Topic Category: Economic Justice

State Takeover of Camden Schools Did Not Improve Students’ Academic Performance

Posted on by Michael Hayes

On March 25, 2013, New Jersey Governor Chris Christie announced that the state would take over the Camden City School District, making Camden the fourth New Jersey district to come under state control following Jersey City (1989), Paterson (1991), and Newark (1995). Under state takeover, the Camden school board was relegated to advisory status to a state-appointed superintendent, who assumed the powers customarily held by the board of education and reported directly to the state commissioner of education.[i]

Over the subsequent eight years, the state implemented substantial changes in the district, some despite community opposition. These changes included closing eight Camden public schools and eliminating more than a thousand teaching and other staff positions.[ii] In June 2021, another three public schools are slated to close and up to 75 additional positions may be eliminated.[iii]

This report examines the impact of the state’s takeover on students’ standardized test scores, the criteria used most consistently by Camden’s state-appointed superintendents to gauge performance. The analysis finds no evidence that state control of the district improved standardized test scores in Camden.

State Takeover’s Impact on the Composition of Camden School Enrollment

At the time of the takeover, 76 percent of Camden residents attending publicly funded schools were enrolled in the Camden City School District, with the remaining 24 percent enrolled in Camden-based charter schools. In September 2014, a new type of school opened in Camden, renaissance schools, which were managed by three charter school networks under long-term contracts with the district.[iv] By the 2019-20 academic year, Camden district enrollment had dropped to 41 percent, while renaissance school enrollment increased substantially to 32 percent, and traditional charter school enrollment increased slightly to 27 percent.[v]

State Takeover’s Impact on Camden Student Performance

This analysis of the impact of the state takeover on students’ standardized test scores combines data from district, renaissance, and traditional charter schools. This was done to reflect the large percentage of Camden students enrolled in renaissance and traditional charter schools and the ongoing movement of Camden students among the three types of publicly funded schools.[vi]

To estimate the impact of the state takeover on student test scores, this analysis examines the pattern of Camden student scores before and after the takeover against those from comparable school districts to separate the effect of the takeover from general trends that could impact test performance, such as changes to the standardized tests or broader economic conditions that reduce poverty.

Figures 1 and 2 illustrate the math and English Language Arts (ELA) standardized test scores of Camden’s district, renaissance, and traditional charter school students versus those of three separate comparison groups in the years before and after the state takeover. The solid vertical line indicates the 2012-13 school year, which was the last school year before the state government fully took over the Camden City School District. To compare test scores across school years, the y-axis represents normalized test scores by converting each school’s test score into standard deviations from the average performing New Jersey school. This change is important because, starting in the 2014-2015 school year, New Jersey switched from using the New Jersey Assessment of Skills and Knowledge (NJASK) standardized assessment to the Partnership for Assessment of Readiness for College and Careers (PARCC).

Figure 1:  3rd and 4th Grade Normalized Test Scores Before and After State Takeover

The first comparison group, represented by the solid black line in the figure, consists of the average scores for all district and charter schools within the three school districts previously taken over by the state (Jersey City, Newark, and Paterson).[vii] The second comparison group, represented by the bold dotted line, comprises all district and charter schools within the original Abbott school districts, which are the state’s historically high-poverty and under-resourced school districts. This group is limited to the original Abbott districts that are still designated as “in-need” and have not previously been taken over by the state government (see Appendix A). The last comparison, represented by the dotted line, is all district and charter schools located within the “type A” or “type B’ district factor group districts – designated by New Jersey as the subset of lowest-income school districts.[viii]

Figure 2: 8th and 11th Grade Normalized Test Scores Before and After State Takeover

Key Findings

Camden City student test scores are lower than those of the three comparison groups in both math and ELA for all years before and after the state takeover. For example, as shown in Figure 1, Camden schools underperformed all other comparison groups in math and ELA in 3rd and 4th grades by more than an entire standard deviation. The only exception to this claim, shown in Figure 2, is for 11th grade ELA, where Camden schools performed better than schools in the existing “takeover” school districts during the years before the state takeover of Camden public schools. However, by the 2011-12 school year, Camden schools were performing worse than all comparison groups, which continued throughout the years after the state takeover.

Camden test scores started to trend in a positive direction even before the state takeover. As shown in Figure 1, Camden had positive growth in standardized test scores for all subjects. However, this steady growth started at least six school years before the state takeover. This suggests that something was happening to the school district before the state takeover that was causing positive trends in 3rd and 4th grade math and reading scores, which could not be attributed to the state takeover. In other words, there is no evidence that the steady growth in 3rd and 4th grade test scores for Camden City schools was the result of the state takeover.

Both Camden City schools and its comparison groups experienced positive spikes in math and ELA in 8th and 11th grades. For example, Figure 2 shows a positive spike in 11th grade ELA test scores for Camden City schools starting in the first year of the state takeover. However, Figure 2 also shows similar positive spikes in 11th grade ELA test scores for the three other comparison groups. This suggests that the Camden City schools’ gains reported in Figure 2 were not unique to Camden City schools because other lower-income schools across the state also experienced similar academic gains in these subjects in the years following the state takeover. Therefore, there is no evidence to suggest that the gains in Camden City schools, reported in Figure 2, resulted from the state takeover. Instead, it is possible that something impacting all low-income schools was causing these academic improvements. For example, Shores and Steinberg find that the Great Recession had the largest negative impact on student achievement for those U.S. school districts serving the most economically disadvantaged students.[ix] Therefore, it is not surprising that Figure 2 reports academic improvements following the Great Recession for many of the highest-poverty schools in the state, not just Camden City schools.

There is No Evidence That the State Takeover Improved Test Scores in Camden

Overall, our results suggest no evidence that the state takeover improved standardized test scores in Camden City schools. These results are particularly concerning because state takeovers disenfranchise district residents. Other studies have found that takeovers also disproportionately impact communities of color.[x] To justify such an intervention, there should be clear evidence of performance gains that could not be achieved under local control. That evidence is absent in Camden.

 

Appendix

Table 1: The List of Abbott Districts (Special Needs Districts) in New Jersey

Panel A: Abbott Districts Eligible for “Special Needs” Re-designation
Asbury Park Bridgeton Camden East Orange
Irvington Keansburg New Brunswick Newark
Orange Passaic Paterson Perth Amboy
Plainfield Pleasantville Salem City Trenton
Union City West New York
   
Panel B: Abbott Districts Not Eligible for “Special Needs” Re-designation
Burlington City Elizabeth Garfield Gloucester City
Harrison Hoboken Jersey City Long Branch
Millville Neptune Pemberton Township Phillipsburg
Vineland

In 2005, the Office of Legislative Service (OLS) conducted an analysis on the 31 Abbott districts to identify those that would continue to be eligible for special needs designation on the basis of their levels of poverty, and those that would be dropped from the original list of special needs districts.[xi] As Camden continued to be eligible for the status, we confine the selection of our control group to that cluster, which is the first panel in the table above. We do not include Paterson or Newark in the “other Abbott districts” comparison group because they are included in the “three existing takeovers” comparison group. 

End Notes

[i] Katz, Matt & Vargas, Claudia (2013, March 25). Christie to announce state takeover of Camden schools, The Philadelphia Inquirer, Pg. A01.

[ii] City of Camden School District Comprehensive Annual Financial Report for fiscal year ending June 30, 2020.

[iii] Bill Duhart (2021, March 5). N.J. city will close 3 schools, but spare a 4th thanks to additional state aid, NJ.com. https://www.nj.com/news/2021/03/nj-city-will-close-3-schools-but-spare-a-4th-thanks-to-additional-state-aid.html.

[iv] New Jersey renaissance schools operate only in Camden.

[v] Camden City Schools District 2016, 2017, 2018, and 2020 budget presentations to the Advisory Board.

[vi] In a forthcoming article, we disaggregate the test scores by type of publicly funded school and by individual renaissance school. The results show no consistent differences in test score trends post takeover between the district, renaissance, and traditional charter schools.

[vii] The Jersey City school district was returned to full local control in 2018; Newark in 2020; and Paterson in 2021.

[viii] The state of New Jersey determines district factor groups by ranking all NJ school districts based on socioeconomic characteristics, and the lowest-ranked school districts (i.e., poorest) are labeled either “type A” or “type B.”

[ix] Kenneth Shores, and Matthew P. Steinberg. (2019). “Schooling During the Great Recession: Patterns of School Spending and Student Achievement Using Population Data”, AERA Open, https://doi.org/10.1177%2F2332858419877431.

[x] Morel, Domingo (2018). Takeover: Race, Education, and Democracy. New York, NY: Oxford University Press.

[xi] The Office of Legislative Services. 2005. Analysis of the New Jersey Budget: Department of Education, Fiscal Year 2006 – 2006. https://www.njleg.state.nj.us/legislativepub/budget/educ06.pdf

Higher Education Funding Still Lags Behind Pre-Recession Levels

Posted on by Louis DiPaolo

A well-funded public higher education system opens up countless opportunities for upward mobility and stability, especially for low-income students and students of color. Yet, in 2019, New Jersey spent 19.6 percent, or $2,006, less on each student than it did before the Great Recession, according to a new report from the Center on Budget and Policy Priorities. What’s worse, during the COVID-19 pandemic, New Jersey lawmakers cut higher education funding by $168.2 million to help balance the state budget.

Years of cuts to higher education, tuition increases, and the diminishing value of financial aid make college less affordable and less accessible. The average tuition at New Jersey’s public four-year institutions grew by 12.8 percent, or $1,646, between 2008 and 2019. At New Jersey’s community colleges, which typically serve a greater share of Pell Grant recipients — grants for students with exceptional financial need —tuition grew by 24 percent, or $974, between 2008 and 2019.

Rising tuition costs also place greater burdens onto groups that have historically and currently face barriers to higher education, like New Jerseyans of color and those with low incomes. In 2018, New Jersey’s public tuitions cost the average Black and Latinx/Hispanic households 14 percent and 13 percent of their incomes, respectively. Meanwhile, the cost of public tuition only costs the average white family 8 percent of their household income.

New Jersey is not alone. Nation-wide, undergraduate enrollment decreased by more than four percent between the fall 2019 and 2020 semesters. Students who are low-income, Black or Latinx/Hispanic, unemployed, or single parents have been more likely to cancel their college plans. Students with low incomes are also more likely to take on and struggle to repay student loans, a situation that the ongoing recession could worsen absent stronger state investments.

An equitable economic recovery will depend on a well-educated workforce. Therefore, policymakers must prioritize raising new and sustainable revenue to support higher education. This could be accomplished, in part, by closing corporate tax loopholes and ensuring wealthy heirs pay their fair share in taxes. If not, cuts to public higher education will continue to reduce opportunities for students of color and students from low-income families.

The “Whitening” of Camden’s Teachers

Posted on by Mark Weber

New Jersey is stronger when people of varied backgrounds, experiences, and perspectives work and learn together. For the state’s public education system, teachers and leaders of color play critical roles in ensuring equity. However, people of color are decreasingly represented in the teaching workforce. This problem is particularly acute in Camden, New Jersey, where the city now employs fewer Black teachers and more white teachers than it did two decades ago. The decline in Black teachers is largely attributed to charter and renaissance school expansion, where charters are hiring fewer teachers of color. This expansion has also resulted in a less experienced workforce, as charter and renaissance teachers have far less experience than Camden City School District teachers. While this is a major workforce equity problem, this is also a problem for students, as students of color benefit from having access to teachers of their race. This brief examines Camden schools, charter expansion, and the resulting shift of the whitening of Camden teachers.

