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HEADS UP! The Property Tax Special Session proposals began to be unveiled yesterday and the formal proposals are to be released today...Last night (Tues 11-14) GSCS learned elements in the report on school funding...for bullet points on GSCS' early information, and related news articles today - click on MORE here
The Property Tax Special Session proposals began to be unveiled yesterday and the formal proposals are to be released today...GSCS learned elements in the report last night on school funding that include the following:
- aid will be based on student characteristics and a district's ability-to-pay (a new 'wealth' formula is being designed and is yet-to-be determined); a formula will be sensitive to individuals’ income capacity within each district (a per capita system)
- there will be some form of aid for all districts;
- budget revenue CAPs will be set at the CPI, and include adjustments for enrollment
- no budget vote will be required if a budget is at or below CAP; if a second question to exceed CAP is needed, a public vote is allowed by to qualify the vote, voter participation must be 20% or greater and in order for the vote to pass, a super majority of 60% of the vote will be required.
- the aid system will be simplified, weighted per individual student needs and is to be based on costing-out recommendations via the 'professional judgment panel method' study conducted by the Dept of Education in 2003;
- this year all districts will be at least 'held harmless' so no district should receive less aid than it did for this fiscal year;
- special education aid will be folded into the new adequacy foundation budget and equalized.
- school board member elections will be moved to November but school budget elections will stay in April;
- County-wide district consolidation will not be pursued, but the Speaker Roberts’ bill A54 featuring ‘super’ county superintendent system will be.
- Department of Education must implement a reorganization plan that will allow for great accountability oversight of districts; the Commissioner’s powers will be largely expanded via QSAC and
- Abbott efficiency standards will be applied to all districts.
- SCI Report – pursue transparency recommendations & school board training measures.
- Limited amount of Academic Achievement aid for high performing districts.
- Adult and Secondary vocational schools – update funding cost factors relative to inflation.
- Special education – establish a consistent tuition structure for private providers; reduce due process/litigation/’dispute council’ referring; greater county level coordination; ensure continued funding category for ‘extraordinary’ special education aid; promote inclusion, increase pre-ID services.
- Implement the recommendations of the Education Mandate Review Commission
- Provide high quality early childhood education in A and B districts and for all children who qualify for free and reduced lunch, no matter where they live.
- Support (the how’s are not defined) full day Kindergarten in the future and those that are currently in existence.
'Tax Cut Plans Come Out Today'
Wednesday, November 15, 2006
After three months of study, legislators today will make public the most ambitious effort in decades to cut property taxes, including a plan to boost public school funding by $1 billion.
The plan will not spell out exactly which schools would get money. And it may take several more weeks before lawmakers and Governor Corzine can agree on how to dramatically overhaul
Paying for public education now accounts for about one-third of the total state budget, roughly $10 billion, and two-thirds of every property tax bill.
The new formula is expected to cost taxpayers roughly an additional $1 billion a year as it gives more money to suburban school districts whose state aid has been frozen for years while local expenses kept rising. This has resulted in higher tax bills for wealthy and middle-class residents while the state paid nearly all the expenses in 31 of
The legislators also will recommend a 20 percent state-funded property tax credit that would be paid directly to property owners, and several proposals to consolidate government services.
Other proposals will include changes to public employee benefits, such as raising the retirement age from 55 to 62, and eliminating a 9 percent pension increase approved five years ago.
The legislative committee studying school funding will offer a plan to cap school budgets, cut costs and offer more money to districts that need it, lawmakers said Tuesday. It will also scrap a special category of public schools that consume nearly half of all state funding. These districts are given special classification as part of the three-decades Abbott v. Burke court battle that led to a state Supreme Court order to boost funding to these low-income districts.
"There's an enormous amount of material in this report that lays out a clear framework of property tax relief and reform as well as accountability for the state and for the school districts," said Sen. John Adler, D-Camden, committee chairman.
The current school-funding formula relies on factors such as enrollment, property values and income levels. The new method would consider the needs of students by focusing on special needs students, English as a second language enrollment and other "at-risk" factors, Adler said.
That would allow the funding to change each year as students move in and out of each school district, he said. But the exact method for allocating the state money will not be included in the report.
