Senate Bill No. 2434 Offers Financial Flexibility to School Districts Facing Aid Reductions
TRENTON, NJ – The Senate Education Committee has favorably reported on Senate Bill No. 2434, a legislative move designed to provide financial relief to school districts facing reductions in state school aid. The bill introduces a tax levy cap adjustment mechanism for districts experiencing decreased state funding in the 2023-2024 and 2024-2025 school years under the framework of P.L.2018, c.67, also known as “S2.”
Currently, school districts are generally limited to increasing their property tax levy by no more than two percent annually. This bill, however, allows for exceptions to this rule, enabling districts to make adjustments in response to specific financial pressures like enrollment increases, healthcare cost rises, and pension contributions.
Specifically, the legislation permits an adjustment to the tax levy growth limitation for districts with reduced state aid, calculated as the difference between the state aid received in the previous year and the aid received in the 2023-2024 or 2024-2025 school years. Additionally, districts that are spending below adequacy beyond the 2024-2025 school year can adjust their tax levy to meet adequacy spending levels.
Importantly, the bill safeguards educational quality by prohibiting districts from using these adjustments to reduce their teacher workforce or cut appropriations for instructional or support services unless such reductions are approved by the Commissioner of Education.