Why did New Jersey establish a new funding formula?
Part of the administration’s reason for designing a new funding system was to attain a unified formula. The other was to save local school districts from annual uncertainty over state aid. In 2002, because of chronic revenue shortfalls, New Jersey all but abandoned the CEIFA formula. Since then, state school aid has been set through the Legislature’s annual budget process, rather than by a consistent formula. The result was six years of stagnant state aid that did not keep up with rising costs in many districts. In addition, without a funding formula, the state made no adjustment for enrollment growth/decline or for changes in districts’ relative wealth.
