Feds order New Jersey to restore cuts imposed by Gov. Phil Murphy in 2018

In response to complaints by Education Law Center and Jersey City Together, the U.S. Department of Education (USED) has found that state aid cuts in the FY22 New Jersey State Budget violate the Maintenance of Equity (MOEq) provision in the American Rescue Plan Elementary and Secondary School Relief Fund (ARP ESSER).

In a November 24 letter to acting Education Commissioner Angelica Allen-McMillan, the federal government ordered New Jersey to immediately restore the cuts.

“This directive from the federal government should come as no surprise,” said Danielle Farrie, ELC Research Director. “It was clear that the aid cuts in the FY22 Budget put New Jersey out of compliance with the ARP ESSER, which specifically prohibits states from reducing state aid to high poverty school districts.”

The ARP ESSER entitles New Jersey to $2.5 billion in federal emergency relief funds, but that funding is dependent on compliance with the MOEq requirement.

New Jersey’s FY22 Budget included cuts in state aid to districts in both the “high need” and “highest poverty” categories as defined by the ARP ESSER.

The MOEq specifically prohibits states accepting ARP ESSER federal funds from disproportionately cutting state aid in high need school districts between FY21 and FY22 and from reducing aid below FY19 levels in the highest poverty districts.

The state aid cuts were dictated by Senate Bill 2 (S2), a change to New Jersey’s school funding formula enacted in 2018, phasing-out “adjustment aid,” a category of state transition aid.

Despite a warning from ELC that the S2 cuts would violate the MOEq in certain districts, the FY22 Budget proposed by Governor Phil Murphy and passed by the Legislature included the aid cuts.

“If the Legislature and Governor sign off on this state aid cut, not only will high need districts have less funding for the 2021-22 school year, but New Jersey risks losing billions in federal funds urgently needed to address the impacts of the pandemic on students, their families, and communities across the state,” said ELC Executive Director David Sciarra, in a statement released prior to the amendment to the state’s funding formula.

“Given the overwhelming need for teachers, support staff and other resources in these districts, any cut in school funding is ill-advised this year,” said Farrie, prior to Murphy’s education cut. “We must ensure the budget does not jeopardize the state’s receipt of billions of federal COVID-19 relief funds for our public schools.”

The budget also authorized a transfer of set-aside funds in the event New Jersey was found to be out of compliance with the MOEq.

“The USED has vindicated the advocacy of Jersey City Together and ELC to enforce Maintenance of Equity” said Brigid D’Souza and Dr. Jyl Josephson, parent leaders with Jersey City Together, a coalition of more than 30 religious congregations, nonprofits and parent groups affiliated with New Jersey Together. “The restoration of millions in state aid will be crucial for high poverty districts across the state, including Jersey City, to invest over the next two years in their students and recover from the pandemic.”

“Now that the USED has found New Jersey violated the MOEq,” said David Sciarra, ELC Executive Director, “we expect Governor Murphy and the Legislature to immediately rescind the cuts and provide the funding owed to more than 80 districts.”

For four years, the governor has used delay tactics to fend off a lawsuit by civil rights advocates who are seeking to integrate public schools even though the state constitution bans school desegregation, even if it’s unintentional.

New Jersey’s schools are among the most racially segregated in the nation.

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