Background: Camden’s Schools, Charter Expansion, and State Control

Recent reports of the likely closing of several schools in the Camden City School District (CCSD) will come as no surprise to anyone who has observed the city’s educational system over the past two decades.[1] Enrollment in CCSD has been declining for years, even as the overall population of students in publicly funded schools has changed little. Instead, and like other cities in New Jersey, CCSD has seen its enrollments drop due to the rapid growth of charter schools: publicly funded schools approved directly by the state and run by private, non-governmental organizations.

Camden’s charter sector, however, is unique: many of its students are enrolled in “renaissance” schools, a special type of charter school authorized by separate legislation that receives additional financial support.[2] Renaissance schools were introduced to Camden with the promise from their supporters that they would enroll all students within their given boundaries or “catchments.”[3] A State Auditor’s report in 2019, however, found that the renaissance schools were enrolling many students outside their catchments, even as students within them were put on waitlists.[4]

Renaissance and other charter school enrollments have become more prevalent in Camden over the last two decades. While the overall number of students in publicly funded schools has declined by less than one thousand students since 2000, the growth in charter and renaissance enrollments has left CCSD with 10,592 fewer students over the same period. 

Changes in Camden’s Teacher Workforce: Less Diversity, Less Experience

While there are several important consequences to the shift in enrollments from CCSD to charter and renaissance schools, one that is not often discussed is the change in the composition of the teacher workforce in Camden.[5] As CCSD enrollments have declined and charter/renaissance enrollments have increased, teaching positions in CCSD have been replaced by positions in charter/renaissance schools.

It is important to note that the decline in CCSD teaching positions preceded the state takeover of the district in 2013,[6] the year before the city’s first renaissance schools opened. Most of the decline occurred after 2006, when the state first appointed a fiscal monitor—who oversees and approves all operation, management, and staffing decisions— for the district.[7] The decline accelerated during the early years of the Christie administration; Governor Christie was well-known as a supporter of charter school expansion.[8]

The demographic composition of the CCSD teaching workforce is considerably different from the charter/renaissance workforce: charter teachers are less experienced and less likely to be Black. While the percentage of Black teachers in CCSD has declined in the last decade, it has always been higher than the same percentage in the charter/renaissance schools.

These two factors—fewer Black teachers in CCDS and a shift to more charter/renaissance teachers—have greatly impacted the overall Camden teaching workforce. Two decades ago, the majority of Camden’s teachers were Black; today, the majority are white.

In 1999, 52 percent of Camden’s teachers were Black; by 2019, only 30 percent were. In contrast, 38 percent of Camden’s teachers were white in 1999; 55 percent were in 2019. Changes in the percentage of Hispanic/Latinx teachers or of other races do not explain this remarkable shift. [9]

The changes in the Camden teacher workforce’s racial/ethnic profile have left Camden’s students with fewer teachers who look like them. In CCSD, 44 percent of students and 41 percent of teachers are Black. In charter schools, however, 31 percent of students are Black, but only 16 percent of teachers are. Similarly, 47 percent of renaissance students are Black, but only 27 percent of teachers are. The shift in the teacher workforce from CCSD to charter/renaissance schools, therefore, creates a greater racial mismatch between students and teachers across the entire city.

Black students in Camden are not the only students whose identities are underrepresented in the teacher workforce: the proportion of Hispanic/Latinx students in Camden is far greater than the proportion of Hispanic/Latinx teachers. This is true in both CCSD and the city’s charter sector. As NJPP notes in its report on educator training in New Jersey, there are significant barriers to entry for potential teachers of color in teacher preparation programs; the problem of teacher diversity, therefore, is hardly exclusive to Camden.[10]

The mismatch of teacher and student race and ethnicity in Camden has important consequences. As NJPP documents in its latest report on the teacher workforce in New Jersey, students of color benefit from having teachers of their own race in their schools.[11] This benefit has eroded, however, as more teaching positions close in CCSD and open in the charter schools.

Another notable change in Camden’s teaching workforce is the decrease in average educator experience. A Camden teacher had 14 years of total experience in 1997; today, they have less than 11 years. This change can almost entirely be attributed to the growth of charter schools. Although the average experience of charter and renaissance teachers has gone up slightly in recent years, charter teachers have far less experience on average than CCSD teachers.

The simplest explanation for charter school teachers’ lack of experience is that the schools do not retain staff nearly as long as CCSD. In the 2018-19 school year, 92 percent of teachers who worked in CCSD in 2017-18 returned. Contrast this with the 70 percent retention rate in the renaissance schools, or even lower rates in some of the charters.

Previous research on New Jersey’s charter sector suggests that some charter operators—including those who operate the renaissance schools—benefit from employing a staffing model that churns teaching staff. [12] Because teachers earn more in their later years, cultivating a less experienced staff allows these charters to operate at a lower per-pupil cost; the savings can be used to offer more competitive wages, which in turn allows for a longer school day. There is a question, however, as to whether this staffing model can be brought to a larger scale, as the supply of novice teachers in New Jersey is shrinking.[13]

Conclusion: Stemming the “Whitening” of Camden’s Teachers

There are at least two reasons why Camden should care about the changes in its teaching workforce. First, students of color benefit from having teachers of color in their schools. In Camden, this means policies should be in place to support the recruitment and retention of Black and Hispanic/Latinx teachers across all sectors: CCSD, charters, and renaissance schools.

Second, the policies that have led to fewer Black teachers in Camden’s schools have been established by the state and are not the result of local action. CCSD has operated under a state fiscal monitor since 2006 and under full state control since 2013. The plan to close CCSD schools and replace them with charter schools was developed by the Christie administration without local input.[14] The Urban Hope Act, which established renaissance schools, is a state initiative but has been confined solely to Camden.

The whitening of Camden’s teacher workforce is the result of policies imposed by outside forces. Yet these very policies have resulted in fewer jobs for Black teachers in a predominantly Black city.[15] The policymakers who have caused this shift have an immediate obligation to acknowledge the problem and propose solutions to address it.

 

 

End Notes

[1] April Saul, (1/8/21), WHYY. “‘How am I going to drop off my kids?’: Parents, stakeholders fret at proposed Camden school closures.” https://whyy.org/articles/how-am-i-going-to-drop-off-my-kids-parents-stakeholders-fret-at-proposed-school-closures-in-camden/

[2] https://www.state.nj.us/education/chartsch/renaissance/docs/2014UHA.pdf

[3] Georgie E. Norcross, III, (4/13/17), The Star-Ledger. “Working together has saved Camden’s schools | Opinion.” https://www.nj.com/opinion/2017/04/working_together_has_saved_camdens_schools_opinion.html

[4] Stephen M. Eells, Office of the State Auditor, New Jersey. (1/15/2019). City of Camden School District.https://www.njleg.state.nj.us/legislativepub/Auditor/341017.pdf

[5] Throughout this report, I refer to “teachers” as certificated staff who do not hold administrative positions. These staff include those who are not in instructional positions but provide student support, including counselors, occupational and physical therapists, nurses, librarians, speech therapists, and so on. “Teachers” in this report does not include those who do not hold a certificate, such as paraprofessionals, custodians, cleric workers, etc.

[6] John Mooney (6/6/2013). Nj Spotlight. “Camden Schools Takeover: Day One, and Counting” https://www.njspotlight.com/2013/06/13-06-05-camden-schools-takeover-day-one-and-counting/

[7] Winnie Hu (10/30/2006).The New York Times. “In New Jersey, System to Help Poorest Schools Faces Criticism.” https://www.nytimes.com/2006/10/30/education/30abbott.html

[8] John Mooney, (7/18/17). Nj Spotlight. “Christie’s Charter Legacy: A Clear Record of Growth.” https://www.njspotlight.com/2017/07/17-07-18-christie-s-charter-legacy-a-clear-record-of-growth/

[9] NJDOE data divides teacher race/ethnicity into seven categories: white, Black, Hispanic, Asian, Native American, Hawaiian Native, and two or more races. (See: https://www.nj.gov/education/data/cs/) The percentage of teachers in the last four categories totaled never rises above 4 percent in the data and is excluded from this analysis.

[10] Mark Weber (2020). New Jersey’s Shrinking Pool of Teacher Candidates. The New Jersey Policy Perspective: Trenton, NJ. https://www.njpp.org/publications/report/new-jerseys-shrinking-pool-of-teacher-candidates/

[11] Mark Weber (2019). In Brief: New Jersey’s Teacher Workforce, 2019. The New Jersey Policy Perspective: Trenton, NJ. https://www.njpp.org/publications/report/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists/

[12] Mark Weber (2019). Ten Important Facts About New Jersey Charter Schools… And Five Ways To Improve The New Jersey Charter Sector. New Jersey Education Policy Forum; New Brunswick, NJ.  https://njedpolicy.wordpress.com/2019/04/26/ten-important-facts-about-new-jersey-charter-schools-and-five-ways-to-improve-the-new-jersey-charter-sector/

[13] Mark Weber (2020). New Jersey’s Shrinking Pool of Teacher Candidates. The New Jersey Policy Perspective: Trenton, NJ. https://www.njpp.org/publications/report/new-jerseys-shrinking-pool-of-teacher-candidates/

[14] See: Mark Weber (5/2/2012). “NJDOE Coup D’Etat.” (blog post).  http://jerseyjazzman.blogspot.com/2012/05/njdoe-coup-detat.html

[15] US Census Bureau data, Camden, NJ, 2019: https://data.census.gov/cedsci/profile?q=ACSDP5Y2019.DP05%20Camden%20city,%20New%20Jersey&g=1600000US3410000 Camden’s population by race: White alone, 23.5%; Black or African American alone, 41.4%; Some other race alone, 27.6%, two or more races, 4.5%; Asian alone, 2.4%.

NJPP Applauds Introduction of New Bill to Boost Pay of Working Families

Posted on by NJPP Staff

February 5, 2021 – New Jersey Policy Perspective (NJPP) applauds the introduction of a new proposal to boost the pay of low-paid workers and their families.

The bill, S3428/A5345, introduced on Thursday by Senator Joe Lagana (D-Bergen, Passaic) and Assemblywoman Verlina Reynolds-Jackson (D-Mercer, Hunterdon), would expand the eligibility of the state Earned Income Tax Credit (EITC) to workers who are at least 18 years of age, regardless of whether or not they have children. It would also eliminate the maximum age limit for workers without qualifying children, allowing workers who are 65 years or older to claim the credit.

“The success of Earned Income Tax Credit (EITC) has been recognized across the political spectrum,” said Senator Joe Lagana (D-Bergen, Passaic). “By upholding our commitment to further expand this program to all eligible workers over 18, we can help more young people get their finances under control and give hard-working seniors some much-needed relief. The need for relief for these workers during the pandemic is as great as ever and our local businesses will benefit from the increased spending power this proposal would create for many residents.”

