In lieu of an abstract, here is a brief excerpt of the content:

  • New Jersey
  • Luke J. Stedrak and Robert Kelchen

state issues affecting p–12 and/or higher education funding

Education funding in New Jersey is under heavy pressure due to the state’s estimated $83 billion pension shortfall,1 even though immediate cuts to funding in 2015 were avoided after the state Supreme Court ruled that Governor Chris Christie legally acted to reduce pension payments by $1.6 billion in order to fund education and other priorities.2

funding priorities/trends for p–12 and/or higher education

New Jersey Governor Chris Christie has announced additional funding priorities to focus on: preparation for approaching Partnerships for Assessment of Readiness for College and Careers (PARCC) assessments, increasing access to preschool education and expanding school choice.3 New Jersey’s FY 2016 budget includes $9.9 billion in P-12 education funding, up from $9.5 billion in FY 2015.4 However, this is approximately $1 billion less than is needed to fully fund the state’s K-12 education formula under the School Funding Reform Act.5 State appropriations for higher education decreased from $734.8 million to $700.7 million for four-year colleges and from $222.7 million to $220.7 million for two-year colleges in FY 2016, which was driven by colleges being required to cover a larger portion of fringe benefit costs. New Jersey allotted $404.7 million for student financial aid (almost all of which is need-based) in FY 2016, an increase of $28 million over FY 2015.6 [End Page 253]

changes to funding formula for p–12 and/or higher education

There have not been any major edits to the P-12 funding formula for New Jersey. The mechanism has both wealth-equalized and categorical aid. Wealth-equalized aid requires equality by assuring that each district has adequate funds based on the ability to generate local revenue. Categorical aid is disbursed with a combination of student data and the cost associated with that category.

Adequacy Budget = (Base Cost + At-Risk Cost (Based on eligibility for free and reduced lunches) +Limited English Proficient Cost + Combination (of Limited English Proficient and At-Risk) Cost + Special Education Census) × Geographic Cost Adjustment

Categorical aid is still provided based on the following seven categories: special education, security, transportation, pre-school, debt service aid / benefit payments, and school choice aid.7 Further, the decentralized nature of the higher education structure in New Jersey, and the lack of a clear strategic plan, mean that funding for appropriations and financial aid are on an ad hoc basis and are primarily influenced by previous allocations.

effect on school district or higher education budgets

A recent New Jersey emphasis has been on a public school choice program in which districts may choose to enroll students who reside out of district without student costs.8 Although financial aid budgets have increased, the decline in higher education appropriations has resulted in state funding making up a smaller share of colleges’ budgets. This has led colleges to try to cut costs (such as Bergen Community College’s decision to replace 64 full-time instructional staff with adjuncts)9 and increase revenue from other sources (as evidenced by a $40 million increase in fundraising at Rutgers).10 [End Page 254]

Luke J. Stedrak and Robert Kelchen
Seton Hall University


1. New Jersey Pension and Health Benefits Study Commission. “A Roadmap to Resolution: Report of the New Jersey Pension and Health Benefits Study Commission.” Trenton, NJ: Author, 2015.

2. Haddon, Heather. “New Jersey Court Backs Chris Christie Administration on Pension Payments.” The Wall Street Journal. June 9, 2015.

3. State of New Jersey. “The Governor’s FY 2015 Budget: Budget Summary.”

4. State of New Jersey. “2016 Appropriations Act.”

5. New Jersey Department of Education. “2015–16 State Aid Summaries.”

6. State of New Jersey. “2016 Appropriations Act.”

7. New Jersey...


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