The Biggest News In New Jersey Property Tax Reform

While most reports about the Special Legislative Session findings have concentrated on a plan to offer a 20 percent property tax credit to “some” homeowners, the proposal that will have the largest impact on school districts and taxpayers is largely being overlooked.

The Joint Committee recommends that a new school aid formula be developed based upon the nationally-recognized professional judgment panels (PJP) model.

The professional judgment model was employed by Augenblick, Palaich, & Associates (APA), the Denver-based consulting firm hired by the New Jersey Department of Education to “cost out” public school financing requirements. The New Jersey Principals and Supervisors Association describes the professional judgment model used by the state as follows:

The Professional Judgment Panel method focuses on the development of educational goals and the construction of theoretical prototype school districts. Education professionals are then asked to identify the resources needed to meet the specified educational goals.

Eric Hanushek, Kennedy School of Government, Harvard University writes in The Alchemy of “Costing Out” an Adequate Education:

“Costing out studies” should be interpreted as political documents, not as scientific studies.

They are incapable of providing the guidance that is sought, because they do not provide an objective and reliable answer of the cost of meeting educational standards.

When there are no accepted scientific standards for their conduct, when there are few empirical restraints, when they cannot be replicated by others, and when there is no requirement for consistency across applications, it should come as little surprise that the estimates please the party who has purchased them.

Hanushek says a much more accurate name for the professional judgment model is the “educators’ wish list model”. The new school district formula developed for New Jersey is a wish list for more state spending combined with a political agenda. The Augenblick study provides the state with cover to slash and practically eliminate state aid for many school districts, to spend $1 billion more in favored communities and to maintain spending for Abbott school districts at 30 percent above parity with the “wealthy” districts.

For example, Cherry Hill Township currently receives $14,992,420 in state aid for education. New Jersey’s professional judgment “costing out” model concludes the school district is spending $9,416,293 too much. The Morris School District gets $7,553,645 in school property tax relief, but the study finds the district is overspending by $6,890,767. As Governor Jon Corzine said, “Anytime you change a formula, there are inevitably winners and losers.”

The Education Law Center has published the cost and funding information from the Augenblick study on its website. Here you can see what your school district spends and the amount deemed necessary under the recommended funding formula. To determine your school district’s average cost per student and the recommended spending per student, divide each figure by the district’s enrollment, which may be found here.

The chart below provides the summary level information based on actual spending as compared to the recommended funding (DOE Adequacy) for each New Jersey school district category.

Click to Enlarge

Amazingly the study concludes, the more a community relies on property taxes to fund its schools, the less the school district needs to spend per student. The less a community relies on property taxes and the less it contributes to the state’s property tax relief fund, the more the community needs to spend on education. We don’t need to tell you what will happen with your property taxes - because you’ve already figured out they won’t be going down.