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GARDEN STATE COALITION OF SCHOOLS
Parent Network FYI – EMAILNET 5-18 forward on 5/23/05
210 West State Street Trenton 08608 609 394 2828
web ‘gscschools.org’
NOTE email address change to: gscs2000@gmail.com [we will continue to use ‘gscs2000@hotmail.com’ during the transition]
Please note all the important information that follows. The DOE and others are beginning to ask important questions about Abbott funding. The press shows signs of understanding the real property tax issues (not politicians' sound bites), and Lynne continues to spread the truth about S-1701, extraordinary aid and parity in testimony and meetings with officials – Betsy.
GARDEN STATE COALITION OF SCHOOLS
EMAILNET 5-18-05
210 West State Street Trenton 08608 609 394 2828
web ‘gscschools.org’
NOTE email address change to:
gscs2000@gmail.com [we will continue to use ‘gscs2000@hotmail.com’ during the transition]
Central offices: Please circulate EMAILNETs to your board of education, parents, staff.
HOUSEKEEPING: GSCS is transitioning its email addresses. It is important that you ensure that the GSCS email addresses are on your tech’s ‘safe list’! Otherwise our email communications will never reach your desk! Pls add gscs2000@gmail.com and gscs2000@hotmail.com [the hotmail address will need to be used until the transition to ‘gmail’ is completed] to your safe list.
Quick Facts: S2417 Adler/Turner Establishing Special Education Review Commission (companion legislation A3904/Stanley) passed unanimously on the Senate floor last week. A3904 is poised for a vote in the Assembly at this point and we look forwad to it being posted very soon. Thanks to Senate and Assembly bill sponsors, and the support of all the education associations, as well as the Bergen County Group ‘Dollars and Sense’ for helping to move this legislation along.
A5269 Roberts/The Constitutional Convention bill passed out of the Assembly on Monday, largely along party lines. It now goes to the Senate, where many think it will be stymied since there is no consensus in the Senate to move the bill along as written. See articles & editorial below for more.
________________________________________________________________________
Articles:
1) State Seeks to Shrink Needy Districts 5-18: http://www.nj.com/news/ledger/index.ssf?/base/news-0/111639227341160.xml
2) Asbury Pk Press Unions Battle for the Benefits:http://www.app.com/apps/pbcs.dll/article?AID=/20050517/NEWS/505170314
3) Philadelphia Inquirer
Assembly Approves Tax Convention: http://www.philly.com/mld/inquirer/news/local/11664678.htm
4) Trenton Times ‘Tax Reform is Hot Topic’: http://www.nj.com/statehouse/times/index.ssf?/base/news-0/111545679996020.xml
5) Star Ledger Editorial ‘Act on taxes now’ 5-3-05 “Despite the efforts by Trenton lawmakers to finger mayors, municipal councils and school boards for the nonstop rise in property taxes, voters expect relief from one place: the Statehouse. Instead of devising a plan, elected leaders continue to bicker over procedure: Constitutional convention or special legislative session? What elected officials don't seem to understand is that homeowners -- buffeted by back-to-back annual tax increases averaging 7 percent -- don't care. They just want action.
6) Trenton Times Dept. of Educ. on FY06: http://www.nj.com/statehouse/times/index.ssf?/base/news-0/111536707485630.xml
FYI: NATIONAL & STATE School funding/Student Performance/More at http://www.schoolmatters.com/
School Matters is provided by the National Education Data Partnership, which was created to help transform the way education information is used by educators, policymakers, superintendents, and parents. The National Education Data Partnership is a collaborative effort of the Council of Chief State School Officers, Standard & Poor's School Evaluation Services, Achieve, Inc., and the CELT Corporation and is generously funded by The Broad Foundation and The Bill & Melinda Gates Foundation. The National Education Data Partnership brings together three distinct but related education data efforts.
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Re S1701:
1. A NEGATIVE CONSEQUENCE: Moody’s Investment Service recently downgraded a Morris County School District due to “new constraints” placed on local district surplus, which can inhibit a district’s flexibility to deal with budgetary needs.
