A2946

ASSEMBLY, No. 2946

STATE OF NEW JERSEY

INTRODUCED MAY 8, 1997

By Assemblyman STANLEY

An Act concerning State aid for certain public school districts and amending and supplementing P.L.1996, c.138.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 3 of P.L.1996, c.138 (C.18A:7F-3) is amended to read as follows:

3. As used in this act, unless the context clearly requires a different meaning:

"Abbott district" means one of the 28 urban districts in district factor groups A and B specifically identified in the appendix to Raymond Abbott, et al. v. Fred G. Burke, et al. decided by the New Jersey Supreme Court on June 5, 1990 (119 N.J.287, 394) or any other district classified as a special needs district under the "Quality Education Act of 1990," P.L.1990, c.52 (C.18A:7D-1 et al,) or designated pursuant to the provisions of section 4 of P.L. , c. (C. ) (now pending before the Legislature as this bill);

"Bilingual education pupil" means a pupil enrolled in a program of bilingual education or in an English as a second language program approved by the State Board of Education;

"Budgeted local share" means the sum of designated general fund balance, miscellaneous revenues estimated consistent with GAAP, and that portion of the district's local tax levy contained in the T&E budget certified for taxation purposes;

"Capital outlay" means capital outlay as defined in GAAP;

"Commissioner" means the Commissioner of Education;

"Concentration of low income pupils" shall be based on prebudget year pupil data and means, for a school district or a county vocational school district, the number of low-income pupils among those counted in modified district enrollment, divided by modified district enrollment. For a school, it means the number of low income pupils recorded in the registers at that school, divided by the total number of pupils recorded in the school's registers;

"CPI" means the average annual increase, expressed as a decimal, in the consumer price index for the New York City and Philadelphia areas during the fiscal year preceding the prebudget year as reported by the United States Department of Labor;

"County special services school district" means any entity established pursuant to article 8 of chapter 46 of Title 18A of the New Jersey Statutes;

"County vocational school district" means any entity established pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes;

"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;

"Debt service" means and includes payments of principal and interest upon school bonds and other obligations issued to finance the purchase or construction of school facilities, additions to school facilities, or the reconstruction, remodeling, alteration, modernization, renovation or repair of school facilities, including furnishings, equipment, architect fees 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 factor group A district" means a school district, other than an Abbott district or a school district in which the equalized valuation per pupil is more than twice the average Statewide equalized valuation per pupil and in which resident enrollment exceeds 2,000 pupils, which based on the 1990 federal census data is included within the Department of Education's district factor group A;

"District income" for the 1997-98 school year 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 1989. Beginning with the 1998-99 school year and thereafter, district income means the aggregate income of the residents of the taxing district or taxing districts, based upon data provided by the Division of Taxation in the New Jersey Department of the Treasury and contained on the New Jersey State Income Tax forms for the calendar year ending prior to the prebudget year. The commissioner may supplement data contained on the State Income Tax forms with data available from other State or federal agencies in order to better correlate the data to that collected on the federal census. 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 resident in each of them;

"Estimated minimum equalized tax rate" for a school district means the district's required local share divided by its equalized valuation; for the State it means the sum of the required local shares of all school districts in the State, excluding county vocational and county special services school districts as defined pursuant to this section, divided by the sum of the equalized valuations for all the school districts in the State except those for which there is no required local share;

"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, or subsequently revised by the tax court by January 15, 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 resident in each of them. In the event that the equalized table certified by the director shall be revised by the tax court after January 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, Statewide equalized valuation per pupil, estimated minimum equalized tax rate for the State, or Statewide average equalized school tax rate;

"GAAP" means the generally accepted accounting principles established by the Governmental Accounting Standards Board as prescribed by the State board pursuant to N.J.S.18A:4-14;

"Household income" means income as defined in 7CFR 245.2 and 245.6 or any subsequent superseding federal law or regulation;

