By Stephen Appezzato
NEW JERSEY – State officials unveiled their $22.2 billion funding package for New Jersey schools as part of New Jersey’s fiscal year 2026 (FY2026) budget. Coupled with this are a number of changes to stabilize swings in state aid school districts faced last year.
The record-high number, a $444 million increase from last year’s funding, makes up more than a third of the entire state budget. “All together, our budget will provide the single largest investment into New Jersey’s public schools in history,” said Gov. Phil Murphy at the FY2026 budget address in Trenton last week. About 68% of the state’s school districts will see increases from last year, including many in the Two River area.
Less Volatility
Those who observed last year’s rollout of state funding will notice the FY2026 allocations are far more stable. After some school districts faced severe cuts for FY2025, school officials and legislators worked diligently to prevent funding swings for FY2026.
“This year’s school funding numbers represent a much-needed stabilization after last year’s volatility,” said State. Sen. Vin Gopal (D-11), who chairs the Senate Education Committee, in a statement to The Two River Times.
To achieve this, state officials instituted a 3% cap on the amount a district could lose in equalization, transportation, special education and security aid and a 6% cap on the amount it could gain this year.
Most of the 15 public school districts in the Two River area will receive slight funding boosts for FY2026. The Henry Hudson Regional, Middletown Township, Oceanport, Red Bank Regional, Rumson-Fair Haven Regional, Shore Regional, Shrewsbury and Tinton Falls school districts will see a 6% funding increase over last year. The Rumson school district will receive 1.9% more, while the Fair Haven, Holmdel Township, Little Silver, Monmouth Beach and Red Bank School districts will see a 3% reduction. Colts Neck Township School District faces a 4.9% reduction from changes to aid categories that are not protected by the 3% cap.
“The 3% cap on cuts and 6% cap on increases are significant steps toward ensuring our schools can plan their budgets with greater predictability,” Gopal said.
According to the state, another new guardrail used in calculating funding this year was incorporating multiple years of property valuation and income measures in determining a district’s local share, or the amount taxpayers would contribute to their local district.
“Through the Senate Education Committee hearings and conversations with superintendents, teachers, school board members and families, we heard firsthand how sudden and severe funding cuts disrupt student learning, forcing districts to consider laying off teachers or cutting critical programs,” Gopal explained. Last year, the Red Bank Borough School District was blindsided by a 19.59% reduction in state aid due to year-over-year swings in property valuation and income measures that skewed its local share.
Aid Calculations
Also new for the FY2026 budget is a change in how special education aid is calculated. This number had been calculated based on a state-wide average of census numbers; now, it is based on a district’s special education enrollment. Additionally, qualifying districts that request flexibility in raising their local tax levy above the existing 2% cap could receive extra state aid this year. This issue was evident last year as districts facing funding cuts struggled to raise their local share of funding because of the 2% levy cap.
For FY2026, the school funding formula was also updated to account for the up-to-date mental health and school security resources districts require.
Lastly, within Murphy’s proposed budget is a $7.5 million allocation to support “high-impact tutoring” and a $3 million allocation to support phone-free schools.
According to state Education Commissioner Kevin Dehmer, this year’s changes are implemented through the state budget and would only last through the fiscal year, unless instated through legislation or the next governor’s FY2027 budget.
Gopal said while he is encouraged by this progress, “we still need more transparency in how state aid is determined for each district. No school should have to build a budget while uncertain about how much aid they will receive.”
“I remain committed to working with local school officials to bring more fairness and accountability to the funding process so that every student in New Jersey has access to the quality education they deserve,” he added.
The article originally appeared in the March 6 – March 12, 2025 print edition of The Two River Times.
