Why RPA Took a Stand on School Funding

When RPA called out Gov. Chris Christie’s proposal last week to provide equal state aid to all New Jersey school students, it took some people by surprise. Why did an organization focused on urban planning issues like transportation, housing, land use and the environment want to wade into a debate about education funding?

The link to RPA’s work might not be immediately apparent, but how schools are funded is tied to core concerns that as planners we focus on all the time: the expansion of economic prosperity, the vitality of the region’s cities, the role property taxes play in land-use decisions, and the many ways that where someone lives determines access to everything from good jobs to good schools. In fact, RPA has a long history of engagement on the issue of education finance, from recommendations that the state assume responsibility for funding public education in both its second regional plan in the 1960s and its third regional plan in the 1990s, to a series of reports on New Jersey property tax reform in 2005 and 2006.

Without strong schools, it will be impossible to broaden residents’ access to opportunity and revive the economies of struggling cities and towns. Inadequate schools squelch individual potential, and they hold back the state and regional economy as a whole. The suggestion by the governor that all students receive the same support from the state ignores the huge differences in children’s needs, and would augment the economic and educational disparities between lower- and higher-income communities.

If school funding were no longer allocated based on need, wealthier communities would see their current aid rise. Less affluent communities, by contrast, would be forced to either cut school funding or sharply raise property taxes, putting more of a burden on lower-income homeowners and discouraging the very development that these places need.

While the current reliance on property taxes for school funding has fueled  inequities in education and economic opportunity, it also has had significant consequences for land use and economic development. Communities are incentivized to attract big commercial development, which generate property tax revenue without adding to school costs. That might appear to make short-term sense for an individual municipality’s finances, but the net result has been zoning codes that encourage commercial development such as a hotel or strip mall when what the area really needs is more compact development and more housing choices. It also adds to resistance to building needed multifamily housing out of fears, often misplaced or exaggerated, that new housing will add more to school costs than municipal revenues. (Read more about the ratables chase in a study by NJ Future.)

RPA explored different approaches to reform in its mid-2000s series on New Jersey property tax reform, and ultimately recommended a new approach to funding schools that increased the state’s contribution from sales tax and lowered average property taxes. We’ll have more to say about property tax policy in the fourth regional plan, A Region Transformed, due out in 2017.

Gov. Christie is right that the state’s property tax system is problematic, but the answer isn’t to move funding away from the students who need it most. Instead, the state should be looking ways to overhaul the system in ways that both support students and foster sustainable communities.