NJ school aid plan cuts funding for 167 districts

🍎 Gov. Sherrill proposes record $12.4B in school aid — but many districts still lose funding

💰 Aid increases capped at 6% and cuts at 3%, drawing criticism from both sides

🏫 Funding battles already hitting towns with school closures, lawsuits

TRENTON — Gov. Mikie Sherrill is proposing a record $12.4 billion in state aid for K-12 schools but the plan will do little to allay critics of the opaque funding formula — or the districts that would lose out.

The proposed funding — part of Sherrill’s fiscal year 2027 budget — would increase school aid by $372 million statewide, while capping reductions so no district loses more than 3% of its aid. This cap saves districts from having to lose another $188.4 million in aid.

On the other end, the governor's plan also caps increases to more than 6%, which critics say shortchanges districts that were long overdue for their fair share.

Under Sherrill's first proposal, 167 school districts would get less than last year. Three dozen will see increases in the multi-millions, including a staggering $60.6 million to Newark, the state's largest district. Newark's state aid haul would amount to more than $1.38 billion.

State officials say the increase is designed to stabilize a funding formula that has caused dramatic swings in recent years.

“My budget is focused on ensuring kids in New Jersey have access to the best education and brightest possible future,” Sherrill said in announcing the plan on Thursday.

Biggest winners and losers in school funding

The largest aid increases again go mostly to major urban districts. Officials say the increases reflect factors such as poverty levels, enrollment and updated special-education counts. But the numbers also reinforce a long-running debate over how state aid is distributed.

👇 See the top winners and losers in the list below.

State Sen. Declan O'Scanlon, R-Monmouth, said the 6% cap means many districts that have been left behind in the past will get less than what the formula says they should receive. And other districts that should have lost more are sheltered by the 3% cap on cuts.

“Now that the formula would finally deliver long-overdue increases to districts that were shortchanged, the state budget overrides the formula to artificially cap the aid increases they are rightfully due," O'Scanlon said, promising to "fight like hell for fairness that is missing from this budget for our schools, towns, and taxpayers.”

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Top winners & losers in Gov. Sherrill's first school aid proposal

Critics say the formula is costly and unfair

A report last month by the Garden State Initiative argues New Jersey’s school funding system is one of the most expensive in the country.

According to the report:

🍎 New Jersey ranks third nationally in K-12 spending, at about $26,990 per student.

🍎 The state also has the highest property taxes per capita in the U.S.

🍎 More than 50% of state education aid flows to just 22 districts out of nearly 600.

Researchers say the system, built around the School Funding Reform Act of 2008, still suffers from transparency problems and volatile year-to-year aid changes.

For example, districts with similar poverty levels can receive vastly different amounts of funding per student. One comparison cited in the report shows Newark receiving about $26,632 per student, compared with $22,942 in Jersey City and $19,437 in North Bergen, despite similar poverty rates.

The group also argues annual changes in state aid often don’t match enrollment trends, leaving school leaders scrambling to finalize budgets after state funding numbers arrive.