New Jersey school districts will not see their state aid decreased by more than 3% this year, state officials announced in a memo sent Tuesday.
The cap on cuts is in stark contrast to last year when some school districts saw double digit decreases as the state fully implemented a new school funding formula.
The memo sent to school districts Tuesday outlines the state funding reduction cap districts can expect for total state funding when creating their 2026 fiscal year budgets.
“This limit will apply to the four primary aid categories — equalization, special education, security, and transportation aid as calculated under the ‘School Funding Reform Act of 2008,’" the memo said.
Other aid categories, including choice funding, military impact aid, county vocational stabilization aid and educational adequacy aid, are determined through factors like enrollment, and are not included in the cap, officials said.
It is unclear if the aid categories excluded from the 3% cap might mean larger total decreases for some school districts. School districts typically learn how much they are slated to get under the governor’s proposed budget within the next few weeks.
Gov. Phil Murphy‘s office and the state Department of Education did not immediately respond to a request for comment.
One education advocate had a mixed reaction to the news of the cap on school funding cuts, saying the cap “portends difficult times” for districts that might receive the full 3% reduction.
“This is disheartening for all, but especially so for districts that have suffered severe cuts for the past seven years,” said Betsy Ginsburg, the executive director of the Garden State Coalition of Schools, a group that represents about 100 districts.
District officials will adjust their budgets and hold difficult conversations with staff over the next few weeks, which will be particularly difficult in light of uncertainty for education at the federal level, she said.
“Despite this news, we commend Acting Commissioner Dehmer for providing us with this information ahead of the Governor’s budget speech, allowing districts extra time to address potential shortfalls,” said Ginsburg. “We in the education space will be navigating troubled waters in the weeks and months ahead.”
School funding has long been a contentious issue in New Jersey.
Districts in the state all receive different amounts of state aid based on enrollment, poverty levels, the tax base of the community and a myriad of other factors.
Under a heavily debated revised school funding formula enacted under then-Gov. Chris Christie, some districts have seen their aid decrease over the years as the state adjusted numbers to match the new formula.
Although the formula was passed more than 15 years ago, the 2025 state budget was the first time it was fully funded, state officials said.
Districts with growing enrollment may see more state dollars while those losing students may get less state aid. Districts may also gain aid if their tax base is weakening or lose state aid if there’s growth in the local economy.
Some school districts facing cuts say the formula is unfair.
Under the $11.7 billion school funding plan Murphy proposed for the 2025 state budget, 442 school districts saw an increase in state aid. Meanwhile, 140 districts saw a decrease, with some losing millions of dollars.
Some of those districts announced teacher layoffs, cuts to busing and the closing of schools after the cuts to state aid.
Some school districts lost more than 50% of their state aid, including Runnemede in Camden County, Bass River in Burlington County and Cape May Point in Cape May County. Some of the districts that lost the most money are non-operating school districts that pay to send all of their students to schools in neighboring towns.
Murphy will unveil his proposed 2026 fiscal year budget Tuesday.
Stories by Brianna Kudisch
Our journalism needs your support. Please subscribe today to NJ.com.
Brianna Kudisch may be reached at bkudisch@njadvancemedia.com.