"Not in the report, but there will be leg[islation] forthcoming very shortly to enact it," Adler said. "I fully expect to have a new formula by Christmas."
That has some education activists concerned.
Waiting for the latest funding formula feels like dejà vu, said David Sciarra of the
"It was developed behind closed doors, released and then moved through the Legislature at lightning speed," said Sciarra, whose organization challenged that 1996 ruling and brought lawsuits that created the current funding formula for poor districts. "We wound up with a formula that was thrown out in terms of urban districts and it did not serve suburban districts and was flawed."
Sciarra said he hopes legislators will hold public hearings once the formula is released so that the process will be "open and transparent."
School advocates were concerned that too little information would be released, leaving too many unanswered questions about how to adequately fund education in the state.
"I think the details are going to dribble out and it's going to make it hard to have a really viable discussion," said Lynne Strickland, executive director of the Garden State Coalition of Schools. "When you hear about [details] in tandem you can't analyze the whole package I'm afraid."
Strickland said her organization favors the plan that would tailor aid to a student's needs, regardless of district. "Conceptually we think it's a good thing, it makes sense," Strickland said. "But how does it play out? The devil's in the details."
The coalition maintains that no public school district should have to shoulder more than 85 percent of its entire budget, nor should the state provide aid that exceeds 85 percent of a district's spending plan. Strickland said that obviously there would be exceptions for very poor districts such as
Others say the new formula will look very much like the current system.
"How this new system is going to differ from what we've had before, we're really not sure," said Frank Belluscio, a spokesman for the New Jersey School Boards Association. "They're talking about the education money following the child, but I don't know how that will differ from what we've had."
Lawmakers will work through the end of the year with several more hearings to air out the details, Senate President Richard J. Codey, D-Essex, said.
"The committees will reconvene one final time to take testimony about the report. There might be a final vote," Codey said. "This will be the largest undertaking I've ever seen in the Legislature in terms of taking on one subject matter."
The reports will recommend broad changes to the state pension system, but the benefits will only affect new employees, said Assemblywoman Nellie Pou, D-Union. That won't save tax dollars immediately, she said.
Lawmakers plan to boost the minimum salary for earning a pension from $1,500 a year to $5,000 and cut pensions for part-time workers, mostly government appointees. The retirement age would be raised to 62, Pou said.
E-mail: mcalpin@northjersey.com and fasbach@northjersey.com
Property tax reduction plan due out today
Posted by the Asbury Park Press on 11/15/06
BY JONATHAN TAMARI
TRENTON — Lawmakers involved in an effort to ease property taxes have predicted swift action once their proposals are unveiled today, but privately some have raised concerns about whether the state can afford the roughly $3 billion in plans already on the table.
The questions arise just months after lawmakers engaged in a bruising budget fight that Gov. Corzine said hinged on questions of fiscal responsibility.
Some key proposals are well-known by now: an average 20 percent property tax credit for most homeowners; pension cuts and an increased retirement age for new state workers; $1 billion in additional state support for public schools; a revised funding formula that will send some of that money to districts that contend they have been shortchanged in the past; and the sale of a major asset — such as the New Jersey Turnpike, the Garden State Parkway or the state lottery — to help pay for the plans.
Other proposals that emerged Tuesday include a plan to move school board elections to November to coincide with general elections, when there is more voter participation.
Another plan will call for a committee to recommend town mergers to save money, with voters in the affected municipalities having final approval.
Lawmakers also hope to narrow the funding disparities between the 31 Abbott districts — poor school districts that receive the majority of state school aid — and other districts that complain of being shortchanged.
But details of the new funding formula, critical to any reforms because school costs make up the largest chunk of property tax bills, will not be in the reports today.
Swift passage predicted
The plans that are proposed could be on a fast track in the Legislature.
"I'd be very disappointed ifwe don't have these reforms passed by Christmas," Sen. John H. Adler, D-Camden, co-chairman of a committee that has studied school funding, said Monday.
Sen. Robert G. Smith, D-Middlesex, co-chairman of a panel examining government consolidation, predicted the plans will beapproved by the end of the year.