"Lease purchase payment" means and includes payments of principal and interest for lease purchase agreements in excess of five years approved pursuant to subsection f. of N.J.S.18A:20-4.2 to finance the purchase or construction of school facilities, additions to school facilities, or the reconstruction, remodeling, alteration, modernization, renovation or repair of school facilities, including furnishings, equipment, architect fees and issuance costs. Approved lease purchase agreements in excess of five years shall be accorded the same accounting treatment as school bonds;

"Low-income pupils" means those pupils from households with a household income at or below the most recent federal poverty guidelines available on October 15 of the prebudget year multiplied by 1.30;

"Minimum permissible T&E budget" means the sum of a district's core curriculum standards aid, and required local share calculated pursuant to sections 5, 14 and 15 of this act;

"Modified district enrollment" means the number of pupils other than preschool pupils, evening school pupils, post-graduate pupils, and post-secondary vocational pupils who, on the last school day prior to October 16, are enrolled in the school district or county vocational school district; or are resident in the school district or county vocational school district and are: (1) receiving home instruction, (2) enrolled in an approved private school for the handicapped, (3) enrolled in a regional day school, (4) enrolled in a county special services school district, (5) enrolled in an educational services commission including an alternative high school program operated by an educational services commission, (6) enrolled in a State college demonstration school, (7) enrolled in the Marie H. Katzenbach School for the Deaf, or (8) enrolled in an alternative high school program in a county vocational school. Modified district enrollment shall be based on the prebudget year count for the determination of concentration of low-income pupils, and shall be projected to the current year and adjusted pursuant to section 5 of this act when used in the calculation of aid;

"Net budget" unless otherwise stated in this act, means the sum of the net T&E budget and the portion of the district's local levy that is above the district's maximum T & E budget;

"Net T&E budget" means the sum of the T&E program budget, early childhood program aid, demonstrably effective program aid, instructional supplement aid, transportation aid, and categorical program aid received pursuant to sections 19 through 22, 28, and 29 of this act;

"Prebudget year" means the school fiscal year preceding the year in which the school budget is implemented;

"Prebudget year equalized tax rate" means the amount calculated by dividing the district's general fund levy for the prebudget year by its equalized valuation certified in the year prior to the prebudget year;

"Prebudget year net budget" for the 1997-98 school year means the sum of the foundation aid, transition aid, transportation aid, special education aid, bilingual education aid, aid for at-risk pupils, technology aid, and county vocational program aid received by a school district or county vocational school district in the 1996-97 school year pursuant to P.L.1996, c.42, and the district's local levy for the general fund;

"Report on the Cost of Providing a Thorough and Efficient Education" or "Report" means the report issued by the Governor pursuant to section 4 of this act;

"Resident enrollment" means the number of pupils other than preschool pupils, post-graduate pupils, and post-secondary vocational pupils who, on the last school day prior to October 16 of the current school year, are residents of the district and are enrolled in: (1) the public schools of the district, excluding evening schools, (2) another school district, other than a county vocational school district in the same county on a full-time basis, or a State college demonstration school or private school to which the district of residence pays tuition, or (3) a State facility in which they are placed by the district; or are residents of the district and are: (1) receiving home instruction, or (2) in a shared-time vocational program and are regularly attending a school in the district and a county vocational school district. In addition, resident enrollment shall include the number of pupils who, on the last school day prior to October 16 of the prebudget year, are residents of the district and in a State facility in which they were placed by the State. 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. Resident enrollment shall include regardless of nonresidence, the enrolled children of teaching staff members of the school district or county vocational school district who are permitted, by contract or local district policy, to enroll their children in the educational program of the school district or county vocational 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.

