"Fully Funding Schools and Cutting Property Taxes Act"; repeals certain sections of law; requires additional aid to lower property taxes commensurate with residents' ability to support schools; appropriates $2.9 billion.

S4482

SENATE, No. 4482

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 22, 2026

Sponsored by:

Senator� CARMEN F. AMATO, JR.

District 9 (Ocean)

SYNOPSIS

���� "Fully Funding Schools and Cutting Property
Taxes Act"; repeals certain sections of law; requires additional aid to
lower property taxes commensurate with residents' ability to support schools;
appropriates $2.9 billion.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning State school aid, supplementing P.L.2007,
c.260 (C.18A:7F-43 et al.), revising various parts of the statutory law, and
making an appropriation.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� (New section)� Sections 2,
3, and 4 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill) shall be known and may be cited as the �Fully Funding Schools and
Cutting Property Taxes Act.�

���� 2.� (New section)� a.� In the
2023-2024 school year and each school year thereafter, a school district or
county vocational school district shall receive State school aid in such
amounts to ensure that the district receives the greatest of:

���� (1) the amount of equalization
aid, special education categorical aid, security categorical aid, and
transportation aid as calculated for the district 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; or

���� (2)� the amount of
equalization aid, special education categorical aid, security categorical aid,
and transportation aid as calculated for the district 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, and, if applicable,
the amount of aid received pursuant to subsection a. of section 3 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill); or

���� (3)� the amount of the
district�s State school aid received in any of the school years between and
including the 2017-2018 school year and the 2022-2023 school year.

���� b. In the 2023-2024 school
year and each school year thereafter, a school district or county vocational
school district may petition the Commissioner of Education and the State Treasurer
to receive any amount of State school aid in addition to the amount of State
school aid determined pursuant to this section, provided that the district
demonstrates that its adjusted tax levy for the budget year will be reduced
from the prebudget year adjusted tax levy in an amount equal to the amount of
additional State school aid approved by the Commissioner of Education and the
State Treasurer under this subsection and any other increase in State school
aid received above State school aid received in the prebudget year.

���� 3.� (New section) a. In
addition to the amount of State school aid provided to a school district
pursuant to P.L.2007, c.260 (C.18A:7F-43 et al.) in the 2023-2024 school year,
a school district that meets the criteria set forth in subsection b. of this section
shall receive an amount of State school aid in the 2023-2024 school year that
is equal to the total amount of reductions experienced by the district in any
of the school years 2018-2019 through 2022-2023.

���� b.� The provisions of this
section shall apply to any school district that experienced a State aid
reduction during any of the school years 2018-2019 through 2022-2023 because:

���� (1)� it had a State aid ratio
in the 2017-2018 and 2018-2019 school years greater than 1.00, as determined in
accordance with the provisions of the fiscal year 2019 appropriations act;

���� (2)� it had a State aid ratio
for the 2017-2018 school year that was less than 1.00 and a State aid ratio for
the 2018-2019 school year that was greater than 1.00, as determined in
accordance with the provisions of the fiscal year 2019 appropriations act; or

���� (3)� it had a State aid
differential that was positive in any of the school years 2019-2020 through
2022-2023.

���� c.� As used in this section:

���� �Non-SFRA aids� means the sum
of supplemental enrollment growth aid, per pupil growth aid, PARCC readiness
aid, professional learning community aid, under adequacy aid, and host district
support aid received by a school district in the prebudget year.

���� �State aid differential� means
the difference between the sum of a school district's allocations of
equalization aid, special education categorical aid, security categorical aid,
transportation aid, adjustment aid, and non-SFRA aids in the prebudget year,
and the sum of equalization aid, special education categorical aid, security
categorical aid, and transportation aid as calculated for the budget year in
each category 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.

���� �State aid ratio� means total
State aid divided by the sum of equalization aid, special education categorical
aid, security categorical aid, and transportation aid as calculated for the
budget year in each category 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 for the corresponding school year.