Privately, however, two Democratic lawmakers said questions remain about how the state can afford to increase property tax credits and school funding without opening new budget holes.
Corzine said Monday that a 20 percent tax cut is a fine idea but that there is a "lot of work" left to make sure it will be long-lasting.
"Relief is fine, but we need a reform and sustainability program," Corzine said.
Along with selling a major asset, lawmakers plan to use half of the revenue from a recent sales tax increase for property tax relief. The state will be able to use the sales tax revenue from two years — fiscal 2007 and 2008 — for the first round of reforms.
But their plans raise questions about how to afford the tax credits in future budgets that only have one year's sales tax available.
Aid formula may change
Assemblyman Herb Conaway Jr., D-Burlington, co-chairman of the school funding panel, said the state will aim to support schools across New Jersey with a new aid plan based on the needs of individual pupils, not the municipalities where they live.
Meanwhile, districts that are deemed to be overspending will have to bring their budgets in line with what state experts believe an education should cost, Conaway said.
Conaway said one way to encourage better use of school dollars is through increased voter participation that would result from moving elections from April to November.
"Elections that have less than 20 percent of people voting in them, clearly in my mind, lack legitimacy (compared with) an election that has a participation rate of 60 percent and upwards," Conaway said Tuesday.
Jonathan Tamari: jtamari@gannett.com
Tax reformers pursue the urge to merge
Plan for town-consolidation panel, and lawmakers' other ideas, head to Corzine's desk
Wednesday, November 15, 2006
BY DUNSTAN McNICHOL AND TOM HESTER
Star-Ledger Staff
Lawmakers who have promised a 20 percent property tax cut for most homeowners will unveil plans today to make it easier for towns to merge, make it harder for schools to spend more, and funnel extra education aid to towns with lots of senior citizens.
After three months of hearings, four special committees seeking ways to rein in
"That is a major and important step in the process, but it's only a step in the process," Corzine said.
"Conceptually, we're in the same ballpark, but there are important details that need to be resolved and commitments made with regard to how we are going to deal with the sourcing of funding for this program over a period of time," said Corzine, who is scheduled to comment on the proposals at a New Jersey State League of Municipalities session in Atlantic City tomorrow.
Committee documents and interviews with lawmakers provided information on several of the proposals yesterday.
The first recommendation from the committee that studied consolidating towns and schools and sharing services will be to set up a commission of nine members with experience in business management, government policy or academic research, according to a draft of the panel's report.
The proposed Local Unit Reorganization and Consolidation Commission would recommend which towns should be merged. Unless lawmakers voted down the idea, mergers would be put up for a public vote in the municipalities involved, and each town would have to approve the proposed merger.
"If we are going to look at ways to reduce property taxes in this state, we need to look at ways to reduce governmental units," said Assemblyman John Wisniewski (D-Middlesex), the committee's co-chairman.
William G. Dressel, the League of Municipalities director, said he is concerned the commission would develop its recommendations with little input from officials or residents of the towns involved.
Members of the school funding committee are set to unveil more than two dozen proposals, including a plan to boost school aid by up to $1 billion a year and distribute the aid more widely, said Assemblyman Herb Conaway (D-Burlington), the committee's co-chair.
While the precise formula is still under development, Conaway said today's report will recommend steering extra funding to towns with large concentrations of senior citizens.
The new formula will estimate a community's relative wealth -- and, therefore, the level of state aid it needs -- on a per-person basis rather than on a communitywide basis. The change should result in more funding for towns where seniors predominate, he said.
"To the extent we can reduce property taxes and keep seniors in their houses, we can keep families together," Conaway said.
OBSERVING THE CAP
School tax increases would be limited to the annual inflation rate, with a special adjustment to account for enrollment growth.
"Any new funding formula must ... include a mechanism to control spending and, as a result, the school tax levy," a draft of the committee' report states.
Communities that stay within the limits would no longer have to put their budget up for a vote. But if a school board wanted to spend more than the caps allowed, it would have to seek voter approval in an April election with special hurdles: The vote would be valid only if 20 percent or more of the district's registered voters participated, and the extra spending would have to be approved by 60 percent of those voting.
