Bill Text: NJ A4161 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes Stabilized School Budget Aid Grant Program to restore certain portions of State school aid reductions; permits certain school districts to exceed tax levy growth limitation in 2024-2025 school year; appropriates $44.7 million.
Spectrum: Moderate Partisan Bill (Democrat 17-2)
Status: (Passed) 2024-05-14 - Approved P.L.2024, c.13. [A4161 Detail]
Download: New_Jersey-2024-A4161-Introduced.html
Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman MITCHELLE DRULIS
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman PAMELA R. LAMPITT
District 6 (Burlington and Camden)
SYNOPSIS
Establishes Stabilized School Budget Aid Grant Program to restore certain portions of State school aid reductions for certain school districts; appropriates $71.4 million.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning school district finances and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section:
"Aid grant" means a Stabilized School Budget Aid grant awarded to an eligible school district under the program.
"Commissioner" means the Commissioner of Education.
"Eligible school district" means a school district for which the State aid differential, as defined in section 3 of P.L.2018, c.67 (C.18A:7F-67), is positive in the 2024-2025 school year and that is subject to a State school aid reduction in the 2024-2025 school year pursuant to the provisions of P.L.2018, c.67 (C.18A:7F-67 et al.).
"Prebudget year" means the school fiscal year preceding the year in which the school budget is implemented.
"Program" means the Stabilized School Budget Aid Grant Program established pursuant to this section.
b. (1) There is established in the Department of Education a Stabilized School Budget Aid Grant Program. The purpose of the program shall be to provide aid grants to eligible school districts of up to two-thirds of the amount of the school districts' State school aid reductions, as proposed in the State aid notices for the 2024-2025 school year distributed to school districts in March 2024.
(2) As a condition of the receipt of an aid grant pursuant to this section, an eligible school district shall:
(a) fully exhaust all tax authority that is available to the school district pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38), thereby implementing, to the maximum extent, all allowable adjustments to the tax levy;
(b) fully exhaust the total amount of the school district's unused tax authority determined pursuant to subsection e. of section 4 of P.L.2007, c.62 (C.18A:7F-39); and
(c) not reduce the total number of school district employees compared to the total number of school district employees in the prebudget year, except that a school district may reduce the total number of school district employees if the commissioner approves the reduction in the district's proposed budget submitted pursuant to subsection d. of this section. The commissioner may approve a reduction in a district's total number of school district employees if the reduction is being made due to an anticipated decline in enrollment in the 2024-2025 school year compared to the prebudget year.
(3) An otherwise eligible school district shall not be eligible for an aid grant in the event that the district's full exhaustion of tax authority pursuant to paragraph (2) of this subsection results in the raising of additional funds that are greater than the amount of the school district's State school aid reduction.
c. Notwithstanding the provisions of sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and C.18A:7F-39) or of any other law, rule, or regulation to the contrary, an eligible school district that is awarded an aid grant pursuant to this section may request increases to its general fund tax levy of up to one-third of the amount of the districts' State school aid reductions, as proposed in the State aid notice for the 2024-2025 school year distributed to school districts in March 2024, in the event that there is a difference that remains after the school district's receipt of aid pursuant to this section; provided, however, that no school district receiving aid pursuant to this section shall raise a general fund tax levy that is greater than 9.9 percent of the prebudget year adjusted tax levy, unless the full exhaustion of tax authority pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38) and subsection e. of section 4 of P.L.2007, c.62 (C.18A:7F-39) is otherwise greater than 9.9 percent of the prebudget year adjusted tax levy. Notwithstanding the provisions of section 3 and section 4 of P.L.2007, c.62 (C.18A:7F-38 and C.18A:7F-39) or any other law or regulation to the contrary, a request to increase the general fund tax levy pursuant to this subsection may be approved without submitting to the voters or the board of school estimate, as applicable, the proposal or proposals that are required pursuant to section 4 of P.L.2007, c.62 (C.18A:7F-39). A request to increase the general fund tax levy pursuant to this subsection shall be included in the application submitted by the school district pursuant to subsection d. of this section.