Beginning in 1997-98 and thereafter, resident enrollment shall also include those nonresident children who are permitted to enroll in the educational program without payment of tuition as part of a voluntary program of interdistrict public school choice approved by the commissioner;

"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;

"School enrollment" means the number of pupils other than preschool pupils, evening school pupils, post-graduate pupils, and post-secondary vocational pupils who, on the last school day prior to October 16 of the current school year, are recorded in the registers of the school;

"Special education services pupils" means a pupil receiving specific services pursuant to chapter 46 of Title 18A of the New Jersey Statutes;

"Spending growth limitation" means the annual rate of growth permitted in the net budget of a school district, county vocational school district or county special services school district as measured between the net budget of the prebudget year and the net budget of the budget year as calculated pursuant to subsection d. of section 5 of this act;

"Stabilization aid growth limit" means 10% or the rate of growth in the district's projected resident enrollment over the prebudget year, whichever is greater. For the 1997-98 school year, this means 8% or one-half the rate of growth in the district's projected resident enrollment and preschool enrollment between the October 1991 enrollment report as contained on the district's Application for State School Aid for 1992-93 and the 1997-98 school year, whichever is greater. For the 1998-99 and 1999-2000 school years, this means the greatest of the following: 10%, one-half the district's rate of growth in projected resident enrollment and preschool enrollment over the October 1991 enrollment report as contained on the district's Application for State School Aid for 1992-93, or the district's projected rate of growth in resident enrollment over the prebudget year;

"State facility" means a State developmental center; a State Division of Youth and Family Services' residential center; a State residential mental health center; a DHS Regional Day School; a State training school / Secure care facility; a State juvenile community program; a juvenile detention center or a boot camp under the supervisional authority of the Juvenile Justice Commission pursuant to P.L.1995, c.284 (C.52:17B-169 et seq.); or an institution operated by or under contract with the Department of Corrections or Human Services, or the Juvenile Justice Commission;

"Statewide average equalized school tax rate" means the amount calculated by dividing the general fund tax levy for all school districts, which excludes county vocational school districts and county special services school districts as defined pursuant to this section, in the State for the prebudget year by the equalized valuations certified in the year prior to the prebudget year of all taxing districts in the State except taxing districts for which there are no school tax levies;

"Statewide equalized valuation per pupil" means the equalized valuations of all taxing districts having resident enrollment in the State, divided by the resident enrollment for the State;

"T&E amount" means the cost per elementary pupil of delivering the core curriculum content standards and extracurricular and cocurricular activities necessary for a thorough regular education under the assumptions of reasonableness and efficiency contained in the Report on the Cost of Providing a Thorough and Efficient Education;

"T&E flexible amount" means the dollar amount which shall be applied to the T&E amount to determine the T&E range;

"T&E program budget" means the sum of core curriculum standards aid, supplemental core curriculum standards aid, stabilization aid, designated general fund balance, miscellaneous local general fund revenue and that portion of the district's local levy that supports the district's T&E budget;

"T&E range" means the range of regular education spending which shall be considered thorough and efficient. The range shall be expressed in terms of T&E budget spending per elementary pupil, and shall be delineated by alternatively adding to and subtracting from the T&E amount the T&E flexible amount;

"Total Statewide income" means the sum of the district incomes of all taxing districts in the State;

(cf: P.L.1996, c.138, s.3)

2. Section 12 of P.L.1996, c.138 (C.18A:7F-12) is amended to read as follows:

12. The commissioner shall establish, based on the standards issued pursuant to section 4 of this act, a basic per pupil T&E amount, and shall develop appropriate weights reflecting the differing costs of providing education at the kindergarten, elementary school, middle school, and high school levels, which weights shall be applied in determining a district's T&E budget as set forth in section 13 of this act. The T&E amount for the 1997-1998 school year shall be $6,720, which shall be adjusted for inflation by the CPI for the 1998-1999 school year. The weights for kindergarten, elementary (grades 1-5), middle (grades 6-8), and high school (grades 9-12) levels for the 1997-98 school year shall be 0.5, 1.0, 1.12 and 1.20 respectively. In subsequent years, the T&E amount and the school level weights shall be established biennially in the Report on the Cost of Providing a Thorough and Efficient Education, with the T&E amount adjusted for inflation by the CPI in the second year to which the report applies.

