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Ed Law Center - How did Newark's "budget crisis" come about


Severe Staff and Program Cuts Deprive Students of a Thorough and Efficient Education

A new Education Law Center research brief shows how Governor Chris Christie's refusal to fund the State school aid formula, while allowing rapid charter school growth, has put the Newark Public Schools (NPS) in a condition of chronic fiscal distress. The ongoing NPS budget crisis has resulted in several years of teacher, support staff and program cuts in district schools, depriving students of the resources needed to achieve State academic standards and denying their right to a thorough and efficient education.

To address the NPS budget crisis and ensure all district students have the opportunity to succeed, ELC recommends that Governor Christie and the State Legislature begin making up NPS's state aid shortfalls in the FY17 State Budget and temporarily halt charter school expansion in the State-operated district until the budget can be stabilized.

The ELC research brief identifies two interrelated factors as the cause of the NPS budget crisis:

·       Governor Christie's refusal to fund the School Funding Reform Act (SFRA) - New Jersey's weighted school aid formula - has had a substantial negative impact on the NPS budget over the last few years. In 2015-16, the annual NPS state aid shortfall under the SFRA reached $132 million.

·       The rapid growth of Newark charter schools permitted by the NJ Department of Education (NJDOE) has resulted in a 375% increase in payments to charter schools from the NPS budget, from $60 million in 2008-09 to $225 million in 2015-16. While payments to charters have risen dramatically, NPS has had to cope with a growing concentration of students requiring additional resources, including students with disabilities and English language learners (ELL). In addition, the Legislature, through the State Budget and going beyond the State's charter school law, has forced NPS to send millions in extra funds to Newark charters, further exacerbating the fiscal crisis.

As a result of these two factors, NPS has been forced to enact draconian cuts to balance the district budget over the last three years. Total NPS spending per student fell by nearly $3,000 between 2008-09 and 2014-15, from $21,179 to $18,208. ELC's analysis of this spending cut shows:

·       Half of the spending cut impacted regular instruction in NPS schools, including classroom teachers, curriculum and supplies.

·       NPS made drastic cuts to support services in schools, including media and library services and support staff, such as attendance and social workers and guidance counselors.

·       While the special education classification rate grew from 14% to 17% in NPS schools, spending per classified student declined by $4,425.

·       The percentage of ELLs grew from 9% to 11%, and spending per ELL student fell by $1,412.

·       Between 2012-13 and 2014-15, NPS lost 390 certificated staff, including 196 teachers in "core" subjects, 19 art and music teachers, 85 resource program and supplementary instruction positions, and 49 educational services positions, including psychologists, social workers, librarians, counselors and nurses.

In comparison to other districts, NPS is now one of the lowest spending in the state. When adjusted for the higher cost of educating at-risk and ELL students under the SFRA funding formula, NPS spending per pupil in 2008-09 was higher than 65% of districts statewide. By 2014-15, only 13% of districts spent more than NPS. The NPS budget is now far below the level NJDOE deems adequate under the SFRA.

The budget crisis is also a factor in NPS's failure to make any progress in evaluating and placing children in special education in a timely manner, as mandated by a federal court settlement reached with ELC over three years ago. As a result of severe cuts to special education, it is difficult for the NPS budget to support the child study teams and other personnel needed to comply with the terms of the settlement.

The ELC research brief also notes that several Newark charters in September asked Commissioner of Education David Hespe to approve large expansions in the coming years. The national KIPP charter chain alone is seeking to triple its enrollment to nearly 9,000 students while adding six new charter schools. If approved by the Commissioner, this further charter growth will not only continue, but will worsen, the NPS budget crisis.

In addition to increasing funding through the SFRA formula and temporarily halting charter expansion, the policy brief also recommends:

·       That the City of Newark increase local property tax revenue for NPS up to the allowable limits;

·       That the Legislature end the practice of giving Newark charters extra funds in the State Budget; and

·       That Commissioner Hespe direct Newark charters to subtract any budget surplus in excess of 2% from NPS's 2016-17 charter payments.

"The Newark Public Schools budget is unsustainable and requires immediate corrective action to ensure all Newark school children, in district and in charter schools, receive the thorough and efficient education to which they are entitled," said David Sciarra, ELC Executive Director. "Commissioner Hespe must put in place a plan to immediately halt the rapid decline in resources necessary to support learning in district classrooms and provide critical support services to meet the needs of students with disabilities, ELLs and other students with special needs."

"The steps we have outlined will help stop the year-to-year budgetary declines and begin to allow NPS to restore essential resources in its schools," Mr. Sciarra added. "The Commissioner cannot continue to look the other way as the consequences of State decisions on school funding and charters severely erode educational opportunities for all Newark students."

Education Law Center Press Contact:

Sharon Krengel

Policy and Outreach Director

973-624-1815, x 24

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