Written Testimony for both the Senate Budget and Assembly Budget Committees

Re:  FY 2007 State Budget

Submitted by: Sheila Brogan

                        302 Kensington Drive

                        Ridgewood, NJ 07450

                        201-652-7354

                        smbrogan@aol.com

Thank you for allowing submission of this written testimony on the FY2007 budget.  I am a ten year veteran member of the Ridgewood Board of Education and I submit these comments on the budget as they relate to public school funding and education.

 Ridgewood is the largest school district in Bergen County with an enrollment of 5,525 students K-12.  It is categorized as district factor group J and one of New Jersey’s “lighthouse districts”.  Our students consistently score well on the SATs (1168 combined math and English scores in 2005) and outscore most of the I and J districts on the state standardized tests for 3, 4, 8, and 11 grades. Our district is considered a wealthy district, but there are many in our community who are finding the property tax burdensome and are telling us that they can no longer support the annual school budget tax levy increases.

There are serious problems with the way our public schools are funded in New Jersey.  The over reliance on the property tax, flat state aid payments, under funding of special education costs, unfunded mandates, and certain legislation present challenges to school districts when developing the school budget.

School Funding Formula

A new school funding formula is needed.  The current formula, CEIFA, has not been run since 2002.  Districts like Ridgewood have received flat funding for five consecutive years.  The state funding for Ridgewood totals $3.1 million. This $3.1 million accounts for 25% of our special education costs and 4.2% of the revenues for our entire budget.  Ninety percent of our budget revenue is collected from the property tax.

Governor Corzine in his budget address “recognizes the inequities that exist in the school funding system.”  I would encourage you to work closely with the governor to develop, implement, and monitor a new school funding formula.  Just last month Assemblyman Craig Stanley sponsored a bill, A882, to establish a Commission to design a new school funding formula.  I would urge passage of this bill in both houses.  The bill addresses many of the issues that school districts throughout New Jersey have been asking legislators to consider.  The time to act on school funding is long overdue.

Mandates

School districts are financially burdened from under funded and unfunded mandates. Two years ago, Governor McGreevey established a Mandate Review Commission.  The Commission met and within the required time frame delivered a report recommending the elimination of some minor mandates and requesting that they be given more time to study larger mandates, such as Special Education, in more detail.  No action has been taken on these recommendations.

I am requesting that legislation be enacted to implement the recommendations of the Mandate Review Commission and consideration be given to reestablishing the Commission so that this valuable work can continue.    In addition, there should be a moratorium on any new mandates until a thorough review of the current mandates is completed by the Mandate Review Commission. In the future, no legislation should be enacted before a detailed financial analysis is completed on the costs for implementation and the requisite funding allocated.

Special Education

Special Education is a significant cost driver in school budgets.  The expenditures for special education are increasing annually at a rate greater than CPI.  Special Education costs are directly related to the needs of the disabled students residing within the school district.  As you know the Federal government has failed to fulfill their promise to fund 40% of the costs of special education.  Currently, IDEA funding covers approximately 18% of the costs for special education nationwide.  If fully funded by the Federal government Ridgewood would receive approximately $1.5 million more a year. 

New Jersey has also failed to fund its commitment to funding special education costs.  It is time to review the special education tier allocations.  Since the funding has been flat there has not been an appropriate increase to the tier allocations and no adjustment for increases in enrollment.  Over the last ten years, Ridgewood has seen the number of classified students increase from 6% in 1996 to 11.5% in 2006.  We have seen an increase in the number of students with autism and severe disabilities.  A look at the state statistics indicate that the I and J districts have all seen a similar enrollment growth in special education.  High performing districts attract special education students because of their high quality instructional programs.

In addition, Trenton has failed to fully fund extraordinary costs for those students whose educational programs cost the district over $40,000 a year.  Senator McNamara, in a letter to our School Board last July said and I quote, "You are correct that had the extraordinary aid formula been fully funded in the FY 2006 budget, it would have cost approximately $91 million.  However, only $52 million was allocated. According to the Office of Legislative Services, the Ridgewood School District should have been slated to receive $833,326.  Due to the under funding of this aid category, Ridgewood will now receive a pro rata share of the available funds in the amount of $477,048.  Clearly this is unacceptable.”

Ridgewood has an outstanding special education program.  Our students are performing well on the state assessment tests.  Over the last few years we have provided our students with more in-district options, developed an elementary grade autistic program with Paramus, and implemented a team teaching model with a regular education teacher and a special education teacher working together in some of our 7, 8, 9 and 10 grade classrooms.  Next year we hope to expand this model into grades 6 and 11.  Our programs are aligned with the IDEA regulations and we are working hard to provide a continuum of options within our schools, so that fewer of our students require out of district placements.  All of this costs money.