���� 4.� (New section)� a.� Notwithstanding
the provisions of this subsection or of any other law, rule, or regulation to
the contrary, a school district that receives an increase in State school aid
compared to the prior school year shall reduce its budget and adjusted tax levy
in an amount equal to the increase in State school aid, provided that the total
adjusted tax levy of the municipality or municipalities, as the case may be,
comprising the school district is more than five percent of the district income
as defined in section 3 of P.L.2007, c.260 (C.18A:7F-45).

���� b.� (1)� Notwithstanding the
provisions of subsection a. of this section or the provisions of section 5 of
P.L.1996, c.138 (C.18A:7F-5), section 3 of P.L.2007, c.62 (C.18A:7F-38),
section 4 of P.L.2007, c.62 (C.18A:7F-39), or any other law, rule, or regulation
to the contrary, in the 2023-2024 school year and each school year thereafter,
the adjusted tax levy of a school district subject to the provisions of
subsection a. of this section may only increase by an amount necessary to cover
an increase in per pupil administrative costs, subject to the limitations in
per pupil administrative costs established pursuant to subsection c. of section
5 of P.L.1996, c.138 (C.18A:7F-5), provided that the adjusted tax levy is first
reduced pursuant to subsection a. of this section.

���� (2)� Notwithstanding the
provisions of this subsection or of any other law, rule, or regulation to the
contrary, a school district subject to the provisions of this subsection may
increase its budget or adjusted tax levy to cover deferred revenue.

���� (3)� A school district subject
to the provisions of this subsection may submit to the voters at the annual
school election or on such other date as is set by regulation of the
commissioner, a proposal or proposals to increase the adjusted tax levy by more
than the allowable amount authorized pursuant to paragraph (1) of this
subsection, in accordance with the provisions of section 4 of P.L.2007, c.62
(C.18A:7F-39).

���� c. �A school district that
receives an increase in State school aid compared to the prior school year shall
not be subject to the provisions of subsection a. of this section if the total
adjusted tax levy of the municipality or municipalities, as the case may be,
comprising the school district is less than five percent of the district income
as that term is defined pursuant to section 3 of P.L.2007, c.260 (C.18A:7F-45).
Notwithstanding the provisions of this subsection or of any other law, rule, or
regulation to the contrary, a school district that receives an increase in
State school aid and meets the criteria set forth in subsection b. of section 3
of P.L. , c. (C. )
(pending before the Legislature as this bill) shall be subject to the
provisions of subsection a. of this section beginning in the 2024-2025 school
year, provided that the district receives an increase in State school aid
compared to the prior school year and the total adjusted tax levy of the
municipality or municipalities, as the case may be, comprising the school
district is more than five percent of the district income defined pursuant to
section 3 of P.L.2007, c.260 (C.18A:7F-45).

���� 5.� Section 3 of P.L.2007,
c.62 (C.18A:7F-38) is amended to read as follows:

���� 3. a. Notwithstanding the
provisions of any other law to the contrary, a school district shall not adopt
a budget pursuant to sections 5 and 6 of P.L.1996, c.138 (C.18A:7F-5 and
18A:7F-6) with an increase in its adjusted tax levy that exceeds, except as provided
in subsection e. of section 4 of P.L.2007, c.62 (C.18A:7F-39), the tax levy
growth limitation calculated as follows: the sum of the prebudget year adjusted
tax levy and the adjustment for increases in enrollment multiplied by 2.0
percent, and adjustments for an increase in health care costs, increases in
amounts for certain normal and accrued liability pension contributions set
forth in sections 1 and 2 of P.L.2009, c.19 amending section 24 of P.L.1954,
c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15) for the year
set forth in those sections,
[
in
the case of an SDA district as defined pursuant to section 3 of P.L.2000, c.72
(C.18A:7G-3), during the 2018-2019 through the 2024-2025 school years,
increases to raise a general fund tax levy to an amount that does not exceed
its local share,
]

and, in the case of a school district first receiving preschool education aid
in the 2025-2026, 2026-2027, or 2027-2028 school years and participating in the
pilot program established by the commissioner pursuant to subsection h. of
section 12 of P.L.2007, c.260 (C.18A:7F-54), increases to raise a general fund
tax levy for the local share of preschool education costs.

