Sweeney & Sarlo Vow to Pass Millionaire’s Tax in January to Add $800 Million More for Underfunded School Districts
TRENTON – Senate President Steve Sweeney and Senate Budget Chair Paul Sarlo today pledged to pass a millionaire’s tax in January 2018 as part of a comprehensive plan to provide every school district with at least 70 percent of the state school aid they are owed by the 2018-19 school year.
Building on the $146 million in additional school aid for underfunded districts that will be included in this year’s budget, the Senate leaders pledged to add an additional $800 million in school aid to next year’s budget by dedicating $800 million from a millionaire’s tax, other revenue and reallocated Adjustment Aid to increase school funding in the FY19 budget.
“We took a landmark first step toward restoring fairness to school funding for schoolchildren and taxpayers in this year’s budget. We will allocate an additional $146 million to underfunded districts on a fair basis for the first time by removing the Growth Cap to provide more aid to districts with growing enrollment and by beginning the phase out of Adjustment Aid from districts that are getting more state aid than they deserve,” said Senate President Sweeney (D- Gloucester/Salem/Cumberland).
The senators also reiterated their commitment to find additional funding in the years ahead to continue the expansion of preschool programs starting with $25 million in this year’s budget.
“Today, we are building on that achievement by announcing that we will enact a millionaire’s tax in January and provide an additional $800 million in school aid next year as part of our commitment to fairly and fully fund the SFRA,” he said. “The SFRA is constitutional, and when fully funded, it will provide every schoolchild with a ‘thorough and efficient’ education and every taxpayer with property tax fairness. We just have to do our part.”
Because of the Growth Cap, Adjustment Aid and years of flat funding by the state, wide disparities exist in both school funding and school property taxes. While 249 school districts receive less than 70 percent of the state funding they are owed, other districts receive more than twice as much state aid as they should. Property taxpayers in the 399 underfunded districts pay an average of 10 percent more in school property taxes every year than their local fair share, calculated under the SFRA formula. Meanwhile taxpayers in districts receiving hundreds of millions of dollars in Adjustment Aid pay as little as 30 percent of their local fair share.
Adding $950 million in aid to underfunded school districts in just two budget years would close 43 percent of the $2.2 billion gap in school funding for underfunded districts. Coupled with the addition of $100 million a year in future years and a 5-to-7-year phase-out of $625 million in Adjustment Aid that goes to school districts receiving more than their fair share of funding, the Senate plan puts full funding of the SFRA with each district receiving 100 percent of fair funding – not a penny more, not a penny less – within reach in the years ahead.
Next year’s $800 million allocation would provide school districts with more than five times the additional school aid they received this year, enabling underfunded districts to both improve the quality of education and cut property taxes.
“This plan will take the first steps to fair and equitable school funding for all school districts in New Jersey,” said Senator Sarlo (D-Bergen/Passaic). “This is the first time in many years that school aid has really been increased. It is a well-defined plan that works towards full funding so that schools throughout the state gain the financial support they are entitled to, and it will repair the flaws in the current system that have caused so many districts to be shortchanged.
“This is about more than fairness in school funding,” Senator Sarlo said. “It will help to bring equity for school districts, fiscal health of school systems and municipal governments, and fairness for taxpayers. You can’t fix property taxes unless you fix school property taxes, and you can’t fix school property taxes unless you fix the problem with the way state provides school aid.”
Senator Sweeney noted that a tax surcharge on income over $1 million is estimated to raise $660 million.
“The millionaire’s tax will be S-1, the first bill we pass when a new governor takes office in January,” Senator Sweeney vowed.
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