John Reitmeyer, NJ Spotlight’s star finance journalist, recently issued a warning: “Murphy and fellow Democrats who control both houses of the Legislature last year enacted an annual budget with a structural gap of more than $1 billion between projected annual spending and revenues. “ While there are multiple factors that account for our excess, one is K-12 education. In “New Jersey’s Fiscal Cliff Explained” (part of Spotlight’s “Change Project,”) analysts at Garden State Initiative dive deep into the flaws in our budget process and the role our unsustainable K-12 education costs play.

Here is the math: While enrollment has been declining in our public schools for a decade (by about 4%, or 53,000 students), per pupil costs have increased by 17%; in 2022, state education spending in NJ was $18.1 billion. We’re not alone in this profligacy: COVID emergency funds artificially—and temporarily—jacked up revenues for every state but that money runs out in September. In addition, NJ has the second lowest state credit rating (first is Illinois), population and economic growth are “mediocre, and bonded and non-bonded debt are significantly greater than most other states’ conditions.” 

How much do we actually spend per pupil? New Jersey is fourth in the nation at $22,000 a year, bested only by D.C., New York, and Vermont.  Even Massachusetts, say the authors, “which has a similarly high ranked public education system to New Jersey, spends less per pupil.”

The Steve Sweeney Center for Public Policy’s “Multi-Year Budget Workgroup” (MYBW) estimates that as more school districts need more money, NJ taxpayers will have to fork over an additional $5 billion through FY2028. That’s in large part due to “legacy costs” from “improperly financed pension and retiree health care costs.” According to MYBW, we’ll need another $7 billion by 2028 just for those items.

The authors conclude,

“New Jersey’s budget sustainability rests on keeping spending growth much lower than it has been over the past several decades, when it has grown much faster than inflation – and probably even reducing actual spending. But the pressure seems to be for even more increases – which is not a positive outlook for the state.”

[photo credit] Flickr: Phil Murphy