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4-28-14 Education in the News
NJ Spotlight - State Opts for Intervention, Not a Takeover, for Fiscally-Pressed Schools in Lakewood...Monitor’s role limited to trying to help solve budget crisis, not taking control of policies or programs

Press of Atlantic City - With caps in effect, some New Jersey superintendents face salary cuts

Star Ledger-Associated Press - NJ high school graduation rate ranks high in new report

Star Ledger -NJBEST college savings plan now getting high marks after rough start

NJ Spotlight - State Opts for Intervention, Not a Takeover, for Fiscally-Pressed Schools in Lakewood

John Mooney | April 28, 2014

Monitor’s role limited to trying to help solve budget crisis, not taking control of policies or programs


While total state takeovers of troubled school districts are getting the most attention of late, the Christie administration’s appointment of a fiscal monitor for the Lakewood public schools last week points up a quieter approach to how the state deals with its most troubled districts.

Less than a month into his tenure, acting state Education Commissioner David Hespe announced Friday that the state would send in a monitor and a team of other officials to help resolve a deepening budget crisis in the Ocean County school district.

Related Links

State Fiscal Monitor Law

School Districts Audits for 2013

The district has said it will ask the state for a $5 million loan to make it through the year.

At the center of the budget deficit is the escalating cost of providing services to district students who choose to attend private schools, many of them yeshivas for the large Orthodox Jewish population.

About 20,000 children in the township attend non-public schools, while district enrollment is under 6,000. The district is spending close to $20 million a year to provide transportation for these non-public students, as well as providing funding for other mandated services, includes special education.

“These are very complicated and unique problems that would be very difficult for any school district to resolve,” Hespe said on Friday in announcing the appointment of the new fiscal monitor.

“This group will go into the district starting Monday and try to assess the problem for the short term, and specifically closing the budget year, but the long term as well,” he said.

The state’s monitor will be Michael Azzara, a long-time education department employee who has served in a monitor role in five districts over the last 15 years. Also on the team will be the state’s county superintendent, Thomas Dowd, and county business administrator Thomas McMahon.

The appointment of a monitor is a more measured approach compared to the state’s recent interventions in school districts.

Just a year ago, in Camden, the state launched its fourth full takeover of a school district in two decades, amid ongoing debate over how the state is managing the districts under its control, especially in Newark.

In the case of Lakewood, state officials are invoking a 2007 law that created the role of a state fiscal monitor to deal specially with school district budget problems. Lakewood becomes the seventh district currently under fiscal monitor, and the 12th overall to fall under the law.

The others currently with fiscal monitors are Asbury Park, Trenton, Pleasantville, Garfield, Elmwood Park and Elmer. Districts that had monitors removed are Camden City, Irvington, Willingboro and Beverly.

Under the law, the state can move in with a monitor when a district faces a deficit or other budgetary questions as determined through their annual audits. The state posts the audits for every district.

Hespe stressed Friday that the state monitor deals specifically with budget problems, not instructional or other program issues.

“The (monitor) law was never designed to lead a district overall,” Hespe said.

But the move also comes as the debate heats up over what role the state should take in school districts. Newark has been the hottest flashpoint, with rising public protests over reform plans put forward by state-appointed Superintendent Cami Anderson.

Camden has been in the early throes of its takeover, as well, as state-appointed Superintendent Paymon Rouhanifard plans to trim back administrative staff with the elimination of nearly 200 positions and is warning of widespread teacher layoffs to come. Azzara, the new Lakewood monitor, served as monitor in Camden for the last five years.

In addition, legislators have been pushing to revamp the state’s monitoring system as a whole. A bill sponsored by state Sen. Teresa Ruiz (D-Essex), chair of the Senate’s education committee, would tighten up the guidelines for when the state intervenes – and end interventions – in school districts. The bill, which is moving through the state Senate, is expected to be posted for a vote this spring.


Star Ledger - NJ high school graduation rate ranks high in new report

 The Associated Press
on April 28, 2014 at 12:01 AM, updated April 28, 2014 at 1:58 AM

TRENTON — A new report finds New Jersey's high school graduation rate is relatively high, and the number of "dropout factory" schools is shrinking.

