ASSEMBLY, No. 613
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman LUSTBADER
An Act concerning State school aid for certain school districts and revising various parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1990, c.52 (C.18A:7D-3) is amended to read as follows:
3. For the purposes of this act, unless the context clearly requires a different meaning:
"Adjusted resident enrollment" means the number of pupils who, on the last school day prior to October 16 of the prebudget year, are residents of the district and are enrolled in: (1) the public schools of the district, except as a post-graduate or evening school pupil; or (2) another school district to which the district of residence pays tuition other than a county vocational school district in the same county or county special services school district; provided that a district shall count pupils in a shared-time vocational program who are regularly attending both the schools of the district and of a county vocational school district on an equated full-time basis in accordance with procedures to be established by the commissioner. For purposes of this section, resident enrollment shall include, beginning in the 1992-93 school year and thereafter, regardless of nonresidence, the enrolled children of teaching staff members of the school district who are permitted, by contract or local district policy, to enroll their children in the educational program of the school district without payment of tuition.
"Bilingual education pupil" means a pupil enrolled in a program of bilingual education approved by the State board.
"County vocational school, special education services pupil" means a pupil who is attending a county vocational school and who is receiving specific services pursuant to chapter 46 of Title 18A of the New Jersey Statutes in special class programs when the pupil is enrolled in a special class register.
"CPI" means the average annual increase, expressed as a decimal, in the consumer price index for all urban consumers in the New York City and Philadelphia areas during the three fiscal years preceding the prebudget year as reported by the United States Department of Labor.
"Current expense" means all expenses of the school district, as enumerated in N.J.S.18A:22-8, other than those required for interest and debt redemption charges and any budgeted capital outlay.
"Debt service" means and includes payments of principal and interest upon school bonds and other obligations issued to finance the acquisition of school sites and the acquisition, construction or reconstruction of school buildings, including furnishings, equipment and the costs of issuance of such obligations and shall include payments of principal and interest upon bonds heretofore issued to fund or refund such obligations, and upon municipal bonds and other obligations which the commissioner approves as having been issued for such purposes. Debt service pursuant to the provisions of P.L.1978, c.74 (C.18A:58-33.22 et seq.), P.L.1971, c.10 (C.18A:58-33.6 et seq.) and P.L.1968, c.177 (C.18A:58-33.2 et seq.) is excluded.
"District income" means the aggregate income of the residents of the taxing district or taxing districts, based upon data provided by the Bureau of the Census in the United States Department of Commerce for the most recent year prior to the budget year.
With respect to regional districts and their constituent districts, however, the district income as described above shall be allocated among the regional and constituent districts in proportion to the number of pupils in each of them. For the 1991-92 school year, regional and constituent pupils shall include pupils attending the schools of a county vocational school or a county special services school district. Part-time post-secondary vocational pupils are to be excluded from this calculation.
"Equalized valuation" means the equalized valuation of the taxing district or taxing districts as certified by the Director of the Division of Taxation on October 1 of the prebudget year.
With respect to regional districts and their constituent districts, however, the equalized valuations as described above shall be allocated among the regional and constituent districts in proportion to the number of pupils in each of them. For the 1991-92 school year, regional and constituent pupils shall include pupils attending the schools of a county vocational school or a county special services school district. Part-time post-secondary vocational pupils are to be excluded from this calculation. With respect to certain operating school districts, other than school districts that received funds through a municipal budget in 1989 as determined pursuant to column 1 (c) of Section C of the Abstract of Ratables, that are composed of one or more taxing districts, where 20% or more of the land area of the taxing district is situated within the development district subject to an intermunicipal tax sharing agreement pursuant to P.L.1968, c.404 (C.13:17-1 et seq.), the equalized valuation shall equal the product of .70 and the amount of equalized valuation certified by the director.
"Evening school pupils" means the equated full-time resident enrollment of pupils enrolled in a public evening school established pursuant to N.J.S.18A:48-1.
"Local levy budget" means the sum of the foundation aid and transition aid received by a school district and the district's local levies for current expense and capital outlay.
