The Color of Opportunity: How Formula Underfunding Disproportionately Impacts New Jersey's Black and Latino Students

New Jersey's School Funding Reform Act (SFRA) is a "weighted" funding formula, designed to deliver adequate funding based on the unique student needs in every school district across the state. The SFRA included key elements to address long-standing racial and socio-economic disparities in New Jersey's public school system, most notably additional funding and resources for low-income students and districts with high levels of student poverty. Yet the State Legislature's continuing failure to fund the formula at required levels for more than a decade has increased, rather than reduced, education inequity among districts. Not well understood in the ongoing debates over school funding is the reality that a large percentage of New Jersey's Black and Latino students attend school in racially segregated districts that also rely heavily on state aid and lack the fiscal capacity to raise funding from the local property tax. In this report, the authors examine for the first time the stark disparities in education funding of Black and Latino students and districts serving disproportionate enrollments of those students. The report analyzes total spending gaps relative to full formula funding and explore the sources of those gaps through an examination of state and local revenue. The findings are troubling and underscore the urgent need for the Legislature and Executive to speed up the path to full formula funding, along with other policy changes to fulfill the State's obligation to provide adequate funding for a thorough and efficient education to all students.