But a national study released Monday by America's Promise and other education groups finds the state's low-income students are graduating at a lower rate than others.

The study finds that 86 percent of New Jersey students who entered the ninth grade in 2008 went on to graduate in 2012. That rate is among the top 11 in the nation and is 6 points higher than the national rate.

Seventy-five percent of New Jersey low-income students graduate, compared with 90 percent of others. That 15-point gap is the same as the national average.


Press of Atlantic City - With caps in effect, some New Jersey superintendents face salary cuts

By DIANE D’AMICO Education Writer | Posted: Saturday, April 26, 2014 9:00 pm

Scott McCartney’s contract as Egg Harbor Township school superintendent expires in June. He would like to stay in the job, but with the state salary cap of $177,500 for the district, he may have to take a slight salary cut to do so.

“The issue of the salary cap is something the board and I have to navigate,” McCartney wrote in a lengthy email on the issue. “I have voluntarily frozen my salary in one year and voluntarily reduced my negotiated annual raise in the remaining years to be sensitive to the taxpayer.”

Caps on superintendent salaries took effect in 2011 through Department of Education regulations as part of Gov. Chris Christie’s efforts to control property taxes. The caps are based on district size and range from $125,000 to $175,000, with an extra $2,500 allowed for districts with high schools.

Districts with more than 10,000 students can pay more with state approval. Superintendents can earn annual merit-based bonuses of up to 15 percent of their base salary for meeting targeted goals.

Paymon Rouhanifard was hired as superintendent of Camden Public Schools in 2013 at an annual salary of $210,000. Newark Superintendent Cami Anderson is paid an annual salary of $247,500 and is eligible for a performance bonus worth as much as $50,000, according to published reports.

McCartney, who now is paid just over $180,000 under a contract signed before the new law took effect, said he wants to stay in the kindergarten through 12th-grade district. So far, superintendents in five of the 25 school districts in Atlantic County have either retired or announced they are retiring at the end of this school year. All were about at or above the salary caps for districts their sizes.

Though only Thomas Baruffi, the shared superintendent in Mainland Regional and Linwood, has publicly stated the cap was a factor in his decision to retire, the cap is influencing, and some say limiting, hiring decisions. At least a half-dozen other superintendents in Atlantic and Cape May counties have salaries that are at or over their cap, according to Department of Education data. They will have to either take pay cuts or leave when their current contracts expire.

A bill has been introduced in the state Legislature to rescind the caps. It is supported by the New Jersey School Boards Association and the New Jersey Association of School Administrators, both of which say the cap is unnecessary in light of the 2-percent cap on school property-tax levies, which is already an incentive to control salaries.

But Americans for Prosperity State Director Daryn Iwicki said the cap is responsible and the right thing to do to control property taxes.

“I want to hear someone complain to me they cannot live on a $175,000 salary,” he said in a statement responding to the bill.

NJASA Executive Director Richard Bozza said since the cap has applied only to superintendents, there are districts where assistant superintendents, business administrators and even principals are making as much as or more than the superintendent, and see no incentive to take on the stresses of the top position. The cap was supposed to eventually extend to other school administrators but never did.

“The cap is a disincentive to take the job,” Bozza said. “And it takes the decision out of the hands of the local school board.”

Officials said the terms of the cap also discourage shared services, because a superintendent can get only an extra $10,000 if they agree to take on two districts. Baruffi has said he would not advise Mainland and Linwood to share a superintendent again, because they remain separate districts, with separate school boards, budgets and unions, and there is too much work for one person.

Other retirees this year are John Gilly, who left Egg Harbor City in December; Steven Ciccariello, who is leaving the Greater Egg Harbor Regional in June, a year before his contract expires; and Janice Fipp in Northfield.

