Murphy Signs Bill That May Force Tax Hikes On 30 School Districts

Gov. Phil Murphy signed a controversial school funding bill on Tuesday that could force a number of school districts – maybe as many as 30 – to raise taxes by next year. He also signed 4 additional pieces of legislation and vetoed three bills.

Murphy, who signed the school funding legislation at Cliffside Park School #3, said the system of school funding "needed to be modernized." He said more funding is needed for special needs students, staffing and other programs at "underfunded" districts.

Murphy also said he would allow districts such as Jersey City to impose a 1 percent payroll taxes to help make up for the shortfall in funding. Murphy signed A-4163, which allows municipalities that have a population over 200,000 to impose an employer payroll tax.

"We need to make sure the means of public funding education," Murphy said, "works for today and tomorrow and not just yesterday"

Murphy said the state is making a "historic re-investiment in our public education," saying: "We're going to keep moving the ball downfield."

The legislation comes from Senate President Steve Sweeney, who essentially won a budget battle earlier this year over school funding that prevented a state shutdown.

The legislation modifies the state’s school funding law, making the reforms that Sweeney says are needed to allow the school aid formula to realize its goal of "providing full and fair funding for all of New Jersey’s school districts."

The bill, S-2, would phase out the “adjustment aid” that continues to compensate districts for students they no longer have and eliminate the “growth caps” that deny other districts funds for enrollment growth.

Residents of those 30 or more districts, as a result, will not only see their state aid reduced. Any district that loses aid and underspends will be required to increase their prior year school tax levy by 2 percent until fiscal Year 2025.

That could mean raising taxes by 2 percent, but Murphy left that provision of the bill open to interpretation.

"That is something that school districts will have to address," he said.

Growth caps on aid for increased enrollment would be eliminated starting in the 2019-2020 school year and the adjustment aid that has continued to flow to overfunded districts would be phased out over seven school years.

“The current system has become unfair to schools and harmful to local taxpayers,” said Sweeney. “It’s creating a structural problem in school funding and taxation that will only grow worse if it isn’t addressed. Our goal is to fully fund every school district in support of equal opportunity for every student.”

Sweeney's office previously listed the school districts that could be impacted:

• Belmar
• Bradley Beach
• Brick
• Cape May
• Clearview Regional High School
• Collingswood
• Commercial Township
• Deal
• Elsinboro Township
• Englewood
• Haddon Heights
• Hopewell Township, Cumberland County
• Jersey City
• Lakehurst
• Lakewood
• Lawrence Township, Cumberland County
• Little Egg Harbor
• Lower Township
• Old Bridge
• Oldmans Township
• Ridgefield
• Seaside Park
• Toms River Regional
• Weehawken

More districts could be forced to raise taxes under the new school funding law, because more than 200 school districts will get less aid than what Murphy originally promised them.

Read more: New Budget: 205 NJ School Districts Get Less Money Than Promised

More than 500 districts were initially supposed to get an increase over last year's amount.

Read more: New NJ State School Aid Figures Released: Who Gets The Big Hike?

Under Murphy's original school funding plan, there were no losers in the 2018-19 budget. Now there are 171 school districts that will need to make up for a decrease in funding from last year. And another 14 school districts will get no increase or decrease at all, so they may face the same dilemma.

Read more: Winning And Losing NJ School Districts In New Budget Deal

You can watch the signing here:

Murphy also signed these three bills into law:

AJR44 (Vainieri Huttle, Chiaravalloti, McKnight/Bateman, Singleton) - Designates June 4 of each year as "Tourette Syndrome Awareness Day" in New Jersey.

S332 (Cruz-Perez/Taliaferro, Gusciora, Jones) - Authorizes impoundment of all-terrain vehicles and dirt bikes for certain crimes and offenses.

S1974 (Beach, Cruz-Perez/Zwicker, Mukherji) - Requires petitions of nomination of candidates for State, county, school, or municipal elective public office to include functioning e-mail addresses therefor.

Murphy also vetoed these three bills:

S1057 (Van Drew, Gopal/Houghtaling, Andrzejczak, Mazzeo, Taliaferro) - Requires EDA, in consultation with Department of Agriculture, to establish loan program for certain vineyard and winery capital expenses.

S1208 (Beach, Oroho/Rooney, Johnson, Schaer, Pinkin) - Prohibits investment of pension and annuity funds by State in entities that avoid Superfund obligations to State.

S1914 (Ruiz, Cruz-Perez/Quijano, Chaparro) - Prohibits investment of State pension and annuity funds in entities engaged in mortgage foreclosures during periods of mortgage foreclosure moratoria in Presidentially-Declared Major Disaster Areas impacted by Hurricane Maria.

Gov. Murphy photo