of enactment of
P.L. , c. (C. )
(pending before the Legislature as this bill) and each school year thereafter,
if:

���� (1)�� in the case of an SDA
district, the district is located in a municipality in which the equalized
total tax rate is greater than the Statewide average equalized total tax rate
for the most recent available calendar year and the district is spending below adequacy
as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70); or

���� (2)�� in the case of a school
district other than an SDA district, the district is located in a municipality
in which the equalized total tax rate is at least 10 percent greater than the
Statewide average equalized total tax rate for the most recent available calendar
year and is spending at least 10 percent below adequacy as calculated pursuant
to section 1 of P.L.2018, c.67 (C.18A:7F-70).

���� b.��� Notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67
et al.), or any other law, rule, or regulation to the contrary, a regional
school district shall not be subject to a reduction in State school aid in any school
year, beginning with the first full school year following the date of enactment
of P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill)
and each school year thereafter, if 50 percent or more of the constituent
districts or municipalities of the regional school district meet either of the
following criteria:

���� (1)�� in the case of an SDA
district, the district is located in a municipality in which the equalized
total tax rate is greater than the Statewide average equalized total tax rate
for the most recent available calendar year and the district is spending below adequacy
as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70); or

���� (2)�� in the case of a school
district other than an SDA district, the district is located in a municipality
in which the equalized total tax rate is at least 10 percent greater than the
Statewide average equalized total tax rate for the most recent available calendar
year and is spending at least 10 percent below adequacy as calculated pursuant
to section 1 of P.L.2018, c.67 (C.18A:7F-70).

���� c.���� Notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67
et al.), or any other law, rule, or regulation to the contrary, an SDA district
that is spending above adequacy as calculated pursuant to section 1 of P.L.2018,
c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid that
exceeds the amount by which the district is spending above adequacy.

����� 11. (New
section)� In developing the Educational Adequacy Report to be issued next
following the date of enactment of
P.L. , c. (C. )
(pending before the Legislature as this bill), the Commissioner of Education
shall engage a diverse group of stakeholders to review:

����� a.�� the
calculation of local share pursuant to section 10 of P.L.2007, c.260
(C.18A:7F-52) and whether the metrics used in that calculation are best able to
estimate a district�s ability to pay for the costs of education through local
revenue, in addition to ensuring that the calculation of local share accurately
assesses a district�s ability to levy funds on the basis of residents�
purchasing power;

����� b.�� the
abilities of the Department of Education and school districts to predict and
anticipate State school aid amounts from year to year;

����� c.�� possible
methods of improving upon the existing preschool funding methodology; and

����� d.�� possible
adjustments to deadlines pertaining to the development, submission, and
adoption of school district budgets.

����� The
commissioner shall publish a summary of the findings and recommendations
resulting from the reviews in the Educational Adequacy Report.

����
12.
� (New section)� a.� There is established the
Special Education Funding Review Task Force.� The purpose of the task force
shall be to assess the effectiveness of State aid provided to support special
education costs, examine the possibility of a tier-based model for special
education funding, make recommendations regarding the implementation of a
tier-based funding model, and provide recommendations for responses to changes
in revenues for special education purposes, including federal revenues.

���� b.��� The task force shall
consist of 11 members, each of whom shall have a background in, or special
knowledge of, the legal, policy, and administrative aspects of special
education in New Jersey, as follows:

���� (1)�� one member appointed by
the President of the Senate;

���� (2)�� one member appointed by
the Speaker of the General Assembly;

���� (3)�� one member appointed by
the Governor;

���� (4)�� one representative from
the New Jersey Education Association;

���� (5)�� one representative from
the New Jersey Principals and Supervisors Association;

���� (6)�� one representative from
the New Jersey School Boards Association;

���� (7)�� one representative from
the New Jersey Association of School Administrators;

���� (8)�� one representative from
the Garden State Coalition of Schools;

���� (9)�� one representative from
the American Federation of Teachers;

���� (10)� one representative from
Great Schools of New Jersey; and

���� (11)� one representative from
the New Jersey Association of School Business Officials.

���� c.���� The appointments to the
task force shall be made within 30 days of the effective date of P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill).� Vacancies
in the membership of the task force shall be filled in the same manner as the
original appointments were made.� Members of the task force shall serve without
compensation but shall be reimbursed for necessary expenditures incurred in the
performance of their duties as members of the task force within the limits of
funds appropriated or otherwise made available to the task force for its
purposes.

���� d.��� The task force shall
organize as soon as practicable, but no later than 30 days following the
appointment of its members.� The task force shall choose a chairperson from
among its members and shall appoint a secretary who need not be a member of the
task force.

���� e.���� The task force shall
hold meetings at the request of the chairperson and shall hold a minimum of
three public meetings, which shall each be held in the northern, central, and
southern regions of the State.� The meetings may take place in-person or through
remote means.� It shall be the purpose of the public meetings to seek input and
gather testimony on the effects of the State�s current method of funding the
costs of special education from education stakeholders including, but not
limited to, education finance experts, special education experts, school
leaders, school business officials, school board members, and members of the
public.

���� f.���� The Department of
Education shall provide stenographic, clerical, and other administrative
assistants, and such professional staff as the task force requires to carry out
its work.� The task force also shall be entitled to call to its assistance and
avail itself of the services of the employees of any State, county, or
municipal department, board, bureau, commission, or agency as it may require
and as may be available for its purposes.