All three are about at or over the salary cap for districts their size. According to state data, Gilly was paid $147,500, more than the cap of $135,000 for a district of as many as 750 students. Ciccariello gets $186,559, more than the $167,500 cap for his mid-sized high school district. Fipp is paid $143,240, just under the $145,000 cap for a kindergarten through eighth-grade district of as may as 1,500 students.

Fipp said after 42 years in education she is just ready to retire and was not influenced by the cap. She said she almost retired two years ago, but a principal also left and she did not want the district to have to replace two top positions in the same year. She said she is now comfortable she is leaving the district in experienced hands and is looking forward to the leisure time.

When Gilly left, the district replaced him with Charles Spragg School Principal Adrienne Shulby, who is now doing both jobs as a cost-saving measure at a salary of $120,176.

Bozza said a major flaw in the cap is that it does not address superintendents in smaller districts who often fill more than one position. Under the regulations, they are still bound by the cap. So even if she does both jobs, Shulby’s salary cannot exceed $135,000.

Shulby said with the increasing time required to do new teacher evaluations, it is proving a challenge to do both jobs. She said there have been discussions about whether another administrator will be needed, but she will continue in both positions for 2014-15.

Other superintendents who are over the cap are Kathleen Taylor in Ocean City and Michael Kopakowski in Middle Township, both of whom are paid more than $180,000 in districts where the cap is $157,500. Neither responded to a request for comment on whether they might retire when their contracts expire.

C. Dan Blachford in Hammonton is almost at his district’s cap of $167,500. He said he is willing to renew.

Pleasantville Superintendent Garnell Bailey’s contract expires in June. The district has advertised for an interim replacement. She is at the salary cap of $165,000 but has had a rocky relationship with the school board and filed a lawsuit against the district in December.

The New Jersey School Boards Association is completing a comprehensive report it expects to release in May on the impact of the cap. A summary of a survey it did last year showed superintendent turnover had slowed since the cap took effect, but it noted that could be because a large number of superintendents retired before the cap took effect, or had new contracts that would not expire until 2014 or later. Contracts can be no longer than five years; most are for three years.

According to an earlier NJSBA survey, 125 superintendents left in 2007-08, followed by a high of 172 in 2008-09, then 159 in 2009-10, 142 in 2010-11 and 140 in 2011-12. There were just 118 who left in 2012-13, of which 21 cited the cap as the reason.

McCartney said he hears of young superintendents leaving the state because of the cap, and has been recruited himself for other jobs. He said he wants to stay in Egg Harbor Township, but it is a difficult decision and he hopes the cap issue is addressed by the state.

“My heart and my home are in Egg Harbor Township,” he said. “I went to school here, I taught here, I work with those who were my teachers and coaches, I work with those that I had the privilege to teach. I have students that are the children of my family, friends, and neighbors. Working in my community and giving back to a system that gave so much to me was what I wanted when I applied to work here.”

Contact Diane D’Amico: 609-272-7241 DDamico@pressofac.com

Star Ledger -NJBEST college savings plan now getting high marks after rough start

By Kelly Heyboer/ The Star-Ledger
Email the author | Follow on Twitter
on April 27, 2014 at 8:30 AM, updated April 27, 2014 at 8:53 AM


TRENTON — When New Jersey launched its 529 college savings plan in the late 1990s, the program was a bit of a joke.

With high fees and low returns, many New Jersey families snubbed the plan — ironically called NJBEST — and invested in other state’s programs to save for their children’s education. Many financial advisers told clients the New Jersey plan was a dud, while some lawmakers questioned why the state was keeping the struggling program open.

But over the past decade, NJBEST has staged a comeback.

After partnering with the investment firm Franklin Templeton in 2003, New Jersey began reducing the fees families pay to participate in the plan and increasing the investment choices. Returns began rising and the number of New Jersey families opening accounts grew from a few thousand to nearly 52,000.

SavingforCollege.com, a site that ranks 529 plans, says New Jersey’s plan now ranks as the second-best in the nation based on its performance over the past year.

NJBEST’s performance was second only to the District of Columbia’s program and ahead of popular plans in Utah, New York and Michigan, according to the site’s analysis.

