NJ Spotlight - Report: NJ Schools Not Fully Recovered from Great Recession…Federal Reserve Bank charts deep cuts in per-pupil funding, significant layoffs of teaching staff… ‘The stimulus was successful as a stopgap, but after the funds were depleted, school districts were faced with a major budget crunch because the local economy had not yet recovered,” the report reads.’

John Mooney | October 1, 2013

The Great Recession has had a lasting impact on New Jersey public education, with funding rates struggling to return to prerecession levels, according to a new analysis by the Federal Reserve Bank of New York.

Marshalling a treasure trove of data, Federal Reserve economists Rajashri Chakrabarti and Max Livingston demonstrate that per-pupil funding had not climbed back to 2008 levels. What's more, funding gaps for New Jersey schools are wider than they would be had they continued to grow at prerecession rates.

The report, “Still Not Out of the Woods? New Jersey Schools During the Recession and Beyond,” indicates that instructional spending was ultimately the hardest hit, citing Camden as one of the districts that suffered the most severe cuts.

New Jersey school districts’ funding and expenditures showed sharp cuts after the recession and have not recovered in the years after, reads the report. “Instead, the gap between the prerecession trend and the actual reality has grown over time.

The report, which works with data through 2012, comes out as Gov. Chris Christie repeatedly boasts as part of his reelection campaign that state aid to schools is at the highest levels in New Jersey’s history.

“No one disputes the fact that the Great Recession has forced every level of government to control spending,” Michael Yaple, spokesman for the state Department of Education, said yesterday in response to the report.

“But let’s be clear: New Jersey’s current state funding for public schools is the most in history. Ever.”

Chakrabarti and Livingston do not contest that state aid has clawed back after steep cuts in 2010-2011, but say that state and local spending overall have not returned to prerecession growth rates. Chakrabarti conducted a similar study of New Jersey in 2012, and recently completed one for New York as well.

The latest New Jersey report says that the federal stimulus in the first year of the recession helped buttress the initial downturn in 2010, but Christie followed with a $1 billion cut in aid, and local districts have yet to recover.

“The stimulus was successful as a stopgap, but after the funds were depleted, school districts were faced with a major budget crunch because the local economy had not yet recovered,” the report reads.

One surprising finding is that median salaries for teachers actually rose during this period. The authors attribute it to the layoff of mostly untenured teachers in 2011 and subsequent years, which left the more experienced and expensive teachers in place.

By looking at districts’ median teacher salaries and experience levels, we are able to see a pattern of growth in median teacher salaries and experience, suggesting that the districts resorted to laying off the less senior (or untenured) teachers,î the report says.

For instance, in Bridgewater-Raritan Regional School District . . . all 225 nontenured teachers received nonrenewal notices in 2010,î it asserts. ìHalf of Newark’s 942 nontenured teachers were laid off.î

The authors withhold judgment as to whether the drawdown in spending will effect student achievement. They also hold out hope that conditions are improving.

“While we do not know yet what effect these spending cuts will have on educational outcomes, it is clear that districts are facing many hardships and difficulties in supporting their activities and operation,” the report reads. “Cuts to instruction, student activities, and social services can potentially affect students in harmful ways.”

“As economic conditions improve, school finance conditions (both funding and spending) are expected to ease,” they added. “It remains to be seen how long this return will take.”