When Gov. Phil Murphy proposed his 2020 budget last week it revealed Lakewood School District would get a massive 63 percent hike in state funding, by far the largest of any district in the state.

But what state officials didn’t make clear is that the additional $14.9 million proposed for Lakewood is special treatment for the controversial district that isn’t called for in the state’s school funding formula.

An NJ Advance Media analysis of state data found Murphy’s administration wants to give Lakewood more money than the district technically qualifies for, while slashing funding to nearly 200 other districts. The state pumped extra money into Lakewood’s preliminary funding for special education and transportation without increasing that aid for most other districts. And it proposed giving millions in new taxpayer money to a district long criticized for enormous public costs tied to private school students, primarily in Jewish yeshivas.

As much as the extra money might be necessary in cash-starved Lakewood, which has relied on state loans to buoy its local school budget, the way Murphy’s administration quietly added it to the state’s budget raised concerns.

“The (state) really needs to explain publicly what’s going on here,” said David Sciarra, executive director of the Education Law Center, a nonprofit that closely monitors school funding. “I would hope that the Legislature examines this in detail and gets answers.”

Murphy’s office referred comment to the state Department of Education, which confirmed it’s proposing Lakewood receives “supplemental aid” for transportation and special education because of the large number of private school students getting those public services. (The state’s main funding formula considers enrollment, demographics and a community’s ability to pay taxes.) But the department declined further comment, citing an ongoing court case over funding for the district.

Michael Inzelbuch, Lakewood’s school board attorney, applauded the decision, which he said should help the district avoid needing another loan. Lakewood’s state funding would increase from $23.5 million to $38.4 million.

“This is the first time in many years that there appears to be a realization that Lakewood, in fact, does not fit the funding formula,” Inzelbuch said. “There is a recognition and a proactive position that, 'let’s get these people money before they go broke."

Lakewood, an Ocean County township now defined by its booming Orthodox Jewish population, has about 6,000 public school students compared to more than 30,000 students in private schools, mostly Jewish yeshivas. State law requires districts to provide busing to private schools, within certain parameters, and more than 20,000 Lakewood children qualify, Inzelbuch said. The district has also controversially labeled hundreds of students as special education and placed them in private schools, leading to skyrocketing special education costs for the district.

In recent years, Lakewood’s school budget has been decimated by escalating state-mandated costs for transportation and special education of private school students that tally more than $50 million. A series of state loans totaling more than $40 million have kept the district afloat.

The state’s newest budget maneuver is undoubtedly better for Lakewood than giving it another loan, which could take years to repay. And it comes amid a legal challenge filed by a district teacher claiming Lakewood can’t provide students a quality education without more money. The state asked a judge to dismiss that case, but the judge has allowed it to move forward.

But the state’s inclusion of extra money still leaves some observers questioning why, especially given how much of that money eventually goes to benefit privately educated students.

At the same time when New Jersey is reducing funding to nearly 200 districts, saying they were previously getting money they were’t actually owed according to the formula, Murphy’s administration low-key proposed giving Lakewood millions in extra funding without any public discussion.

That’s the style of school funding that has historically left school districts with unfair aid, said Jeffrey Bennett, a representative of the Fair Funding Action Committee, which fought to get more money for underfunded districts. Continuing that pattern now jeopardizes the equity of the state’s school funding moving forward, he said.

What’s also troubling is the diversion of more public money to Lakewood’s private school students without any explanation for how the funding increases were calculated, Sciarra said.

“The (education) department needs to explain to the public how it came up with these increases,” Sciarra said. “What are they designed to accomplish? And how is this going to benefit, over the long haul, the district’s budget for pubic school students?”

Regardless of the method, the money is desperately needed, Inzelbuch said.

Lakewood is still in the early stages of paying back its state loans and can’t sustain taking on a new loan every year, he argued.

The extra state money proposed in Murphy’s budget will allow the district to preserve programs for public school students that could have been cut to pay for mandatory costs associated with private school students, he said.

“This is a big win for Lakewood,” Inzelbuch said.

So big, in fact, that the proposed increases for Lakewood dwarf all other school districts.

Only two other districts, Atlantic City and Woodbridge, are set to gain more than 20 percent in state aid.

Lakewood, however, would actually be seeing a slight decrease in aid if not for the extra special education and transportation funding, two categories in which many districts were flat funded.

Lakewood accounts for nearly 100 percent of the Murphy administration’s proposed $6.1 million increase in transportation aid. Loch Arbour got $275 more and every other district was flat funded.

Of the $31.4 million increase in special education aid, more than quarter would go to Lakewood ($8.9 million). No other districts would see more than a $800,000 increase.

Adam Clark may be reached at adam_clark@njadvancemedia.com. Follow him on twitter at @realAdamClark. Find NJ.com on Facebook.

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