This downgrade is significant in that it targets the S1701 requirement that districts reduce their surplus to a 2% maximum as a negative and contrary to stable budgeting practice. A downgrade results in costing districts more interest when they need to borrow money, such as bonding for school facilities needs. It is interesting to note that this downgrade took effect even though the local district itself carries the highest rating available at the time of the downgrade, at ‘AA1’. The Summit Independent Press reported that “[Moody's is quoted as saying, it…] "believes that new constraints on reserves could severely limit school district financial flexibility . . . " Thus it is the restrictive surplus policy in S1701, not the local district’s fiscal well-being, that was the specific issue that brought about the downgrade.
2. EXTRAORDINARY AID/ SPECIAL EDUCATION AID for STUDENTS:
#1 GSCS Steps Up Special EducationAid Advocacy for FY06
The Department of Education has stated that it would take 91M to fully fund Extraordinary Aid for Special Education this year, approximately 39M more than the 52M in the Governor’s proposed budget. However, this number should actually be less, since the Abbott districts already have their funding needs met in the special education aid category, per Supreme Court protection. GSCS is advocating for the State to fund Extraordinary Aid back up to 100% for Non Abbott districts, as well as to update their special education aid, particularly at the Tier 4 level, to current special education enrollment per district. Funding these at risk students will appropriately recognize that they and their special needs do count; school budgets can be better stabilized through fulfilling this unpredictable funding need; parents will not be pitted against one another.
#2) It has been brought to our attention that some believe that Extraordinary Special Education Aid must continue to be used for direct property tax relief, rather than be applied to program needs in district. This is NOT the case, not even under S1701.
The state directive to direct the increase in extraordinary special education aid for FY04 as property tax relief was a one-shot requirement from the Appropriations Act then, when the additional 37M – for which GSCS advocated – was added to that aid category to bring up the total allotment to 52M [100% funded for FY04] that year. We have inquired about how this aid can be used and accounted for today and have received clarification on this from the Department of Education.
In accordance with the DOE current process for this aid, the following memo as to its required accounting method was sent out by New Jersey Association for School Business Officials on 3-30-05. The NJASBO email memo documents how this aid can be accounted for and how it may be used for program needs. “Many of you have received notice from the Department relative to your 2004/05 Extraordinary aid award that you must record as revenue and accounts receivable for this school year. I want to remind all of you that these funds may be appropriated and used in the current school budget without limits imposed by S1701. You, therefore, do not need county approval to use these fund this year to supplement your current budget. If you do appropriate these funds, unused appropriations will roll to surplus and be included in your calculation of excess surplus. If you do not appropriate these monies to the FY04/05 budget, these funds will roll to surplus but may be excluded from the excess surplus calculation and appropriated for use next year; again, without limits imposed by S1701.
John Donahue, NJASBO March 30 2005”.
3. It didn’t seem fair, so GSCS posed the question to the Statehouse: Will the costs of the ‘Five Year Long Range Facilities Plans’ (required by the state) to be completed by districts this year be included in the S1701 Administrative Costs benchmarking?
The answer is NO.
Thanks to GSCS Moorestown /GSCS Board VP Toni Hopkins, for initiating this inquiry.
SIGN UP: 14TH ANNUAL BREAKFAST MEETING FRIDAY, JUNE 3, 8:30-11:00
Date and Time: 8:30 a.m. to 11:00 a.m. Friday June 3, 2005.
Location: Forsgate Country Club ( approx. 1 mile, head east off Exit 8A, NJ Turnpike)
What:
Sit down Breakfast & GSCS Program ‘Exploding the Myth: Parity Aid is Not the Culprit’/Gubernatorial Candidates Corzine, Forrester & Schundler invited.
See www.gscschools.org for Sign Up sheet
HEADS UP!
GSCS STATEWIDE Parent Network is GR0WING: Let’s PURSUE S1701 IN THE FALL!
