Public testimony by David Healy, Wednesday March 20, 2019; Assembly Budget Committee Hearing, State House Annex, Trenton, NJ
My name is David Healy and I proudly serve as superintendent of Toms River Regional Schools. I testify today on behalf of my school district, representing 15,200 students and 2,700 full and part-time staff members. We will lose more than $83 million cumulatively in the next six years, including $2.8 million this upcoming year, because of the state aid cuts contained in Senate Bill S-2.
The S2 Bill was touted as a measure to move money from “overfunded” school districts to “underfunded” districts. However, the formula that determines a district’s status as “over” and “under”funded, and specifically as it relates to the distribution of the now $6.5 billion in equalization aid, is critically flawed.
First, the aid formula uses equalized property valuations and personal income to determine a community’s ability to pay, but the property wealth figures do not include the billions of dollars in payments in lieu of taxes, or PILOTs. And many years before S2, in 2010, state leaders were provided with a comprehensive Comptroller's report which identified that such tax abatements would skew the property wealth for school aid allocations (August 18, 2010 report from A. Matthew Boxer to Governor Christie, Senate President Sweeney and Assembly Speaker Oliver). Why, so many years later, has this still not been addressed?
Second, the property wealth figures in the formula cannot be relied upon for the 30-plus towns (last count) that have not had legally-required property revaluations in more than 25 years.
Third, when attempting to fully analyze the property and income wealth calculators in the formula, the NJ Department of Education denied an Open Public Records Request because the computer program making the allocations is ‘proprietary.’ The $6.5 billion in equalization aid is approximately 17% of the state's entire budget, and this lack of transparency is deeply unsettling, especially since the property rate, or multiplier, in the formula rose 49.2% from 2008-09 to 2018-19 while the income rate only increased 1.6%? Something is clearly not making sense.
Governor Phil Murphy during his March 2018 budget address publicly stated that the funding formula, last revised in 2008, is outdated and requires modernization. Commissioner Repollet echoed the governor’s comments during his March 2018 confirmation hearing. Additionally, the governor ensured all of us that there would be no losers in his budget. I attended both events and was reassured by this until July 13, 2018 when we learned that our district would lose $2.4 million. This was after our budget was approved by the NJDOE offices and adopted by Board of Education. Meanwhile, the outdated and flawed formula remains, and is now adversely affecting more than 10 percent of New Jersey’s student population from the Support our Students coalition alone.
While I testify today in solidarity with my Support Our Students cohorts and affected districts statewide, I must direct some of my testimony specifically toward Toms River. Because our tax levy is lower than our local fair share, some have concluded that we are not taxing enough. The truth is we tax less because we spend less. We are the second lowest total cost per pupil, large district in the state, but if we spent at just the state averages in terms of total cost per pupil, our tax levy would be higher than our local fair share. The current funding formula does not account for this, thereby making us a victim of our own efficiency and seemingly penalizing us.
Some would argue that a decrease in enrollments should simply correlate to a decrease in state aid, thereby justifying draconian cuts in state aid. But using Toms River as just one example, our low total costs per pupil and the $37 million we are now below adequacy is based on current enrollments. Besides changes in property and income wealth and the related multipliers, student enrollment is one of several variables that affect the state aid formula calculations, but what is also relevant is a district’s student profile. For example, in the last decade our special education enrollments have actually increased by 250 students and our free and reduced population is up by 1,500 students. In fact, our free and reduced eligible population has doubled in 10 years to nearly 30% of our overall student population.
Some might be led to believe that districts and communities like ours are simply overfunded and wealthy. We are neither. We have yet to fully recover $500 million of the more than $2.2 billion in tax ratable losses from Superstorm Sandy, a storm through which we lost 10,000 homes and endured thousands more in foreclosures. In fact we lead Ocean County, NJ and the Country in the percentage of foreclosures. We also lead Ocean County in homelessness, and rank eighth in the State.
My mission today, as it has been for the better part of two years, is to convince you, our state leaders, to immediately pause all further cuts until the critical flaws of the state’s funding formula are fixed. We respectfully request that a joint legislative committee be immediately convened, with an aggressive timeline, to evaluate the concerns with the Local Fair Share calculators and the calculation of a district’s adequacy budget, and to provide recommendations to the full state legislature.
As many of you know, this is far from the first time we’ve outlined the facts. Long before S2 was passed, we tried to convince state leaders to examine the flaws of the funding formula, and to get at the root of the problem to ensure fair funding for ALL New Jersey students moving forward. We’ve relayed the facts presented today through correspondence with numerous state legislators no fewer than ten times, from January 2016 through February 2018, with not one response or so much as a receipt confirmation. So you’ll forgive me if I remain skeptical that a testimony based on facts and logic will finally spark the change we’re seeking.
But my students give me hope, and I am here because of them, and I proudly sit alongside them today. It was our students who led our rally in Trenton to oppose state aid cuts-- which is the only action that has resulted in a request for dialogue by state leaders-- and it is our students who represent the future of Toms River, the State of New Jersey, and this county. Everything I do as superintendent is student-centered, because student achievement, student safety, and student well-being is our mission.
What is your mission then, if it leaves in its wake tens of thousands of vulnerable students, for whom achievement, security, and well-being is compromised? I sit on the precipice of eliminating over 400 staff positions in the next six years-- 80 next year alone-- with sweeping cuts to core services and programs, and drastically increased class sizes. Our district will be unrecognizable if not inoperable.
These decisions based on a critically flawed formula have real-life consequences. An exercise I periodically conduct with my own team of educators, is one designed to bring back in focus why we are all here. Today and in terms of the state aid issue, none of us would be in this room today if not for children. All children. Our children. May we be reminded today of whom we’re here to serve, and may we re-instill in our children the confidence that justice and fairness are feasible and that the adults in their lives can be trusted to act in their best interest. There is only one side here and that is our children. I implore all of you to listen closely to our testimony, remain open minded and take swift action based on a child-centered agenda before irreparable harm is done to hundreds of school districts and the tens of thousands of children they serve.