Across New Jersey, school officials are facing a difficult budget season and weighing big decisions, including cutting teachers, closing schools and selling property to stay afloat.
The state Department of Education released its proposed state aid figures for nearly 600 public school districts in February, prompting local officials to start crunching numbers for their district budgets for the upcoming school year.
Though the state budget includes a $386 million increase in K-12 funding, roughly a third of districts will see cuts. Many more are still recovering from years of steep reductions.
Some districts — including Toms River, Plainfield, Lakewood and Middletown — have said they may need to layoff teachers, close schools, drastically raise taxes or sell off property to stay out of the red. (See nine districts struggling to close their budget gaps listed below.)
How state aid is distributed to districts has long been a contentious issue in New Jersey. The state’s funding formula, designed over 15 years ago, was fully implemented for the first time last year.
Aid has gradually shifted away from historically overfunded districts to underfunded ones in an effort to create fairness, state officials said. However, this shift has left some schools feeling shortchanged.
MORE: N.J. school districts are panicking over funding. Here’s how one lawmaker wants to fix it.
Gov. Phil Murphy’s administration made aid decreases more predictable by capping them at 3% and limiting increases to 6% this year. But some districts say that change exacerbated struggles to close budget gaps.
“The Governor is proud of his record investments in New Jersey’s K-12 public education system, including the multi-year funding formula phase-in,” Murphy spokesperson Stella Porter said last month. “We look forward to discussing our proposal with legislative leadership over the next few months.”
As school districts finalize their budgets, here are nine proposing controversial steps as they face financial challenges:
Toms River
The Toms River Regional School District’s revenue crisis has been mounting since New Jersey revised its funding formula, according to school officials.
Over the past six years, Toms River has lost 60% of its state aid, totaling $137 million. In July, the Ocean County district sued the state over the cuts, with Superintendent Michael Citta calling the funding reduction “legislative child abuse and neglect.”
Despite receiving a proposed $1.69 million increase in aid this year, the district still faces a $22 million shortfall for the 2025-26 academic year, Citta said at a recent board meeting.
To help close the gap, officials plan to sell a district-owned corporate building on Hooper Avenue that was used as an early learning center. The center will relocate to North Dover Elementary School and the Hooper Avenue property will be sold to Ocean County. Negotiations on the price are ongoing, according to school officials.
Toms River Regional, one of the largest districts in the state, serves about 14,500 students across 18 schools.
Citta called the planned sale a “temporary fix” to a funding issue the district plans to continue fighting.
Evesham
Evesham Township School District could see nearly 10% of its staff cut next school year due to financial strains from years of state aid reductions.
Last month, nearly 500 teachers in the Burlington County school district issued a rare “no confidence” vote in Evesham Superintendent Justin Smith.
The vote was made after the district’s preliminary $85.7 million budget was revealed. It included cutting 83 teaching and staff positions.
The plan also calls for larger class sizes in middle and elementary schools, as well as the elimination of all elementary extracurricular activities. Health benefits for paraprofessionals will be cut and transportation services will be outsourced to address a $4 million shortfall, according to the proposal.
Factors such as rising costs, increased expenses for special education, transportation, and staff salaries also contributed to the shortfall, according to officials.
Evesham, one of the largest elementary districts in southern New Jersey, serves about 4,400 students. While the district’s state aid is increasing by 6% for the next school year, it has still lost over $7 million in aid since 2018, local officials said.
East Orange School District had a public meeting Oct. 16 2024, where 93 layoffs were suggested to offset an estimated $25 million budget shortfall.Jelani Gibson
East Orange
While East Orange School District faced financial challenges earlier school this year, there are signs of improvement.
Just a month into the school year in October, the district announced it was cutting 93 teaching and coaching positions due to a $25 million budget shortfall and difficulties making payroll for May and June.
However, for the upcoming academic year, the Essex County district could see some relief and receive its largest state aid increase in 17 years, according to East Orange Superintendent Christopher Irving.
East Orange School District is projected to receive $184.6 million in state aid — a 5.3% increase from last year.
Funding will be used for essential school investments and to settle ongoing collective bargaining contracts with district employees, Irving said.
The superintendent did not specify whether the increase in aid would directly address payroll issues or staffing shortages.
Wayne
Wayne Township Public Schools is considering laying off 40 employees and reducing school security costs to address financial difficulties caused by rising expenses.
The district is set to receive about $13 million in state aid, a 6% increase from last year. However, it still faces a $7.1 million budget gap for the 2025-26 academic year, according to local officials.
In its $197.9 million budget plan, school officials are considering reducing costs by shifting to an in-house security program instead of using Wayne police officers.
And along with the layoffs, 18 retiring employees will not be replaced. The district is also exploring plans to implement fees for athletic programs and extracurricular activities.
