New Jersey Policy Perspective’s Shoddy Research Misses The Mark On Extra COVID Funding For Schools

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This was originally published at the Sunlight Policy Center of NJ.

New Jersey Policy Perspective (NJPP) has published a report, “School Funding in New Jersey: Preparing Now for the 2020-21 School Year,” co-authored by Bruce Baker and, once again, Mark Weber, Ph.D., (a.k.a Jersey Jazzman). SPCNJ embarked on writing this blog with the aim of finding some grounds for agreement with NJPP because the need for additional COVID-specific funding is real. In that vein, SPCNJ acknowledges that NJPP did indeed state that there is a need for additional funding to help schools deal with COVID-related costs.

But that is all NJPP did. Unfortunately, after reading this report, New Jersey citizens will have gained no further understanding or knowledge of the funding required for necessary measures.  NJPP presented no data on COVID-specific funding needs for the state or school districts. Rather, NJPP delved into a broader policy agenda that happens to align with the agenda of its major benefactor, the New Jersey Education Association (NJEA), but does not support the case for additional COVID-specific funding.  In doing so, the bulk of the report stoops to the same sort of shoddy NJPP research SPCNJ exposed in two previous reports authored by Weber (here and here).  This now makes three Weber reports where NJPP has cherry-picked research and used research that does not support its claims.  Most importantly, none of this supports the case for additional COVID-specific funding.

Now, to hold NJPP accountable for its shoddy research.

NJPP makes four major false claims:

False Claim #1: “Decade of Disinvestment” Shown as Percentage of GSP

NJPP claims that these COVID-related funding needs come “on the heels of a decade of disinvestment” in our education system.  In support of this thesis, NJPP provides a graph entitled “New Jersey’s Education Spending Effort Has Declined Since the Great Recession.”  The graph purports to show NJ education spending declining as a percentage of Gross State Product (GSP), where the percentages peaked at 4% to 4.25% from 2009 to 2011 and dropped to 3.75% in 2017.  But this graph is highly misleading. Obviously, if GSP goes down and spending stays the same or goes up, the spending percentage will go up.

This is precisely what occurred. Graph 1 shows that New Jersey GSP dipped from 2009 to 2011, dropping -4.6% in 2009 and another -1.4% in 2011.  This caused education spending as a percentage of GSP to correspondingly increase.  As GSP increased from 2012 onward, the spending percentage correspondingly decreased, precisely as depicted in the NJPP graph. As would be expected, Graph 1 below is the visual inverse of the NJPP graph in the report.

So what actually happened to education spending?  During the 2008 to 2017 “decade of disinvestment” that NJPP describes, NJ education spending increased in eight of the ten years, reaching successive record levels for every year from 2012 to 2017.  In total, spending increased 14.7%.

The best measure of education spending is per-pupil spending. Graph 2 shows that education spending did dip -1.3% in 2009 and -5.2% in 2011, but by 2012 it was higher than in both 2008 and 2010, reaching an all-time high of $17,266 in 2012.  It rose every year after that until 2017, reaching a new all-time high in 2017 of $18,920 per pupil.

This raises the question of why NJPP chose to use relative data (percentages) to back an absolute claim (a spending decline) when hard, absolute data was readily available.  The answer would appear to be that the hard, absolute data did not support NJPP’s claim.  So NJPP cherry-picked the data instead.  Once again, NJPP appears to set out its preferred conclusion and then cherry-pick the data to support it.  This is simply not sound research.

There is more data that undercuts NJPP’s thesis that 2008-2017 was a decade of disinvestment: how much New Jersey spent on education compared to other states.  The facts show that during 2008-2017, NJ education spending greatly exceeded the national average and ranked among the top four states in the nation every single year.  As shown in Table 1 below, NJ’s education spending during the decade of 2008-2017 ranged from 151% to 164% of the national average, with a mean of 159%.  In other words, during this decade of “disinvestment,” NJ spent 59% more than the national average and ranked as one of the top three states every year except 2015, when it ranked fourth.

