Quality Public Education for All New Jersey Students

 

 
     Property Tax Reform, Special Legislative Session & School Funding
Special Session Notes week of Oct 2
Read for details of joint committee meetings

(courtesy to gscs) Princeton Public Affairs Group, Inc.

                                                                                                                                                                                                                       

Special Session on Property Tax Reform

Update XXV

Tuesday, October 3, 2006

 

            Today, October 3, 2006, the Joint Legislative Committee on Public School Funding Reform (JCSF) met to take testimony from invited guests Thomas Parrish, American Institutes for Research and Judge Richard F. Wells, Office of Administrative Law.  The committee also heard invited testimony from representatives of special education service providers and advocates on the delivery of high quality special education programs and services in a cost-effective manner.

 

Co-chair, Assemblyman Herb Conaway opened the hearing with a brief background and accomplishments of the first speaker, Judge Richard F. Wells. Wells is an Administrative Law Judge with the Office of Administrative Law.  He spoke about the role of that office in due process special education hearings.

 

Wells began by discussing how special education relates to the legal process.  Specifically, his testimony focused on the use of IEP’s and how the recent court precedents have impacted children with special needs. 

 

The three areas in which Wells discussed the special education law was the background of the law with regard to special education dealing with administrative law judges; relevant statistics; and the recent developments in this area of law.

 

In addition, Wells mentioned the various court precedents and their impact on special education.  First, the Individuals with Disabilities Education Act (IDEA) was interpreted to mean that students with special needs must be educated in the least controversial setting and manner.  Second, the effects of OAL in special education settings have amended their rules to be more flexible.  Finally, the US Supreme Court found that the IDEA fee provisions do not extend to outside expertise and that the money allocated for court fees can only be used for what is defined as a reasonable attorney fees.

 

            Senator John Adler, co-chair began the questions and asked if Wells had any additional suggestions for changes that the committee could make to the education funding system in New Jersey.  He answered that he did not have the province to comment and that the examples that improve the speed for which cases are disposed was a benefit to the spending by the state on such cases.  He also argued that the recent ten day rule that was instated is helpful for both parties.

 

The next invited speaker was Thomas Parrish, Ph.D., Managing Director for the American Institutes for Research.  He spoke from a remote location, Palo Alto, California about the costing-out of special education services. He began with a brief overview of special education funding nationally and then spoke about the funding formula used in New Jersey.

 

Today, fourteen percent of public school students use some portion of special education assistance. Since the passage of IDEA the number of students in special education has risen every year. 

 

The problems that Parrish identified with the current special education funding include 1. Rising enrollments; 2. The least restricted environments; 3. General education encroachment, which deals with the nature of entitlement; 4. Accountability, with fiscal, educational, and results; and 5. The need for full federal funding.

 

Parrish then separated and discussed the funding from the federal government, the state and the local funding sources and formulas.  From the federal government there has been a substantial growth in federal funds, but they are not able to make up for problems that are incurring from the state and local funding formulas. According to Parrish, New Jersey’s special education funding formulas are based on pupil weights and thus uses a tiered system.  While this funding formula is the most popular throughout the US (19 other states use similar funding formulas), this formula is not the most effective in New Jersey. The census based funding formula, where funding is based on the total enrollment of the district, is independent of special education needs, was suggested as the better formula to use in New Jersey.

 

Senator Joe Doria asked if a change in the funding methodology used in New Jersey would lead to a more cost effective manner.  Parrish responded that the tiered system has much inefficiency so any other funding formula would be better than the current system.

 

Conaway then asked about weighting factors and whether a single weight or weighting by category of placement was best. Parrish noted that a special education funding structure that is removed from the other processes is the best alternative; this is the census approach.  

 

After the two invited guest speakers provided testimony to the committee, the JCSF asked five other member of the education committee to be a part of a round table discussion and provide approximately five minutes of testimony about special education funding.  The first speaker in the round table was Cathy Moncreif, a member of the Board of Directors for the New Jersey School Board Association (NJSBA).

 

Moncreif shared her observations and suggestions for change.  She stated that passage to fund the extraordinary aid cost was a success for New Jersey school districts; however, this was only funded for one year and should be reinstated.

