Provides that school districts with unpaid balances on certain borrowed funds are not subject to State school aid reductions; requires use of surplus funds to repay borrowed funds.

This bill (A2904) prevents New Jersey school districts with unpaid balances on state-issued loans from facing automatic reductions in State school aid. It directly affects districts that borrowed funds - such as advance State aid payments or emergency aid - under current law. Instead of reducing future aid to repay these loans, the bill requires districts to use their surplus funds (undesignated general fund balances) to repay the debt, as reflected in their annual school budgets. This changes the repayment mechanism from aid cuts to direct budgetary repayment, applying to districts otherwise subject to aid reductions under existing funding rules.