March 2, 2010

Honorable Arne Duncan

Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, D.C. 20202

Honorable Thelma Melendez

Assistant Secretary for Elementary and Secondary Education
U.S. Department of Education
400 Maryland Avenue, S.W.
Washington, D.C. 20202

Re: Request to Require New Jersey to Restore FY10 Primary

Formula Aid to Approved SFSF Program Level

Dear Secretary Duncan and Assistant Secretary Melendez:

Education Law Center (ELC), New Jersey State National

Association for the Advancement of Colored People (NJSNAACP),
Dollars & Sense Education Advocacy (DSEA), the Statewide
Education Organizing Committee (SEOC), the Statewide Parent
Advocacy Network (SPAN), Paterson Education Fund (PEF) and the
New Jersey Black Issues Convention (NJBIC) are organizations
working to advance equal educational opportunities for New
Jerseys 1.3 million public school children, with a particular
focus on the states low-income students, students of color, and
students with disabilities and other special needs. On behalf
of these students, we write to request that the U.S. Department
of Education (Department) immediately review New Jersey's
February 11, 2010 order to reduce K-12 primary formula aid below
the level established for FY2010 in the States approved
application for State Fiscal Stabilization Funds (SFSF).
Further, we request that, upon confirmation of the aid
reduction, the Department direct New Jersey to restore primary
formula aid to the approved level and, the event the State
refuses to do so, take other appropriate measures, including,
but not limited to, delaying release of Phase II SFSF funds
until the State fulfills its commitments under federal law.
 In June 2009, the Department approved New Jerseys
application for SFSF funds for the FY2010 school year. See
Application for Initial Funding under the SFSF Program,
http://www2.ed.gov/programs/statestabilization/stateapps/nj.pdf
(filed May 28, 2009)(Application). In the Application, the
State represented that it would use approximately $956 million
in SFSF funds to restore and support the States primary K-12
formula at the total level of $5.8 billion for FY2010.1 See
Application, at 6, 10. Thus, under the States proposal, 16% of
primary formula funding would consist of federal funds provided
through the SFSF program. Further, the $5.8 billion in primary
formula support includes both funding to restore primary formula
funding to the FY2009 level and $150 million for an equity and
adequacy adjustment required by the States funding formula, the
School Funding Reform Act of 2008 (SFRA).2 Based on New Jerseys
commitment to use SFSF funds to provide primary formula aid at
this specified level, and to partially implement an equity and
adequacy adjustment in the States new formula, the Department
approved the Application and released the requested amount of
SFSF funds.

On February 11, 2010, New Jersey, through an Executive

Order issued by the Governor, advised local school districts
that State formula aid would be reduced by a total of $476
million for FY2010. Office of the Governor, Press Packet from
Governors Address to Special Legislative Session (February 11,
2010) at
http://www.nj.gov/governor/news/news/552010/approved/20100211b.h
tml. This reduction in state aid includes $350 million in
primary formula aid supported by SFSF funds, or 74% of the total
aid cut. As a result, New Jersey has cut primary formula aid
from $5.8 billion to approximately $5.45 billion for FY2010.

As we explain, it appears that New Jerseys February 11th

cut in FY2010 primary formula aid is not only inconsistent with
the States approved Application, but also subverts
Congressional requirements for the SFSF program established in
the American Recovery and Reinvestment Act (ARRA).

First, it is clear that New Jersey has reduced primary

formula aid below the level of the States assurance and
1
The State designated equalization aid in its funding formula as primary
for purposes of the SFSF Program. Application, Attachment II, E-5.
2
The $150 million included in the primary formula aid level for FY2010
represents one-third of an equity and adequacy adjustment of $450 million
required under the SFRA. As the State indicates in the Application, the
level of State support necessary to fully fund the equity adjustment would
have been $6.1 billion. Application, at 6.