"Maximum Statewide foundation aid" shall be determined annually by subtracting the total State aid payable pursuant to sections 14, 16, 80 and 81 of P.L.1990, c.52 (C.18A:7D-16, 18A:7D-18, 18A:7D-20 and 18A:7D-21) and sections 26, 29, 30 and 31 of P.L.1991, c.62 (C.18A:7D-21.1 et al.) from the maximum State school aid, by subtracting the funds appropriated pursuant to section 38 of P.L.1991, c.62 (C.18A:7D-28.2), and by adding any additional State aid which results from the provisions of section 27 of P.L.1991, c.62.
"Maximum State school aid" shall be determined for the 1992-93 school year and annually thereafter by adding 80% of the increase in the State school aid inflator and the maximum State school aid for the prebudget year. However, beginning in the 1993-94 school year, the Governor may increase the maximum State school aid to an amount not to exceed the value of the State school aid inflator.
The State school aid inflator shall be determined for the [1992-93] 1993-94 school year and annually thereafter by multiplying the value of the school aid inflator for the prebudget year by the sum of 1.01 and the PCI. For the [1991-92] 1993-94 school year, the value of the school aid inflator in the 1992-93 school year is[$4,250,000,000] $4,569,425,000.
"Net budget" means the sum of the foundation aid received by a school district and the State aid received pursuant to sections 14, 16, 25, 80, and 81 of P.L.1990, c.52 (C.18A:7D-16, 18A:7D-18, 18A:7D-33, 18A:7D-20, and 18A:7D-21) and sections 26 and 31 of P.L.1991, c.62 (C.18A:7D-21.1 et al.) and the district's local levies for current expense and capital outlay. For a county special services school district, the net budget shall also include tuition received by the district to provide services pursuant to chapter 46 of Title 18A of the New Jersey Statutes.
"Net debt service" means the balance after deducting all revenues from the school debt service budget of the school district and the school debt service amount included in the municipal budget, except the amounts to be raised by local taxation and State aid.
"Postgraduate pupils" means pupils who have graduated from high school and are enrolled in a secondary school for additional high school level courses.
"Prebudget year" means the school year preceding the year in which the school budget will be implemented.
"Pupils eligible for free meals or free milk" means those children who have been determined to be eligible to receive a free meal or free milk under the National School Lunch Act, 42 U.S.C. §1751 et seq., and the Child Nutrition Act of 1966, 42 U.S.C. §1771 et seq., as of October 15 of the prebudget year.
"PCI" means the average annual percentage increase, expressed as a decimal, in State per capita personal income over the four fiscal years ending on June 30 prior to the prebudget year. The per capita personal income for each of the four years shall be the average of the per capita personal income for the four quarters in each fiscal year utilizing the quarterly data for State personal income and State population as published by the United States Department of Commerce.
"Resident enrollment" means the number of pupils who, on the last school day prior to October 16 of the prebudget year, are residents of the district and are enrolled in: (1) the public schools of the district, including evening schools; (2) another school district, other than a county vocational school district in the same county or county special services school district on a full-time basis, State college demonstration school or private school to which the district of residence pays tuition; (3) a State facility; (4) are receiving home instruction; or (5) are in a shared-time vocational program and are regularly attending a school in the district and a county vocational school district. Pupils in a shared-time vocational program shall be counted on an equated full-time basis in accordance with procedures to be established by the commissioner. For purposes of this section, resident enrollment shall include, beginning in the 1992-93 school year and thereafter, regardless of nonresidence, the enrolled children of teaching staff members of the school district who are permitted, by contract or local district policy, to enroll their children in the educational program of the school district without payment of tuition.
Handicapped children between three and five years of age and receiving programs and services pursuant to N.J.S.18A:46-6 shall be included in the resident enrollment of the district.
"School district" means any local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes and any county special services or county vocational school districts established pursuant to chapter 46 or chapter 54 of Title 18A of the New Jersey Statutes.
"Special education services pupil" means a pupil receiving specific services pursuant to chapter 46 of Title 18A of the New Jersey Statutes in special class programs when the pupil is enrolled in a special class register.
