TRENTON – Federal education officials have ordered New Jersey to restore millions of dollars in school funding cuts to as many as 81 school districts and charter schools or risk forfeiting billions in federal aid.

The U.S. Department of Education said in a Nov. 24 letter that this year’s school-aid cuts violated a “maintenance of equity” requirement in the American Rescue Plan, which could jeopardize $2.5 billion through the Elementary and Secondary School Emergency Relief program if they’re not reversed.

The federal government wants to avoid what happened with stimulus funds distributed during the Great Recession, when states used their federal windfall as an excuse to cut funding in ways that hurt low-income students, said Danielle Farrie, research director for the Education Law Center.

“The purpose is to make sure that districts, especially low-income districts, shouldn’t be in a position to be making cuts to programs and services in these extremely extraordinary years when they need more resources in order to meet the needs of their students,” Farrie said.

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The Education Law Center had calculated that the restorations could amount to more than $172 million, including more than $126 million to Jersey City and $13 million to Asbury Park. But federal guidance for calculating per-pupil spending was updated, which could lower the totals, though the state missed a deadline to submit required data so it remains unclear.

About one-third of New Jersey school districts saw their state aid reduced this year, part of a five-year plan to return to the long-ignored school funding formula. But not all of them would get money back, as the order applies only to high-poverty and high-need school systems.

Other districts would be expected to perhaps raise revenue or move resources around more readily, Farrie said.

Senate President Steve Sweeney, D-Gloucester, the lead supporter of the 2018 school-aid law, condemned the federal government for “undermining the school funding law put in place to provide full and equitable funding to New Jersey’s schools.”

“This is an unfortunate decision that undermines the ability of the state to provide full and equitable funding to every school district in New Jersey,” he said. “The 2018 school funding reform law corrected longstanding inequities that penalized districts with growing enrollment or increased need like Newark, Paterson, and Woodbridge. This decision could put funding for these and other school districts at risk.”

Though the aid cuts were part of a plan already in motion before the pandemic started, that doesn’t allow them to proceed under terms of the additional federal aid, Farrie said.

“Regardless of the cause or impetus for those cuts, no district should be in a position to be cutting services,” Farrie said. “And in fact, that’s the entire point of the federal dollars, to make sure that they can expand resources for kids, to make sure that they are caught up from these years of disruption.”

“No district should be in a position to be cutting programs and services, whether they knew that those cuts were coming or not,” she said. “We want to make sure that districts have the resources to serve their kids.”

The maintenance of equity requirement also applies to school aid in next year’s state budget.

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