 

She also mentioned that the law based on IDEA and modified on NCLB, while regulated by the federal government, is not funded at the federal level. The suggestions that Moncreif provided to the committee include the need to control out of district placements; the need to reduce litigation costs and possibly use a peer revue process or another mediation process; reduce transportation costs; charge medically based services to health care not the school district; and provide direct funding to schools where the child is educated, not to the district where the child resides.

 

Toni Gotthilf, executive committee member and Began County representative with the New Jersey Association of School Administrators, was the second to speak.  She suggested that the committee review the organizational model of the “cost five” and examine the joint needs of school districts.  Gotthilf also argued that private funding for special education is better than public school funding.

 

Third, Diane Autin, Esq., co-executive director of the Statewide Parent Advocacy Network spoke about the cost of segregation.  She stated that the placing students out of district and out of state is far more costly than keeping students in district.  Autin recommended that there be county based services for certain programs and that all teachers need to have the ability to teach special education.  She also said that the state needs to have a stronger state monitoring system with regard to legal cases and that the legislature should pass a law that would place the burden of proof back on the school districts.

 

Mark Finkelstein, superintendent and representative with the Middlesex Regional Educational Services Commission said that using his types of programs for special education is more cost effective than using public schools.  He also said that the state should stop promoting the private and for profit schools and should promote the shared services instead.

 

Finally, Gerard Thiers, executive director for ASAH spoke briefly about the public programs as inefficient when compared to private programs.  He suggested that the JCSF take a holistic approach to funding special education and that students need to be kept in district.

 

Several questions were asked to the round table participants after they each provided testimony to the committee.  Finkelstein suggested that the state do an independent assessment of the cost savings and have a third party look at the tax structure.  The committee also wanted to know how progress was measured.  Many of the panelists argued that the assessment measures were inadequate and should be re-evaluated.

 

Conaway asked about accountability of the schools and the panelists said that accountability was difficult because the schools look at the rates of classification.  The real problem was that the schools are not sure how to classify the students.  In fact, a lot of districts, that are trying to comply with the requirements, are too limited by funding to comply completely or adequately.

 

Finally, the last suggestion of the panelists was that children and parents, especially those in low income and minority school districts, are requesting special education programs for their children, because the programs are a higher level of education when compared to their general education settings in Newark and Camden.

 

The next meeting is scheduled for Tuesday, October, 3 2006 at 5pm.  This committee hearing will be the eighth fact finding meeting for the JCSF in order to reform the states public school funding formula. The committee will take public comments at this meeting at the Ballroom and Theater at Collingswood. Those wishing to testify should register with committee staff by telephone at 609-984-6843 or email at blecata@njleg.org.

 

Individuals testifying should bring 20 copies of any written testimony and are advised that testimony will be publicly available on the Internet. Written and electronic comments, questions and testimony submitted to the committee by the public, as well as recordings and transcripts, if any, of oral testimony, are government records and will be available to the public upon request.

 

If you have any questions please contact Amy Dempster at dempster@ppag.com or (609) 396-8838.

 

Special Session on Property Tax Reform
Update XXVI
Wednesday, October 4, 2006

        The Joint Legislative Committee on Government Consolidation & Shared Services met today.  The committee heard testimony from invited speaker made up of three panels including a government representative panel, a police and firefighter panel and a business panel.

        The Committee heard testimony form invited speakers concerning the following bills:

A-50 Roberts            Creates Municipal Efficiency Promotion Aid Program in DCA.

A-52 Roberts            Moves fire district elections to November general election date;
                       
Revises approval procedures and imposes spending cap.

S-864 Bark/Allen        Establishes program to promote consolidation of municipalities,
A-416 Bodine/           regionalization of school districts and shared services through
Chatzidakis             enhanced homeowner’s rebates.

S-2244   Smith          Requires holding of binding countywide referendum on whether
(pending intro)         responsibility for certain functions currently implemented at

                       
municipal level is to be assumed by county government.

SJR-47                  Establishes “Municipal Alignment Reorganization and
Kyrillos/Sweeney        Consolidation Commission” to develop plan to consolidate
AJR-69          pairs and groups of municipalities.