"Special needs district" means any school district, other than a school district in which the equalized valuation per pupil is more than twice the average Statewide equalized valuation per pupil, which, as of June 5, 1990: a. was classified by the Department of Education as an urban school district and was included in the department's district factor group A or B; or b. in which the quotient produced by dividing the number of pupils eligible for AFDC by the resident enrollment, less the number of preschool, evening school and post-graduate pupils, is greater than or equal to 0.15 and the number of pupils eligible for AFDC is greater than 1,000. For this calculation, pupils eligible for AFDC means those children aged 5-17 and resident in the district who are members of families which are eligible for "Aid to Families with Dependent Children" pursuant to P.L.1959, c.86 (C.44:10-1 et seq.), as of September 30 of the prebudget year.
"State facility" means a State residential facility for the retarded; a day training center which is operated by or under contract with the State and in which all the children have been placed by the State, including a private school approved by the Department of Education which is operated under contract with the Bureau of Special Residential Services in the Division of Developmental Disabilities in the Department of Human Services; a State residential youth center; a State training school or correctional facility; a State child treatment center or psychiatric hospital.
"Statewide average equalized school tax rate" means the amount calculated by dividing the sum of the current expense and capital outlay tax levies for all school districts, other than county vocational school and county special services school districts, in the State for the pre-budget year by the equalized valuations of all taxing districts in the State except taxing districts for which there are no school tax levies.
"Statewide equalized valuation" means the equalized valuation of all taxing districts in the State as certified by the Director of the Division of Taxation on October 1 of the prebudget year. In the event that the equalized table certified by the Director of the Division of Taxation shall be revised by the tax court after December 15 of the prebudget year, the revised valuations shall be used in the recomputation of aid for an individual school district filing an appeal, but shall have no effect upon the calculation of the property value multiplier.
"Total Statewide income" means the sum of the district incomes of all taxing districts in the State.
(cf: P.L.1991, c.62, s.1)
2. Section 9 of P.L.1990, c.52 (C.18A:7D-9) is amended to read as follows:
9. Each district's adjusted income shall equal the district income,
unless the district meets the conditions in subsection a. or c, whichever is greater.
a. If for any school district:
RV < 0.5 and RI/RV > 1.5; then the district's adjusted income shall equal the greater of:
(1) P - ($15,000 x E); or
(2) 1.5 x RV x SI x E where
P is the district income;
SI is the State average income per pupil, calculated by dividing total Statewide income by the Statewide resident enrollment;
RV is the ratio of district equalized valuation per pupil to the State average equalized valuation per pupil, calculated by dividing the district's equalized valuation per pupil by the Statewide equalized valuation per pupil;
RI is the ratio of district income per pupil to the Statewide average income per pupil, calculated by dividing the district's income per pupil by the State average income per pupil; and
E is resident enrollment.
b. As used in this section:
"District income per pupil" equals the district income divided by the resident enrollment;
"Equalized valuation per pupil" equals the district's equalized valuation divided by the resident enrollment;
"State average equalized valuation per pupil" equals the Statewide equalized valuation divided by the resident enrollment of all school districts in the State.
c. Any school district that received foundation aid in the prebudget year and which is not a special needs district, a county vocational school district, or a county special services school district and which is a high tax district, shall have its adjusted income equal the greater of:
(1) P x (1 - ((TR - 1.25)/1.88155773)); or
(2) P x 0.5 where
P is the district income; and
TR is the ratio, expressed as a decimal, of the district's equalized school tax rate necessary to fund its maximum permitted net budget in the prebudget year to the State average equalized school tax rate necessary to fund all districts at their maximum permitted net budget in the prebudget year.
As used in this subsection, "a high tax district" is a school district which had an equalized school tax rate in the prebudget year, based upon the amount of local tax revenue necessary to fund its maximum permitted net budget in the prebudget year, that exceeded by 25 percent or more the State average equalized school tax rate necessary to fund all districts at their maximum permitted net budget in the
prebudget year.
