Newark Public Schools will receive an additional 5 percent in state aide under legislation signed into law by Gov. Phil Murphy.

At a bill-signing ceremony at Cliffside Park School No. 3, Murphy said the bill, S-2, modernizes the state's school funding formula for the first time in a decade.

“New Jersey’s education system experienced eight years of neglect during the previous administration, which underfunded our public schools by $9 billion,” said Murphy, a Democrat.

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Murphy thanked both Senate President Steve Sweeney and Assembly Speaker Craig Coughlin for their commitment to updating the school funding formula.

"The necessary adjustments we are making today will bring fairness to the system and ensure our school children receive the quality education they deserve,” Murphy said.

The legislation, which takes effect in Fiscal Year 2020, modifies the current school funding law to eliminate adjustment aid as well as State aid growth caps and allows adjustments to tax growth limitations for certain school districts. The balanced approach will provide more equitable funding distribution through the school funding formula.

Over the course of seven years, aid to overfunded districts will be reduced and aid to underfunded districts will be increased so that all public school districts achieve their 100 percent of funding by 2025 under the formula contained in the School Funding Reform Act (SFRA).

Under the new law, Newark will receive $787,623,912 in 2018-19, an increase of $37.506 million, or 5 percent, over what the district received last year. 

But not all urban districts will see increases. Jersey City, for example, will see its state aid reduced by $3.5 million, or 0.85 percent. (To help Jersey City make up for the decease in state aid, Murphy also today signed A-4163, which allows municipalities that have a population over 200,000 to impose an employer payroll tax.)

The law is intended to help districts that have been historically underfunded. Neighboring Belleville, for example, will receive $28,335,839 in state aid in 2018-19, a increase of $1.349 million, or 5 percent, over what the district received last year.

State Sen. M. Teresa Ruiz, who co-sponsored the legislation, said the law will help ensure all New Jersey students are receiving fair funding.

"As chair of the Education Committee, it has been rewarding to get to a pathway where we will be fully funding our districts," said Ruiz, a Democrat who represents both Belleville and Newark. "For the second year in a row, the Township of Belleville and the City of Newark gained in critically needed funds."

Ruiz thanked Murphy and praised Sweeney for "meeting this issue with such fervor and dedication." She said his "tireless work" is in large part the reason the funding formula was updated.

"It is not about winners and losers it is about ensuring all of our children are given the same opportunities regardless of what neighborhood they grow up in," Ruiz said. "This is a great first step. We need to keep our focus on moving an education agenda that continues to create excellence in all of our schools.”

Under the new law, any district that loses aid and underspends will be required to increase their prior year school tax levy by 2 percent until Fiscal Year 2025. Former Abbott districts that underspend but have significantly higher tax rates than the statewide average, will be held harmless from aid losses through Fiscal Year 2025. In addition, county vocational school districts will not see any decrease in state aid.

Underfunded districts will see aid increases based on funding made available from aid reductions, and additional funding provided through the annual appropriations act with the goal of full funding by Fiscal Year 2025.

The law also permits any former Abbott districts to exceed the 2 percent tax cap without voter approval to increase their local levy up to the expected local levy determined by the funding formula. This provision will last only until Fiscal Year 2025. Non-Abbott districts are still subject to the 2 percent tax cap.

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