For the 1997-98 school year, the T&E flexible amount shall be $336, and the T&E range shall be from $6,384 to $7,056. These figures shall be adjusted by the CPI for the 1998-99 school year. In subsequent years, the T&E range shall be established biennially in the Report on the Cost of Providing a Thorough and Efficient Education, with the T&E range adjusted for inflation by the CPI in the second year to which the report applies.

Notwithstanding the provisions of this section, the T&E amount for an Abbott district for the 1997-98 school year shall be the average I and J district per pupil local levy budget amount in the 1996-97 school year, indexed by the CPI or three percent, whichever is greater. The T&E amount for the 1997-98 school year shall be adjusted for inflation for the 1998-99 school year by the CPI or three percent, whichever is greater. In subsequent years, the T&E amount for an Abbott district shall be established in the report and shall be calculated as follows: add the prebudget year T&E program budgets of all I and J districts, the portion of the prebudget year local levies above the maximum T & E budgets for all I and J districts including any local levies approved and raised pursuant to paragraph (9) of subsection d. of section 5 of P.L.1996, c.138 (C.18A:7F-5), and aid received by all I and J districts pursuant to section 22 of P.L.1996, c.138 (C.18A:7F-22) in the prebudget year; divide this amount by the total resident enrollment of all I and J districts after multiplying the resident enrollment for kindergarten pupils in each I and J district by .5; index this per pupil amount by the CPI or three percent, whichever is greater. The commissioner shall adjust the T&E range and flexible amount for the Abbott districts as appropriate.

(cf: P.L.1996, c.138, s.12)

3. (New section) a. There is established the Supplemental Program Commission which shall be composed of 12 members as follows: three members to be appointed by the President of the Senate, not more than two of whom shall be of the same political party; three members to be appointed by the Speaker of the General Assembly, not more than two of whom shall be of the same political party; the Commissioner of Education as an ex officio, nonvoting member, or a designee; and five members to be appointed by the Governor, not more than three of whom shall be of the same political party. The members appointed by the Governor shall have demonstrated and recognized expertise in research, planning, implementation, or evaluation of successful programs to serve disadvantaged students and shall include three representatives of public or independent institutions of higher education located within the State and three public school practitioners from local school districts within the State. Members of the commission shall serve without compensation.

The commission shall organize as soon as may be practicable after the appointment of its members and shall select a chairman from among its members and a secretary who need not be a member of the commission. Staff and related support services shall be provided to the commission by the Department of Education. The commission shall also be entitled to call to its the assistance and avail itself of the services of the employees of any State, county, or municipal department, board, bureau, commission, or agency which it may require and which may be available to it for these purposes, and to employ professional and research personnel, stenographic and clerical assistants and incur traveling and other miscellaneous expenses necessary to perform its duties, within the limits of funds appropriated or otherwise made available to it for these purposes. The commission may meet and hold hearings at the place or places it designates.

b. It shall be the duty of the commission to conduct a study of the research on the special supplemental programs and services necessary to address the educational needs of disadvantaged students and which supplement the regular education programs available to those students. The commission shall determine the specific package of supplemental programs and services which shall be implemented to meet the needs of disadvantaged students as required by the Supreme Court in its Abbott II and Abbott III decisions and the cost of implementing the programs and services in the schools and districts serving disadvantaged students. The package of programs shall include, but not be limited to, early childhood programs such as preschool classes and full-day kindergarten, and a full array of programs necessary to eliminate, to the degree possible within the school setting, the disadvantages of students.The commission shall determine the definitions of students, schools, and school districts eligible to receive funding to implement all or a part of the package of supplemental programs and services. The commission shall also formulate recommendations to control, regulate, and monitor the use of additional funding which is made available to support the supplemental programs and services.