���� b. (1) The allowable
adjustment for increases in enrollment authorized pursuant to subsection a. of
this section shall equal the per pupil prebudget year adjusted tax levy
multiplied by EP, where EP equals the sum of:

���� (a)�� 0.50 for each unit of
weighted resident enrollment that constitutes an increase from the prebudget
year over 1%, but not more than 2.5%;

���� (b)�� 0.75 for each unit of
weighted resident enrollment that constitutes an increase from the prebudget
year over 2.5%, but not more than 4%; and

���� (c)�� 1.00 for each unit of
weighted resident enrollment that constitutes an increase from the prebudget
year over 4%.

���� (2)�� A school district may
request approval from the commissioner to calculate EP equal to 1.00 for any
increase in weighted resident enrollment if it can demonstrate that the
calculation pursuant to paragraph (1) of this subsection would result in an
average class size that exceeds 10% above the facilities efficiency standards
established pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.).

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

���� d. (1) The allowable
adjustment for increases in health care costs authorized pursuant to subsection
a. of this section shall equal that portion of the actual increase in total
health care costs for the budget year, less any withdrawals from the current expense
emergency reserve account for increases in total health care costs, that
exceeds 2.0 percent of the total health care costs in the prebudget year, but
that is not in excess of the product of the total health care costs in the
prebudget year multiplied by the average percentage increase of the State
Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually
determined by the Division of Pensions and Benefits in the Department of the
Treasury.

���� (2) The allowable adjustment
for increases in the amount of normal and accrued liability pension
contributions authorized pursuant to subsection a. of this section shall equal
that portion of the actual increase in total normal and accrued liability pension
contributions for the budget year that exceeds 2.0 percent of the total normal
and accrued liability pension contributions in the prebudget year.

���� (3)
[
In the case of an SDA district,
as defined pursuant to section 3 of P.L.2000, c.72 (C.18A:7G-3), in which the
prebudget year adjusted tax levy is less than the school district's prebudget
year local share as calculated pursuant to section 10 of P.L.2007, c.260
(C.18A:7F-52), the allowable adjustment for increases to raise a tax levy that
does not exceed the school district's local share shall equal the difference
between the prebudget year adjusted tax levy and the prebudget year local
share.
]

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

���� (4) In the case of a school
district first receiving preschool education aid in the 2025-2026, 2026-2027,
or 2027-2028 school years and participating in the pilot program established by
the commissioner pursuant to subsection h. of section 12 of P.L.2007, c.260
(C.18A:7F-54), the allowable adjustment for increases to raise a general fund
tax levy for the local share of preschool education costs shall be equal to the
actual increase required to provide preschool education under the pilot program
less State aid provided pursuant to subsection h. of section 12 of P.L.2007,
c.260 (C.18A:7F-54).

���� A school district first
receiving preschool education aid in the 2025-2026 school year and
participating in the pilot program established by the commissioner pursuant to
subsection h. of section 12 of P.L.2007, c.260 (C.18A:7F-54) may, prior to the
delivery of tax bills pursuant to R.S.54:4-64, recertify to the county board of
taxation the sum to be raised in the district during the ensuing school year if
the change in the amount to be raised is equal to the district's local share of
preschool education costs for that school year.

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

���� f.���� The adjusted tax levy
shall be increased or decreased accordingly whenever the responsibility and
associated cost of a school district activity is transferred to another school
district or governmental entity.

(cf: P.L.2025, c.100, s.3)

���� 6.� Section 4 of P.L.2007,
c.62 (C.18A:7F:39) is amended to read as follows:

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

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

���� c. A school district may
submit to the voters at the annual school election, or on such other date as is
set by regulation of the commissioner, a proposal or proposals to increase the
adjusted tax levy by more than the allowable amount authorized pursuant to
section 3 of P.L.2007, c.62 (C.18A:7F-38)
or pursuant to paragraph (1) of subsection
b. of section 4 of P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill)
. The proposal or proposals to increase the adjusted tax levy
shall be approved if a majority of people voting shall vote in the affirmative.
In the case of a school district with a board of school estimate, the
additional adjusted tax levy shall be authorized only if a quorum is present
for the vote and a majority of those board members who are present vote in the
affirmative to authorize the additional adjusted tax levy.

