Report to Summit Board of Education

Garden State Coalition of Schools (“GSCS”)

GSCS Board of Trustees Meeting re: S1701

January 19, 2006

Ann Bushe and Eleanor Doyle attended the GSCS meeting on January 11, 2006.

Lynne Strickland discussed a recap of the School Funding Symposium which was held at Rutgers on December 7 and which was attended by a number of our administrators, board and community members.  Lynne suggested, as an outcome of the Forum, that the GSCS would be taking a more active role in developing a strategy proposal for school funding since it appears that “the state will  never do it”.  Lynne suggested, as the speaker at the Forum from California warned – “We don’t want to find ourselves suffering the “California experience” where the state took over complete responsibility for funding schools and the schools went from OK to disaster overnight.”

The GSCS meeting then moved into a discussion of issues concerning S1701 with journalists from the Star Ledger (John Mooney and Dunstan McNichol).  John Mooney, in particular, intends to write a column discussing the impact of S1701 and was interested in hearing anecdotes from the GSCS members on how the law is impacting GSCS’s various members.  Many of the district representatives were able to point to specific provisions in S1701 that are having a negative impact in their districts. 

Most complained about the limitations on the surplus amounts.  These limitations can have a significant impact on funding for the unexpected, for example an emergency capital improvement (like a new boiler) or unanticipated special education students moving into the community.  These unexpected events could easily wipe out any allowable surplus. Some districts gave examples of how this surplus limitation is negatively impacting their bond rating – which translates into higher bond costs to be absorbed by property taxpayers.

Another common complaint was the strict limitations on the growth of administrative costs which basically hold all districts to the costs in place at the time the law was passed. We offered as an anecdote that we will be opening new primary centers – particularly the one at Wilson School, but will be constrained from hiring an administrator to cover that facility.  In addition, the limitations on administrative costs will eventually impact districts’ ability to retain supervisors.  This in turn, will impact the quality of teachers who will not have the benefit of close supervision and training, from principals and supervisors. To the extent that a district was efficient in holding down its administrative costs before the law was passed – and Summit is such a district – they, and we, are now penalized for this efficiency since we cannot increase these costs despite our increases in enrollment.

Another common complaint is the inability to transfer funds from one account to another so that a surplus, that surplus in one account  can’t be used to make up a shortfall in another account.

Clearly S1701 is having some degree of impact in all districts.  However, at least for districts in our economic range – which includes the suburban district membership of the GSCS –most are, in fact experiencing growing enrollments.  And with growing enrollments comes the Spending Growth Limitation Adjustments permissible under S1701 to accommodate spending for these growing enrollments.  This SGLA for enrollment growth is also accompanied by SGLAs for new facilities and for increasing insurance costs.  It is these SGLA’s that allow districts a higher cap in overall spending than is otherwise permitted under S1701.  Thus, in the coming year, our SGLAs, plus the support that we anticipate from SEF, will relieve us, to some degree, from the cap limitations otherwise imposed by S1701 (though not the administrative cap which will negatively impact our district).

What became apparent through the course of this dialogue, however, was that S1701, which was intended to limit spending and reduce property taxes is, in many districts having exactly the opposite effect.  For the past 4 years, state aid has been basically frozen while enrollments and costs have continued to rise.  With the SGLAs that are permitted under S1701, the state permits districts to take growth into account by passing to the local property taxpayers the responsibility to pay for this growth.  Basically, by keeping state funding flat, the state is passing to the local taxpayer the responsibility to pay for growth, which would otherwise have been paid by state aid.  Where enrollments are growing, the schools have no choice but to fund the costs of growth by increases in property taxes – exactly opposite the intended effect of S1701.   

While S1701 has serious problems, so long as enrollments are growing, SGLAs will ameliorate the draconian consequences that S1701 could impose – but only so long as the local property taxpayer is willing to fund the growth.  Where the property taxpayers are unwilling to support this growth, districts will see a serious deterioration in the quality of education, directly related to the inability to fund quality programs. 

Thus the state funding formula and the lack of increases in state aid commensurate with our growth, is as much at fault as S1701.   This funding methodology requires a complete overhaul with the state sharing its equal responsibility for providing a thorough and efficient education without imposing almost all of the cost on the local property taxpayer in districts such as ours and others represented by the GSCS.

It was a thoroughly interesting and important meeting and we look forward to reading Mr. Mooney’s assessment of the situation, and the GSCS efforts to propose solutions to this problem.