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A 3428

Provides that regional school districts are not subject to State school aid reductions under certain circumstances.

2026-2027 Regular Session Introduced by Heather Simmons

The bill exempts certain regional school districts that spend 10% below adequacy and have taxes 10% above average from State aid reductions.

Introduced, Referred to Assembly Education Committee
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Bill Summary · A 3428

Bill Summary: A 3428 (New Jersey, 222nd Session)

Purpose and intent

  • The bill provides that certain regional school districts (RSDs) would be exempt from State school aid reductions under specific financial and demographic conditions.
  • It aims to protect high-tax, under-adequacy regions that have already invested in regionalization from reductions in State aid, effectively preserving funding levels for those districts.

Key provisions and changes

1) Amends current law on State aid adjustments (P.L.2018, c.67)
- In 2019-2020 through 2024-2025 school years:
- If a district’s State aid differential is negative, the district shall receive State aid equal to:
- The district’s prior-year aid plus the district’s proportional share of increases in State aid in the current year, plus adjustments for the overall State aid reductions, allocated by the district’s negative differential relative to statewide negative differentials.
- Any increase in State aid will be allocated in order to equalization aid, then special education, security, and transportation aid, with each category capped by amounts specified in related law (sections 11, 13, 14, and 15 of P.L.2007, c.260).

  • If a district’s State aid differential is positive:
    • The district shall receive State aid equal to prior-year aid minus a percentage of the differential, with the following schedule:
    • 13% reduction in 2019-2020
    • 23% in 2020-2021
    • 37% in 2021-2022
    • 55% in 2022-2023
    • 76% in 2023-2024
    • 100% in 2024-2025

2) New section establishing an exemption for certain RSDs (Section 2)
- A regional school district meeting both conditions:
- Spending at least 10% below adequacy (per the adequacy metric in 2018 law, C.18A:7F-70), and
- Each constituent district is located in a municipality where the equalized total tax rate is at least 10% above the statewide average
- Shall not be subject to State aid reductions.

  • Definition: “State school aid” = sum of equalization aid, special education categorical aid, security categorical aid, and transportation aid for the budget year (per sections 11, 13, 14, 15 of P.L.2007, c.260).

3) Effective date
- Effective immediately.
- Applies to State school aid distributed in the first full school year following enactment.

4) Administrative and ancillary provisions (Section 1)
- The bill preserves existing language around adjustments, but introduces the new protections and sequencing for reductions, including how reductions are allocated and to which aid categories.

Who is affected

  • Regional school districts that meet both criteria in Section 2 (below-adequacy spending and higher-than-average local property tax rates) would be exempt from State aid reductions.
  • Other districts (including SDA districts and districts with positive or negative State aid differentials) continue to be subject to the existing reduction schedules and redistribution rules, with the new prioritization and category caps from the amended law.

Procedural and timeline considerations

  • The bill sets its own time frame for the aid reductions (2019-2020 through 2024-2025).
  • If enacted, the exemptions would begin with the first full school year after enactment.
  • The bill requires administrative determination of adequacy metrics and tax-rate thresholds consistent with the existing 2018 and 2021 framework for regionalization and adequacy calculations.

Notable details and caveats

  • The exemption is narrowly tailored to RSDs that are financially efficient (spending at least 10% below adequacy) and located in municipalities with notably higher property tax rates (equalized total tax rate at least 10% above statewide average).
  • The bill interacts with, and modifies, the framework established by P.L.2018, c.67 and P.L.2007, c.260, including the categorization and sequencing of aid adjustments.

If you’d like, I can provide a side-by-side comparison of current law versus the bill’s changes or a plain-language example showing how a hypothetical RSD would be affected under the new provisions.

Compiled from official sources — confirm details with the bill’s official record.

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