O’Toole/Beck

        Co-Chair of the committee Assemblyman Wisniewski convened the meeting explaining that the purpose of putting the aforementioned bills on the agenda was to layout the broad concept of what the committee has been working on. He informed attendees that the committee would not take action on the bills today but wanted to continue dialogue with groups testifying.

        The government representative panel consisted of the League of Municipalities, The Association of Counties, and the Conference of Mayors. Bill Dressel, Executive Director of the League of Municipalities began the panel’s testimony. Dressel stated at the outset that the League is not opposed to regionalization but it is looking for transparency and public input and the panel before the committee wanted to get into some details regarding the bills.  Since June the League has been paying special attention to the CORP reform package and wanted to continue to do so. Co-Chair Wisniewski interrupted to inform everyone that Speaker Roberts will be at next hearing to talk about A-51.  The League voiced support for the incentives provided in A-51 over S-864 with the caveat that they would also support changes to A-51. The League’s recommendations to the committee were as follows:

                -Acknowledge citizens and voters in each municipality right to pick the government that they want to;
               
-Acknowledge- larger does not always mean more efficient;

               
-Recognize that personnel costs are the biggest burden and laws should be amended to end cost drivers such as binding arbitration agreements; and

                -Consider the Cahill Commission’s findings.

        In closing, Dressel said “there is no Rolaids bill that will spell relief.”  Wisniewski began questioning asking if the state needed 566 municipalities, to which Mr. Dressler responded that decision should be left up to the citizens. He would defer to the people at the local level. Senator Smith requested that within the week the league provide the committee a study on why some municipal functions could not be done at the county level.  Assemblyman Bob Gordon was not sure if he supported moving health offices to a higher level. According to Gordon those offices receive a lot of foot traffic and he is not sure if it is a good idea to move to county level.

        Before moving to the Association of Counties representative Co-Chair Wisniewski drew laughs from the audience asking the rhetorical question, “If you were George Washington coming across the Delaware and there were no services here, would you say ‘I’ve got it’ let’s set up 566 municipalities?”

        The Association of Counties offered to do and forward to the committee a cost benefits analysis on the health services component of Smith’s bill S2244.

        The Mayor of Frenchtown also President of The Conference of Mayors testified that the Mayors main concern was to keep local taxes down. While he thought the bills were well intentioned he encouraged the committee to carefully study the components of the bills. He went on to lament that all towns are not equal and local residents need to vote on local referendum.

        The testimony from the police and firefighter panel echoed early testimony taken from individuals in the same field of service over the past couple of weeks.  The groups support mergers only if reducing costs does not result in a compromise of service.  The problem that has remained consistent is how to deal with contractual agreements between unions and the governing body.

        With regard to moving fire district elections to November general election date proposed in A-52, Fire Commissioner Roger Potts didn’t oppose moving the date but expressed concerned about political interference if it is held on same day as Election Day.  He recommended setting aside a nonpartisan day.  Senator Smith pointed out that only 2% turn out to vote right now and this bill’s objective is to increase that percentage.

        The NJ Chamber of Commerce, NJBIA and CIANJ made up the business panel.  Each group asked the committee to be bold in this undertaking.  Specifically, on the package of bills Chamber representative Jim Leonard said the Chamber supports any legislation that provides incentives for shared services. They also support A-52 to increase voter turnout and S2244 putting services in the hands of those that use the services. Chris Emigholz with NJBIA expressed BIA’s support of all the bills especially those sponsored by Senator Kyrillos and Senator Smith. He recommended the committee move in the direction of mandates and said BIA supports the general direction A50 & A69 are going but they don’t go far enough. The bills need to include incentives for business. Speaking on behalf of CIANJ, Paul Tyahla, emphasized the business communities’ support of consolidation and shared services and asked the committee to be aggressive in their course of action.

        Asked by Assemblyman Malone if we “the legislature” don’t take action what will happen to business, the group responded that businesses will leave the state. Emigholz also pointed out that there is a personal element to this as well. Potential employees do not want to come to NJ due to the property taxes so businesses are loosing out on job candidates. In closing, the business panel reiterated that businesses are part of this equation and need to be considered in the legislation.

               
Assemblyman Wisniewski adjourned the meeting.  The next committee meeting is scheduled for Wednesday, October 11 at 10am.

If you have any questions please contact Lorna O’Hara at ohara@ppag.com or (609) 396-8838.