Inspired by the successful& motivated school community meetings that still continue [Rumson/Monmouth meeting just last week] due to sustained, even increasing, parent concern for quality education – GSCS has directly been involved with 16 regional meetings throughout the state -
GSCS is Setting its Sights: on a ‘Fall Rally in Trenton for Quality Education’
Be a part of improving your child’s education environment: Get on the GSCS Parent Network Action-Information List and SEND YOUR EMAIL ADDRESS TO: cyndywu@gmail.com Please note that you are an interested parent/your
name/school district. Thank you.
In case you didn’t see it ….
EXCERPTS/GSCS Testimony on State Budget FY’06/Assembly Budget Committee 3-29-05
“…This year has been unusually stressful for public education in terms of funding stability for quality programs. For the fourth straight year, state formula aid (per CEIFA) to Non Abbott districts is being
held flat, in spite of enrollment growth in many districts combined with mandated program growth, as well as double digit increases in cost drivers beyond local school district control (e.g., health benefits, insurances, utilities). Stable support for public school programs has further been pressured by the imposition on districts of the hastily passed S1701 legislation. This law does not help districts contain costs in any substantive way and unfortunately gave the public false expectations that property taxes would be reduced significantly. In addition, in passing this bill, the legislature signaled its misunderstanding over what really drives the major costs in school budgets. While the Assembly moved bills ahead to ameliorate some of the negative impacts of S1701, the Senate chose to manage by potential crisis,“giving S1701 a year” to see what problems shake out.
Due to state budget ills in the recent past and certain misperceptions that influence policymaking, a number of stressors continue to confront school communities and policymakers alike. It is time to address these stressors with clarity to engender positive results. Certain issues in particular stand out that require in depth understanding so that decisions by policy makers may be as well informed, thus more productive, as possible:
I. Property taxes rising and state aid falling.
There is a direct link between increasing property taxes when state aid is pared back to localities (see attached chart). This year that recognition has finally gone public. To his credit, Governor Codey did not point a finger of blame at towns and schools as being the culprits for the large property tax increases in recent years. On the downside, the Governor did not propose any increase in school aid which means taxpayers and school programs alike will continue to be hit hard. It is notable also that the relationship between less state aid requiring more property taxes to support local services has finally been cited with regularity by the press this year.
The public gets it too:
From a new Quinnipiac University poll released a little over a week ago ….More than six out of ten New Jerseyans (61%) oppose Codey's plan to reduce or eliminate property tax rebates, and 70% say that they prefer state taxes increased, rather than local property taxes, if tax hikes are needed to pay for local schools and government. ….
(Richards/Quinnipiac Univ.): “And in a clear message to Trenton, voters say it's better to raise state taxes than to force property tax hikes by freezing state aid to schools and local government.”
[Politicsnj.com 3-19-05]
FYI - Statewide equalized tax rates show that more and more municipalities fall above the line of the statewide equalized average tax rate now, with 335 municipalities - 60% - at and above the average (see Funding & Data Reports/Statewide Equalized Tax Rate Reports at the our website (‘www.gscschools.org’). Those below drop at a more extreme pace and thus the result is that more districts are more stressed to provide local property tax support while less districts are comparatively less stressed. In terms of equalized school tax rates, shore communities – especially in the south – and Abbott districts are the least stressed as groups.
Like the Governor’s complaint that the state budget is impacted by entitlement costs, so too are school district budgets constrained. GSCS has repeatedly spoken to the issue of cost drivers in school budgets. We continue to ask the state to work with schools to find ways to cost contain these drivers, such as the State Health Benefits Plan (SHBP) that requires school districts to cover the full costs of health plans for married couples in their system, rather than allowing an incentive buy-back plan so that one spouse’s plan could cover the others. This would save millions of dollars across the state for those districts that participate in the SHBP. This practice is allowed in municipalities but not in school districts. Why not?