Bottom Line: NJPP’s use of a graph with education spending as a percentage of GSP is highly misleading.  NJPP’s title for this section of the report is “School Funding Never Recovered from the Last Recession.” In reality, the decline in the graph was due to fluctuations in GSP, not decreases in funding.  The facts show that education spending actually increased in eight of the ten years and a cumulative 14.7%.  2008-2017 was decidedly not a “decade of disinvestment.”  NJPP’s claim as presented is false.

False Claim #2: “Decade of Disinvestment” Shown as Percentage of Personal Income

In the same graph reflecting education spending as a percentage of GSP, NJPP shows state and local revenues as a percentage of state personal income.  This graph line tracks closely with the GSP graph line.  But the data behind the personal income graph line is just as flawed.

NJPP does not explain why it chose state and local revenue for its data.  The title for the graph is “New Jersey’s Education Spending [emphasis added] Has Declined Since the Great Recession.” State and local revenue is an important measure but it does not measure spending.  And of course, if NJPP is claiming there has been a “decade of disinvestment [emphasis added],” then the relevant measure is actual state and local education spending not revenue.

NJPP choice of a measure of revenue is all the more perplexing given that the U.S. Census Bureau provides an exact measure of state and local spending per $1,000 of personal income.  This data is precisely on-point if one wants to show what percentage of state personal income is invested in education.

Graph 3 below shows that state and local education spending per $1,000 of personal income did indeed increase in 2010 and then decreased steadily from there.  As shown in Graph 4, this can be explained by the fact that personal income dropped in the immediate aftermath of the Great Recession and increased steadily thereafter.  Although Graph 4 uses Bureau of Economic Analysis data and Graph 3 uses Census Bureau data, in the main, Graph 4 presents the visual inverse of Graph 3.  In other words, as with GSP, the change in the percentage of personal income spent on education reflects changes in personal income not changes in education spending.  As shown in Graph 2 above, actual New Jersey education spending increased 14.7% from 2008 to 2017. 

Also cutting against the thesis of a “decade of disinvestment,” Graph 3 shows that New Jersey spent well in excess of the national average for education spending as a percentage of personal income.  From 2008-2017, New Jersey education spending ranged from 126% to 132% of the national average, with a mean of 130%.  The facts show that New Jersey’s citizens are very generous with how much of their personal income they spend on education – exactly the opposite of what NJPP purported to show.

Bottom LineNJPP claims the graph shows that “the percentage of New Jersey’s economy devoted to school funding … declined sharply since 2009 …,” citing the percentage of state and local revenue to personal income.  In reality, the decline in the graph was due to increases in personal income.  As shown in Graph 2 above, education spending, which is the relevant measure, actually increased in eight of the ten years and a cumulative 14.7%.  As presented, NJPP’s claim is false.

In addition, it must be reiterated that NJPP’s choice of a measure of revenue is highly questionable, given that the title of the graph used the word “spending,” and that the Census Bureau provides a precise measure of state and local spending per $1,000 of personal income.  NJPP could have used this readily available and exactly on-point data, but it did not.  Why not? Because it does not support NJPP’s preconceived conclusion.  Once again, NJPP cherry-picked the research.

False Claim #3: NJ’s Highest Poverty Students Have Suffered the Greatest Cuts

NJPP claims that “school districts enrolling the highest poverty students have suffered the greatest cuts.”  NJPP bases this on the incontestable fact that the School Funding Reform Act of 2009 (SFRA) has never been fully funded.  Yet NJPP offers no rationale as to why not fully funding the SFRA indicates that these students suffered “the greatest cuts.”  NJPP claims that last year 100,000 students attended schools in districts where the SFRA spending gap was greater than $5,000, but provides no information on which districts these were, nor any data on the absolute amount of spending in these districts and the amounts of any actual cuts.  This is a strange basis for reaching this conclusion when there is readily available data on exactly what NJ has been spent in high-poverty school districts.

It should be noted that NJPP’s major funder, the NJEA, has consistently supported fully funding the SFRA, so it is clear that NJPP is aligned with the NJEA on this issue. 

