Lakewood schools borrowed millions from New Jersey and still can’t pay its bills

Bloustein Local Government | News

The Lakewood School District in New Jersey is facing severe financial distress, having borrowed $165 million since 2014 and now seeking an additional $93 million loan from the state to stay afloat. This mounting debt has been primarily attributed to the district’s unique circumstances, including a vast private school student population, high transportation and special education costs that exceed state reimbursements, and insufficient state aid. Despite calls to reform the funding formula, little action has been taken, and the district continues to accumulate debt. This situation has led to disruptions in public school education, including teacher shortages and the use of online courses and substitute teachers.

Marc Pfeiffer, assistant director at Rutgers University’s Bloustein Local Government Research Center, emphasizes that the money Lakewood is borrowing reflects a deficit in the district’s budget rather than any inherent obligation to repay the state. The district’s financial woes have highlighted the urgent need for a new funding formula and a permanent solution to address the disparity between public and private school funding in Lakewood. While there have been calls for change and acknowledgments of the problem by state officials, concrete actions and a viable repayment plan remain elusive, leaving the district in a precarious financial situation., September 27, 2023