School elections historically draw turnouts of about 15 percent. Frank Belluscio, a spokesman for the New Jersey School Boards Association, said the new restrictions could be onerous.
"I don't think we ought to restrict the will of the voters simply because many of them choose to stay home," he said.
Lawmakers plan to wait until tomorrow to lay out specifics of their plan to reduce property taxes for most taxpayers by up to 20 percent.
That plan would replace existing property tax rebates with a credit of up to 20 percent of property tax bills. At least half the state's homeowners would be eligible for the full credit, but those with higher incomes would see smaller credits, and top earners would receive none.
"They've recognized the fact that property tax has to be tied to income," said Assemblyman Lou Manzo (D-Hudson), a member of the committee studying constitutional reforms. "This component will do that."
Assembly Democratic aides briefed lobbyists on the latest recommendations throughout the day yesterday. Meanwhile, Republican lawmakers still had not been given draft copies of the reports being presented by panels they served on.
"I resent that," said Assemblyman Joseph Malone (R-Burlington), a member of the Joint Committee on Consolidation and Shared Services. The recommendations, he said, "ought to be finalized among committee members before briefing lobbyists.
"Making sure this thing is okay with lobbyists is a terribly divisive slap in the face to the public. That's disgraceful."
Staff writers Joe Donohue, Robert Schwaneberg and Jeff Whelan contributed to this report.
Expecting the unions to 'freak out'
Tax reform pits Democrats against state employees
Wednesday, November 15, 2006
BY TOM MORAN
Star-Ledger Staff
Democrats and government workers are normally the coziest of friends. But this week, that's likely to change.
Because Democrats today will propose a strict cap on spending in schools and local governments, a move that's bound to pinch the unions hard.
"They are going to freak out, big-time," said Senate President Richard Codey. "We understand that."
For taxpayers, this is a fight to be cherished. Because the vast majority of the money we raise through the property tax goes directly into the salaries and benefits of government workers.
So any property tax reform that keeps the unions happy is certain to be phony. Both sides can't win.
Yes, many government workers do solid work. Most of us are indebted to a good teacher or two. Social workers who march into tenement buildings alone to rescue abused children are heroes. And someone's got to plow the snow.
But the math is inescapable. We have among the best-paid teachers and cops in the country. And we provide all government workers with cushy benefits that are beyond the dreams of most taxpayers.
So today, Codey and Assembly Speaker Joe Roberts are choosing sides. They want to cap spending increases at 4 percent a year, according to Codey. Gov. Jon Corzine is pushing for a similar cap on property tax revenues.
Which means this could be a breakthrough moment for Democrats, who seem to finally recognize that they are risking a voter revolt if they don't get serious.
The party's old friends in the union movement are not pleased by this turn. Because with health and utility costs rising by double digits, a hard cap like this is bound to cause layoffs, or rollbacks in salaries and benefits, or both.
"The workers are going to suffer on this," said Cheryl Gordon, executive director of the American Federation of State, County and Municipal Employees.
Educators are worried, too. What happens, they ask, if health costs continue to skyrocket? What if a school wants to hire tutors to remedy low test scores, but can't because of the cap?
"We are definitely concerned," said Frank Belluscio of the New Jersey School Boards Association.
The governor is taking all this in stride. His hope is that the pain will be spread widely enough that all parties will learn to live with it in the name of a greater good.
"Nobody ever said this was going to be easy," he said.
Both Corzine and legislative leaders would make allowances for enrollment growth in schools. And both parties want to allow voters to override the cap if 60 percent approve, in elections with at least 20 percent turnout.
Still, this could finally force schools and local governments to stop handing their employees big raises and obscene benefits packages.
So are the Democrats getting religion on spending? Is the party that steered us into this mess getting serious about pulling us out?
Maybe.
But they may also be striking a pose. If history is any guide, the cap can be softened a bit each year until it becomes virtually meaningless.
When Gov. Brendan Byrne won passage of the state's first income tax in 1976, he sent extra aid and enacted the first local spending caps.
For one glorious year, the total property tax levy did not increase at all.
"I thought of this first," Byrne said yesterday. "And it worked for a while."