The EITC is a refundable tax credit for low- and moderate-income working individuals and families. The tax credit was established by the federal government in 1975; since 2000, New Jersey has supplemented the program with a state version of the credit

“This legislation is timely as so many New Jerseyans are struggling to make ends meet amid uncertain times,” said Assemblywoman Verlina Reynolds-Jackson (D-Mercer, Hunterdon). “More residents should be able to claim the Earned Income Tax Credit (EITC) which has helped many retain more of their income at the end of the year. They have earned it. Young adults entering New Jersey’s workforce deserve to be included in the provisions of the EITC as they are working to build something for themselves and their families. Thank you to all who have worked with me on this legislation and support it. It’s a much-needed economic boost for New Jersey families.”

Due to the EITC’s narrow eligibility requirements – including restrictions based on age, family type and size, residence, and immigration status – far too many workers miss out on this resource.

“Strengthening the EITC is a critical way to improve economic security throughout New Jersey, both during and beyond the current crisis,” said Vineeta Kapahi, Policy Analyst at New Jersey Policy Perspective (NJPP). “This tax credit has long been an effective tool for reducing poverty and putting money in the pockets of workers who need it, but too many workers are excluded from this credit due to narrow eligibility requirements. By expanding access to the EITC, New Jersey can help workers make ends meet while supporting state and local economies.”

Fortunately, New Jersey lawmakers have taken steps to improve the tax credit with proposals to expand eligibility and raise benefit levels. A pair of bills introduced by Senator Vin Gopal (D-Monmouth) and Assemblywoman Verlina Reynolds-Jackson, S765/A839 and S764/A840, would increase the tax credit for workers without children and allow qualifying relatives to count as qualifying children, respectively.

“New Jersey can always improve upon ways to support hard taxpaying workers,” said Senator Vin Gopal (D-Monmouth). “Making changes to the state EITC to expand credit from the current 40 percent to 100 percent over time to individuals without children, and to also allow people to claim a relative as a qualifying child for tax purposes will boost their economic security, and improve their quality of life. Especially in these trying times, we need to come up with solutions to provide prosperity for all of our residents, and making changes to the state EITC is an important step in the right direction.”

Under current law, workers under 25 and over 64 are not eligible for the federal EITC if they do not claim dependent children when they file taxes. Last year, New Jersey partially addressed this by lowering the state EITC eligibility for childless workers to 21 years of age. Several other states, including Minnesota, Maryland, and California, already expanded EITC eligibility for childless workers.

“The EITC puts money directly in people’s pockets and is a proven tool for fighting inequality and stimulating the economy,” said Assemblyman Raj Mukherji (D-Hudson). “Every penny spent through this program will circulate back to our small businesses and local communities, creating jobs and equitable growth. This is a sensible investment into the working families of our state at a time when they need it the most.”

The EITC is one of the most effective policies at reducing poverty and one of the wisest investments a state can make. In 2018 alone, the federal and state EITCs benefitted over 576,000 New Jersey workers and infused nearly $2 billion into local communities across the state.

“Every dollar invested in the Earned Income Tax Credit (EITC) program is a dollar well spent on reducing income inequality in New Jersey and helping low and moderate-income families build wealth and economic security,” said Dena Mottola Jaborska, Associate Director at New Jersey Citizen Action. “EITC investments are also the most strategic way to deliver COVID relief to the families who will suffer the worst economic setbacks brought on by the pandemic, for years to come. As one of the state’s largest free tax preparation agencies, New Jersey Citizen Action has seen the EITC tax credit transform the economic well-being of families. We urge the Legislature to move this EITC expansion bill package in its entirety.”

  • S3428/A5345: Expands eligibility under New Jersey earned income tax credit program to allow taxpayers who are at least 18 years of age or older to qualify for the modified benefit.
  • S836/A841: Increases benefit amounts under New Jersey earned income tax credit program from 40 percent to 50 percent.
  • S765/A839: Increases benefit amounts incrementally under New Jersey earned income tax credit program from 40 percent to 100 percent for resident individuals who cannot claim qualifying child.
  • S764/A840: Enhances benefit provided under New Jersey earned income tax credit program by treating a qualifying relative as a qualifying child.
  • S2194/A4229: Expands eligibility under New Jersey earned income tax credit program to allow taxpayers with Individual Tax Identification Numbers to qualify.

 

Reforming WorkFirst NJ Will Help Reduce Child Poverty

Posted on by Brittany Holom-Trundy

The following testimony, on S2956, was delivered to the Senate Health, Human Services, and Senior Citizens Committee on January 14, 2021.

Good afternoon Chairman Vitale and members of the Committee. Thank you for this opportunity to provide my testimony on the proposed Work First New Jersey (WFNJ) reforms. My name is Dr. Brittany Holom-Trundy, and I am a senior policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.

Though these reforms are not the full set of improvements that we would like to see, NJPP strongly supports the changes proposed in S2956 as a response to the Governor’s conditional veto on last year’s legislation. These reforms include needed changes to work requirements for parents, increases in child support pass-throughs to better help families, elimination of graduation requirements for 18-year-olds, and positive language changes. We believe this is a good first step toward a WFNJ that more effectively tackles childhood poverty, helps support low-income families, and builds a stronger future for the state.

As my predecessor Ray Castro’s work has shown, WFNJ provides a key channel of support for parents and children living in poverty. This is particularly true for Black and Latinx families, who are overrepresented amongst low-income families. Year-over-year changes reported throughout the pandemic have continued to emphasize how essential this lifeline is, especially for single-parent families. As people have lost employment, income stability, and family members in record numbers, these safety nets couldn’t be more important.

We hope that the committee will advance these reforms. We also encourage all legislators to consider further improvements, including increases in cash assistance and expanded eligibility for immigrant families in desperate need of support. Now more than ever New Jersey’s parents and children need solid commitments from our state leaders to their well-being and a brighter future.

Thank you for your time.

New Jersey’s Minimum Wage Rises to $12 on January 1

Posted on by Nicole Rodriguez

New Year’s will bring some relief to New Jersey’s lowest paid workers when the minimum wage rises from $11 an hour to $12 an hour. This is the latest scheduled increase under the 2019 law to raise New Jersey’s minimum wage to $15 an hour, for most workers, by 2024. This raise will help workers better afford basic needs, ensure more families can cope with the increased financial pressures brought on by the COVID-19 pandemic, and better maintain the economic demand for goods that small businesses need to thrive.

Other low-wage workers will also see an increase in 2021. The minimum hourly wage for both seasonal workers and workers of small employers (businesses with five or fewer employees) will increase to $11.10. Meanwhile, farmworkers will see their minimum hourly wage increase to $10.44, and the tipped wage will increase to $4.13. Last year’s increase boosted the economic security of over 460,000 workers. For 2021, it’s unclear exactly how many workers will see an increase as the accuracy of estimates are complicated by the pandemic.

While this is a welcomed rise in wages, more work remains to be done to ensure that all workers can live with dignity, meet basic needs, and have an opportunity to thrive. For example, housing remains unaffordable for most minimum wage workers, making it difficult to afford other necessities like transportation and medical care.[1] And this crisis has exacerbated these problems for low-paid workers, who suffered the most from job losses in 2020.

Thankfully, New Jersey’s minimum wage law has positioned the state for a stronger pandemic recovery. In the years leading up to the pandemic, low-wage workers in states that raised their minimum wages experienced much faster wage growth than those in states that didn’t. Moreover, raising wages during recessions helps to both hasten and strengthen the economy’s recovery.

While we still have a long way to go to ensure that everyone can succeed in New Jersey, the latest increase to the minimum wage is a welcomed improvementduring these difficult times.

Chart: New Jersey's Path Towards a $15 Minimum Wage

End Note

[1] National Low-Income Housing. 2020.  Out of Reach 2020: New Jersey. https://reports.nlihc.org/oor/new-jersey

NJPP Applauds Passage of Historic Marijuana Legalization Bill

Posted on by Brandon McKoy

Earlier today, the New Jersey Senate and Assembly passed enabling legislation to legalize recreational cannabis in the Garden State. The bill, which sets the regulatory framework for the new legal cannabis industry, comes on the heels of New Jersey voters approving cannabis legalization on the General Election ballot in November. In response to this historic vote, New Jersey Policy Perspective (NJPP) releases the following statement. 

Brandon McKoy, President, NJPP: 

“This is a historic day for New Jersey and a pivotal step toward dismantling the failed War on Drugs, which has disproportionately harmed Black and Latinx communities. Today’s vote codifies the will of the voters who overwhelmingly passed marijuana legalization on the November ballot. It also says loud and clear that prohibition does not work. 

“While there is still much work to be done to improve New Jersey’s legal market and fully secure equity, this is the culmination of years of hard work by social justice advocates who insisted on doing legalization the right way. This bill will use the tax revenue from legal cannabis sales to invest in communities harmed most by the drug war. NJPP applauds the countless advocates, grassroots activists, state lawmakers, and everyone else who made today’s vote possible.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy. In 2016, NJPP released a landmark report detailing how a legal cannabis market could net the state over $300 million in annual revenue, grounding the legalization debate in hard facts and figures.

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Parents are Essential Too: Supporting Working Families During the Pandemic

Posted on by Vineeta Kapahi

The wellbeing of New Jersey’s children and working parents — as well as the state’s recovery from COVID-19 — depends on families being able to balance work and caregiving. Even before the onset of pandemic, many New Jersey families struggled with this balancing act. Now, the current crisis has created untenable conditions for many families who face the additional pressures of unstable and unpredictable employment, schooling, and childcare.

Although lawmakers enacted several state and federal policies to support working families during the pandemic, many of these programs are neither universal nor permanent. As a result of underinvestment and piecemeal policymaking, many workers continue to face barriers to paid leave, job protections, adequate wages, quality and affordable childcare, and work stability and flexibility. This report examines the circumstances of New Jersey’s working parents, assesses the strengths and shortcomings of existing policies, and identifies solutions to improve conditions for parents, children, and employers.

Households with Children Face Disproportionate Barriers to Economic Security

New Jersey families with children faced disproportionately large economic challenges both before and during COVID-19, including poverty and the loss of employment and income. Prior to the pandemic, families with children under 18 were already more likely to live below the federal poverty level than families without children.[i] In 2019, approximately one in ten families with children in New Jersey lived in poverty.[ii] Now, almost a year into the pandemic, working families are falling further behind. Households with children are twice as likely (19 percent) to report that it was very difficult to cover usual expenses during the last seven days as households without children (9 percent), according to the most recent U.S. Census Bureau Household Pulse Survey (conducted between November 11 -23, 2020).[iii] In addition, while COVID-19 has caused unprecedented economic disruptions across the state, households with children in New Jersey were 23 percent more likely to report experiencing loss of employment income since the beginning of the state’s stay-at-home order in mid-March than families without children.[iv]

Low-Income, Black, and Latinx Workers are Least Likely to Work from Home

The ability to work from home has enabled many parents to practice social distancing while continuing to work during the pandemic. Not all employees, however, are able to telework. One key factor that influences whether an employee is able to work from home is occupational segregation. Because employment opportunities are shaped by systemic barriers to education and discrimination in hiring and promotion, ability to work from home varies by race and income.

