News

N.J.’s Use of ARRA Funds

August 11, 2009

Laura Waters

The Campaign for Educational Equity based at Teachers College, Columbia University, has published an analysis of each state’s application for ARRA school stimulus money. Its conclusion is that just about everyone’s given short shrift to equity:

Of the three stated educational goals of the Act — stabilizing education funding, allowing continuation of equity and adequacy reforms, and promoting education reforms to boost student achievement — only the first seems to have been substantially achieved. Virtually all of the states have stabilized their funding levels for FY 2010 at the previous year’s level, with the application of the federal stimulus funds. ( In many instances, however, this “flat funding” will nevertheless result in substantial cuts in educational services since mandatory cost increases will not be covered.)

How’d New Jersey do? Not so well. In fact, we’re singled out (along with Georgia, Virginia, and Washington) for acknowledging up front that we anticipate “falling short of full-funding levels in spite of the infusion of stimulus money.” The report notes specifically,

We do know from other sources that New Jersey’s budget shortfalls do specifically undercut equity and adequacy adjustments called for by the statutory formulae

“Other sources?” Could that be the Education Law Center’s June 2nd missive to Arne Duncan in which “ELC writes to request that the USDOE reject New Jersey’s amended application for initial funding under the State Fiscal Stabilization Fund Program?”

The 3-page letter, signed by Executive Director David Sciarra, explains that N.J. is violating ARRA’s directive to use the money not only to stabilize school spending in spite of the economic recession, but also to use the stimulus money “for phasing in State equity and adequacy adjustments.” While N.J., “correctly designates” Corzine’s School Funding Reform Act as the formula for distribution, ELC claims that we violate our own plan by only partially funding it, even with all the ARRA money. – we’re $3.3 million short. Sciarra also notes that, in turn, we’ve violated the terms of the State Supreme Court’s recent Abbott v. Burke decision, which is “premised on the expectation that the State will continue to provide school funding aid during this and the next two years at the levels required by SFRA’s formula each year.”

The USDOE, by the way, rejected ELC’s appeal. N.J. will get the stimulus money. We will also, according to ELC and The Campaign for Educational Equity, shortchange poor kids by limiting our use of ARRA money to maintaining the status quo.

How can we do otherwise? Our school infrastructure – 600 districts with demographics determined by tiny swatches of a diverse and segregated state – destines educational inequity among schools. The problem’s not whether we have enough money. (We do – our per pupil costs are about the highest in the country. Part of our problem is that we equate increases in student achievement with increases in funding.) By slicing ourselves so thin, we create school districts restricted to single neighborhoods, which drives up segregation. Unless we address our allegiance to local governance, the best we can do with public education in New Jersey is separate and equal. Right now we’re not even close to that low bar.

Laura Waters

5 Comments

Bruce, August 11, 2009 @ 9:14 pm Reply

Some really great points here. Kind of strayed from the original discussion of stimulus money, but in an important direction. I should note that we (a separate group) will have more detailed state by state analyses of stimulus funding in the near future. We are evaluating the actual distributions in state budgets – not what states said they would distribute in their applications (which tend not to be accurate). The TC Columbia group looked only at applications.

Now, to your other point: You have very nicely and concisely explained the major reason why fixing NJ schools is an expensive task. Let's start by acknowledging that NJ schools, on average, spend a lot, and on average, do quite well (see: http://schoolfinance101.wordpress.com/2009/06/17/vacuous_bowdon/) That we are unsatisfied with doing as well as we are doing is a good thing.

What I like about this post is that you point out that it is the combination of inefficiently small schools and racial & economic segregation that dramatically increase the costs of having good schools. I will, as soon as I get a chance, put together a blog entry that addresses the magnitude of the additional costs associated with a) small districts in NJ, b) racially isolated districts in NJ and c) the combination of the two.

On the size issue alone, a K-12 district under 800 students in NJ has a cost per pupil, of achieving the same outcomes as the larger district that is $2,000 higher than larger districts. A K-8 district under 300 students has a similarly elevated cost compared to larger K-8 districts. This is a cost differential, per kid, that need not exist in a population dense state.