But the Legislature, in its wisdom, opened one loophole after another to allow more and more spending. Within just four years, property taxes were rising by 10 percent again. So maybe this cap will prove to be less than it appears.
But at the starting gate, at least, Democrats seem to be serious. And that is reason to rejoice.
Tom Moran's column appears Wednesdays and Fridays. He may be reached at tmoran@starledger.com or (973) 392-1823.
Tax reform could boost school funds
Tuesday, November 14, 2006
Lawmakers rushed to meet their Wednesday deadline for releasing a property tax reform plan with last-minute wrangling focused on a new formula that could boost school funding by as much as $1 billion.
The final plan will feature a proposed 20 percent property tax credit for most residents, a 4 percent cap on local government spending, and cuts to pensions and other benefits for state employees, according to several legislative sources.
The biggest changes in benefits will be for lawmakers themselves. The panel reviewing benefits as part of the special legislative session is considering one proposal that would cut pensions for lawmakers and government appointees.
The retirement age would jump from 55 to 62 and state workers would pay more for medical benefits, under the plan being reviewed, legislative sources said. Lawmakers are also planning to eliminate a number of current regulations that allow legislators and appointees to roll several public jobs into one large pension.
Workers would have to designate which of their multiple public jobs is the one that will generate the pension and eliminate the others, under the pension proposal. Many appointees are paid for work by several state agencies, local governments and other boards, all of which add up to a higher pension.
The pension and benefits changes come as Governor Corzine negotiates new contracts with the state worker unions.
In its first offer to officials from the Communications Workers of America last week, the administration called for state workers to pay a larger share for health insurance and higher co-payments for coverage.
Most of the what the property tax reform panel is planning to recommend Wednesday -- higher co-pays and changes in the pension system, for example -- are also part of the administration's initial offer, said Bob Master, a CWA spokesman.
He called them "draconian" and vowed to fight the proposals, but also acknowledged that most initial offers are whittled down during the give and take of contract talks. Still, Master blasted the ruling Democrats in the Legislature for abandoning their advocacy of the middle class and said lawmakers were trying to win "political points when they know that there is no payoff for property taxpayers."
Lawmakers are also working on ways to pay for all of their tax-cutting proposals.
The property tax credit would be funding through $600 million in new sales taxes. Earlier this year legislators agreed to raise the sales tax from 6 cents for every $1 purchase on most consumer goods to 7 cents, but only if half of the $1.2 billion it would bring in is dedicated to property tax relief.
Some are also hoping that a technically complicated deal like selling off the New Jersey Turnpike could be done in time to send the proceeds back out to taxpayers.
Corzine's administration is examining the potential sale of lease of assets like the turnpike, but the governor is cool to the idea of using that money as any one-shot budget fix.
Lawmakers, however, are supportive of using the money from any asset sale for property tax relief.
"They're all being looked at and they'll be readied to be teed up," Senate President Richard J. Codey, D-Essex, told The Associated Press of the financing proposals under consideration.
Codey and Assembly Speaker Joseph Roberts, D-Camden, have said they want a 20 percent property tax cut for "most" New Jerseyans. With the average property tax bill $6,000 and growing, that credit would be about $1,200, far more than the average property tax rebate, which has been cut to about $300.
Lawmakers also need to find money for their new public education formula.
One legislator familiar with the education plan said it could cost the state anywhere from $600 million to $1 billion a year. Details of the plan were still being negotiated Monday.
Paying for public education now accounts for about one third of the total state budget and two-thirds of every property tax bill.
The current formula centers on factors such as enrollment and socioeconomic makeup of the community; legislators promise a new method that tailors the aid to students' needs and other factors. Some say that will allow for more money to aging, low- to moderate-income suburban districts shut out of the so-called "Abbott" decision, a state Supreme Court ruling mandating funding for the state's poorest schools.
Trenton Bureau Chief Charles Stile contributed to this article, which also contains material from The Associated Press.
* * *
Possible changes for new workers
The benefits reform committee, which is led by Assemblyman Nicholas Scutari, D-Union, and Assemblywoman Nellie Pou, D-Passaic, is leaning toward recommending reforms for new workers that would:
• Increase the retirement age from 55 to 62.