“Franklin Templeton Group has done a good job investing for the New Jersey plan,” said Joe Hurley, the site’s founder and an expert on 529 plans.

Hurley credits NJBEST’s falling fees and improved investment strategy with the plan’s improving reputation. SavingforCollege.com, which once ranked NJBEST as one of the worst plans in the nation, now give it five caps, its highest ranking.

Franklin Templeton, the California firm New Jersey hired a decade ago to replace the state treasurer as NJBEST’s investment adviser, recently beat out about 50 other companies to win the contract to oversee the program for another seven years.

The firm has been advertising nationally and sending representatives to talk to financial advisers to get the word out that NJBEST has turned itself around.

“We have one of the larger teams in the field working with financial advisers,” said Roger Michaud, senior vice president of Franklin Templeton Distributors. “We have a lot of great news to share.”

State 529 plans — named after a section of the federal tax code — gained popularity in the late 1990s after the law was changed to provide tax advantages for investors in state-sponsored college savings plans.

With tuition rapidly rising, parents and grandparents were encouraged to open 529 plans for young children to save for college. But each state structures its plan differently, and families are permitted to invest in any state’s program, making it difficult for parents to compare their choices.

Under NJBEST — which stands for New Jersey Better Educational Savings Trust — families can save as little as $25 a month, or $300 a year, in an account.

Investments in the program grow federal income tax-free, and the accounts can eventually be used for the student to attend college or pay for education expenses at any qualified institution in the country.

In addition to the money saved, beneficiaries are eligible for up to $1,500 in scholarships if they eventually attend a New Jersey college.

At last count, NJBEST had 51,757 accounts with $1.3 billion in assets, Franklin Templeton officials said. Franklin Templeton 529, the company’s national plan open to non-New Jersey residents, has another 171,426 accounts with $2.9 billion invested.

Though the program has been growing, New Jersey’s 529 plan remains a midsize program compared to other states, according to several rankings. By comparison, Virginia’s plan, the largest in the nation, has more than $40 billion invested.

Lower fees

NJBEST was long criticized for having some of the highest fees in the country, with investors paying as much as 1 percent annually to participate in the plan. But in recent years, New Jersey eliminated the $25 annual contract fee for accounts and lowered the program’s fees.

Last week, the state announced another fee cut, reducing the management fee account holders pay from 0.2 percent to 0.1 percent.

Officials at the state Higher Education Student Assistance Authority, which oversees NJBEST, said they hope the fee cut prompts people to take a second look at the program.

“I would encourage those who plan to start saving for college costs to compare the overall value, features and performance of NJBEST and Franklin Templeton 529 College Savings Plan to that of other plans,” said Gabrielle Charette, executive director of HESAA.

Though NJBEST’s reputation has been improving, critics say it still lacks one critical advantage. Unlike several other states, New Jersey does not offer residents a state tax deduction for contributions to 529 plans.

In 2012, there was strong bipartisan support for a bill that would have allowed New Jerseyans a state tax deduction of up to $10,000 for married couples and $5,000 for individuals for contributions to NJBEST accounts.

The legislation was overwhelmingly approved by both houses of the state Legislature, but Gov. Chris Christie vetoed the bill after the state Treasury estimated it could cost New Jersey more than $6 million in tax revenue a year. Several similar bills providing state tax benefits for NJBEST investors were introduced this year and are being debated.

Costs soaring

Even without the state tax breaks, state officials argue NJBEST is a good deal, especially as college costs continue to rise and student debt grows.

At current estimates, a baby born this year would have to pay about $260,000 to graduate with a four-year bachelor’s degree from a mid-priced school in 2034 — if tuition keeps rising at current rates, according to SavingforCollege.com’s college cost calculator.

That means families would have to begin saving a whopping $561 a month in a savings plan now if they want to cover 100 percent of the bill, according to the estimate.

“At HESAA, we tell families that every dollar saved through a 529 college savings plan is a dollar that does not need to be borrowed. Families across New Jersey are hearing this message and opening these important accounts,” said Charette, HESAA’s director.

Garden State Coalition of Schools
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