d. A school district seeking an aid grant shall submit an application to the commissioner, in a manner and form to be determined by the commissioner. The application shall, at a minimum, include:
(1) a written plan explaining how the district will allocate the aid grant and how the district will fund operations in future school years in which the district does not receive the aid grant;
(2) a request to increase the general fund tax levy pursuant to subsection c. of this section, if applicable and if sought by the school district;
(3) the eligible school district's proposed budget, including the district's proposed general fund tax levy, all tax levy adjustment amounts, any increases sought by the district pursuant to subsection c. of this section, and the proposed general fund tax levy's percentage increase relative to the prebudget year adjusted tax levy;
(4) the percentage difference between the prebudget year adjusted tax levy and the adjusted tax levy of the year prior to the prebudget year;
(5) the estimated impact on the average homeowner if all tax levy adjustments, including any increases sought by a district pursuant to subsection c. of this section, are approved;
(6) a description of how the eligible school district will use the funds raised through its proposed general fund tax levy, including any increases sought by a district pursuant to subsection c. of this section, with a particular focus on areas of instruction and support services; and
(7) a school board resolution approving the request to apply for aid pursuant to this section.
e. Aid grants awarded under the program to an eligible school district meeting the applicable conditions enumerated in subsection b. and subsection c. of this section shall be allocated to eligible school districts in a manner to be determined by the commissioner.
f. An eligible school district that receives an aid grant pursuant to this section shall submit a resulting final budget to the commissioner within a timeframe, and in a manner and form, to be determined by the commissioner. In the event that the school district has already certified its general fund tax levy prior to its receipt of an aid grant, the secretary of the board of education shall re-certify to the county board of taxation the sum or sums to be raised for the school year. The amount re-certified shall be included in the taxes assessed, levied, and collected in the municipality or municipalities comprising the district.
2. There is appropriated from the Property Tax Relief Fund to the Department of Education the sum of $71,437,562 to effectuate the provisions of section 1 of this act.
3. This act shall take effect immediately.
STATEMENT
This bill establishes in the Department of Education a Stabilized School Budget Aid Grant Program. The purpose of the program is to provide aid grants to eligible school districts of up to two-thirds of the amount of the districts' State school aid reductions for the 2024-2025 school year. A school district would be eligible to apply for an aid grant under the program if the district is subject to a State school aid reduction in the 2024-2025 school year.
In order to receive an aid grant under the program, an eligible district is required to apply to the commissioner and meet certain conditions related to raising its local tax levy. As a condition of the receipt of an aid grant, an eligible district is to fully exhaust: 1) all tax authority that is available to the school district pursuant to current law that establishes a two percent tax levy growth limitation and certain allowable adjustments above the two percent cap; and 2) the total amount of the district's "banked cap." Under current law, a school district may add to its adjusted tax levy in any one of the next three succeeding budget years, the amount of the difference between the maximum allowable amount to be raised by taxation for the current school budget year and the actual amount to be raised by taxation for the current school budget year. In addition, an eligible district receiving aid under the bill is to not reduce the total number of school district employees compared to the prior school year, unless the commissioner approves reductions that are being made due to an anticipated decline in enrollment in the 2024-2025 school year compared to the prior year.
Under the bill, an otherwise eligible school district is not eligible for an aid grant in the event that the district's full exhaustion of current law tax authority results in the raising of additional funds that are greater than the amount of the school district's State school aid reduction.
The bill appropriates $71.4 million to fund the Stabilized School Budget Aid Grant Program.
An eligible school district that is awarded an aid grant may implement increases to its general fund tax levy up to one-third of the amount of the districts' State school aid reductions, in the event that there is a difference that remains after the district's receipt of aid under the bill. The bill provides, however, that no school district receiving an aid grant under the bill can raise a general fund tax levy that is greater than 9.9 percent of the prebudget year adjusted tax levy, unless the full exhaustion of tax authority required under the bill is otherwise greater than 9.9 percent of the prior year tax levy.