Prior to the onset of COVID-19, only one in three workers was able to work from home. While approximately one in three Asian and white workers were able to telework, only one in five black workers and one in six Latinx workers were able to telework. In addition, high wage workers were six times as likely to be able to work from home as low wage workers.[v]

Racial and income disparities in teleworking that existed prior to the onset of the pandemic have been compounded during the current crisis, according to a survey that asked if any adults in a household substituted any work that was typically conducted in person with telework since mid-March. While over half (58 percent) of Asian respondents and nearly half (47 percent) of white respondents substituted some or all of their typical in-person work with telework, only one-third of Black (36 percent) and Latinx (30 percent) respondents transitioned to telework.[vi]

The ability to work from the safety of home during COVID-19 is most often afforded to workers who are the highest paid.[vii] At least one adult was able to transition to remote work during the pandemic in 79 percent of households earning over $200,000 per year and in 55 percent of households earning between $100,000 to $149,999 per year. In general, households with the lowest incomes are least likely to have transitioned to some or all telework due to COVID-19. Fewer than a quarter of households earning less than $50,000 per year had at least one adult who moved some or all their work to telework due to the pandemic. Accordingly, the households least able to bear the additional costs of childcare resulting from the COVID-19 pandemic are often those who need it most.

COVID-19 Intensifies Childcare Challenges

While the inadequacies and inequities in New Jersey’s childcare infrastructure did not begin with the COVID-19 pandemic, the current crisis has exacerbated and complicated childcare challenges. Approximately one-third (266) of New Jersey’s school districts began the 2020 school year with plans for all remote-learning, approximately half (395) had plans for hybrid models, and less than 10 percent (75) had plans for in-person learning.[viii] In addition, families have had to navigate diverse and changing conditions among childcare providers and schools in New Jersey. Because of the constantly evolving nature of the ongoing public health emergency, facility closures often come with little or no advanced notice, leaving families scrambling to plan childcare. Even among parents who can telework, many now face the dual responsibility of working while providing childcare or overseeing remote learning due to a loss of childcare or shift to online learning. For families with children that require ongoing supervision, juggling work and childcare duties simultaneously is an impossible task.

Before the onset of COVID-19, childcare was already a challenge for many working families. Most children (73 percent) in New Jersey live in households where all parents work.[ix] For single parents, the majority of whom are women, the difficulties of managing childcare and work are especially acute. The vast majority of single parents work – 90 percent of single fathers and 84 percent of single mothers.[x]

New Jersey is home to nearly 600,000 young children and infants, as well as 1.3 million school aged children and teens (between the ages of 6 and 17).[xi] In 2019, almost half (46 percent) of children under the age of six in New Jersey lived in a childcare desert, or a place where the number of children is more than three times the licensed childcare capacity.[xii] In addition to inadequate and inequitable childcare availability, childcare is not affordable for many low- and moderate-income families. New Jersey ranks as the fifteenth most expensive state in the country for childcare costs. The average cost for one year of care for a four-year-old in New Jersey is $10,855. Infant care is even more costly for New Jersey’s families, with an average annual cost of $12,988 per year.[xiii]

Insufficient affordable and quality childcare not only harms children, but also pushes parents – especially mothers – out of the workforce. Accordingly, lack of access to childcare is not only a problem for families with children, as it also hurts employers and New Jersey’s broader economy. Over 300,000 adults in New Jersey reported that they could not work because they had to care for children not in school or daycare in November 2020, according to the Census Bureau’s Household Pulse Survey.[xiv]  Similarly, in a poll of over 900 parents of infants and toddlers in New Jersey, 14 percent of parents reported that they left their jobs to manage childcare and 17 percent reported that they were forced to reduce their work hours.[xv]

Surveys of New Jersey residents suggest that the current crisis has had a particularly large toll on working mothers, low-income parents, and Black and Latinx parents. Among parents of children under the age of three in New Jersey, women (19 percent) were six times more likely to report that they had left their jobs to manage childcare since the onset of COVID-19 than men (three percent).[xvi] In an October 2020 poll of parents with children in New Jersey public schools, low-income Black and Latinx parents were 1.5 times more likely than parents overall to either take time off from work or leave their job to stay at home when their child is not in school (22 percent vs. 14 percent).[xvii]

State lawmakers have taken some steps to improve access to and stabilize childcare during COVID-19, but more must be done. For example, the New Jersey School-Age Tuition Assistance Program provides financial support for care for school-aged children engaged in remote learning due to COVID-19. To participate in this program, families must have a gross household income less than $150,000 per year. In addition, the childcare provider must be licensed or registered, which excludes families who rely on care from a relative.[xviii] While this program has been helpful for many households with school-aged children, it is temporary – the program is scheduled to expire on December 30th, 2020.

As COVID-19 infection rates remain high, uncertainty and fluctuation around school and daycare statuses is likely to continue to pose a significant challenge. [xix] In addition to extending and expanding programs that increase childcare affordability, a greater commitment of public resources is needed to create lasting, meaningful reform in the state’s childcare system to promote childcare availability and quality for all families. With structural improvements and adequate and equitable investments, the state can build a stronger childcare system that better supports the wellbeing of New Jersey’s children and working families as well as the state’s recovery from the current crisis.

Federal Expanded Leave Programs Lack Inclusivity and Longevity

The federal and state governments’ patchwork policy response to the pandemic has partially and temporarily improved conditions for some working parents. However, the gaps in some federal and state policies neglect to fully address the needs of workers and children. Because workers’ ability to take leave to care for a child depends on a variety of factors, including employer type and size, employer’s policies, and whether an employee has already taken leave, many parents remain in the difficult situation of juggling work responsibilities and caring for their children. Further, many of these programs are set to expire at the end of 2020. Amid unprecedented uncertainty around the status of schools and childcare, examining gaps in existing programs and taking steps to ensure universal coverage is more important than ever.

Families First Coronavirus Response Act (FFCRA)

Enacted in March 2020, the Families First Coronavirus Response Act (FFCRA) contains two key provisions for certain employers to provide paid leave to their employees for specified reasons related to COVID-19. The Emergency Paid Sick Leave Act (EPSLA) grants workers access to up to 80 hours (or the equivalent of two weeks of work for part-time workers) of partially paid leave if they are unable to work due to a COVID-19 quarantine order, illness, or their child’s COVID-19 related school / childcare closure.[xx] The Federal Emergency Family and Medical Leave Expansion Act (EFMLEA) provides employees who need to care for a child whose school or daycare is closed due to COVID-19 up to 12 weeks of job-protected partially paid leave .[xxi]

Under both of these provisions of the FFCRA, wage replacement for workers is tied to the reason for taking leave — wage replacement for employees who take leave for childcare is lower than for those who take leave due to their own illness. Employees who are unable to work because they are themselves quarantining or experiencing COVID-19 symptoms may take leave at their regular pay rate (up to a maximum of $511/day). Employees who take Emergency Paid Sick Leave to provide care are eligible for two-thirds of their regular rate of pay (maximum of $200/day). For employees who are taking Emergency Family and Medical Leave (EFML), the first two weeks may be unpaid (these weeks can be combined with other leave such as the EPSLA) and the remaining 10 weeks are paid at two-thirds of the employee’s regular pay rate (maximum of $200/day).[xxii]

While the leave available under the FFCRA has been helpful for many workers and employers, the program is set to expire on December 31, 2020. Even if the program is extended, not all workers are eligible to take leave under the FFCRA. Workers at large employers (over 500 employees) are excluded from all paid leave provisions under this law. As a result of this exemption, half of New Jersey’s private workforce (1.7 million workers) is automatically excluded from the FFCRA.[xxiii] This exclusion disproportionately limits access to paid leave for Black workers, who are overrepresented among workers at private firms with over 500 employees. While 50 percent of all private sector workers in New Jersey work for firms with over 500 employees, 62 percent of Black workers at private employers work for firms with over 500 employees.[xxiv]

Under the FFCRA, companies with fewer than 50 employees may qualify for exemption from the requirement to provide leave to care for a child out of school or childcare if these requirements would “jeopardize the viability of the business.”[xxv] In addition, employers may exclude healthcare providers and emergency responders from taking paid leave due to school closings or childcare unavailability.[xxvi] As a result of these two exemptions, an additional 34 percent of the private workforce (1.2 million employees) could potentially be denied paid leave for child care. The table below shows the estimated amount of private sector workers in New Jersey who are excluded from coverage under each exemption. In total, only 16% to 50% of New Jersey’s private workforce is guaranteed emergency paid leave for COVID-19 related childcare under the FFCRA.[xxvii] [xxviii]

The FFCRA’s interaction with other programs also poses challenges for many workers. Employees who need to take leave due to both COVID-19 related reasons and other circumstances are not eligible for additional leave under the Family and Medical Leave Act (FMLA). For example, an employee who is a new parent or had to take medical leave may have exhausted their FMLA leave earlier in the year would not be able to access this benefit. Similarly, workers who have taken leave under the FFCRA, but later need take leave because of another illness or caregiving need, do not have access to FMLA for the remainder of the year.

All Workers Deserve Flexibility, Paid Leave, and Protections

The transition to remote learning in New Jersey’s schools and changes to childcare availability due to COVID-19 has complicated the balancing act between work and caregiving for New Jersey’s working families. It is clear that New Jersey cannot wait for the federal government to act — Congress has yet to negotiate an extension of critical leave programs under the FFCRA that expire at the end of December — making it especially important that state lawmakers support the economic security, health, and wellbeing of working families. In a state where the majority of parents are workers, New Jersey cannot afford to push parents out of the workforce. While the challenges facing working parents in New Jersey are substantial, there are several steps that the state can take to immediately improve conditions for working families with children, including increasing flexibility, expanding paid leave, and strengthening protections for workers.

Increase Flexibility and Stability for Workers

The communities that have been hardest hit by COVID-19 are also those that are least likely to be able to work from home, least likely to have stable and predictable schedules, and least likely to be able to afford childcare.  In July 2020, state lawmakers introduced legislation that would prohibit employers from requiring employees to be physically present at work during the public health emergency if they can work remotely and have a school-aged child.[xxix] This is an important step and may help many parents who are able to perform their work remotely; however, for many workers, teleworking is not possible.

In addition to risking their health to perform in-person work, many workers in New Jersey continue to face inflexible, unpredictable, and unstable scheduling practices. These scheduling practices pose challenges to meeting and planning caregiving responsibilities.[xxx] Regulating scheduling practices for hourly workers to ensure that workers have advanced notice of their schedules, fair compensation, sustainable hours, and flexibility when they need it, would improve conditions for New Jersey’s working families.

Expand Paid Leave

Gaps in existing policies leave many New Jersey families without paid leave, making them more likely to lose income and face financial insecurity. Expanding access to paid leave during a public health emergency would help keep more New Jerseyans in the workforce and better accommodate the needs of workers who are sick or need to provide care. Given the exclusions in FFCRA and looming sunset date for these federal paid leave provisions, the state cannot afford to rely on the federal government to provide adequate paid leave to workers.

