State Turns Over School Funding Code Sought In Brick, Toms River

BRICK, NJ — A group of school districts will be hiring an expert to review the algorithm code that the New Jersey Department of Education uses to distribute equalization aid to schools, after the state forwarded the code to the attorneys on Monday.

Judge Mary Jacobson ordered the Department of Education to turn over the algorithm code to the districts that sued for its release, after two years of wrangling and rejections of Open Public Records Act requests.

James Edwards, business administrator for the Brick Township School District, confirmed the state turned over the algorithm to the attorneys at Weiner Law Firm, which has been handling the lawsuits over school aid for Brick, Toms River Regional, Freehold Regional, Lacey, Jackson and other school districts.

Edwards said the state provided "a printout of the algorithm in its granular form."

"We did not expect the algorithm to be converted into some meaningful format, and the DOE was not obligated to do so," Edwards said. "Ultimately, an expert will need to be retained to decipher/analyze the algorithm." Once it's been analyzed, then the districts will be able to compare it to the formula in the state statutes to determine whether it is accurate or arbitrary.

The algorithm code is at the heart of the fight by Brick, Toms River and other districts over state aid cuts under S2, the state law passed in 2018 that cut so-called "adjustment aid" to nearly 200 districts across the state.

The adjustment aid was part of the changes to New Jersey's school funding that happened with the passage of the School Funding Reform Act of 2008 and, S2 proponents say, was supposed to be eliminated years ago.

The claim was that districts receiving the so-called adjustment aid were not paying their local fair share of property taxes. The passage of S2 resulted in mandated cuts to that aid.

S2 also requires districts that are under adequacy — meaning they are spending less than what the education department says is necessary to provide a thorough and efficient education — to increase their property tax levy by the state maximum of 2 percent, the cap instituted in 2010 when districts agreed to hold to the cap in exchange for no longer fighting to convince voters to pass the school budget.

For Brick, Toms River and a number of other districts, the scheduled aid cuts amounted to millions of dollars. Cumulatively, Brick Township has estimated it will be losing more than $42 million, and Toms River has estimated a cumulative impact of more than $90 million.

At the same time, officials in those districts contended the property values calculations did not reflect what was happening in the community.

Toms River's property value multiplier had risen by 48 percent since 2008, Doering said in late 2019. That was despite the $2 billion in ratables that were destroyed by Superstorm Sandy in 2012, of which more than $500 million had not returned to the tax rolls at that point.

"When you think property values should have gone down, they went up," Edwards said in 2019, when Brick's ratables were still lagging by about $300 million from the destruction caused by Sandy.

At the same time that the property value multiplier skyrocketed in Toms River, the income multiplier for Toms River had risen just 1.5 percent, Doering said.

"The multipliers make no sense," Doering said.

Proponents of S2 have insisted that Toms River, Brick and other districts have not paid their fair share of property taxes to support their schools for years and the aid cuts should have happened years ago.

Dozens of requests for the algorithm code — used to determine the multipliers — were made under the Open Public Records Act, and each one, from reporters to school districts to state officials, was rejected. The Department of Education told districts the formula was "proprietary." Read more: Toms River, Brick Seek 'Secret' Math Equation In School Aid Fight

That was the basis of the lawsuits that led to Jacobson's order on Friday that said: "Defendants shall provide the equalization aid school funding calculation algorithm code to Plaintiffs no later than January 11, 2021."

The education department also was ordered to provide "a privilege log" for 40 documents that were responsive to a search on the term "equalization aid" no later than Friday.

Because the state Department of Education had objected to sharing the algorithm code, Jacobson is considering whether to award counsel fees to the school districts which had sued to compel the production, Board President Stephanie Wohlrab said.

"We hope that this will open the door to figuring out why Brick hasn’t received the funding it deserves and, more importantly, fixing the problem for the students, district employees and taxpayers of Brick Township," Wohrab said.

Brick, Toms River and more than 20 other districts are continuing to pursue a lawsuit against the state that alleges the districts are underfunded.

The school funding litigation is currently before the Appellate Division of the Superior Court.

William Doering, business administrator for the Toms River Regional Schools, said the code supplied by the state Department of Education is just a piece of the OPRA request that was the focus of the lawsuit that provided the algorithm code.

"If people were thinking this was going to tell all, it does not, but it does give us something to analyze," Doering said during the Toms River school board's committee meetings Wednesday night.

"There are a few other components of that Open Public Records request that are still being pursued," Doering said.

Another court hearing on the outstanding OPRA issues is scheduled for later in January, Doering said.

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