A ROADMAP FOR IMPROVING NEW JERSEY'S SCHOOL FUNDING FORMULA - THE IMPACT OF CENSUS-BASED FUNDING FOR SPECIAL EDUCATION

Oct 15, 2026

Uploaded by Callum

Report analyzes how New Jersey’s 2008 School Funding Reform Act uses census-based funding for special education and how this approach affects equity across districts. It finds major variation in special education classification rates that leads to inequitable resource distribution, including many districts funded for fewer students than enrolled. The analysis quantifies funding gaps and recommends actions for Governor, Legislature, and NJDOE, including an SFRA review and adjustments to special education aid allocations for FY2025 and beyond.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages14

Reading Time35 min

AccessFree to download

Executive Summary

Key Findings

Recommendations

Introduction

Census-Based Model vs. Previous Tiered System

A ROADMAP FOR IMPROVING NEW JERSEY'S SCHOOL FUNDING FORMULA: THE IMPACT OF CENSUS-BASED FUNDING FOR SPECIAL EDUCATION Danielle Farrie, Ph.D. & Nicole Ciullo April 2024 About the Authors Danielle Farrie, Ph. D., is Research Director at Education Law Center. Since 2008, she has conducted research and data analysis to support public policy advocacy for ELC and partner organizations. Dr. Farrie is the lead author of ELC’s Making the Grade report and has authored book chapters and peer-reviewed articles on topics such as school finance and school segregation. She has testified about school funding issues before numerous state and national commissions and has provided expert testimony in state school funding lawsuits. She holds a Ph. D. in sociology from Temple University. Nicole Ciullo is Research and Policy Associate at Education Law Center. She tracks legislative, policy, and research developments impacting K-12 public schools nationwide, gathers and analyzes data and assists in the writing and production of reports and publications. Nicole received [a B.A. in](a B.A. in) Spanish and Sociology from The College of New Jersey, and a master’s degree in Public Administration from Rutgers University-Newark. About Education Law Center Education Law Center ( ELC) pursues justice and equity for public school students by enforcing their right to a high-quality education in safe, equitable, non-discriminatory, integrated, and wellfunded learning environments. We seek to support and improve public schools as the center of communities and the foundation of a multicultural and multiracial democratic society. We strive to secure and protect the rights of students who are underserved, experience inadequate learning opportunities, or face discrimination based on race, ethnicity, socioeconomic status, language, religion, sex, sexual orientation, gender identity, immigrant or migrant status, or disability. To achieve these goals, we engage in litigation, research and data analysis, policy advocacy, communications, and strategic partnerships and collaborations © April 2024 Education Law Center, Inc., Newark, NJ. All rights reserved. Executive Summary In an effort to reduce state spending on special education in public schools, New Jersey moved to census-based funding as part of the new school funding formula, the School Funding Reform Act (SFRA), adopted in 2008. The census approach funds all districts using the statewide average classification rate and a statewide average "excess cost. " In this report, we find: Classification rates for special education vary greatly among school districts, resulting in the inequitable distribution of resources to fund districts’ actual special education enrollment. In 2022-23, 60% of school districts were funded for fewer special education students than they enrolled, a 12 percentage point increase from 2009-10, the year after the transition to census funding. In 2022-23, districts with classification rates higher than the statewide average received $378 million less than if they were funded on their actual special education enrollment. Districts with higher-than-average classification rates must divert funding from general education programs or raise additional local revenue to fill the gap for unfunded special education students. About half of the underfunded districts would have to divert more than $600 per pupil from general education to cover these unfunded students. Education Law Center (ELC) recommends that the Governor, Legislature, and New Jersey Department of Education ( NJDOE) include an analysis of special education funding as part of a comprehensive review of the SFRA. The Governor and Commissioner of Education are required to review the formula every three years through the Educational Adequacy Report ( EAR), and the next EAR is due in time to inform the FY2026 state budget. While modifying the method used to fund special education is not allowed through the EAR, the N

FAQs

Why did New Jersey switch to a census-based funding model for special education?

New Jersey adopted a census-based model under the School Funding Reform Act, aiming to help control special education costs by funding districts using statewide average classification rates and excess cost. The introduction notes the shift was at least partly linked to cost concerns identified in a recent report.

What does the report find about classification rates across districts?

Classification rates for special education vary greatly among districts, producing an inequitable distribution of resources. In 2022-23, 60% of districts were funded for fewer special education students than they enrolled, increasing compared with 2009-10.

What steps does the Education Law Center recommend?

The report recommends that the Governor, Legislature, and NJDOE include special education funding analysis in a comprehensive review of the SFRA and use the upcoming Educational Adequacy Report cycle to inform the FY2026 state budget. It also calls for immediate legislative actions for FY2025, including a dedicated SFRA review and increased Extraordinary Special Education Aid allocations.

Oct 15, 2026

Uploaded by Callum