New Jersey’s school funding formula sends roughly $12 billion in state aid to districts every year, built specifically to close wealth gaps between towns. A newer, more contested comparison to Mississippi’s reading gains has reopened a much older debate about whether that money is reaching the students who need it most.
New Jersey Spends the Most on Schools in America. Why Do Critics Say Mississippi Is Catching Up?
New Jersey’s public school funding system remains one of the more complex and consistently debated pieces of state government, a formula responsible for distributing billions of dollars in state aid to more than 1.3 million public school students every year. Grounded in the School Funding Reform Act, the system is designed around a fairly straightforward principle, calculate what a genuinely adequate education actually costs in a given district, then determine how much of that cost the local community can reasonably shoulder through property taxes before the state fills in the rest.
How the Formula Actually Works
The funding formula runs through three core calculations. The state first determines a district’s Adequacy Budget, the dollar amount required to provide a thorough and efficient education, a figure that scales upward based on weighted student enrollment to reflect the genuinely higher costs of educating low-income students, students with disabilities, and English language learners. From there, the Department of Education and State Treasury calculate a district’s Local Fair Share, assessing local property values and community income to determine how much a given municipality can reasonably be expected to contribute through property taxes. The state is then constitutionally obligated to cover the difference through Equalization Aid, the mechanism that bridges whatever gap remains between what a district needs and what its local tax base can actually provide.
| Funding Source | Share of Total | Impact |
|---|---|---|
| State Aid | ~46.5% | Distributed via the formula to bridge wealth gaps between towns |
| Local Property Taxes | ~45.8% | Wealthier towns rely less on state aid; poorer towns rely heavily on it |
| Federal Grants | ~7.7% | Mostly targeted toward Title I and special education services |
New Jersey districts collectively receive roughly 12 billion dollars in state aid annually, and the formula’s underlying goal, equalizing educational opportunity across towns with vastly different property wealth, remains broadly popular even among the system’s critics. Where the real disagreement lives is in whether that spending, now among the highest in the country on a per pupil basis, is actually producing proportionate results for the specific students the formula was built to help most.
A Comparison That Has Become a Genuine Flashpoint
That question has taken on new urgency this year, driven by a comparison that has circulated widely in New Jersey education policy circles, that Mississippi, one of the poorest states in the country, has begun outperforming New Jersey’s own low-income students on national reading and math benchmarks despite spending a fraction of the money per pupil.
According to federal Census school finance data, New Jersey’s current per pupil spending ranked fourth highest in the country in fiscal year 2024, while Mississippi’s ranked fifth lowest, roughly less than half of New Jersey’s total. Despite that gap, Mississippi has posted the largest fourth grade reading and math score gains of any state since 2013, with the state’s economically disadvantaged fourth graders now ranking first nationally in reading and second in math on the National Assessment of Educational Progress, the exam widely referred to as the Nation’s Report Card. Advocacy groups including the Sunlight Policy Center of New Jersey have pointed to that gap directly, arguing it undercuts the long standing assumption that higher state spending automatically translates into better outcomes for the low-income and high-need students the funding formula was specifically designed to prioritize.
The Case for What Mississippi Actually Did Differently
Supporters of the comparison point to a specific, identifiable policy shift rather than a vague cultural explanation. Mississippi’s 2013 law embraced what researchers call the science of reading, systematic phonics instruction paired with early diagnostic screening, intensive literacy coaching for struggling schools, and a mandatory third grade reading benchmark students generally must clear before advancing. Analysts have also noted a structural difference that made rapid implementation politically easier in Mississippi than it has proven in New Jersey, the state operates without the kind of powerful teacher collective bargaining apparatus that has historically slowed curriculum and retention policy changes in states like New Jersey, where similar reforms tend to face considerably stiffer political resistance.
Defenders of New Jersey’s current spending levels push back on a direct dollar for dollar comparison, arguing it ignores real structural differences between the two states. New Jersey’s cost of living runs considerably higher than Mississippi’s, requiring higher teacher salaries just to remain competitive, and the state funds far more extensive special education services than most states attempt to match at comparable scale. New Jersey also serves a meaningfully different English language learner population than Mississippi does, and because it can take five to seven years for a child to reach full academic fluency in a new language, states with larger, faster growing EL populations tend to show weaker unadjusted fourth grade scores for reasons that have little to do with instructional quality.
A Genuine Methodological Dispute, Not a Settled Question
The comparison has also drawn direct statistical pushback from researchers who question whether Mississippi’s gains are being measured fairly in the first place. Because the state’s third grade retention policy prevents students who fail to meet reading benchmarks from advancing, some statisticians have argued that Mississippi’s fourth grade NAEP results may partly reflect a selection effect, weaker readers simply are not sitting for the fourth grade exam in the same numbers other states allow, which could inflate the state’s average scores independent of any actual instructional improvement. Mississippi’s own reading gains researchers have pushed back on that critique in turn, noting the state’s average test taker age has barely shifted over the past decade despite retaining more students, suggesting the gains are not purely an artifact of test population changes.
New Jersey’s own standing looks considerably different depending on which national analysis is cited. Independent research from the Learning Policy Institute, using demographically adjusted NAEP scores, places New Jersey among the top five states nationally in eighth grade reading and among the top performers in eighth grade math as well, a very different picture than the fourth grade, income adjusted comparisons the Mississippi focused critiques tend to emphasize. That gap between studies is not necessarily a contradiction so much as a reflection of how differently researchers can slice the same underlying achievement data, by grade level, by subject, by income bracket, or by how heavily a given analysis adjusts for demographic differences between states.
What This Actually Means for New Jersey’s Funding Debate
Regardless of which side of the Mississippi comparison proves more persuasive, the underlying concern driving it, that New Jersey’s overall high rankings mask real, persistent gaps for its lowest income, Black, and Hispanic student populations, reflects a genuine and long documented pattern in the state’s own education data, one that predates this particular comparison by years. Advocacy groups continue to argue that New Jersey’s adequacy targets have not kept fully current with inflation and modern resource demands, even as critics of current spending levels argue the state should be looking harder at instructional method and accountability reforms rather than assuming additional funding alone will close the gap. Both camps, notably, agree on the same basic diagnosis, that New Jersey’s strong statewide averages have concealed a real and serious underperformance problem among its most vulnerable students. Where they diverge sharply is on the prescription, whether the fix runs primarily through structural curriculum and accountability reform, primarily through updated and expanded funding, or, as is likely the case, through some combination of both that New Jersey lawmakers have yet to fully commit to pursuing.