• Eliminate a 9 percent pension increase approved five years ago.
• Request Governor Corzine to require new employees to contribute to health care costs as he negotiates new labor contracts.
• Eliminate publicly funded pensions for new part-time legislators, employees and appointed officials.
• Require people with more than one public job to base a pension on one job and cap the salary that can be used to calculate a pension, starting at $94,000 per year.
November 15, 2006
School Districts With Officials but No Schools? New Jersey
By WINNIE HU
“I was going to go back to school to help boost the population,” said James E. Hall, 88, one of the school board members, who also happens to be the borough’s tax assessor and secretary of the Board of Health.
If New Jersey’s 615 school districts seem a lot for a small state (
But with four legislative committees in New Jersey poised to release plans on Wednesday aimed at easing the state’s property tax burden — two of them examining changes in the school financing formula and consolidation of services — a growing number of lawmakers and educators are calling for the elimination of these districts without schools. Although they serve only 2,172 children, a tiny fraction of the state’s 1.4 million students, they cost local taxpayers a total of more than $800,000 a year in administrative expenses, including salaries and office supplies.
And any serious plan to try to control property taxes in
For now, one notion of consolidating all 615 districts into 21 countywide systems seems unlikely, though lawmakers say they are continuing to examine ways to change the financing formula and perhaps foster the streamlining of the districts.
“It just shows how crazy our patchwork quilt of school districts is,” said State Senator Bob Smith, a Democrat from
These districts with bureaucracies but relatively few students range from the wealthy seaside resort of Mantoloking, where residents live in lavish houses looking out at the ocean, to a tiny enclave in South Jersey where employees of the famed
“It’s kind of weird,” said Barbara Christian, a board member in
Still, many residents in these districts want to remain separate so they can have some say in how their children are educated and preserve the distinct identity of their communities.
In many cases, the arrangement also keeps their property taxes lowbecause the school district does not incur such costs of operating schools as building maintenance and teacher salaries.
In Mantoloking, for instance, the Borough Council adopted a resolution in August to oppose consolidation of its five-student district. The Mantoloking students attend
“We have a very excellent deal going on, and we’ve had it for 50 years,” said William K. Dunbar, the mayor of Mantoloking. “We don’t want to join with any other town because our costs would go skyrocketing.”
The latest push to focus on districts without schools reflects the larger struggle to streamline
As recently as 2004, Gov. James E. McGreevey said he would rid the state of nonoperating school districts that “oversee nothing but their own existence.” But he backed down after the districts protested and neighboring schools objected to taking on additional administrative responsibilities.
“It was symbolic of all of the problems connected to changing these kinds of relationships,” said William L. Librera, the education commissioner at that time. “If you can’t even consolidate nonoperating school districts, which exist just for clerical reasons, how are you ever going to bring larger places together?”
But Frank Belluscio, a spokesman for the New Jersey School Boards Association, said that smaller districts, including those without schools, would be more willing to join together for such educational benefits as more elective courses, if there were not financial obstacles. For instance, Mr. Belluscio said that any savings realized by eliminating some administrative positions would probably be offset by the increased costs of a larger school system.
In cases where districts have merged to create regional school systems, financing has been a contentious issue because affluent communities often pay far more in property taxes than neighboring towns in the same school system. The Beach Haven school district contends that it pays an average of $38,210 for each of its 90 students to attend Southern Regional High School in
“It’s just absurd,” said Deb Whitcraft, a longtime Beach Haven resident and former mayor. “It’s not just unfair, but we also have no say in how the money is spent. People are furious all over the island.”
Senator John H. Adler, a Democrat from
But while few will openly admit it, some residents in well-off school districts whose children attend local schools also balk at the idea of sending their children to school with those from poor families.
“The quality of the school is supposed to have to do with the quality of the education delivered,” said William Firestone, a professor of education policy at
In Teterboro, whose land consists mostly of
While Mr. Hall said there would certainly be advantages to joining another school district, he remained divided over whether the borough should do so. “We’re doing well the way we are,” he said. “I like it because it’s working.”
Richard G. Jones contributed reporting.