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commitment in the Application, as approved by the Department.
Under the ARRA, Governors shall first use SFSF funds to
provide the amount of funds necessary to restore primary
formula aid in FY2010 to the greater of the level in FY2008 or
FY2009, and to allow existing State formulae increases to
support elementary and secondary education for fiscal years 2010
and 2011 to be implemented and allow funding for phasing in
State equity and adequacy adjustments, if enacted under state
law prior to October 1, 2008. P.L. 111-5, (H.R.1), February 17,
2009; 123 Stat. 115, as amended by P.L. 111-8 (H.R.1105), the
Omnibus Appropriations Act 2009, Division A, Sec. 523; March 11,
2009; 123 Stat. 524, Title XIV, Sec. 14002(a)(i)(II).

Consistent with ARRA requirements, New Jersey, in its

Application, committed to using SFSF funds to restore primary
formula aid to the FY2009 level and to partially implement an
equity and adequacy adjustment in the SFRA funding formula.
Further, the Department accepted the States commitment, and
approved the use of SFSF funds to enable the State to provide
primary formula support at the specified levels. The States
February 11th mid-year aid cut appears not to comport with the
commitments and assurances made by the State to the federal
government to secure SFSF funds, nor conform to the express
requirements established by Congress in the ARRA.

Second, New Jersey has made clear that it will use the
February 11th reduction in K-12 formula aid to balance the
overall FY2010 State budget. Thus, primary formula aid, which
includes a substantial infusion of SFSF funds, will be diverted
for purposes other than to support primary and secondary
education. While New Jersey, like other states, faces revenue
and fiscal challenges with its overall budget, the use of school
formula funding, supported by federal SFSF funds, for any
purpose other than for primary and secondary education is
inconsistent with Congressional requirements under the ARRA.

Finally, New Jerseys mid-year cuts in primary formula aid

disproportionately impact school districts with extremely high
concentrations of low income students and Black and Latino
students. Our analysis shows that 40% of the cut in formula aid
is in districts classified by the State as high needs due to a
student poverty rate of over 40% and student achievement levels
below state benchmarks. Many of these districts have student
poverty rates of over 60%. Moreover, 80% of the students in
these districts are Black and Latino. Put simply, the States
cuts in K-12 formula aid, including SFSF funds, has a disparate
impact on New Jerseys low income students and high poverty
districts, and students of color, with the latter raising

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concerns regarding State compliance with Title VI of the Civil
Rights Act of 1964, 42 U.S.C.A. 4200d, and the Departments
implementing regulations.

For these reasons, New Jerseys February 11th reductions in

primary formula aid appear to conflict with the Congressional
objectives and requirements for the SFSF program; retreat from
the States own commitments to support K-12 primary and
secondary education in its approved Application for SFSF funds;
and will have a disproportionate impact on our states neediest
students, schools and communities.

Accordingly, we request the Department to, first, review

New Jersey's February 11th order to reduce K-12 primary formula
aid below the level established for FY2010 in the States
approved Application. Further, upon confirmation of the aid
reduction, the Department should direct New Jersey to
immediately restore primary formula aid to the approved
Application level. In the event New Jersey does not do so, we
further request the Department to take all appropriate measures,
including delaying payment of Phase II SFSF funds, until the
State meets the commitments contained in its Application and the
requirements of the ARRA.

We applaud the efforts of Congress and the Department to

assist New Jerseys public school children in a time of serious
fiscal need. Further, we recognize that New Jersey, like other
states, faces fiscal and budgetary difficulties. However, these
difficulties do not justify or permit New Jersey to ignore the
requirements for the use of SFSF funds or to not fulfill its
commitment to utilize the substantial SFSF funds provided by
Congress under the ARRA to support public education.

If you have questions, or we can assist in this matter,

please do not hesitate to contact me.

Sincerely,

David G. Sciarra, Esq.

Education Law Center

New Jersey State NAACP; New Jersey Black Issues Convention

Paterson Education Fund; Statewide Parent Advocacy Network
Dollars and Sense Education Advocacy; Statewide Education
Organizing Committee

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cc: Governor Christopher Christie
Honorable Russlyn Ali, Asst. Sec. for Civil Rights
Charles Rose, General Counsel
New Jersey Congressional Delegation
New Jersey Legislature