By making minor changes to existing state programs, New Jersey lawmakers can substantially improve access to paid leave, especially for workers caring for children due to school and childcare changes resulting from COVID-19. For example, expanding the state Earned Sick Leave law to provide for additional days and improved access to paid sick days during a public health emergency would allow more workers to be able to care for loved ones, maintain financial security, and remain in the workforce. In addition, New Jersey could expand eligibility for Family Leave Insurance (FLI) to parents who are ineligible for other paid leave programs and who are unable to work because they must care for a child at home due to a COVID-19 related school or daycare closures. This program could also be made more inclusive by expanding eligibility to include all workers who pay into the program, regardless of immigration status.

Strengthen Job Protections

New Jersey has taken several steps to improve access to job protections, yet far too many workers still refrain from taking leave out of fear of losing their job or retaliation from their employer. Near the onset of COVID-19, New Jersey lawmakers enacted legislation to prohibit employers from terminating or penalizing workers who have themselves contracted or are likely to have contracted an infectious disease and request to take time off work based on the recommendation of a licensed medical professional.[xxxi] Nevertheless, this measure does not provide any protection for workers who take leave due to school or childcare closures resulting from COVID-19.

New Jersey’s Family Leave Act (NJFLA) has been expanded to include care for a loved one due to COVID-19 and care for a child at home because of a public health emergency related closure of schools or places of care.[xxxii] Nevertheless, NJFLA remains limited in several ways. Notably, NJFLA does not apply to employers with fewer than 30 employees, and the protections only cover employees who have been at their job for at least one year and have worked 1000 hours. On the other hand, under the FFCRA, there is no required duration of employment as part of the EPSLA provision and for EFMLEA, workers only have to be employed for 30 calendar days. Since both provisions of the FFCRA expire at the end of 2020, state lawmakers can partially address the gap that will be created in the absence of Congressional action by extending NJFLA to workers who have been employed for 30 days (as opposed to one year) when taking leave during a public health emergency.

Parents are Essential Too

During a health and economic crisis that has upended school, childcare, and work arrangements, ensuring that employees can take time off when they are sick or need to care for their loved ones is essential. Access to workplace flexibility, comprehensive paid leave, and job protections are not only important for the wellbeing of families with children, but also for public health and the economy. By making meaningful changes to promote the wellbeing of New Jersey’s workers who have disproportionately borne the harm caused by the current pandemic, New Jersey will not only be able to have a stronger and more equitable recovery from COVID-19, but also be better prepared for future crises.

 

End Notes

[i] The Census Bureau considers families with a total money income (before taxes) less than the family’s poverty threshold to be in poverty. For example, the 2019 poverty threshold for a family with one adult and one child was $17,622. For a family with two adults and two children, the poverty threshold was $25,962. To access poverty threshold tables, see https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html .

[ii] United States Census Bureau. American Community Survey. 2019 1-Year Estimates. Table S1702: Poverty Status in the Past 12 Months of Families. https://data.census.gov/cedsci/table?q=poverty%20child&g=0400000US34&tid=ACSST1Y2019.S1702&hidePreview=false

[iii] United States Census Bureau. (2020) Household Pulse Survey. Week 19. Spending Table 1: Difficulty Paying Usual Household Expenses in the Last 7 Days, by Select Characteristics: New Jersey. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[iv] United States Census Bureau. Household Pulse Survey. Week 19. Employment Table 1. Experienced and Expected Loss of Employment Income, by Select Characteristics: New Jersey https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[v] Gould, Elise and Hedi Shierholz. 2020. “Not everybody can work from home.” Economic Policy Institute. https://www.epi.org/blog/black-and-hispanic-workers-are-much-less-likely-to-be-able-to-work-from-home/

[vi] United States Census Bureau. 2020. Household Pulse Survey: Week 19. Transportation Table 1. Teleworking during the Coronavirus Pandemic, by Select Characteristics: United States. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[vii] United States Census Bureau. Household Pulse Survey: Week 19. Transportation Table 1: Teleworking During the COVID-19 Pandemic, by Select Characteristics. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[viii] Mooney, John and Colleen O’Dea. (September 2020). “NJ Schools Reopen: What Districts Are Remote, In-Person, or Hybrid?” NJ Spotlight News. https://www.njspotlight.com/2020/09/nj-schools-reopen-plan-list/

[ix] United States Census Bureau. American Community Survey 2019: ACS 1-Year Estimates. Table DP03: Selected Economic Characteristics. https://data.census.gov/cedsci/table?q=parents%20employment&g=0100000US_0400000US34&tid=ACSDP1Y2019.DP03&hidePreview=false

[x] Due to limitations in the data, gender identities of the total population of parents could not be fully accounted for here. Please note that transgender and gender nonconforming people, among others, are often made invisible by data.

[xi] American Community Survey. 2019 1-Year Estimates. “Age of Own Children Under 18 Years in Families and Subfamilies by Living Arrangement by Employment Status of Parents”. https://data.census.gov/cedsci/table?q=employment%20children&g=0100000US_0400000US34&tid=ACSDT1Y2019.B23008&hidePreview=true

[xii] Center for American Progress. “Early Learning Factsheet 2019 – New Jersey”. https://cdn.americanprogress.org/content/uploads/2019/09/12071433/New-Jersey.pdf

[xiii] Economic Policy Institute. October 2020. “The cost of childcare in New Jersey”. https://www.epi.org/child-care-costs-in-the-united-states/#/NJ

[xiv] United States Census Bureau. Household Pulse Survey: Week 19. Employment Table 3. Educational Attainment for Adults Not Working at Time of Survey, By Main Reason for Not Working and Paycheck Status While Not Working. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[xv] Fairleigh Dickinson University. September 30, 2020. “Poll: New Jersey Working Parents Face Child Care Challenges Due to COVID-19” https://view2.fdu.edu/publicmind/2020/200930/index.html

[xvi] Fairleigh Dickinson University. September 30, 2020. “Poll: New Jersey Working Parents Face Child Care Challenges Due to COVID-19” https://view2.fdu.edu/publicmind/2020/200930/index.html

[xvii] Global Strategy Group. November 17, 2020. “Parents’ Survey Identifies Stark Racial and Income Disparities This Fall Semester” https://njchildren.org/wp-content/uploads/2020/11/NJ-Public-School-Parents-Memo-Updated-F11.16.20.pdf

[xviii] New Jersey Department of Human Services. ”COVID-19 Childcare.” https://www.childcarenj.gov/COVID19

[xix] New Jersey Department of Health. 2020. “New Jersey COVID-19 Dashboard.” https://covid19.nj.gov/

[xx] U.S. Department of Labor. (2020) “Temporary Rule: Paid Leave Under the Families First Coronavirus Response Act.” https://www.dol.gov/agencies/whd/ffcra

[xxi] U.S. Department of Labor. (2020) “Temporary Rule: Paid Leave Under the Families First Coronavirus Response Act.” https://www.dol.gov/agencies/whd/ffcra

[xxii] U.S. Department of Labor (2020). “Families First Coronavirus Response Act: Employee Paid Leave Rights.” https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

[xxiii] U.S. Census Bureau. (2020). Quarterly Workforce Indicators (1990-2018). Washington, DC: U.S. Census Bureau, Longitudinal-Employer Household Dynamics Program. https://qwiexplorer.ces.census.gov.

[xxiv] Ibid.

[xxv] U.S. Department of Labor. Families First Coronavirus Response Act: Employee Paid Leave Rights. https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

[xxvi] Paid Leave Under the Families First Coronavirus Response Act. (2020). 85 FR 19326. https://www.federalregister.gov/documents/2020/04/06/2020-07237/paid-leave-under-the-families-first-coronavirus-response-act

[xxvii] U.S. Census Bureau. (2020). Quarterly Workforce Indicators (1990-2018). Washington, DC: U.S. Census Bureau, Longitudinal-Employer Household Dynamics Program. at https://qwiexplorer.ces.census.gov. These estimates are based on an average of quarterly data from 2018, which is the latest year for which data are available.

[xxviii] U.S. Census Bureau. (2020). Quarterly Workforce Indicators (1990-2018) [computer file]. Washington, DC: U.S. Census Bureau, Longitudinal-Employer Household Dynamics Program. https://qwiexplorer.ces.census.gov

[xxix] New Jersey 2019th Legislature. Assembly No. 4462. https://www.njleg.state.nj.us/2020/Bills/A4500/4462_I1.HTM

[xxx] Schneider, Daniel, Kristen Harknett, and Megan Collins. (2020) Working in the Service Sector in New Jersey. https://shift.hks.harvard.edu/working-in-the-service-sector-in-new-jersey/

[xxxi] New Jersey Public Law 2020, Chapter 9. https://www.njleg.state.nj.us/2020/Bills/PL20/9_.PDF

[xxxii] New Jersey P.L. 2020, Chapter 23. https://www.njleg.state.nj.us/2020/Bills/PL20/23_.PDF

Proposed Cap on Legal Marijuana Licenses Undermines Racial Equity

Posted on by Brandon McKoy

Throughout the campaign to legalize cannabis and develop a regulated marketplace, advocates and state lawmakers alike have highlighted the importance of centering racial equity and economic justice, invoking the need to repair the many harms created by the War on Drugs — especially among marginalized communities of color. While the specific language of the legalization bill (S21/A21) continues to evolve, there are currently provisions within it that severely threaten New Jersey’s ability to reach these goals. The legislation must be amended, especially as it relates to the number of licenses available to cultivators, to ensure our state can lead by example and create a market that realizes the values of equity and justice that have been espoused from the start.

The legalization bill currently implements an arbitrary and incredibly low cap on the number of licenses that will be made available to cultivators, leaving it at just 28. This stipulation is set to remain in place for the first 18 months following the first sale by a newly licensed recreational dispensary. Considering this first sale is likely to be more than a year after the Cannabis Regulatory Commission is formed, the actual wait period is closer to three years.

Allowing this to remain in place would not only limit competition and privilege larger corporations at the expense of other applicants, it would also create a situation where New Jersey’s recreational and medical cannabis markets are unable to provide adequate supply and meet the level of demand that exists, thus inflating prices and allowing nearby states — once they get their legal markets up and running — to siphon off business from New Jersey operators.

As of today, there have already been 12 licenses awarded, with 9 pending from the 2019 Request for Applications, meaning that a total of 21 licenses have already been claimed. If the proposed cap of 28 were to remain in place, only 7 remain to be disbursed.

When placing this in context with other legal cannabis markets across the country, it is clear that a limit of just 28 licenses is irrationally low, especially for a state with as many residents as New Jersey.

Cultivator Licenses for States with a Legal Cannabis Market

State

Number of
Cultivators

State Population

Number of Cultivators per 100,000 residents
Alaska 200 731,545 27.34
California 5,700 39,512,223 14.43
Colorado 700 5,758,736 12.16
Illinois 20 12,671,821 0.16
Massachusetts 130 6,892,503 1.89
Michigan 330 9,986,857 3.30
Nevada 160 3,080,156 5.19
Oregon 1,150 4,217,737 27.27
Washington 1,120 7,614,893 14.71
New Jersey
(proposed)		 28 8,882,190 0.32

Source: NJPP Analysis of Legal Cannabis Markets across the United States

For the vast majority of cannabis markets, where the number of licenses and cultivators are better able to meet state demand, the prices for recreational cannabis are approximately $200 per ounce. In the only other state where the number of licenses is arbitrarily low, Illinois, market prices for recreational cannabis are well over $300 per ounce. This is an important consideration due to the excise fee structure that state lawmakers reportedly agreed upon earlier this week, which would be implemented nine months following the first recreational sale, per reporting by NJ.com.