It is imperative that money be allocated in the FY2007 budget to fully fund extraordinary special education aid.  It is essential that any new funding formula include revised tier funding amounts as the costs for tier 3 and 4 students has become more expensive in the last five years. 

In addition, I would ask you to support the $19 million for special education grants proposed by Governor Corzine in his budget.  The number of students diagnosed with autism has more than doubled in New Jersey and grants to set up and enhance programs for autistic students would provide more in-district options and reduce out-of district placements and special education expenditures. Our Board has worked closely with Assemblyman Russo in crafting a bill, A2279, to establish and fund special education grants.  This bill was introduced to the Assembly in January and was referred to the Assembly Education Committee.  A companion bill, S1702, was introduced in the Senate last month.  I ask for your support of this legislation.  These seed grants will offset startup costs for new programs that will ultimately slow the growth of special education costs as more students will be educated in public schools with their non-handicapped peers.  These grants make sense educationally for students and economically for school districts.

School Construction

Ridgewood is grateful for the state school construction aid that we received over the last four years.  We were given debt service aid for our high school and elementary school construction projects.  We received grant money for many of our capital projects.  We would not have been able to afford many of these projects without this state aid.  With careful oversight, all of our projects were completed on time and within budget.  With eleven buildings built between 1895 and 1964, we have much capital work still to complete.  Our five year capital plan lists $24 million worth of projects.  Ridgewood allocates between $1.6 and $2 million each year for capital work.  Without future state aid we will fall behind in our capital project work. Furthermore, we have two elementary schools that need additional classrooms.  These classrooms would be used to house special education classes and to meet projected enrollment increases.

I understand and support the need for a new management system to oversee school construction grants.  Once this new system is in place, money must be allocated to replenish the grants for both the Abbott and the regular operating districts.  This funding lessens the tax burden on our local property owners and provides for safe, modern school facilities for our students.

State Health Benefits Plan

Health insurance is another significant cost driver for school budgets. The legislature should consider changes to the laws governing the State Health Benefit Plans for school districts.  In restructuring the rules for districts enrolled in SHBP, I ask you to consider the following:

      Allow for opt out provisions for those district employees having coverage through a spouse.  Ridgewood which privately insures through Horizon Blue Cross Blue Shield negotiated an opt-out provision reducing our health insurance premium costs by $250,000 a year.  Over the course of the three year contract we have saved our taxpayers $750,000 in health insurance premiums.

      Allow for districts to provide a variety of health insurance options.  Ridgewood offers both PPO and Traditional Indemnity plans.  All new hires are provided with PPO coverage and at tenure may switch to traditional coverage.  Over the last three years we have seen the number of staff members choosing to retain PPO coverage after tenure growing. 

      Provide only one policy per couple, if both a husband and wife are employed by the school district.  Eliminate the requirement that stipulates separate policies for a husband and wife working in the same school district.

      Allow districts the ability to negotiate with the bargaining units contributions for health insurance.  In Ridgewood our teachers, secretaries and administrators contribute towards the cost of family coverage. 

Changes in the SHBP law for school districts would reduce health insurance premium for school districts and reduce property taxes used to fund this portion of the budget.

S1701

S1701 has many unintended consequences.  This legislation was enacted to slow the growth of school budgets and reduce the reliance on the property tax.  Capping spending might on the surface appear to be a good idea to control budget growth and ultimately reduce the property tax, but in this case all it does is cap spending by CPI which bears no relation to our budget cost drivers -- special education, energy, health insurance, and transportation.  These costs are increasing at a rate greater than the CPI.  Budget cuts are inevitable with this scenario.

The combination of flat state aid and S1701 have resulted in property tax increases of 6 to 7% a year statewide and school budget cuts.  Although Ridgewood has managed to keep our property tax increases below 5% for the last three years, we have not escaped the budget cuts.  This year we have heard from many high performing districts across the state that they will be cutting world language programs, increasing class size, reducing the number of athletic teams, discontinuing art and music programs and reducing funding for capital projects. I cannot imagine that the legislature meant to cause irreparable damage to the educational programs in New Jersey’s high performing districts, but damage has been caused by S1701.

It is time to repeal S1701.  This is poor public policy that only harms our schools.

Property Taxes

It is time to address high property taxes in New Jersey.  New Jersey’s over reliance on the property tax to fund education is problematic for senior citizens and low and middle income homeowners.  I encourage you to call for a special session of the legislature to address property taxes.  I would urge you to read the recommendations made by the Citizen’s Tax Assembly, a citizen’s group brought together by the New Jersey Coalition for the Public Good.  One hundred citizens from across New Jersey met in September of 2003 and June of 2004 to discuss tax reform.  The recommendations of the Tax Assembly were published in a report called “Let the People Speak: A Report of the Citizen’s Tax Assembly”.  This report is available through the New Jersey Coalition for the Public Good and provides many good ideas from citizens who are supportive of changing New Jersey’s tax system with its over reliance on the property tax.