���� A school district without a
board of school estimate may submit to the voters at a special school election
authorized pursuant to section 2 of P.L.1995, c.278 (C.19:60-2), a proposal or
proposals to increase the adjusted tax levy for the subsequent school budget
year by more than the allowable amount authorized pursuant to section 3 of
P.L.2007, c.62 (C.18A:7F-38).� A proposal submitted at a special election shall
comply with the requirements of this subsection and of paragraph (9) of
subsection d. of section 5 of P.L.1996, c.138 (C.18A:7F-5).� A 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 subsection 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.

���� In the case of a school
district in which the annual school election has been moved to November
pursuant to subsection a. of section 1 of P.L.2011, c.202 (C.19:60-1.1), the
school district may submit a separate proposal for additional funds for the
budget year, or a separate proposal for additional funds for the subsequent
budget year, or separate proposals for additional funds for each of those
budget years.� In the event that a school district submits a separate proposal
for additional funds for the subsequent budget year and the separate proposal
is approved, the school district shall not add to its adjusted tax levy for the
subsequent budget year any amount authorized pursuant to subsection e. of this
section.

���� (1)�� A proposal or proposals
submitted to the voters or the board of school estimate to increase the tax
levy pursuant to this subsection shall not include any programs or services
necessary for students to achieve the core curriculum content standards.

���� (2)�� All proposals to
increase the tax levy submitted pursuant to this subsection shall include
interpretive statements specifically identifying the program purposes for which
the proposed funds shall be used and a clear statement on whether approval will
affect only the current year or result in a permanent increase in the levy. The
proposals shall be submitted and approved pursuant to sections 5 and 6 of
P.L.1996, c.138 (C.18A:7F-5 and 18A:7F-6).

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

���� e.���� A school district that
has not been granted approval to exceed the cap
under section 3 of P.L.2007,
c.62 (C.18A:7F-38),
pursuant to subsection c. of this section may add to
its adjusted tax levy in any one of the next three succeeding budget years the
amount of the difference between the maximum allowable amount to be raised by
taxation for the current school budget year and the actual amount to be raised
by taxation for the current school budget year.�
A school district that has
not been granted approval to exceed the cap under paragraph (1) of subsection
b. of section 4 of P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill) may, pursuant to subsection c. of this section, add to its
adjusted tax levy the amount of the difference between the maximum allowable
amount to be raised by taxation for the current school budget year and the
actual amount to be raised by taxation for the current school budget year,
provided that the sum of the amount of State school aid and the adjusted tax
levy is less than the adequacy budget calculated pursuant to section 9 of P.L.2007,
c.260 (C.18A:7F-51).

(cf: P.L.2025, c.234, s.6)

���� 7.� Section 11 of P.L.2007,
c.260 (C.18A:7F-53) is amended to read as follows:

���� 11.� Each school district's
and county vocational school district's equalization aid shall be calculated as
follows:

���� EQAID = AB - LSHARE provided
that EQAID shall not be less than zero; and

where

���� AB is the district's adequacy
budget calculated pursuant to section 9 of
[
this
act
]

P.L.2007,
c.260 (C.18A:7F-51)
; and

���� LSHARE is the district's local
share calculated pursuant to section 10 of
[
this
act
]

P.L.2007,
c.260 (C.18A:7F-52)
.

���� Each district's equalization
aid for general fund expenses shall be expended to provide a thorough and
efficient system of education consistent with the core curriculum content
standards established pursuant to section 4 of
[
this act
]

P.L.2007
,c.260 (C.18A:7F-46)
.