The commission shall be formed within 60 days of the effective date of this act and shall issue its findings and recommendations to the Governor, the Legislature, and the State board by December 1, 1997. The State board shall utilize the recommendations of the commission in the formulation and adoption of regulations on demonstrably effective program aid pursuant to subsection b. of section 18 of P.L.1996, c.138 (C.18A:7F-18b.).

4. (New section) The commissioner shall develop a procedure and appropriate standards to determine whether districts, in addition to those defined as Abbott districts pursuant to the provisions of section 3 of P.L.1996, c.138 (C.18A:7F-3), shall be designated as Abbott districts. The procedure shall include a mechanism by which a district may petition the commissioner for designation as an Abbott district. The commissioner may designate a district as an Abbott district if he finds that the district meets the established standards which shall be consistent with the New Jersey Supreme Court decision, Raymond Abbott, et al. v. Fred G. Burke, et al., (119 N.J. 287).

The procedures established by the commissioner shall also be used to determine if any district which is defined as an Abbott district pursuant to the provisions of section 3 of P.L.1996, c.138 (C.18A:7F-3) no longer reflects the characteristics of an Abbott district as identified by the New Jersey Supreme Court in Raymond Abbott, et al. v. Fred G. Burke, et al. (119 N.J. 287). If the commissioner makes that determination, he shall file a preliminary report of his finding with the district. The district shall have the opportunity to respond to the report and to challenge the commissioner's findings prior to any final decision by the commissioner. A district may appeal the commissioner's decision to the State board and to the appropriate court.

5. This act shall take effect immediately.

STATEMENT

This bill provides parity between the Abbott districts and the I and J school districts. The bill amends the "Comprehensive Educational Improvement and Financing Act of 1996," P.L.1996, c.138, to stipulate that the T & E amount for an Abbott district in the 1997-98 school year will be the average I & J district per pupil local levy budget amount in the 1996-97 school year, indexed by the CPI or three percent, whichever is greater. The T & E amount for the 1998-99 school year will be the 1997-98 Abbott district T & E amount adjusted for inflation. For subsequent school years, the bill establishes the following formula for the calculation of the T & E amount for an Abbott: add the prebudget year T & E program budgets of all I and J districts, the portion of the prebudget year local levies above the maximum T & E budgets for all I and J districts, and distance learning network aid received by the I and J districts in the prebudget year. This amount is then divided by the total resident enrollment of all I and J districts after multiplying the resident enrollment for kindergarten pupils in each I and J district by .5. The resulting per pupil amount is then indexed by the CPI or three percent, whichever is greater, to determine the Abbott district T & E amount for the budget year.

The bill also establishes the Supplemental Program Commission to conduct a study of the research on the special supplemental programs and services necessary to address the educational needs of disadvantaged students and which are required to supplement the regular education programs available to those students. The commission must also determine the cost of implementing those programs and services in the schools and districts serving disadvantaged students. The New Jersey Supreme Court in the Abbott line of decisions held that the educational needs of at-risk students were required to be addressed by the State. Under the "Comprehensive Educational Improvement and Financing Act of 1996," the Commissioner of Education is directed to recommend to the State Board of Education programs eligible to be funded through demonstrably effective program aid and which must be directed at the needs of students who come from districts with high concentrations of poverty. Under the provisions of this bill, the State board would be required to utilize the recommendations of the commission in the formulation and adoption of regulations on the use of demonstrably effective program aid.

The bill also directs the Commissioner of Education to develop a procedure and standards to determine whether districts, in addition to those defined as Abbott districts under current law, should be designated as Abbott districts. The procedure is to include a mechanism by which a district may petition the commissioner for such designation. Also, the procedure established by the commissioner is to include provisions for the commissioner to determine if any district designated under current law as an Abbott district no longer reflects the characteristics of such a district. If the commissioner makes that determination, the district must be given an opportunity to respond and to challenge the commissioner's finding prior to the rendering of any final decision on the issue.

Provides parity for the Abbott districts and establishes a commission to define supplemental programs for disadvantaged students.