����� 13. (New
section)� The Special Education Funding Review Task Force established pursuant
to section 12 of P.L. c. (C. )
(pending before the Legislature as this bill) shall issue a final report
detailing its findings and recommendations to the Governor, and to the
Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no later
than one year after the organization of the task force.� The report shall be
posted in a prominent location on the Internet website of the Department of
Education.

����� 14.�
Sections 1, 3, 5 through 7, and 10 of this act shall take effect immediately
and shall first apply to the first full school year following the date of
enactment.� Sections 2, 8, 9, and 11 through 13 of this act shall take effect
immediately.� Section 4 of this act shall take effect immediately and shall
first apply to the Educational Adequacy Report to be issued next following the
date of enactment.� The Special Education Funding Review Task Force shall
expire 30 days after the issuance of the report required pursuant to section 13
of this act.

STATEMENT

���� This bill makes various
changes to special education aid and the Educational Adequacy Report. The bill
also establishes the Special Education Funding Review Task Force.

���� The bill requires the
Department of Education to make available on the department�s Internet website
the calculation of aid payable to each school district in the succeeding year
in a user-friendly manner, including explanations of the variables used to determine
the district�s aid. The information is required to be posted each year within
two days of the Governor�s Budget Message.

���� Additionally, the bill makes
certain changes to the Educational Adequacy Report, which is submitted to the
Legislature every three years to update the various parameters used to
calculate State aid to school districts. Pursuant to the bill, the Commissioner
of Education may initiate a review of certain elements of the school funding
formula, including the metrics for adjusting costs in intervening years between
reports. Additionally, the bill requires that a draft of the Educational
Adequacy Report be made available for public comment for at least 30 days,
during which time members of the public may provide remarks on the draft report
at public hearings to be held at various locations across the State and through
the submission of written and electronic testimony.

���� During the development of the
next Educational Adequacy Report following enactment of this bill, the
commissioner is required to engage a diverse group of stakeholders to review
and make recommendations concerning: the calculation of a district�s local share
and whether the metrics used are best able to estimate a district�s potential
adjusted tax levy; the abilities of the Department of Education and school
districts to predict and anticipate State school aid amounts from year to year;
possible methods of improving upon the existing preschool funding methodology;
and possible adjustments to deadlines pertaining to the development,
submission, and adoption of school district budgets. The bill requires the
commissioner to publish a summary of the findings and recommendations in the
Educational Adequacy Report.

���� Additionally, the bill
establishes reduction adjustment aid to ensure that the amount of State school
aid provided to a school district is not decreased by more than two percent of
the district�s prebudget year total operating budget. The total operating budget
is defined as the sum of a district�s general fund revenues from local sources,
State sources, federal sources, and other sources, less any withdrawals from
reserve accounts and reimbursements for extraordinary special education aid.

���� The bill also establishes
certain municipal overburden protections to prevent a school district from
receiving a reduction in State school aid. Pursuant to the bill, an SDA
district would not be subject to a reduction in State school aid if it is
located in a municipality in which the equalized total tax rate is greater than
the Statewide average equalized total tax rate for the most recently available
calendar year and if the district is spending below adequacy. In the case of a
school district other than an SDA district, the district would not be subject
to a reduction in State school aid if it is located in a municipality in which
the equalized total tax rate is at least 10 percent greater than the Statewide
average equalized total tax rate for the most recently available calendar year
and is spending at least 10 percent below adequacy. These municipal overburden
protections would also apply to a regional school district if 50 percent or
more of the district�s constituent districts or municipalities met either of
the aforementioned qualifying criteria. An SDA district that is spending above
adequacy would not be subject to a reduction in State school aid that exceeds
the amount by which the district is spending above adequacy.

���� Additionally, the bill
provides that the amount of vocational expansion stabilization aid received by
a county vocational school district would be adjusted to allow for increases in
resident enrollment. The adjustment would equal the number of additional
students enrolled in the district multiplied by the additional cost per pupil
for county vocational school districts and the geographic cost adjustment.

���� The bill also changes how
special education aid to school districts is calculated. Under the provisions
of the �School Funding Reform Act of 2008,� the State provides special
education aid to school districts using the census-based method. Under this
method, districts receive funding for special education based on the assumption
that a fixed percent of the total student population requires special education
services, rather than using the actual number of special education students to
determine the amount of State aid that school districts will receive. This bill
eliminates the use of the census-based methodology and calculates State aid for
special education based on the actual number of special education students
included in the district�s resident enrollment.

���� Under current law, a school
district is reimbursed for certain special education costs in the form of
extraordinary special education aid. However, in recent years the State�s
appropriation for extraordinary special education aid has covered only a portion
of eligible costs provided in state, with the percentage covered fluctuating
from year to year. The bill requires the State to increase the appropriation
from year to year, or otherwise ensure that the percentage of a school
district�s costs reimbursed through extraordinary special education aid
increases compared to the previous fiscal year.

���� Finally, the bill establishes
the Special Education Funding Review Task Force for the purpose of assessing
the effectiveness of State aid provided to support special education costs,
examining the possibility of a tier-based model for special education funding,
making recommendations regarding the implementation of a tier-based funding
model, and providing recommendations for responses to changes in special
education revenues, including federal revenues. The task force would consist of
11 members, each of whom is to have a background in, or special knowledge of,
the legal, policy, and administrative aspects of special education in New
Jersey. The task force is required to issue a final report detailing its
findings and recommendations to the Governor and the Legislature no later than
one year after the organization of the task force.