Predominantly black & poor districts must pay a substantial wage premium to recruit/retain teachers of comparable qualifications (to “average” districts). That wage premium is eliminated when racial isolation is eliminated. And, there are additional cost pressures associated with improving outcomes in these settings.

Funding the system in its current structure is somewhat like chasing one's tail. But, spending more is likely a more politically palatable option than tackling these much deeper and more complex problems. And, it is least ethical to do neither (though some states do just that).

There's a fun connection here with the Mt. Laurel decisions and COAH (Mixing Abbott and COAH in the same conversation is really popular).

Thanks for addressing this head on!
Dyrnwyn, August 11, 2009 @ 11:05 pm Reply

I wish any of this really mattered. Sure difficult kids require more money in many cases (though there are myriad lower-cost alternatives that seems to be getting it done with the same children). New Jersey has some really good schools (though only one high school in the top 100 despite its spending) and more than its fair share of terrible to downright horrible ones (all five of the Camden middle schools in Year 8 of missing AYP for instance). But the ELC, though rightly pinpointing this, has missed the issue entirely.

This state cannot afford its public education system anymore. This is made worse by the governor's desire to “reinforce” his friendship with the NJEA and the education establishment at every turn. remember…even with the state stabilization aid (the no teacher layoff fund) he still added another $300 million dollars to public education spending. And we still added another 1200 teachers to the workforce despite declining enrollment. And we still increased teacher payroll by another $400 million despite the economy.

We have a spending problem. When you don't control what you spend, you will always have a revenue problem, whether it's your credit card, or Uncle Sam's.
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Bruce, August 12, 2009 @ 3:05 pm Reply

A few random points to address here:

1) keep in mind that the average private independent day school operating pk-12 (non-church subsidized schools which actually file tax returns) still spends far more than the average NJ public school district and more than most Abbott districts (and serve relatively large numbers of children). I have a major report on this topic to be released next Tuesday and an Ed Week commentary to follow. Independent Catholic schools spend about the same as public schools and those which have been trying to get by spending much less are financially failing at an increasing rate. That is, private sector market pricing of pk-12 education in this region remains higher than the public expenditure per child – yep – even in NJ (though it’s closer in NJ than nearly any other state).

2) One additional culprit to blame here is our neighbor to the east/north. In the late 1990s (around 1998 I believe), New York state implemented as part of their state aid program a tax relief aid program targeted at affluent Westchester and Long Island districts (STAR aid increases with wealth). Rather than stimulating substantial property tax cuts this aid has arguably led to a spending spree over time in these districts, many of which compete directly for teachers and administrators with North Jersey districts. It’s kind of like giving Neiman-Marcus $100 gift certificates to billionaires. They’re more likely to take the $100 and spend $500 than to save the $100. Salaries for teachers and administrators in NY districts tend to be much higher than NJ salaries and have rapidly outpaced NJ salaries – especially for administrators (poor NY districts are really out of luck though, including NYC). NY Times columnist Ford Fessenden has written about this in the past (counting up the number of principals and district administrators making over $300k per year). The cost of operating schools is obviously strongly influenced by the competitive wage for most school personnel – teachers. What happens in NY State doesn’t necessarily in NY State.
Dyrnwyn, August 12, 2009 @ 4:54 pm Reply

I like forward to your study, but I have to ask…does it include $12 billion in school construction, pension, healthcare, and benefit subsidies that far outpace anything in the private professional or school sectors? the cost of public education is magnified by myriad factors that don't include the cost of those currently deployed in schools, a fundamental difference between private and public school costs.

Your point about actual private school costs is well taken…I am on the board of two private schools which serve low-income students and tuition cost subsidies essentially destroy the model. Which raises the question: if you are going to pay “X” to educate a student, would you rather do it in a school where there is actually learning happening, and where the workforce is ostensibly private, so their compensation is in line with the economy at large, or in one where achievement is middling to terrible, but the workforce and facilities cost continue to scale independent of any current economic factors, and for the literal life of the employees? Bruce, I know you work on this stuff, but it's tough to ignore the realities of what I am saying here, regardless of equal current-day pricing.