SPCNJ researched education spending in the original Abbott districts as a proxy for high-poverty districts.  This makes sense, as the New Jersey Supreme Court identified these districts as high-poverty in its seminal Abbott case.  These are listed in Table 2 below using NJ Department of Education data for both the years 2016-2017 (the last year of NJPP’s supposed “decade of disinvestment”) as well as 2017-2018 (the year NJPP was referring to regarding the 100,000 students in sub-SFRA-level districts).

The data shows that only four Abbott districts were below the state funding average in 2016-2017 and only five in 2017-2018.  That means that 87% and 84% of these Abbott districts, respectively, were exceeding the state funding average.  In total, the Abbott districts averaged 117% of the state funding average for both years.  As a state, New Jersey spent 155% of the national average in 2016-2017 and 159% of the national average in 2017-2018, both third-highest in the nation.  So Abbott district spending exceeded these very high levels by 17% and amounted to $24,388 and $25,545, respectively.

Bottom Line: This specific funding data undermines NJPP’s claim that high-poverty students “suffered the greatest cuts.”  On the contrary, the data shows that, with a few exceptions, New Jersey’s high-poverty school districts have received generous funding well in excess of the state average. Perhaps there is data out there that would support NJPP’s claim, but NJPP does not present such data, and the actual facts about Abbott-district funding belie the claim.  As presented by NJPP, this is another false claim.

False Claim #4: NJ Is Not One of the Highest-Taxed States

As with so many other ills that afflict New Jersey, NJPP’s solution is to raise taxes. Again. Both in terms of expanding the millionaire’s tax – a perennial and current policy priority for the NJEA – and increasing property taxes (by way of cutting state education aid to wealthier school districts).  NJPP claims that New Jersey’s taxpayers can afford this by citing research to claim that “New Jersey is not a high-tax outlier.”

This is simply not accurate.  As the New Jersey Business and Industry Association (NJBIA) reported, New Jersey already has the highest income tax on the wealthy, the highest property taxes and the highest sales taxes in the North Atlantic region (DE, MD, PA, NY, CT and MA).  These are of course the states that New Jersey competes against for jobs, businesses and people.

Likewise, the Tax Foundation ranks New Jersey dead last in the nation for its State Business Tax Climate Index (which includes income, property and sales taxes) for the sixth straight year!  There are many other studies that rank New Jersey as one of the very highest-taxed states (see SPCNJ’s “Beware the Downward Spiral” for details).  The facts are, and as every New Jersey taxpayer knows, New Jersey is one of the very highest-taxed states in the nation, and is indeed an “high-tax outlier.”

Moreover, NJPP seems oblivious to the consequences of its tax-raising posture.  As many studies have determined, New Jersey has one of the worst out-migrations of people, businesses and wealth in the nation (see “Beware the Downward Spiral” for details).  NJBIA determined that New Jersey has lost $24.9 billion in adjusted gross income from 2004-2016.  Those are tax revenues New Jersey will never see. Even Democratic Governor Andrew Cuomo of New York has recognized the danger of over-taxing the wealthy: “Tax the rich, tax the rich, tax the rich.  We did that. God forbid the rich leave.”

The claim that New Jersey is not a high-tax outlier is false.

Conclusion: NJPP’s Shoddy Research Does Not Make a Case for Extra COVID Funding

SPCNJ asks how stooping to shoddy research and publishing false claims helps the cause of extra COVID funding for New Jersey’s schools.   All New Jersey citizens are being hurt by the pandemic.  All school districts will need additional funds for COVID-related costs.  All parents are rightly concerned about the health and safety of their children.  NJPP could have built a solid, data-driven case for additional COVID-specific funding, but it chose not to do that.  Instead, NJPP engaged in shoddy research to make a (flawed) case for fully funding the SFRA and expanding the millionaire’s tax.  This broader, non-COVID-specific agenda happens to align very well with the NJEA’s longstanding policy positionsbut it doesn’t advance the case for extra COVID funding. 

Once again, New Jersey is ill-served by NJPP’s shoddy research.

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