����
A district�s equalization
aid shall include such additional amounts as may be necessary to ensure that
the district is funded at the amount of its adequacy budget, after
consideration of the adjusted tax levy and all other amounts of State school
aid to which the district is entitled, provided that the total adjusted tax
levy of the municipality or municipalities, as the case may be, comprising the
school district is more than five percent of the district income as defined in
section 3 of P.L.2007 , c.260 (C.18A:7F-45).

���� A school district may make an
appeal to the commissioner on the amount of its equalization aid on the basis
that the calculation of income within the local share formula under section 10
of
[
this
act
]

P.L.2007, c.260 (C.18A:7F-52)

does not accurately reflect the district's income wealth.

(cf: P.L.2007, c.260, s.11)

���� 8. �There is appropriated from
the Property Tax Relief Fund to the Department of Education the sum of $2,946,618,000
for the purposes of providing additional State school aid in the 2023-2024
school year. Notwithstanding the provisions of any law, rule, or regulation to
the contrary and subject to the approval of the Director of the Division of
Budget and Accounting, any unexpended balances from this appropriation are
appropriated to the Schools Development Authority for the purposes of
supporting school facilities projects and supporting emergent needs and capital
maintenance in school districts.

���� 9.� The following sections are
repealed:

���� Section 2 of P.L.2018, c.67
(C.18A:7F-5d);

���� Section 3 of P.L.2018, c.67
(C.18A:7F-67); and

���� Section 4 of P.L.2018, c.67
(C.18A:7F-68).

���� 10.� This act shall take
effect immediately.

STATEMENT

���� The bill is to be known as the
�Fully Funding Schools and Cutting Property Taxes Act.� The bill requires that,
beginning with the 2023-2024 school year, State school aid will be provided to
school districts at levels consistent with the School Funding Reform Act of
2008 (SFRA) up to their adequacy budget, and prevents future cuts to State aid.
It also requires a school district to reduce its tax levy in an amount equal to
any increase in State school aid above the prior budget year under certain
circumstances, allowing the district to subsequently increase its levy from a
lower level than the prior budget year.

���� It is the sponsors� intent to
bring equity to New Jersey�s school system by increasing State aid
contributions to SFRA adequacy budget levels in a manner consistent with the
�thorough and efficient� education clause in the State Constitution (N.J.
Const. art. VIII, sec. 4, par.1). Providing school aid in this manner will
reduce property taxes based on the ability of each school district�s residents
to support schools.

���� The bill repeals certain
sections of law enacted as part of P.L.2018, c.67 (commonly referred to �S2�)
that resulted in loss of aid and higher property taxes in certain school
districts.

���� The bill requires the State to
provide aid to school districts equal to the greatest amount of:

�

aid according to the SFRA;

�

aid according to the SFRA and, if applicable, additional aid to
provided to school districts that lost funding as a result of the
implementation of S2; or

�

State school
aid received in any of the school years between and including the 2017-2018
school year and the 2022-2023 school year.

���� Under the bill, a district may
petition the Commissioner of Education and State Treasurer for additional aid
if it demonstrates a willingness to reduce its adjusted tax levy by an amount
equal to any additional aid received.

���� The bill requires a school
district to reduce its school tax levy by the same amount of their State school
aid increase above the prior year if the total tax levy of the municipality or
municipalities comprising the district is more than five percent of school
district income. After lowering its levy commensurate with a State aid
increase, a school district may increase its levy by an amount necessary to
cover an increase in per pupil administrative costs and deferred revenue. The
bill requires a district to submit a proposal to voters of the district if it
wishes to exceed this limitation. If the voters do not approve the proposal, a
school district may add to its adjusted tax levy the difference between the
maximum amount to be raised by taxation for the current budget year and the
actual amount to be raised by taxation for the current school year if the
amount of State school aid and the adjusted tax levy is below the adequacy
budget in the next three succeeding budget years.

���� Lastly, the bill appropriates
$2,946,618,000 for the purposes of providing additional aid under the bill. The
bill stipulates that any unexpended balances are appropriated to the Schools
Development Authority for the purposes of supporting school facilities projects
and supporting emergent needs and capital maintenance in school districts.