Summary of Bill A-3881 (Session 222, New Jersey)
Main purpose and intent
- The bill makes targeted updates to New Jersey’s school funding framework, adds a publicly accessible funding portal, and adjusts procedures around State aid notices, district budgets, and legislative review of the Educational Adequacy Report.
- Its overarching aim is greater transparency in how State school aid is calculated and distributed, and to provide districts with earlier and clearer information to plan budgets.
Key provisions and changes
1) Preliminary State aid notices and budget timing
- Beginning with the 2026-2027 school year, the Commissioner of Education must:
- Within 30 days after the Educational Adequacy Report is approved, notify each district of base per-pupil amounts, weights (grade level, regional districts, at-risk, bilingual, combination pupils), cost coefficients (security, transportation), and related rates and excess costs for special education and speech-only pupils, for each applicable year.
- No later than the end of the first week in December, provide a preliminary State aid notice detailing the minimum State aid payable to the district in the next year.
- Within two days after the Governor’s State budget message is transmitted, notify districts of the projected statewide property value rate and statewide income rate used to calculate local shares for the following year.
- For 2008-2009 and beyond, State aid amounts will be based on budget-year pupil counts projected by the commissioner, with actual counts reconciled in the following year.
2) Legislative review of the Educational Adequacy Report
- The bill changes approval mechanics for the Educational Adequacy Report:
- Instead of deeming the report approved unless a concurrent resolution objecting to all or part is adopted, the Legislature must adopt a concurrent resolution either approving the report or indicating specific objections and directing a revised report by January 1.
3) Local share calculations (equalized valuation and district income)
- Redefines equalized valuation (EQVAL) and district income (INC) for calculating local shares:
- Use the average of the district’s values over the preceding three years, with a specific adjustment: for the prebudget year, use the lesser of actual value or 1.05 times the year preceding that year; for 2026-2027, use 1.05 times the year preceding the prebudget year.
- Also adjusts the statewide property value rate and statewide income rate in 2026-2027 to reflect prior-year values (see section 6 below for a special provision).
4) District budget flexibility for potential aid reductions
- Begins with the 2026-2027 year, creating a mechanism for districts facing a potential State aid reduction to submit their budget within five days after the appropriations act and revise within the first six months of the budget year, with possible calendar adjustments by the Commissioner.
5) New Jersey Education Funding Portal (Section 5)
- Creates a dedicated portal on the Department of Education website to:
- Make available inputs, calculations, and methodologies used to formulate State school aid under the School Funding Reform Act and related laws.
- Allow users to adjust data inputs (e.g., enrollment, property values, district income) and see estimated impacts on State aid.
- Provide user-friendly explanations of funding formulas (adequacy budgets, local shares, risk/LEP weights, geographic cost adjustments, special education funding, extraordinary aid, security and transportation aid).
- List preliminary notices, district budget data, and historical aid by district, with links to laws, regulations, current budgets, and the Educational Adequacy Report.
6) Special provision for 2026-2027 local shares and equalization
- For 2026-2027, the statewide property value rate and income rate used for local share calculations are set to the same values as 2025-2026.
- The total statewide equalization aid available for 2026-2027 will equal the sum of all districts’ allocated equalization aid (i.e., no general increase in available aid beyond the allocated amounts).
Affected parties
- School districts and county vocational school districts (State aid calculations, budgets, local shares).
- The Department of Education (administration of the funding portal and related guidance).
- The Legislature (review and approval process for the Educational Adequacy Report).
- The general public and district stakeholders (enhanced transparency through the Fund Portal).
Procedural/timing notes
- Immediate effective provisions: Sections 1–3 and 6–7 take effect immediately.
- Section 5 (Education Funding Portal) takes effect the first day of the fourth month after enactment.
- Sections subject to agency rulemaking or calendar adjustments may require implementation steps coordinated with the Commissioner.
