NJ Education Spending & the Collapse of Equity [Update]

Posted on November 4, 2013



A while back, I wrote this post on the collapse of educational equity in New Jersey.

A few years back, I wrote this post to try to clear up the multitude of falsehoods I kept hearing about New Jersey taxes and spending.

Well… not much time to write a great deal of explanatory text today… but here are a few updated figures. Tax figures are from the state and local tax query system of Taxpolicycenter.org.  Note that these figures only go through FY 2011, as do Census data on local public school district spending used in the retreat from equity post above.

But before I go to my updated slides, note that the Center on Budget and Policy Priorities also recently produced a report on education spending since 2008, finding that New Jersey was among those states that either in percentage terms or on a per pupil basis, had seen reductions in inflation adjusted elementary and secondary education spending.

Slide5

So, here’s New Jersey spending on education since 1990, beginning with STATE DIRECT EXPENDITURES on k-12 and higher education. Note that the peak of state direct spending on k-12 was in 2006, following the largest scale up of “Abbott” funding (from 1998 to 2005ish). Since that time, first with the adoption of the School Funding Reform Act (for comments on problems with SFRA, see this post)  and then with recession era cuts, state support has declined.

Slide1Here’s combined state and local direct spending on education PER CAPITA (NOT per pupil, but per population) – which is the lions share of spending on education (federal being relatively small… but for a temporary “stabilization” boost).

Slide2Now, one argument for the per capita drop is/was that earnings/incomes, etc were dropping and thus the burden on the taxpayer was simply too high and climbing. But here’s what the direct spending – state and local – on education looks like as a share of personal income.

Slide3Yes, even as a share of income, education spending declined.

And this decline comes largely as a function of state aid decline. And, when state aid declines, the natural tendency is to use local property taxes to the extent possible to offset that decline.

So, as we can see, property taxes spiked.

Slide4

And, of course, some local public districts have far more capacity to offset their losses with property tax increases than do others. See this post

And for more information on persistent property tax disparities by wealth in NJ see this post!

So… during this period, as the post mentioned at the outset of this post explains – the progressiveness of New Jersey’s state school finance system begins to decline.

Slide6

progressivenessThat previously progressive system had actually made some substantial strides for low income children.

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