Letter to New Jersey on Required Local Share and Maintenance of Equity — June 29, 2022

Summary

This is a letter dated June 29, 2022 from the Office of Elementary and Secondary Education at the United States Department of Education to Angelica Allen-McMillan, Acting Commissioner of the New Jersey Department of Education, with the name James F. Lane, Ed. D., Senior Advisor, Office of the Secretary, printed at the end. The letter responds to an April 5, 2022 letter about New Jersey's request to consider a school district's state-required, locally-generated share of education funds when evaluating whether New Jersey has maintained equity under section 2004(b) of the American Rescue Plan Act of 2021. It states that New Jersey may consider each school district's required local share, established by N.J.S.A. 18A:7F-5(b), when calculating the State's compliance. It also states that the review did not include whether New Jersey maintained equity in its high-need and highest-poverty LEAs.

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“Letter to New Jersey on Required Local Share and Maintenance of Equity — June 29, 2022.” Original at www.ed.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-education-6-29-2022-used-www-ed-gov-5036417f3f-1a1f7a7ace/, SHA-256 a7135cbd5a4d35f3b3bbc44e258a06f787f27244ff7c3c07be939b941ada4d13.

Full text

                            UNITED STATES DEPARTMENT OF EDUCATION
                                 OFFICE OF ELEMENTARY AND SECONDARY EDUCATION



                                                                   June 29, 2022

The Honorable Angelica Allen-McMillan
Acting Commissioner
New Jersey Department of Education
PO Box 500
Trenton, NJ 0865-0500
Dear Commissioner Allen-McMillan:
I am writing in response to your April 5, 2022, letter, in which you provide additional clarification
regarding New Jersey’s request to consider a school district’s state-required, locally-generated share of
education funds for the purposes of evaluating whether New Jersey has maintained equity in its high-need
and highest-poverty local educational agencies (LEAs) under section 2004(b) of the American Rescue
Plan Act of 2021 (ARP). Thank you for your ongoing collaboration on this issue.
The Department is fully committed to supporting schools and communities in addressing opportunity
gaps exacerbated by the pandemic, targeting resources and efforts to students who need them most, and
building our education system back even better than before. Equity in access to educational resources—
including equity in Federal, State, and local funding—is essential to achieving this vision for the success
of our students. The Department’s implementation of ARP maintenance of equity requirements helps
ensure that State and local funding supports the students who have been subject to longstanding
opportunity gaps in our education system and have also experienced the greatest impact from the COVID-
19 pandemic. Moreover, ARP's maintenance of equity requirements are vital for ensuring that State and
local educational agencies maintain funding and staffing levels to address the impacts of the pandemic on
our education system, and for protecting high-need schools and students from disproportionate cuts where
any reductions in State and local effort do occur.
As detailed in the Maintenance of Equity Frequently Asked Questions (MOEquity FAQ),1 the State
MOEquity requirement generally considers the use of State funding sources only. However, the guidance
allows States to consider local revenues, such as property taxes or taxes on mineral rights, in certain
instances where the revenues are part of a State’s “guarantee” for education under State law (for example,
a certain amount of funding is “guaranteed” to each LEA on a per pupil basis, a portion of which is
generated locally depending on local financial capacity). This guidance allows a State to consider certain
mandatory local revenues together with its State funding for elementary and secondary education when
calculating State MOEquity. The guidance does not determine whether the State has met the MOEquity
requirement. All States, including those that require a local contribution as part their State’s guarantee for
education funding, must meet the statutory requirement to maintain equity in their high-need and highest-
poverty LEAs.



1
 Updated December 27, 2021, and available at https://oese.ed.gov/files/2021/12/Maintenance-of-Equity-updated-
FAQs_12.29.21_Final.pdf.


                                 400 MARYLAND AVE. SW, WASHINGTON, DC 20202
                                                www.ed.gov

    The Department of Education’s mission is to promote student achievement and preparation for global competitiveness by
                                fostering educational excellence and ensuring equal access
Based on the state-specific information you and your team have provided to the Department, New Jersey
may consider each school district’s “required local share,” established by N.J.S.A. 18A:7F-5(b), for the
purpose of calculating the State’s compliance with the MOEquity requirement in section 2004(b) of the
ARP Act. This decision is based on our understanding that, under State law, New Jersey has an
elementary and secondary education funding model that guarantees an amount of funding for each school
district, partially financed with revenues raised by local taxing authorities. (See, generally, N.J.S.A.
18A:7F-43, et seq.) State law requires that the State annually calculate each school district’s contribution
under three different formulas; the lowest of the three resulting figures is the school district’s “required
local share.” (See N.J.S.A. 18A:7F-5(b).)
We understand that many communities levy local taxes at a rate higher than is necessary to meet the
required local share under State law. As a result, these school districts generate a local contribution that
exceeds the required local share. As described in your letter of April 5, 2022, you propose to consider
only each school district’s “required local share,” not the actual local contribution for those districts
where it is higher, for the purpose of calculating compliance with the MOEquity requirement. We agree
that only New Jersey’s minimum State-mandated local contributions may be considered.
This review relates only to New Jersey’s State maintenance of equity requirements under section 2004(b).
This review did not include whether the specific amount of funding guaranteed to each school district is
appropriate to meet the educational needs of its students, nor whether New Jersey maintained equity in its
high-need and highest-poverty LEAs. It is incumbent on New Jersey to calculate whether it maintained
equity under section 2004(b) of the ARP Act.


                                                        Sincerely,




                                                        James F. Lane, Ed. D.
                                                        Senior Advisor, Office of the Secretary
                                                        Delegated the Authority to Perform the
                                                        Functions and Duties of the Assistant Secretary
                                                        Office of Elementary and Secondary Education


cc: Office of State & Grantee Relations

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