Special Session on Property Tax Reform
Update XXVII
Thursday, October 5, 2006

        Today, October 5, 2006, the Joint Legislative Committee on Constitutional Reform and Citizens Property Tax Constitutional Convention reconvened to take testimony on New Jersey's local budget cap law and what other states have done constitutionally to control or cap property tax increases.

The committee co-chairs Senator Bernard F. Kenny and Assemblyman John J. Burzichelli invited the Department of Community Affairs (DCA) Commissioner Susan Bass Levin to discuss the state's existing budget cap law and Iris Lav, deputy director of the Washington, D.C. based Center for Budget and Policy Priorities, to talk about property tax control efforts in other states.  Senator Diane Allen and fellow JCCR committee member Senator Leonard Lance both testified at the hearing.  They shared with the committee their legislative amendment to the constitution, which is SCR 15. 

Kenny began the committee with a recap of the main issues that have surfaced throughout the committee hearings.  He said that the discussions have come down to a few issues.  First, the uniformity clause, which prevents taxing property owners differently based on their type of property.  He said that if it was up to him he would enact a classification section, which would change the uniformity clause; however, the Governor and the rest of the members on the committee do not agree.

The second issue was the way the state assesses people.  It is currently done on a county level not on a local level.  The committee is looking into assessment done on a regional level. Next, was the nature of assessments and how they are done in the state.   Finally, the committee is looking at the exemptions that exist in the constitution and determining if they should be taxed.  The exemptions that exist include religion, charity institutions, non-profits and education.  The committee is also examining the numerous legislative exemptions passed over the past hundred years. 

Kenny stated that the goal of the committee was to try and give the residential tax payer a tax break, and they will attempt to do so without attacking the uniformity clause.

Senator Allen was the first speaker to provide testimony to the committee at the hearing.  She presented the constitutional amendment she and Senator Lance sponsored.  SCR15 proposes a constitutional amendment to establish an annual State appropriations cap based on inflation plus State population growth, a reserve of one-half of revenues collected above State appropriations and directs one-half for direct property tax relief.

Most of the questions from the committee members were directed at their colleagues Lance and Allen.  Kenny said that he was concerned about limiting the states ability to borrow money.  He argued that the state needed to be cautious about limiting their ability to borrow given times like what happened on September 11th.  Lance responded that Article 8 of the New Jersey constitution allows the state, in the time of need, to borrow money for emergencies

Allen responded that the bill did not limit spending and that there was a need to cap spending in some way.  She said that the committee needed to first examine how caps in spending would work with New Jersey’s tax structure and then decide where the caps should be put in place.  She also suggested limiting fiscal spending.

        The other concern of the committee members was the money for disasters or catastrophes.  Lance and Allen answered that their bill established a mechanism for savings to be put into a “rainy day” fund.  They also said that their bill did not cap education spending in any way.

        After the two legislators presented their bill, the committee took testimony from invited speakers regarding property tax caps and spending tax caps as mechanisms for providing property tax relief.

        The first invited speaker was Susan Bass Levin, Commissioner of DCA.  She discussed the state's existing budget cap law by sharing the history of the cap laws.  She also presented why caps are put into place, the basic mechanisms of the caps, how they work and how they are operating today.

        The next speaker was Iris Lav who is the deputy director of the Washington, D.C. based Center for Budget and Policy Priorities.  Lav discussed the various cap laws in other states.  She began with an overview of the different types of property tax caps.  She presented the issues that exist with rate limits and assessment limits.

        She concluded her testimony with the statement that she does not think that caps work.  She said that the problems with caps are that people don’t want the service deterioration.  Also, under some caps there is a shift to other local revenue sources and they tend to push down expenditures.

The suggestions Lav provided to the committee is to make the property tax relief mechanisms more comprehensive and understandable; use circuit breakers for all ages and include it well into the middle class; diversify local government revenue sources; and increase state aid for education.

           
While the Joint Committee on Constitutional Reform and Citizens Property Tax Constitutional Convention has not scheduled another meeting at this time Senator Kenny mentioned at the hearing that the topic for discussion would be the issue of debt.

        If you have any questions please contact Amy Dempster at dempster@ppag.com or (609) 396-8838.