A Closer Look at NJ's School Funding Reform Bill: Why A5966 Matters for Collingswood

A new bill in Trenton — Assembly Bill 5966 (A5966) — proposes meaningful changes to how New Jersey calculates and distributes state aid to public schools. While it doesn’t overhaul the entire system, it makes targeted, technical fixes that could significantly benefit school districts like Collingswood — where state aid has often felt unpredictable, opaque, or misaligned with real community needs.

On this page, we’ll take a deep look at how the funding formula works today, what A5966 changes, and what it means for our town.

THE FORMULA AT THE HEART OF IT ALL

At the core of NJ’s school funding system is a deceptively simple equation:

Equalization Aid = Adequacy Budget – Local Fair Share

Let’s unpack that:

• Adequacy Budget: How much money the state says your district should spend to provide a "thorough and efficient" education, based on student needs (like enrollment, special education, free/reduced lunch status, etc.).
  

• Local Fair Share (LFS): How much your town is expected to contribute locally — based on property wealth and income.
  

• The difference is filled in by Equalization Aid from the state.
  
  

The Local Fair Share Formula:

As codified in state law, the LFS is calculated like this:

LFS = (Equalized Valuation × Property Rate × 50%) + (District Income × Income Rate × 50%)

Where:

• Equalized Valuation (EQVAL) = the town’s tax base
  

• District Income (INC) = combined income of residents
  

• Rates = statewide multipliers set annually by the Department of Education

This formula tries to balance both property wealth and income capacity, giving them equal weight.

Why It Matters

This formula doesn’t just determine how much money your district receives — it defines how fairly the state treats your community.

If the Local Fair Share is calculated too high, your district is expected to raise more money locally — even if that money isn’t actually available through taxes. That means less state aid, more strain on local taxpayers, and sometimes painful cuts to staff or programs.

On the flip side, if the formula accurately reflects your town’s true ability to fund education, then the state fills in the right amount — and your schools have a reliable, equitable foundation to serve every student.

In short: this formula is the engine that drives the resources, staffing, and stability behind every classroom in New Jersey. Getting it right is critical.

HOW A5966 CHANGES THE FORMULA

A5966 doesn’t throw out this formula — it refines it by changing how the numbers inside it are calculated. Here’s how:

1. Uses 3-Year Averages for Property Value and Income

Current Law:
LFS calculations often rely on single-year snapshots, which can be volatile.

A5966 Fix:
Switches to a 3-year rolling average for both:

• Property Valuation (EQVAL)
  

• District Income (INC)
  

BUT — and this is key — the most recent year in the average is capped:

The prebudget year value used must be no higher than 105% of the previous year’s value.

Example:
If your town’s property values jumped 20% this year due to revaluation or new construction, only 5% of that growth counts in the formula.

Why it matters:

• Smooths out dramatic swings.
  

• Prevents one big spike from suddenly making a district look “wealthier” than it actually is.
  

• Especially helpful for smaller districts or towns experiencing fast growth or redevelopment.
  

2. Freezes Statewide Rates for One Year

Each year, the DOE sets:

• The Statewide Property Value Rate (PVR)
  

• The Statewide Income Rate (INR)
  
  

These multipliers affect every district’s Local Fair Share.

A5966 Freezes the 2026–2027 rates at 2025–2026 levels.

Why it matters:

• Prevents systemic shifts in aid due to statewide recalibration.
  

• Adds stability as the state transitions to new calculations.
  

3. Adds Clarity and Oversight to the Adequacy Report Process

The Educational Adequacy Report (EAR) is issued every 3 years and sets:

• The base cost per student
  

• Weights for special education, at-risk, LEP, etc.
  

• Cost multipliers for transportation, security, etc.
  
  

Currently, it’s automatically approved unless the Legislature objects.

A5966 changes this to require explicit legislative approval via a concurrent resolution. If the Legislature disagrees, the Commissioner must submit a revised version.

Why it matters:
This increases accountability and ensures funding assumptions are reviewed and publicly debated — not just rubber-stamped.

4. Aligns Aid Timing with Budget Planning

Districts often find out how much state aid they’ll get too late to build responsible budgets.

A5966 fixes this with two major improvements:

• By early December: districts receive a preliminary aid noticeshowing the minimum aid they can expect.
  

• Right after the Governor’s budget: districts get the maximum potential aid and projected income/property rates used in the next year’s formula.
  
  

Why it matters:
More clarity and lead time → better budgeting → less disruption for schools and staff.

5. Allows More Budget Flexibility for Districts Facing Cuts

If a district is facing a reduction in state aid, A5966 allows it to:

• Delay submitting its budget until 5 days after the state budget is enacted (instead of in March).
  

• Revise its budget up to 6 months into the school year.
  
  

Why it matters:
Helps districts avoid premature cuts or staffing decisions when aid numbers are still shifting.

A New Tool For Transparency

A5966 requires the DOE to create a public-facing New Jersey Education Funding Portal.

It will:

• Show every district’s inputs, calculations, and aid history
  

• Let users simulate changes to enrollment, property value, or income
  

• Explain in plain language how aid is calculated
  

• Display three years of data for every type of categorical aid
  
  

Why it matters:
Finally, anyone — parents, educators, taxpayers — can understand how school funding works in New Jersey.

WHAT IT MEANS FOR COLLINGSWOOD

For communities like Collingswood, these reforms are overdue. We’ve dealt with:

• Late aid notifications
  

• Unclear formula decisions
  

• Sudden changes in state support that disrupt programs and planning
  
  

A5966 doesn’t fix every funding issue, but it does:

• Start to smooth out the math
  

• Provide more timely data
  

• Give us a clearer view of how and why aid changes
  
  

That means more predictability, better advocacy, and a stronger foundation for long-term planning.

BRIDGE THE GAP COLLS SUPPORTS A5966

We believe:

• School funding should be stable, fair, and transparent
  

• Districts should be able to plan responsibly
  

• The public deserves clear insight into how aid is calculated
  
  

A5966 moves us in that direction — and we’re watching closely to ensure it passes and is implemented fully with room to continue improvements.

What You Can Do

• Share this post with your network
  

• Email or call your state legislators to express support for A5966
  

• Stay tuned as we monitor the Education Funding Portal rollout
  
  

Together, we can make school funding work for every student, in every town.