Proposed Excise Fee Structure for New Jersey’s Legal Cannabis Market

Average Price per Ounce of Cannabis

Excise Fee
$350 and above $10
$250 to $350 $30
$200 to $250 $40
$199 and below $60

Source: Bill to launch N.J. legal weed industry is back on track, could pass by Monday, NJ.com, Nov 17, 2020.

If the number of licenses remains low, and the average price per ounce in the market remains well above $300 as it has in Illinois, the amount of revenue that could be collected and distributed back into communities harmed by the War on Drugs would be severely limited. The bottom line is that the bill’s current approach to licenses would allow a limited number of companies to wield outsized control, undermining the state’s goals of centering racial equity and economic justice in the legal cannabis market.

In order to fix the weaknesses in the bill, the following must occur:

  • Eliminate the arbitrary cap on the number of licenses and enable the Cannabis Regulatory Commission to determine and award licenses as it sees fit.
  • Exempt micro-licenses and conditional licenses from any caps so that equity candidates can truly take part in the legal market.

 

If these actions are not taken, the cap on licenses will create an unnecessarily restricted market during the early years of its formation. As a result, there will be little-to-no opportunity for equity candidates who have less capital and limited resources to break into the market; it would also drastically reduce funds collected from the excise fee on legal cannabis that could be directed into communities harmed by the War on Drugs.

School Funding in New Jersey: A Fair Future for All

Posted on by Mark Weber

This is Part 1: Series Overview and a Plan for the Future of School Funding in New Jersey: A Fair Future for All. Click the links below to access Parts 2 through 5.

Part 2: School Resources, Revenue, and Taxes

Part 3: The School Funding Reform Act – 2020 Update

Part 4: The Cost of an Adequate Education in New Jersey

Part 5: Inequities Within School Districts

NJPP’s second annual report on the state of school funding in New Jersey arrives at a time of unprecedented challenges, both fiscal and educational. The COVID-19 pandemic has forced school districts to radically change how they deliver instruction, while the ensuing economic downturn has created a fiscal crisis for both the state and its local school districts. Ironically, the looming threat of cuts to education spending comes at a time when there is a stronger research consensus than ever about the role of funding in student academic achievement: Adequate and equitable school funding is the necessary precondition for student success. If New Jersey is to see its students thrive through this emergency, it must find a way to ensure that all children, no matter where they live or what learning challenges they face, have access to schools that are adequately funded.

This series, School Funding in New Jersey: A Fair Future for All, provides an in-depth look at the current state of school finance in New Jersey: how the state got here, what the consequences have been for our students, and how the state should proceed in the face of the current crisis.

In Summary

Principles
  • School districts enrolling more children from low-income families and more English language learners need more resources to equalize educational opportunity. These are the same districts, however, that are at a disadvantage in raising revenues from the onset, because their tax capacity is lower.
  • A state school funding system, therefore, should drive more funding to the districts that need it most, but have the least capacity to raise it themselves. In other words, statewide school funding should be progressive.
  • Acknowledging the revenue inequities that arise from property taxation, property taxes remain an important revenue source because they are less volatile and, therefore, less likely to decline in an economic slump.
  • State aid to schools is tax relief: it makes state and local taxes more progressive because it distributes the tax burden more equitably.
  • Fewer resources mean fewer staff per student and less-competitive wages for staff. Districts with proportionally more students requiring additional support, including those who are economically disadvantaged, English language learners, or children with disabilities, benefit from having these resources.

Key Findings
  • Compared to other states, New Jersey still makes a strong effort to fund its schools (“effort” being the proportion of the state’s economy dedicated to K-12 education). But New Jersey has made less effort to fund schools after the recession of 2009 than it did before; the state has never made up for the losses in school revenues following the recovery. Consequently, New Jersey school districts are in a worse fiscal position now than they were before the last recession.
  • New Jersey has gone backwards in school funding progressiveness over the past decade. For the first time in decades, New Jersey’s highest-poverty schools are spending less than its lowest-poverty schools. This said, New Jersey’s underlying school funding formula is more progressive than in many other states.
  • New Jersey is not a tax-and-spend outlier: it ranks 31st in the nation on own source revenues, and 8th in the nation on state and local taxes (as a percentage of income). New Jersey has more progressive state and local taxes than its neighbors; however, the wealthiest residents of New Jersey still pay less in taxes than those in the middle. New Jersey’s state school aid system is one of the reasons its taxes are less regressive.
  • New Jersey’s School Funding Reform Act (SFRA) is designed to drive more funding to districts with greater needs but lower tax capacity. But SFRA spending targets were set based on older and lower standards for student learning; to reach the new, higher standards, students and schools will need more resources. In addition, SFRA has features that drive aid toward districts that are already spending well above adequacy targets. For example: the funding formula allocates some state aid for special education to every district regardless of whether it spends above its adequacy target. The result is that the wealthiest districts with the greatest capacity to raise their own revenues still receive funding under SFRA.
  • More school districts are falling below their spending targets in 2019 than they were in 2010, the first year of SFRA. This is because many districts have not received the state aid they need, and some districts are not making their local required effort to fund their schools. The students in underfunded districts are more likely to be English language learners and come from low-income families. Research shows that these students need additional resources to achieve equal educational opportunity.[1] The SFRA formula was designed specifically to address this reality; continually underfunding these districts, therefore, undermines the primary goal of the law.
  • Under-spending districts – those with current spending below their SFRA specified adequacy targets – have higher concentrations of Black and Latinx students, and fewer teachers per 100 students. Many of these districts were not Abbott districts: they have never enjoyed the extra funding that came to districts that were party to the Abbot
  • The Governor’s budget for this year – released before the pandemic – was moving more state aid toward traditionally underfunded districts, although not enough to make up for historical funding gaps.
  • Analysis from our National Education Cost Model (NECM) shows New Jersey spends more than other states on schools; consequently, the state’s outcomes are higher than other states. Yet there are some districts in New Jersey, serving proportionally more students in economic disadvantage, that do not spending enough to meet the modest goal of national average outcomes.

Recommendations
  • Given the economic impact of the current pandemic and the increased costs of operating schools safely, all of New Jersey’s education stakeholders must unite and press for federal aid for schools. In addition, the state must consider raising additional revenues from its wealthiest residents, who pay less in taxes proportionally than middle-class residents.
  • In the face of the coming economic downturn, New Jersey should maintain and enhance the features of its school aid system that promote school funding progressiveness while decreasing tax regressiveness.
  • If cuts in state aid need to be made this year, New Jersey should first target the aid flowing to high-tax capacity districts, including categorical aid that is allocated outside of the adequacy formula.
  • If cuts in state aid need to be made, it is better to apply those cuts as a share of school district budgets, and not as a percent of state aid. Cutting aid as a share of aid will harm the highest-poverty, lowest-capacity districts more – those that are more dependent on aid to begin with.
  • SFRA spending targets should be recalibrated to align with new, higher standards; currently, they are too low, as they were based on previous, less rigorous outcome goals. Recalibration of the formula can occur without legislative change, a primary objective of the three-year Educational Adequacy Reports.
  • Judicial actions are not enough to ensure all of New Jersey’s students receive adequate funding: the state must take legislative and administrative actions to resolve the underfunding of many of its school districts, particularly those that do not have standing under the Abbott
  • New Jersey should stem the increase in the number of small, autonomous school districts, which tend to be less efficient than larger districts.
  • The state should conduct analyses of within-district spending differences, not local districts. These analyses should take into account drivers of cost differences such as special education, student characteristics, grade levels, and school type (magnet, charter, etc.). The methods described in this report will provide reasonable, actionable information for schools to more equitably allocate resources.


School Funding in New Jersey: An Overview

Years of research confirm an inescapable fact: Equitable and adequate funding is a prerequisite condition for providing a quality elementary and secondary education system. In past decades, when school funding has been increased students have benefited from those increases, demonstrating better outcomes in a range of educational measures.[2] Conversely, when school funding has been cut, students have suffered the consequences. Several recent studies reveal the adverse effects of the Great Recession of 2008 on student achievement.[3] Unfortunately, while adequate school funding is necessary for student success, public school systems across the country are currently bracing for an unprecedented economic recession resulting from the COVID-19 pandemic. Worse, most of these school systems, including schools in New Jersey, have still not fully recovered from the drastic cuts in school funding caused by the Great Recession.

NJPP’s first annual report on the state of New Jersey’s School Funding Reform Act (SFRA), released in 2019, addressed the first decade of the implementation of SFRA (2008 to 2018), the effects of the great recession on SFRA, and the failure of the state to fully recover and fund SFRA as designed.[4] As of that report, New Jersey had still not fully funded its school aid formula, and many districts faced significant gaps between their current spending levels and spending levels estimated in the formula as needed to achieve desired outcomes. Most of these spending gaps were a function of school districts failing to receive sufficient state aid because the state failed to fully fund its own formula. But some other districts fell below their “adequacy” targets because those districts failed to provide their full local contribution. Notwithstanding minor technical changes to the formula recommended in our first-year report[5] that have not been addressed, the long-term issues remain the same. New Jersey must both move toward fully funding the formula as it stands, while simultaneously considering the recalibration of that formula to today’s outcome goals and standards, as well as an increasingly diverse student population.

And yet New Jersey faces a severe fiscal crisis in the days ahead. The shock of the sudden economic shutdown will undoubtedly affect school budgets for years to come. Tax revenues will be lower as activity slumps, even as the state will have new public health spending obligations as it manages the effects of the pandemic. At the same time, it is impossible to imagine New Jersey making a meaningful recovery without adequately funded schools. A well-educated populace is the backbone of a strong economy, particularly in New Jersey, with its high rates of college attainment.[6] The state must not abandon its constitutional obligation to provide a “thorough and efficient system of free public schools” for its children; in fact, it will likely have to increase spending on schools given the realities of COVID-19. As the authors of this report have noted elsewhere:

Due to the COVID-19 pandemic, public schools will likely experience even greater revenue losses in the coming years than they did during the Great Recession. Further, it appears that safely reopening schools in the fall of 2020 will itself be costly. Much smaller class sizes will be required to meet social-distancing guidelines and contain the spread of the coronavirus; this, in turn, will require hiring additional personnel, finding new classroom space, and perhaps creating staggered schedules. It will mean more instructional hours for teachers, more staff hours spent cleaning and sanitizing facilities, and more complicated bus routes. Schools will have to budget for additional time and effort from maintenance and operations staff, food service workers, and other support positions. Nursing and other medical services — already inadequate in many schools (Willgerodt, Brock, & Maughan, 2018) — will need to be improved. And, to ensure equitable internet access, districts will have to redouble their investments in broadband and portable computers. Finally, since learning losses due to this spring’s school closures are likely to be most severe for students who live in poverty (Herald, 2020; Rothstein, 2020), schools in low-income neighborhoods will face especially daunting challenges come September. In short, we can expect the costs associated with reopening schools to be significantly greater this fall than in previous years, particularly in high-poverty schools and districts.[7]

Never has New Jersey been in such need of good school funding policy, grounded in high-quality research and sound analyses, that balances the needs of New Jersey’s children – especially its most disadvantaged children – with the state’s current fiscal realities. This series of reports strives to clarify the issues before the state regarding school funding by explaining where New Jersey is currently regarding K-12 education spending, how it arrived here, and the consequences of its school funding choices. This research lays the foundation for a school funding plan, as presented below.