2. Parity is not the High End Cost Driver in Abbott
While GSCS has always supported the concept of parity and continues to do so, this distinction of what drives the high cost of Abbott has become increasingly important to understand. Why? Because policymakers – in seeking to reduce school aid - can promote misguided legislation based on misunderstanding. For instance, a number of legislators have indicated that suppression of I & J spending was an underlying rationale behind S1701. Their premise was that if I & J spending were suppressed that parity aid would be correspondingly reduced and thus less aid would have to be required for Abbott districts. Reduction in parity aid will not result in less aid to Abbotts in current context. At the same time, this back-door approach not only hurts higher wealth districts, but negatively impacts every Non Abbott district in the state.
In fact, supplemental aid to Abbotts is the ‘last aid dollar’ decided upon for Abbotts by the state. A state practice underscores the importance and place of supplemental aid: since parity aid is based on a per pupil formula, that parity number will be adjusted when audited enrollment figures are finalized. As directed in letters sent out by the Department of Education for several years now, if an Abbott district’s projected the parity aid number needs to be adjusted downward [due to a reduced pupil count], the dollar amount of aid to that district is not reduced.
Rather, a bookkeeping transfer is made adding what was reduced in the parity amount as an increase in the supplemental aid side of the ledger. This year the parity reduction amounted to more than $90M. That amount was simply renamed supplemental aid and transferred on the books to the supplemental line.
In addition, according to the Education Law Center, approximately $627M in supplemental aid (now dubbed “Discretionary Education Opportunity Aid) was awarded over and above parity aid by the State to the Abbott districts for the 2004-05 school year. [90M + 627M = 717M above parity aid.]
Another example that parity is not the end cost driver for Abbotts is found on the DOE website (Commissioner’s Press Release on Comparative School Spending Guide 2005) “…Expenditures in New Jersey’s 31 Abbott districts were, on average, higher than non-Abbott districts. Total comparative costs in Abbott districts ($13,857) exceeded the average expenditure in non-Abbott districts ($10,385) by 33.4 percent...”
In 2003-04 I&J Parity was projected at $10,552 by the State. With a rare exception, per pupil spending in Abbott districts was higher, e.g., (Comparative Spending Guide2005):
Asbury Park at $17,017 New Brunswick$15,105
Newark at $15,312 Long Branch $12,506.
Camden at $13,476
3. School Construction
The Star Ledger published an article Sunday 3-20-05 pointing out that wealthier districts are further ahead of middle and lower income districts in obtaining state funds for school facilities. The article did not relay certain options that are available under the law, and this requires clarification.
When the School Construction law was written GSCS was concerned that prioritizing district facilities needs be incorporated into the legislation and in fact, it was. Per PL2000,
Ch. 72, 18A:7G.5 (d) m. “The commissioner shall establish, in consultation with the Abbott districts, a priority ranking of all school facilities projects in the Abbott districts based upon his determination of critical need, and shall establish priority categories for all school facilities projects in non-Abbott districts.” Further, the legislation established an appeal process for districts that failed 2 school bond referenda within three years (C.18A:7G-12).
Finally, it is important to note that enrollment growth in higher wealth districts outpaced state averages by nearly 2 to 1 in from the late 90’s through 2003.
4. The New Jersey system of school funding requires an overhaul: there are two systems of school funding in N.J: 1) Court Protected Abbott and 2) Non Abbott.
·Non Abbott funding is not stable or predictable: The school funding formula, CEIFA, has not been run since 2001-2002. In the first year that CEIFA was not run, the Trenton prediction was that not updating CEIFA saved the state more than $400M then. Since FY03 the Appropriations Act has been used to specify any aid changes for schools, which have been relatively minimal and usually more district-specific.
·It is important that data reporting must show separate figures for Non Abbotts and Abbotts. It is confusing and inappropriate to combine figures such as statewide per pupil spending amounts for two distinctly different types of school district funding categories. Like the NCLB message, disaggregating the data will avoid Non Abbott and Abbott alike from “getting lost in each other’s averages”.
It is past time for the state to take a lead in developing a school funding formula that does not divide but that works to provide support and quality education for all our schoolchildren…”
