Cherry Hill's State Funding Background

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• The State of NJ has chronically underfunded the Cherry Hill School District for decades.

 

• Under the School Funding Reform Act (SFRA), the most recent education funding distribution formula, Cherry Hill should receive $29 million. But NJ has never allocated enough money to fully fund the formula.

 

• Cherry Hill has never received its formula-mandated amount. For 2021-22, it received $24.6 million. 

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• This came after many years of advocating for increased funding. In 2010, then Gov. Christie slashed funding to education: Cherry Hill received $7.9 million to educate more than 11,000 students. (Of that $7.9 million, $3.9 million was taken from money Cherry Hill schools had in its excess fund balance, earmarked to help the following year’s budget, as well as 25% of the money from its capital reserve. That money has never been returned.). Funding has been climbing in small increments since then.

 

• Cherry Hill has lost out on more than $170 million it was entitled to under SFRA. It will never recover this money.

 

• While Cherry Hill has been underfunded, many districts in NJ (roughly one third) have been overfunded, according to the SFRA formula. Districts like Washington Township, Toms River, Brick, Freehold, Lenape Regional and Eastern Regional all have received more than their fair share of funding.

 

• When the formula was first implemented, those overfunded districts were given adjustment aid to help them transition to their allotted funding amounts. However, this excess aid was never phased out as planned.

 

• In 2018, the Legislature passed a law (S2) to distribute education funds more equitably. Over the course of seven years, aid to overfunded districts will be reduced and aid to underfunded districts will be increased. By school year 2024-25, Cherry Hill should receive $29.3 million in state aid.

 

• The overfunded districts are protesting in Trenton and lobbying to overturn this law. They have formed a coalition to challenge this law any way they can.

 

• The Department of Education will not reveal the funding formula used to calculate and allocate state aid to the districts. It claims that the wealth calculations considered part of the formula are proprietary.

 

• Part of the criticism of the overfunded districts is that, because the state has been allocating them more aid than they were due, they have been able to keep their property taxes low. As a result, their taxpayers do not have to pay their fair share of their schools’ budgets. 

 

• In Cherry Hill, local taxpayers shoulder almost the entire burden. For the 2019-20 school year, 91.5% of the district budget came from local sources. The state contributed 8.5% of the budget (federal sources were negligible: 0.1% came from Medicaid reimbursements).

 

• In overfunded districts like Washington Township, Toms River, Brick and Eastern Regional, the state covers anywhere from one fifth to one third of their school budgets.

 

• Complicating the issue is the state’s 2% cap on property taxes. Even if these towns wished to raise their property taxes in order to contribute more to their school budgets, they are restricted by law to a 2% tax increase per year. Gov. Murphy vetoed a bill that would have exempted overfunded districts from this restriction.

 

• One key factor as to why Cherry Hill has been underfunded is the notion that Cherry Hill is a wealthy community and can therefore afford the tax burden it has accumulated. This assumption is based on a study done in 2000 assigning Cherry Hill to District Factor Group GH (on a scale rated A to J, with A as the poorest and J the wealthiest). In 22 years, that assessment has not been reevaluated. 

 

• In 2019-20, eight out of 19 Cherry Hill schools were Title 1 schools. A school is designated as a Title 1 school when 40% of its students qualify for Free and Reduced Lunch. Across the district, 18% of Cherry Hill students qualify for Free and Reduced Lunch (up from 15% in 2010). 

 

• Cherry Hill also has 2,000 special education students with IEPs, requiring additional funding to appropriately address their educational needs. In 2018-19, Cherry Hill requested $3.6 million from the state for special education; it received $1.8 million in state aid. The actual amount Cherry Hill spent on special education in 2018-19 was $16.9 million. The state covered 10% of Cherry Hill’s special education needs. 

 

• Another factor in the inequitable distribution of funds is the change in student populations. Districts like Toms River have experienced drops in enrollment, yet until the passage of S2, they did not see a reduction in funding. While state aid is supposed to follow the child, this has not been followed consistently or fairly.

 

• Fair Funding for CHPS has worked alongside the Fair Funding Action Committee (FFAC), a coalition of underfunded districts that has been instrumental in getting S2 passed in Trenton. The group has been spearheaded by Kingsway and Chesterfield school districts, and it is a powerful voice in the battle on behalf of the underfunded districts.