Series Summary

Part 2: School Resources, Revenues, and Taxes

This report focuses on two of the three core indicators of statewide school funding fairness and effectiveness: effort and progressivity. Effort is a measurement of how much of a state’s economic capacity is directed toward K-12 education. Progressivity measures how much more (or less) a state’s neediest school districts receive relative to its most affluent. Compared to other states, New Jersey makes a strong effort to fund its schools: it devotes more of its economic capacity to education funding than most other states. Unfortunately, New Jersey decreased its share of economic capacity allocated to elementary and secondary school funding since the last recession. New Jersey’s high-poverty districts have suffered the greatest consequences of these reductions. Even though New Jersey exerts high effort relative to other states, it made less effort to fund schools after the Great Recession of 2009 then it did before. The state never made up for these losses in school revenues following the recovery; consequently, New Jersey has lost its position as the leader in progressive financing of schools.

New Jersey’s effort to fund schools is directly tied to its taxation system. Complaints about all taxes are a regular feature of political debates in New Jersey; however, New Jersey is not a tax-and-spend outlier. The state ranks 31st in the nation on own source revenues, and 8th in the nation on state and local taxes (as a percentage of income).[8] New Jersey also has less regressive state and local taxes than its neighbors: while the wealthiest residents still pay less in state and local taxes than those in the middle, New Jersey’s overall tax system does put more of the tax burden on its wealthiest citizens compared to many other states. An important reason for this relative progressiveness in taxes is the New Jersey school aid system. State aid to schools is tax relief: it makes state and local taxes more progressive because it distributes the tax burden for schools more equitably. New Jersey’s state school aid system is one of the primary reasons its taxes are less regressive here than they otherwise would be.

There are a multitude of problems with property taxation for local public goods and services, including schools. They are inequitable, both in terms of the revenues they generate and in terms of how they fall on local taxpayers. They tend to be regressive, with low income taxpayers paying a larger share of their income in property taxes. Many of these disparities are derived from over a century’s worth of manipulation of real estate markets, often with the primary goal of racial exclusion of home ownership in suburbs and orchestrated urban racial isolation through placement of low-income housing projects. Add to this the distortions in local tax rates created by placement of high value, though undesirable, industrial and utility properties.

But there’s one undeniable truth about revenues from property taxes that make it difficult, if not implausible, to eliminate them altogether from the revenue portfolio for schools: property tax revenues are far more stable than income or sales tax revenues. Fiscal planning for local public school districts, including maintenance of an equitable and adequate system of schooling, requires a balanced revenue portfolio inclusive of stable sources. The goal, moving forward, should be to identify the best strategies and creative policy options for taking advantage of the stability of property tax revenues while mitigating the inequities they have historically yielded.

While New Jersey is moderately better than most states at progressively funding its schools – driving funding where student needs are greatest and tax capacity is lowest – for the first time in decades, New Jersey’s highest-poverty schools are spending less than its lowest-poverty schools. This slide toward regressive funding has real and educationally meaningful consequences: New Jersey’s least affluent schools have fewer teachers per student and less competitive teacher salaries than they did before the recession of 2009.

In the face of an economic slump, federal aid for schools is critically important for all other states to operate safe and healthy schools in the coming years. New Jersey must also consider additional state taxes, targeted to its wealthiest residents, who still pay proportionally less than the state’s middle class.[9] If adequate federal and state aid isn’t forthcoming, however, New Jersey may be forced to consider cuts in state aid. In the previous recession, New Jersey (unlike other states) chose to make cuts based on a percentage of school budgets, and not on a percentage of state aid. This was a better – though still imperfect – approach that caused less harm to districts serving the most disadvantaged students. This report includes a simulation of cuts using both approaches; while neither is ideal, the harm to the districts enrolling students in the highest poverty quintile is clearly less when cuts are made based on school budgets.

Part 3: The School Funding Reform Act – 2020 Update

New Jersey’s School Funding Reform Act (SFRA) is designed to drive more funding to districts with greater needs but lower tax capacity. These are districts with lower property values; consequently, they must have much higher taxes rates simply to raise equivalent funds for their local schools. Students in these districts are more likely to be English language learners (ELL) and come from low-income families: these are the students research shows need more resources to achieve equal educational opportunity. SFRA, therefore, makes school funding more fair for both taxpayers and students.

Providing more funding to districts with higher concentrations of ELL and lower-income students is a common feature of state aid formulas, backed by a large body of research. ELL students require teachers with particular skills and training, as well as appropriate instructional materials and assessments.[10] While the amount varies across state contexts, there is no doubt that extra resources are needed to provide ELLs with effective instruction.[11] Similarly, modern research confirms that additional resources for lower-income students – used to reduce class sizes, lengthen instructional time, and increase educator salaries – yields significant and positive results.[12]

Unfortunately, tracking the funding of SFRA shows the collapse of progressive funding in New Jersey over the past decade. More school districts are falling below their spending targets in 2019 than they were in 2010, the first year of SFRA. This is because many districts have not received the state aid they should, and some districts are not making their local required effort to fund their schools. A common feature of districts falling well below SFRA funding targets (more than $5,000) is that they serve predominantly Latinx and low-income student populations. Schools in districts with larger funding gaps have fewer certified staff per pupil, and have less competitive teacher wages for otherwise similar teachers.

New Jersey saw its largest gains in student achievement for economically disadvantaged students during the mid-2000s – the same time when funding to Abbott school districts was being scaled up. After the Great Recession, however, the state pulled back from its commitment to equitable education funding; consequently, gains for disadvantaged students stalled. In addition, student “growth” is lower, year-after-year, in districts with funding gaps compared to districts without. In recent years, schools in districts with larger funding gaps have lower student outcomes on statewide standardized tests, demonstrating just how important adequate school spending is.

The Governor’s budget for this year – released before the pandemic – was moving more state aid toward traditionally underfunded districts, although not enough to make up for historical funding gaps.[13] In addition, SFRA spending targets were set based on older and lower standards for student learning; they are likely to be insufficient for the state’s newer, more rigorous standards. Closing these spending gaps must be a priority for New Jersey, even in the face of another recession. Our statistical models suggest that closing the SFRA funding gap leads to substantial gains in student outcomes. Closing a spending gap by $1,000, for example, is able to offset about half the difference in math achievement associated with a 10 percentage point increase in a district’s share of low-income students.

In the face of the coming economic downturn, New Jersey should maintain and enhance the features of its school aid system that promote school funding progressiveness while decreasing tax regressiveness. New Jersey’s school funding system has features that drive aid to districts that are already overfunded and have high local taxing capacity. Some state aid for special education, for example, automatically goes to more affluent districts, regardless of those districts’ ability to raise local revenues for schools. If cuts in state aid need to be made this year, New Jersey should first target the aid flowing to these high-capacity districts, including categorical aid that is allocated outside of the adequacy formula.

If further cuts need to be made, it is better to make cuts based on school budgets, and not simply cut overall state aid. Cutting school budgets will still harm the highest-poverty districts, but less than cutting state aid. Judicial actions are not enough to ensure all of New Jersey’s students receive adequate funding: the state must take legislative and administrative actions to resolve the underfunding of many of its school districts, particularly those that do not have standing under the Abbott rulings. In addition, SFRA spending targets should be recalibrated to align with new, higher standards; currently, they are too low, as they were based on previous, less rigorous outcome goals.

Cutting State Aid to Schools Is Always Harmful – But There Are Less Harmful Ways To Cut

Scenario Poverty Quintile Local per Pupil

 

 State per Pupil Cut per Pupil Total per Pupil After Cut
Baseline 1-Lowest $9,020 $1,942 $10,962
2-Low $8,375 $2,372 $10,746
3-Middle $7,512 $2,953 $10,466
4-High $6,161 $3,935 $10,096
5-Highest $2,623 $8,166 $10,789
Cut 12 percent of State Aid

 

More harmful to high-poverty
school districts.

 1-Lowest $9,020 $1,709 $233 $10,729
2-Low $8,375 $2,087 $285 $10,461
3-Middle $7,512 $2,599 $354 $10,111
4-High $6,161 $3,463 $472 $9,624
5-Highest $2,623 $7,186 $980 $9,809
Cut 5 percent of Per Pupil Revenue

 

Less harmful to high-poverty
school districts.

 1-Lowest $9,020 $1,393 $548 $10,414
2-Low $8,375 $1,834 $537 $10,209
3-Middle $7,512 $2,430 $523 $9,943
4-High $6,161 $3,430 $505 $9,591
5-Highest $2,623 $7,626 $539 $10,250
Part 4: The Cost of an Adequate Education In New Jersey

This report turns the focus to adequacy: whether schools have the resources they need to meet a common educational goal. To evaluate New Jersey’s adequacy in school funding, we use the National Education Cost Model (NECM), a method that takes into account both school inputs (spending) and outputs (test scores) to determine whether districts and states are spending what they need to provide students with a quality education.

Our analysis shows New Jersey spends more than other states on its schools; consequently, New Jersey’s educational outcomes are better than those in other states. Yet there are some districts in New Jersey, serving proportionally more students in economic disadvantage, that do not spend enough to meet the modest goal of national average outcomes. These under-spending school districts have higher concentrations of Black and Latinx students, and fewer teachers per 100 students, than other districts that spend adequately. Many of these districts were not Abbott districts: they did not have standing under the earlier Abbott rulings and subsequently did not receive the benefits of increased spending during the pre-SFRA period.

Coupled with the analysis in Part III of this series, there is adequate evidence to show that even as New Jersey is relatively high spending and high achieving state, it has many districts that still do not have enough funding to achieve average educational outcome goals. New Jersey must acknowledge this limitation and fix its state aid formula so districts can meet the challenge of providing an adequate education for all students – even in the face of the post-pandemic fiscal crisis.

Some New Jersey school districts are particularly underfunded by multiple measures.

District SFRA Adequacy Budget (Incl. Spec Ed) NJDOE Adequacy Budget NJDOE Gap per Pupil SFRA Simulated Gap per Pupil NECM Gap per Pupil
EAST NEWARK BORO $22,464 $20,417 -$9,327 -$11,374 -$11,639
DOVER TOWN $21,346 $19,893 -$8,586 -$10,039 -$1,600
FAIRVIEW BORO $20,030 $18,821 -$8,746 -$9,955 -$7,687
GUTTENBERG TOWN $21,573 $19,876 -$7,965 -$9,662 -$6,250
BOUND BROOK BORO $21,473 $20,234 -$8,123 -$9,362 -$1,050
FREEHOLD BORO $20,112 $18,812 -$6,565 -$7,865 -$5,938
PROSPECT PARK BORO $19,155 $17,907 -$6,372 -$7,620 -$4,930
BELLEVILLE TOWN $20,151 $18,167 -$5,615 -$7,599 n/a
LINDENWOLD BORO $20,545 $19,282 -$6,101 -$7,364 -$1,541
CARTERET BORO $20,569 $18,733 -$5,406 -$7,242 n/a
WEST NEW YORK TOWN $21,821 $20,340 -$5,686 -$7,167 -$6,059
Part 5: Inequities Within School Districts

State school funding systems like New Jersey’s focus on allocating resources between districts. There has, however, been increasing federal focus on within-district funding inequities – differences in resources between schools within the same district. For a state like New Jersey, this is a secondary concern: most districts in the state are not large enough to have schools with significant differences in students or resources. In addition, the differences in resources that do exist within districts are often driven by variations in grade levels or special education populations. Attempts to measure within-district inequities in school funding must account for these differences.