(cf: P.L.1991, c.62, s.6)
3. Section 13 of P.L.1990, c.52 (C.18A:7D-15) is amended to read as follows:
13. a. [For the purpose of calculating foundation aid for the 1991-92 school year pursuant to section 4 of P.L.1990, c.52 (C.18A:7D-4), excess surplus for all districts shall be $0.00.] (Deleted by amendment, P.L. , c. )(now pending before the Legislature as this bill).
b. For the purpose of computing the maximum Statewide foundation aid for the [1991-92] 1993-94 school year pursuant to section 3 of P.L.1990, c.52 (C.18A:7D-3), maximum State school aid in the 1992-93 school year shall equal[$4,100,000,000] $4,361,540,000.
c. For purposes other than for the computation of foundation aid pursuant to section 4 of P.L.1990, c.52 (C.18A:7D-4), the State foundation amount for the 1991-92 school year shall equal $6,835.00 and for the 1992-93 school year shall equal the product of $6,835.00 and the sum of 1.0 and the PCI.
(cf: P.L.1991, c.62, s.9)
4. (New section) a. Any school district that will receive foundation aid in the 1992-93 school year and which is not a special needs district, a county vocational school district, or a county special services school district and which is a high tax district, shall receive additional State aid in the 1992-93 school year as provided in subsection b. of this section.
For the purposes of this section, "a high tax district" shall mean a school district in the 1992-93 school year which has an equalized school tax rate, based upon the amount of local tax revenue necessary to fund its maximum permitted net budget, that exceeds by 25 percent or more the State average equalized school tax rate necessary to fund all districts at their maximum permitted net budget.
b. A district's additional State aid shall equal the difference between the district's adjusted foundation aid as calculated pursuant to subsection c. of this section and its actual foundation aid for the 1992-93 school year.
c. A district's adjusted foundation aid shall be determined by recalculating the district's foundation aid as if its adjusted income used in calculating local fair share, pursuant to section 7 of P.L.1990, c.52 (C.18A:7D-7), were to equal the greater of:
(1) P x (1 - ((TR - 1.25)/1.88155773)); or
(2) P x 0.5 where
P is the district income; and
TR is the ratio, expressed as a decimal, of the district's equalized school tax rate necessary to fund its maximum permitted net budget to the State average equalized school tax rate necessary to fund all districts at their maximum permitted net budget.
No district shall receive any additional aid as a result of this section which would cause the district's equalized tax rate, based on the amount of local tax revenue necessary to fund its maximum permitted net budget, to be less than the State average equalized school tax rate necessary to fund all districts at their maximum permitted net budget.
Nothing in this section shall permit a school district to exceed its maximum permitted net budget, unless the district has received approval from the voters or the commissioner.
5. Sections 4, 5, 6, 7, and 8 of P.L.1991, c.63 (C.52:27D-118.35 through 118.39) is repealed.
6. This act shall take effect immediately, except that sections 1, 2, and 3 shall first be applicable to the 1993-94 school year.
STATEMENT
This bill provides additional State school aid to foundation aid districts which have school tax rates which are 25 percent above the State average.
For the 1992-93 school year only, the bill would allocate approximately $30 million to some 100 foundation aid school districts which face equalized property tax rates, if they spend at their net budget cap level, of 25 percent or more above the State average equalized tax rate, assuming all districts spend at their net budget cap level. No district, however, would receive aid that would bring this tax rate below the State average, and the additional aid could not be used to spend above cap unless the district has approval from the voters or the commissioner for a cap waiver.
The bill also amends the Quality Education Act of 1990 to provide additional foundation aid, beginning in 1993-94, to foundation aid districts which face high equalized school tax rates. Foundation districts which, when spending at cap, had equalized tax rates in the prior year of 25 percent or more above the State average equalized tax rate, when all districts spend at cap, would have the income factor in the foundation aid formula reduced. This could reduce the district's local fair share, and thereby increase its foundation aid.
County vocational school districts, special service school districts, and special needs school districts would not be eligible for these aid programs.
To finance the increase in foundation aid to high taxing districts beginning in 1993-94, without redistributing foundation aid from other school districts, the bill increases the amount of maximum State school aid by $30 million.
The bill funds the additional State aid for 1992-93 and the increased foundation aid for 1993-94 and thereafter, by repealing the $30 million discretionary aid program in the "Supplemental Municipal Property Tax Relief Act." The impact upon any particular municipality of this repeal should be small, while the additional State aid to school districts could result in substantial relief to taxpayers in the high taxing foundation aid districts.
Provides additional State aid to certain high taxing foundation aid school districts.