The state's 15-month funding review opens Monday in Blackwood as health premiums rise 34 percent, aid caps keep 203 districts below their full formula amount, and any rewrite of the funding law runs through the Legislature.

The first South Jersey forum in the state's school funding review opens at 6 p.m. Monday in Civic Hall at Camden County College in Blackwood.

In Cherry Hill, which district leaders say has been underfunded by the state for years, the board voted 7-1 for a budget that closed a near-$29 million gap with $8 million in operational cuts and $6.5 million in personnel savings, then raised the local property tax 7.4 percent. “It's really time for the people in Trenton to give us their fair share,” Waleska Batista-Arias, president of the Cherry Hill Education Association, told 6abc.

The review can recommend, but only the Legislature can rewrite

The New Jersey Department of Education launched the 15-month outreach August 5 with the Hunt Institute, an education policy nonprofit, supporting a steering committee being convened this fall; legislative representatives are among the invited organizations. Recommendations to the Legislature, plus a roadmap carrying the work into 2027, will draw on what the department hears through the 2026 outreach.

“Education spending is the single largest investment our state makes year to year, and we have a responsibility to ensure we are getting the best return on every dollar spent,” Governor Mikie Sherrill said at the August 5 launch.

The caps on annual swings, three-year averaging and enrollment-based special education aid — the provisions districts rely on to keep aid predictable — are written into each year's budget rather than into the School Funding Reform Act, which has not been amended since 2018.

Danielle Farrie, research director at the Education Law Center, told NJ Monitor in March: "I think we need to codify these changes in law. There's just no other way to say it. The changes are necessary. There seems to be legislative agreement on that."

“The core structure of New Jersey's school funding formula is sound,” Robert Kim, the Education Law Center's executive director, said in April. “But after nearly two decades, we need to consider additional modifications to make sure funding aligns with needs and that the required revenue is reaching all students at appropriate levels.”

A 6 percent ceiling and a 3 percent floor govern this year's aid

State aid can rise no more than 6 percent or fall more than 3 percent in a single year. The caps are in their second year, and 297 of the state's 574 districts sit at one of those limits, per NJ Monitor.

The FY2027 state budget, signed June 30, supplies a record $12.4 billion in formula aid and a record $1.4 billion for the state's preschool programs, according to the governor's office.

Assemblyman Gerry Scharfenberger (R, 13th District) said at an April budget hearing: “The top 10 school districts get $4.4 billion. That's 7% of the entire budget, so we really have to look at this.” State and local K-12 funding totals $26,990 per student, third-highest in the country, per the Morristown-based Garden State Initiative.

The formula starts from adequacy — what the state has defined as the education the constitution requires — and districts raise part of that cost locally through property taxes; state aid fills the rest. The FY2026 Educational Adequacy Report set the per-pupil starting figure of that calculation at $14,972, a figure the caps kept 203 districts from receiving in full this year, per NJ Monitor. The Education Law Center's 2022 research puts majority-Latino districts more than $3,300 below their adequacy targets while majority-white districts ran more than $1,700 above.

“We've been at bare bones for a few years now... Politics shouldn't bleed into public education but unfortunately, it does. It's salt in the wound,” Toms River Regional Superintendent Michael Citta, whose district says the caps have blocked aid it is owed, told NJ Spotlight News in July.

The formula budgets health benefits at $24,545 per employee

The formula counts health benefits at $24,545 per employee. That figure comes from the FY2026 Educational Adequacy Report, which set it from the average 2024 cost, prorated for employees who waive coverage and adjusted for inflation. “Normally, we are most concerned with the formula... But the proximate cause of anxiety for districts is really health insurance — that is what has all districts over the barrel,” Betsy Ginsburg, executive director of the Garden State Coalition of Schools, told NJ Spotlight News in July.

New Jersey School Boards Association figures show premiums rose 14 percent in 2025 and 31.9 percent in 2026.

The School Employees' Health Benefits Commission approved the 2027 rates September 25 in a 4-2 vote. Average active-employee health premiums rise 34.4 percent, effective in January; premiums in the PPO10 and PPO15 plans rise 45.1 percent. Retiree rates, approved in July, rise 11.3 percent for retirees not on Medicare and 6.2 percent for those who are. NJEA called the increase “simply unacceptable” in a September 25 statement.

The increase's components compound rather than add, per the New Jersey Department of the Treasury's rate-setting analyses. The biggest drivers: 10.7 percent from the underlying growth in medical and drug claim costs, 4.2 percent from anti-selection — healthier members buying coverage elsewhere and leaving a costlier pool behind — and a larger margin, of which 4.2 percentage points repay the $70 million the plan borrowed this year from its retiree fund under Chapter 28. Chapter 44, the 2020 law that governs the plans, bars changes to what the plans cover, including deductibles, copays and network rules, until January 1, 2028; only the Legislature can act before then.

Health benefits are not the only cost the formula underestimates. The state Schools Development Authority has acknowledged billions of dollars in unmet construction need in the low-income districts where it builds the schools; the FY2027 budget provides $50 million a year there for capital maintenance and emergent projects, per the Education Law Center.

One report can raise the formula's costs without a bill

The School Funding Reform Act requires an Educational Adequacy Report every three years. When a report recalculates costs upward, the new figures take effect unless the Legislature rejects them by concurrent resolution within 90 days. The Legislature rejected the 2014 and 2017 reports that way; the 2020 and 2023 reports took effect unchallenged. The Education Law Center has said those reports updated prices without asking whether the formula's inputs — student weights and staffing costs — still fit. The next report lands in fiscal 2029; work on the review continues into 2027.

Three days after the September 25 vote, State Senator Mike Testa (R, 1st) filed S-4544, which would lift the caps for one year and appropriates $332.6 million to cover the added aid. Senators Vin Gopal (D, 11th) and Troy Singleton (D, 7th) sponsor S-3620, which would cap aid losses at 2 percent and open future adequacy reports to public comment. Assembly Speaker Craig Coughlin (D, 19th) introduced A-3881, which would give districts preliminary aid figures by the first week of December. S-4118 would send state aid to districts in municipalities whose land the Highlands and Pinelands Acts keep off the tax rolls. Former Jefferson Township Superintendent Jeanne Howe made that fix the subject of a June email to NJ Spotlight News: “Ultimately, relief will require a revision of the school funding formula that accounts for districts heavily impacted by the Highlands and Pinelands Acts.”

For residents who want in: the remaining forums run Wednesday, October 14 at Stockton University in Galloway, Atlantic County; Thursday, October 22, virtual; Tuesday, October 27 at the Donald M. Payne School of Technology in Newark; and Thursday, November 12, virtual. At the in-person sessions, comment sign-up is first-come, first-served, with up to three minutes per speaker. Written testimony goes to FundingOutreach@doe.nj.gov.

When the forums end on November 12, districts will be facing January's premiums with the formula unchanged; the review's recommendations, and any fix from the Legislature, come after that.

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Sources

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• New Jersey School Boards Association, active-employee premium figures, School Board Notes (May 4, 2026)

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• School Funding Reform Act, P.L. 2007, c. 260 (C.18A:7F-43 et al.), as amended by P.L. 2018, c. 67

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