S2 Funding Formula 'Fundamentally Flawed,' South Brunswick Superintendent Tells Lawmakers

SOUTH BRUNSWICK, NJ – South Brunswick School District Superintendent Scott Feder recently testified before the Senate Budget and Appropriations Committee, telling lawmakers that the state’s S2 funding formula was “fundamentally flawed.”

Feder’s testimony came after the school district received $2.6 million in funds under the new $102.7 million bill passed recently by the Senate. More: South Brunswick Schools May Still Lose Over $1M Under New Deal

Initially facing a state aid cut of $4,063,240, the district still stands to lose $1,38,1502 with the new deal.

During his testimony, Feder focused on the S2 funding formula that led to aid cuts for 2023-24 and told lawmakers that it had "damaging impacts" on the district.

“When you use a funding formula that allocates money based upon how much a town is spending to fund their schools and not on how much those schools are spending, you have a fundamental issue. In fact, today’s funding formula has nothing to do with collectible property taxes and nothing to do with school district spending. The state has created a guaranteed roadblock for districts that have been determined to be overfunded by state aid and underfunded by local taxes. I am referring to the 2 percent CAP which makes it impossible for the intended purpose of the formula to be implemented,” Feder said.

“While I suspect that no one in this room has the appetite to create scenarios where property taxes increase, I know that our communities do not have the appetite to see their school districts dismantled to the point of minimal mental health supports, minimal strong security measures, lose sports and the arts, and have class sizes in the 30s for even our youngest students, but that is what is or will be happening in these districts.”

The hearing, which was held at Ramapo College in Mahwah, saw Superintendents from Freehold and Wildwood school districts also testifying before the committee.

During his testimony, Feder noted three ways in which the formula was flawed:

1. The formula does not account for a school district’s spending
2. The formula does not account for adequacy. “What it does do is spit out an adequacy calculation, but does nothing to S2 districts other than guarantee we get further and further away from ever being able to adequately spend for our children,” Feder said. South Brunswick is currently under adequacy (according to the formula) by 1.6 million dollars. Next year, with the scheduled 4 million dollar cut, we would move to 7.2 million dollars under adequacy.
3. The formula uses a main variable being the valuation of a municipality, which has absolutely nothing to do with how schools collect tax. When the mandatory 2 percent CAP is coupled with the existing formula there is no correlation to collectible tax.

Feder pointed out that while the formula was put in place to fix underfunded districts, what it has done is change who the current underfunded districts are.

South Brunswick has the seventh lowest per pupil spending in the state for similar districts, Feder said.

Among the top 10 spenders in the state for districts like South Brunswick was Teaneck which saw a 14 percent increase and already was $10,000 more per pupil; Paramus with a 16 percent increase; West Orange with a 17 percent increase and Wayne 20 percent increase.

“The formula continues to award money to towns where in some cases have significantly higher demographics and who already spend thousands more per pupil than others while taking away monies from lower demographic districts who already spend less. I know that was not the intent of the formula, but it is the reality,” Feder said.

“And to add insult to injury these districts can go even further by mandating that their community spend an additional 2 percent on the tax levy. How could this be the plan? How could spending not even be considered in a funding formula where such disparity and high spending practices already exist?”

Feder urged the lawmakers to lift the 2 percent CAP for districts where the formula has made the claim that the local fair share is too low and funding has been cut. “Not doing so is counterintuitive to the purpose of the formula. Without doing this, the formula simply facilitates that districts who do not already collect their local fair share will be destined to fail,” he said.

The Superintendent also asked the lawmakers to fix the formula and remove or adjust the wealth of a town variable as it has nothing to do with the collected taxes that are used to fund schools. "Instead, write a formula that factors in district spending, adequacy and of course town and school-related demographics,” Feder said.

After his testimony, one of the lawmakers said the state needs to make “substantial reform to school funding formula.”

Sen. Andrew Zwicker thanked Feder for his testimony and told the committee there were other districts like South Brunswick that find themselves in a difficult situation due to the school aid cuts.

"There are a significant number of schools in a similar situation where they are doing everything correctly under the formula and it's just not sustainable. That’s what we need to look at,” Zwicker said. “We are headed towards a breaking point.”

What Is S2 Funding Formula?

S2 was signed into law in 2018, and targeted districts that were said to be overfunded and losing enrollment, especially districts that were receiving so-called "adjustment aid" when the School Funding Reform Act of 2008 took effect.

The S2 cuts, which were supposed to be spread out over seven years — the 2024-25 budget would be the final year — wiped out adjustment aid for most of the districts receiving it in the 2020-21 budget. The focus has shifted to "local fair share," which the state defines as what it says a school district's residents should be paying in property taxes to support their schools. It is defined by complex algorithm that is still the subject of litigation under an Open Public Records Act lawsuit.

The S2 aid cuts are scheduled to end with the 2024-25 school budget year, but there is no indication what will happen beyond then.

You can watch the entire budget hearing here.

Have a correction or a news tip? Email sarah.salvadore@patch.com