Nevertheless, within-district inequities are a valid concern, and federal law requires New Jersey to collect data and conduct analyses. This report suggests methods for conducting these analyses: specifically, school disparity analysis should explore how resources differ between schools based on factors such as student disadvantage, English Language Learner (ELL) status, grade level, special education status, and school type (district, magnet, charter, etc.). The state should conduct these analyses, not local districts, as the state is more likely to develop the data gathering and analysis capacities needed. The methods we describe in this report will provide reasonable, actionable information for schools to more equitably allocate resources.

This report also notes that, despite evidence that school districts with lower enrollments and smaller schools are less efficient than larger ones (up to a point), New Jersey has expanded its number of small districts and schools, largely by expanding the number of autonomously operated charter schools. In a time of looming financial crisis, the state should assess whether expanding the number of small schools is fiscally prudent

A Plan for School Funding in New Jersey During and After the Pandemic

Now more than ever, equitable and adequate school funding is critically important for New Jersey’s future. Well-funded schools have always led to better student outcomes, greater individual opportunities, and a stronger economy. But in the days ahead, adequate funding will also be necessary to keep New Jersey’s students healthy and fully engaged in learning – even if students attend school virtually. As difficult as it may be, the state should set its sights on the future – a future that will only be bright if it includes a well-educated citizenry. This means ensuring that schools have the resources they need to address students’ learning needs and keep them safe.

We hope that New Jersey’s K-12 education policymakers and stakeholders find the analysis and recommendations in this series of reports useful as they prepare for the days ahead. Based on our findings, what follows is a plan for school funding during and after the current pandemic.

1.   Press for federal relief

As the authors of this series have noted elsewhere: Only the federal government has the ability to tax or borrow on the scale required to cover the states’ ongoing expenses in education, healthcare, and other sectors.[14] Earlier this year, Bruce Baker and Matthew Di Carlo presented a plan for federal intervention to stabilize revenues for public elementary and secondary schools.[15]The plan allocates revenues to states in two phases: first, a major aid package, distributed over two years, to offset the initial shock to state revenue systems; second, a gradual, three-year process of reducing federal aid back to pre-pandemic levels. This plan would help states like New Jersey avoid adopting austerity measures that would harm public schools and the students they serve. Obviously, New Jersey has limited power over federal policy. All of the state’s education stakeholders, however, should agree to work in concert to press for federal aid for schools along with the other states, which face a similar fiscal crisis.

2.   Prepare to spend more on schools to keep them safe and healthy.

The health and safety of all children must be a top priority for state and local government. Until the pandemic can be stopped, schools must prepare for a new way of teaching students. Social distancing (requiring smaller class sizes), enhanced maintenance, more health and nursing services, greater access to technology and broadband: this is the new reality of public schooling in New Jersey. The costs must be accounted for when making decisions about the allocation of state aid to schools.

3.   Maintain school funding progressiveness

In the face of the coming economic downturn, New Jersey should maintain and enhance the features of its school aid system that promote school funding progressiveness while decreasing tax regressiveness. The School Funding Reform Act (SFRA), as originally designed, drives state aid to districts serving the neediest students, which also happen to be the districts with the least ability to raise their own revenues locally. This should be the ongoing and sustained direction of SFRA: putting money where it is needed most. The state should not, therefore, change the features of SFRA that make it progressive, such as reducing student weights for low-income or English Language Learner status.

4.   Put tax increases on the table

Too often, lawmakers automatically rule out any tax increase during an economic downturn (or, for that matter, during a period of growth). But overall state and local taxes in New Jersey are regressive: the state’s wealthiest residents pay less as a percentage of their income than taxpayers in the middle quintile. Asking the most affluent residents of New Jersey to pay at least as much as the average resident so schools can function during and after a pandemic is a reasonable request and sound policy.

5.   Keep property taxes, but consider reforms

Complaints about property taxes are a perennial feature of New Jersey politics – and many of those complaints are valid. Yet despite the aforementioned problems associated with property taxes, they have the one important virtue of being much less volatile than income or sales taxes. Keeping them a part of the school funding mix, therefore, helps districts when budgeting for the future. Creative reforms to property taxation, such as such as pooling commercial and industrial property taxes and redistributing them statewide, may mitigate tax and revenue inequities and regressiveness for local residential property owners; policymakers should consider such reforms.

6.   If the state must make cuts in school aid, first target the aid going to high-capacity districts

SFRA has features that allocate state aid to school districts that already have the capacity to raise adequate funds locally. Some special education aid, for example, flows to districts that could raise needed revenues on their own. Other “categorical” aid goes to higher-wealth districts, regardless of their capacity to raise taxes. This aid is the result of political compromises; however, in a crisis, those compromises become a luxury the state cannot afford. While cutting school aid is never desirable, New Jersey should first target aid going to these “zero-aid” districts.

7.   It is better to cut school district budgets than cut school district aid

In the last recession, New Jersey, unlike other states, chose to make cuts in state aid to districts based on a percentage of their budgets, and not on a percentage of state aid they received. While the cuts were harmful, these were “better” cuts: they harmed the districts enrolling the most disadvantaged students less than they could have. If the state must cut aid, it should once again base those cuts on budgets. An even better approach would be to start by only cutting and/or reallocating state aid presently allocated to districts whose spending exceeds their formula adequacy targets.

8.   Recalibrate SFRA to new, higher learning standards

SFRA’s original spending targets were set based on old, outdated outcome goals. Schools are now expected to teach to new, more rigorous standards, while students take ambitious tests aligned to these standards. SFRA’s spending targets should be recalibrated to align with these new goals: if schools are expected to adhere to higher standards, they need more resources. It may also be valuable to consider, at this juncture, the role of health and counseling services in schools, and recalibrating state support for these purposes.

9.   Do not wait for judicial actions to equalize school funding

Judicial actions are not enough to ensure all of New Jersey’s students receive adequate funding: the state must take legislative and administrative action. Too many districts that do not have standing under the Abbott rulings have been harmed by the underfunding of SFRA. Many of these districts have large populations of Latinx, English language learners, and low-income students – the very students who need more resources to equalize educational opportunity. Education stakeholders should not expect the courts to solve this problem; the legislative and executive branches must, instead, be proactive and ensure that all of New Jersey’s children have access to well-funded schools.

10. Reconsider the increase of small, autonomous school districts

Research shows that very small schools and school districts are needlessly inefficient. In New Jersey, many are also needlessly racially segregated. Yet New Jersey has allowed the growth of these autonomous entities (some of which are charter schools) over the past decade. Some of these districts also exacerbate racial and economic segregation and isolation. In a time of economic crisis, the state should reconsider whether it can afford more small, autonomous school districts.

11. The State should conduct within-district funding equity analyses

The state should conduct analyses of within-district spending differences, not local districts. These analyses should take into account drivers of cost differences such as special education, student characteristics, grade levels, and school type (magnet, charter, etc.). The methods described in this report will provide reasonable, actionable information for schools to more equitably allocate resources.

12. School funding policies must ameliorate, not perpetuate, systemic racism

The analyses in this series of reports repeatedly show that the greatest harms from school underfunding are felt by New Jersey’s students of color, particularly Latinx and black students. For years, the state has refused to provide the necessary funding these students need to equalize educational opportunity. This must not stand. While education, by itself, cannot negate centuries of racism and oppression, it remains a necessary part of any broad program of social and racial justice. Even a severe economic downturn cannot be used an excuse to continue to underfund schools serving students of color; doing so will only continue to perpetuate the systemic racism that has oppressed these students for far too long.

 

Endnotes

[1] Baker, B. D. (2017). How Money Matters for Schools. Learning Policy Institute. https://learningpolicyinstitute.org/product/how-money-matters-report

[2] Jackson, C. K. (2018). Does school spending matter? The new literature on an old question (No. w25368). National Bureau of Economic Research.

[3] Shores, K., & Steinberg, M. (2017). The impact of the Great Recession on student achievement: Evidence from population data. Available at SSRN 3026151.

Jackson, C. K., Wigger, C., & Xiong, H. (2018). Do school spending cuts matter? Evidence from the Great Recession (No. w24203). National Bureau of Economic Research.

[4] Baker, B. D., & Weber, M. (2019). New Jersey’s School Funding Reform Act at 10 Years. New Jersey Policy Perspective.https://www.njpp.org/reports/in-brief-new-jerseys-school-funding-reform-act-at-10-years

[5] Which include using a competitive wage adjustment in place of a CPI to address inflation, and also to capture regional variation in wages at the labor market, rather than at the county level.

[6] The Almanac of Higher Education, 2018-19. Washington, D.C.: The Chronicle of Higher Education. https://www.chronicle.com/interactives/almanac-2018

[7] Bruce D. Baker, Mark Weber, and Drew Atchison (June 1, 2020). Weathering the storm: School funding in the COVID-19 era. Phi Delta Kappan. https://kappanonline.org/school-funding-covid-19-baker-weber-atchison/

[8] US Census Bureau Annual Survey of State and Local Government Finances, 1977-2017 (compiled by the Urban Institute via State and Local Finance Data: Exploring the Census of Governments; accessed 23-Jun-2020 02:26), https://state-local-finance-data.taxpolicycenter.org

[9] New Jersey lawmakers recently reached a deal to increase taxes on the state’s wealthiest residents. See: Tully, T. (September 17, 2020). “Deal Reached in N.J. for ‘Millionaires Tax’ to Address Fiscal Crisis” The New York Times.  https://www.nytimes.com/2020/09/17/nyregion/nj-millionaires-tax.html

[10] Rumberger, R. W., & Gándara, P. (2015). Resource Needs for Educating Linguistic Minority Students. In Handbook of Research in Education Finance and Policy (Second Ed.),  pp. 585–606. New York: Rutledge.

[11] Sugarman, J. (2016). Funding an Equitable Education for English Learners in the United States. Migration Policy Institute.  https://www.migrationpolicy.org/research/funding-equitable-education-english-learners-united-states

[12] Baker, B. D. (2016). Does Money Matter in Education? Second Edition. The Shanker Institute.http://www.shankerinstitute.org/resource/does-money-matter-second-edition

[13] See Part 3  of this series for details.

[14] Bruce D. Baker, Mark Weber, and Drew Atchison (June 1, 2020). Weathering the storm: School funding in the COVID-19 era. Phi Delta Kappan. https://kappanonline.org/school-funding-covid-19-baker-weber-atchison/

[15] Bruce D. Baker and Matthew Di Carlo (April, 2020). The Coronavirus Pandemic and K-12 Education Funding. Washington, D.C.: The Shanker Institute .https://www.shankerinstitute.org/sites/default/files/coronavirusK12final.pdf

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