How We Got Here

New Jersey decides how much state aid each district gets using a formula called the SFRA. Here's how it works in plain English:

Think of it like a household budget. Your costs go up about 5% a year, but your boss only gives you a 2% raise. Every year you fall a little further behind. Now imagine the fixed costs you can't skip — your mortgage, your car payment. Those are like salaries, health benefits, and special education mandates. You can't just not pay them.

So the cuts fall on everything else — paraprofessionals, building maintenance, electives, bus routes, class sizes. That's exactly what's happening in West Orange.

FY27 shows a partial recovery (+$3.0M in equalization aid), but we're still $4.8M below where we were in FY24.

Imagine if 20% of your income adjusted from year to year and you had no way to predict it. West Orange lost $7.1M in equalization aid in a single year (FY25 to FY26) — a 46% drop — with almost no warning.

A family can skip a vacation or put off a car repair and it impacts only their household. A school district has to lay off teachers to balance its budget—which it is legally required to do—and it impacts many students.

Schools are funded by property taxes. But the formula that decides how much state aid we get doesn't just look at property — it heavily weights the total income of everyone in town to determine how much we can afford to pay. Income is used as a proxy for wealth, but it's a crude one. A town's aggregate income doesn't tell you how much property tax revenue a district can actually raise under a 2% cap.

And because the formula uses total income rather than median income, a handful of very high earners pull the number up for everyone — even though most West Orange families are solidly middle-class. If the formula used median income (what the typical family actually earns), West Orange might qualify for significantly more state aid since it would give a more realistic view of our income. We’re still working to figure that out. 

The property side has its own problem. Home values are rising faster than what people actually earn. The formula sees higher property values and says "this town can afford more." But a higher home value doesn't put more money in your pocket — you can't pay your tax bill with your Zillow estimate. Your home might be worth more on paper, but your paycheck is the same.

In communities like West Orange, where property values have climbed faster than incomes, this creates a real gap between how wealthy the formula thinks we are and what families can actually afford. We look richer on paper. We aren't richer in practice. And the formula doesn't know the difference.

The result: the state keeps demanding more from West Orange, but the actual families living here can't keep up. A more accurate formula would measure what a community can actually raise under the constraints of the tax cap — not what it looks like on a spreadsheet.

*Based on budget totals. Source: FY26 School Budget.

These costs are real. But they're not the root cause — the formula is.

The district has taken steps to control costs where it can — for example, switching health insurance plans to save money. But most big-ticket increases are like every family's bills: health care goes up, insurance goes up, contractual obligations go up. You can shop around at the margins, but you can't opt out.

When a school district's costs outpace its revenue, 7,000+ students absorb the hit.

State law caps tax increases at 2% per year. There are a few escape valves, but they're limited:

• Banked cap (saved-up taxing room from prior years): Exhausted. The district used its last $465K in FY26.
• Voter referendum: The county superintendent has to approve it first — that process is not guaranteed.
• Health care cost adjustment (18A:7F-3d): This tool exists and could generate additional revenue — but the district has underutilized it.

We can't wait for the formula to be fixed. Formula changes require legislation — that means bills, sponsors, committees, and votes. More state or federal aid means either higher taxes somewhere else or cuts to other programs. None of that happens fast.

Schools that decline don't just bounce back. When programs are cut, class sizes balloon, and buildings deteriorate, families who can afford to leave, leave — and that shrinks the tax base, making the problem even worse.

It's not fair that West Orange families should have to pay more to make up for a broken state formula. But fairness and urgency aren't the same thing. Our kids are in these classrooms right now.

Note: FY27 K-12 aid ($34.5M) excludes PreK aid (~$9.4M).

At the March 26 BOE meeting, Business Administrator Flowers presented $220M in expenditures against $206M in revenue. Superintendent Moore: "We're in a bad spot." The preliminary plan calls for a minimum of 70 positions eliminated — on top of the 57 already cut.

Board President Rock is in contact with legislators, but: "Word on the street in Trenton is it's going to be tight. An overhaul for school finance isn't happening in the next six months."

Board member Stevenson has said raising the levy beyond 2% is "a non-starter" — though WOPE believes all revenue options deserve public discussion.