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For More Information Contact the Public Information Office:
Kathryn Forsyth, Director

For Release: March 3, 2005

DOE Releases State School Aid Notices

The New Jersey Department of Education today provided the state's 616 school districts with information regarding the amounts of state aid they can anticipate in their 2005-2006 budgets.

The state aid totals can be found on the DOE web site at

Assistant Commissioner Richard Rosenberg will host a call-in conference call for reporters today at 4:00 p.m. Reporters should call the DOE Public Information office at 609-292-1126 for the call-in number and participant code.

The following is the text of the letter that accompanied the aid notices to the state's 31 Abbott districts:

TO: Abbott Superintendents
Business Administrators
FROM: Gordon MacInnes, Assistant Commissioner
Division of Abbott Implementation
SUBJECT: FY06 Budget

At this point, you should have received your district's state aid notification as required by N.J.S.A. 18A:7F-5. Given Acting Governor Codey's budget recommendations for FY06, it may be helpful to put the changes to the Abbott budget process in context.

In November, the Commissioner's regulations established the presumptive budget protocol as the standard for reviewing district budgets for FY06. At the time, this was accepted as an achievable goal and the department has worked with Abbott districts subsequently to encourage presumptive budget submissions. Unfortunately, there is no reasonable prospect that the funds required to support presumptive budgets can be generated this year.

In order to address the huge shortfall in state revenues and the inherited structural deficit, the Governor has recommended a State Budget that reduces FY05 spending by more than a billion dollars. In fact, the recommended budget is lower than FY04-05 by more than 2%, the largest decrease in the last 30 years. School formula aid has been frozen Statewide. However, to maintain parity and preschool programs, the Governor has recommended an increase of $59 million for the Abbott districts. Thus, Abbott districts will receive education opportunity aid sufficient to fund the greater of FY06 parity or the combination of FY05 education opportunity aid and discretionary education opportunity aid. The small increase in FY06 education opportunity aid will be used to fund priorities such as the approved incremental costs of new facilities. If your district qualifies for this additional educational opportunity aid, you will be notified in the next several days.

Notwithstanding the additional funding recommended for the Abbott districts, it is clear that the State will not be able to fund Abbott district budgets as intended. To this end, the State intends to seek permission from the New Jersey Supreme Court to suspend those funding protocols for FY06. Thus, while you should retain your work and analysis towards a presumptive budget, you should not anticipate the receipt of DEOA for FY06. You are encouraged to consider increasing your local levy to support any increased spending over FY05. Finally, to the extent your district submits a budget with growth beyond CPI inflation of 3.01%, you will be required to submit the documentation specified in the Department's February 8, 2005 correspondence.

We understand that this unexpected and sudden change to the budget process will require additional work to identify further spending reductions or increased revenues beyond State aid prior to transmission of your budget. The staff from the Division of Abbott implementation is available to work with you to answer questions about the budget process and provide assistance in identifying areas for reallocation and reduction in these difficult budget times.

The following is the text of the letter that accompanied the aid notices to non-Abbott districts.

TO: Chief School Administrators
Board Secretaries/School Business Administrators
FROM: Richard Rosenberg
Assistant Commissioner
SUBJECT: State School Aid for 2005-06

Enclosed are your state school aid notices for the 2005-06 school year. This year the fiscal problem facing the state has resulted in Acting Governor Codey proposing a state budget that reduces spending. As such the overall state budget is lower than FY 04-05 by more than 2%. Despite this reduction in proposed spending, total school aid rose by $305.4 million from $8.99 to 9.29 billion, with much of that increase going towards teachers pensions and medical benefits, teachers social security, and payments to fulfill debt service obligations. Formula aid, however, is level funded at FY 04-05 levels. The only exception is court mandated funding for Abbott districts that will see a modest $59 million increase to ensure parity and fund Abbott preschool program expansion.