TRENTON, NJ — The New Jersey Assembly Education Committee has favorably reported on Assembly Bill No. 4161, which establishes a new grant program aimed at stabilizing school budgets affected by state aid reductions. The Stabilized School Budget Aid Grant Program, set within the Department of Education, is designed to provide financial assistance to eligible school districts facing reductions in state school aid for the 2024-2025 school year.
This bill was approved in the New Jersey Assembly on Monday by a vote of 51-20 with members abstaining.
The program will offer aid grants covering up to two-thirds of the reductions in state school aid. To qualify, districts must be impacted by state aid cuts and will need to apply through the commissioner, fulfilling specific conditions. These conditions include utilizing their full tax authority under the existing law, which caps tax levy growth at two percent with some exceptions, and tapping into their “banked cap” — unused tax levy increases from previous years that can be applied to future budgets.
Additionally, districts receiving the grants are required to maintain their current level of school employees, barring enrollment-driven adjustments approved by the commissioner. The bill also stipulates that if a district raises more funds than its state aid reduction through tax increases, it becomes ineligible for the grant.
The legislation has secured an appropriation of $71.4 million to fund the program. Furthermore, districts that receive aid grants may increase their general fund tax levy by up to one-third of the amount cut from their state aid, provided the total increase does not exceed 9.9 percent of the previous year’s tax levy, unless required by the exhaustion of their tax authority.