Rising costs for staff salaries, health care benefits, transportation and special education have contributed to the financial strain, school officials said.
The Wayne Township Public School District is pre-K-12 district in Passaic County with nearly 8,500 students. The district spends more on legal services, classroom supplies and extracurricular activities than most similarly sized districts, according to school officials.
Lakewood
Lakewood’s Board of Education unanimously rejected a proposed $307.3 million budget last month, which included staff cuts and a request for a loan for the next school year.
The district is projected to receive a $1.6 million increase in aid for 2025-26, according to the Department of Education’s figures. However, school officials say they are still facing a substantial deficit and are seeking a $130 million state loan, despite already being deep in debt.
The Ocean County school district is considering staff cuts, a tax increase and closing an elementary school to address the shortfall, according to the plan.
A final budget was supposed to be submitted to the county for approval by March 19. Lakewood Superintendent Laura Winters told the Asbury Park Press the district is seeking guidance from Ocean County Superintendent Susan Naples on how to proceed.
Financial instability has been an ongoing issue for the district. In February, Lakewood received a $65 million emergency loan from the state to help pay its teachers.
Lakewood Public Schools’ fight for state aid has ended up in court. In 2023, lawyers for parents argued the district’s funding was so low it violated students’ rights, leaving mainly low-income Hispanic students without the “thorough and efficient” education required by the state.
Lakewood students protest long term school funding problems outside the Trenton Thunder Stadium after they were not allowed to protest at the New Jersey State Board of Education in 2017.NJ Advance Media for NJ.com
Plainfield
In Plainfield, school officials have proposed raising property taxes by 36% — the district’s first tax increase in six years — to help close a budget gap.
The measure was strongly opposed by Plainfield Mayor Adrian Mapp, who says it would further burden residents already facing financial struggles in the low-income Union County city.
The tax levy would hike school taxes $853 annually for the average homeowner in Plainfield. The median household income in Plainfield was $70,712 in 2022 — one of the lowest in the county, according to Census data.
The Plainfield School District relies heavily on state aid, with nearly 75% of its budget coming from state funding.
Plainfield is slated to receive about $288 million in state aid under Murphy’s budget proposal — 4.3% more than the previous year. However, the increase is much smaller than the double-digit percentage hikes the district experienced in previous years.
State officials have advised low-income districts like Plainfield to start increasing local tax levies to prepare for reduced state funding, according to local officials.
Jackson
A second school building is closing in Jackson Township in less than a year due to state funding cuts, officials said.
The Ocean County school district approved a restructuring plan in February that will close Christa McAuliffe Middle School by the end of the academic year, with plans to sell or lease the building to help close a budget gap.
State aid has declined by nearly 53% since the state’s funding formula was revised in 2017, according to the local board of education.
During that timeframe, the district’s enrollment has also dropped to 6,914 students, down from 8,189 in the 2017-18 school year.
Jackson’s restructuring follows the closure of Sylvia Rosenauer Elementary School last June, which was linked to a $22.4 million reduction in state aid over seven years, officials said.
The district is projected to receive $12 million in state aid for the 2025-26 school year, a 3% increase from last year.
Middletown
Two Monmouth County middle schools may close as part of a district’s restructuring plan in response to state aid cuts.
Middletown’s school board proposed a $197 million budget for the 2025-26 academic year, which includes plans to cut costs by closing two schools and converting a middle school into an elementary school.
Students from Navesink Elementary School and Leonardo Elementary School would be transferred to Bayshore Middle School, one of the district’s three middle schools, under the proposal.
Declining enrollment has contributed to the reduction in state aid, as Middletown’s student population has dropped from around 10,000 in 2009 to 8,500, local official said.
Under Murphy’s proposed budget, Middletown would receive about $14.8 million in state funding for next school year, a 6% increase.
Superintendent Jessica Alfone blamed the district’s financial problems to the lack of “full funding” previously promised by the state.
Passaic
Passaic Public Schools officials say they plan to cut 51 jobs next year due to financial struggles and reduced state aid.
The district’s $369 million budget for 2025-26 was approved by the county and adopted at a public hearing in March.
Passaic Superintendent Sandra Montañez-Diodonet did not specify how many teaching positions would be affected by the layoffs but called it a “reduction in force,” according to NorthJersey.com.
School officials said the district has struggled financially since early fall, citing a steady decline in enrollment — about 200 fewer students each year — that has led to reduced state aid.
Rising staff healthcare and energy costs have also widened the budget gap, officials said.
Passaic is a low-income school district serving over 10,000 students across 15 schools, relying heavily on state funding. It is set to receive $271.2 million in state aid for 2025-26, about $899,000 less than last year, according to the state Department of Education.
Stories by Nyah Marshall
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Nyah Marshall may be reached at nmarshall@njadvancemedia.com