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Governor spoke to S1701 question at Monmouth Town Meeting; Column on Abbott districts contributing a fairer share of taxes to their school programs; School construction management changes; Assembly Education legislators disagree on Abbott mission,more
STAR LEDGER
Time is ripe for poorer districts to contribute
Friday, March 10, 2006 by Tom Moran
David Sciarra is a lefty lawyer whose mission in life is to help urban kids get a decent education.
And he's very good at it. For a decade or so, he's been beating the state over the head in court, forcing
That money has helped poor kids catch up to suburban kids on reading and math scores. Among fourth graders, the gap has been cut in half.
But these days, Sciarra is a nervous fellow.
Because while the urban schools have gotten more and more money, the suburban districts have not. Their basic aid has been virtually frozen since 2002, sending their property taxes soaring.
Sciarra knows that suburban legislators, the majority in
Which brings us to his surprising recommendation: Sciarra now believes that some of the healthier Abbott districts should lighten the state's load by raising their own property taxes.
So now Sciarra, the man who brought billions of dollars to the cities, says some of them are making out a bit too well.
"If an Abbott district can contribute more funds because property values have gone up, they need to do so," Sciarra says. "We have to adjust."
The next move is up to Gov. Jon Corzine, who now faces a test of his political gumption.
He is traveling the state this week warning people to brace themselves for tough budget moves. Now we'll see if that includes some of the heavily Democratic Abbott districts.
Gordon MacInnes, the assistant education commissioner charged with running the Abbott programs, recommended recently that Corzine take the leap.
"There are a number of districts that can afford to raise their taxes," MacInnes says. "This is not a fair system now. I don't think it's sustainable over time. You may get to the stage where the Legislature just won't budge, and then you'll have a constitutional crisis."
But he knows it will be tough. It's been tried before.
In 2003, the state ordered 11 Abbott districts, including
"After they got a few phone calls, they folded," says MacInnes.
Corzine seems to be a more serious fellow. And the pressure to change has grown since 2003.
"This is a wound that gets worse every year," says Lynne Strickland, head of the Garden State Coalition of Schools, which represents more than 100 suburban districts.
Strickland and her coalition have been remarkably supportive of the Abbott programs over the years. But it's getting harder for her to hold that alliance together.
"Things have gotten better in a lot of Abbott districts," she says. "They need to contribute more. Fair is fair."
Even if it raises only a modest sum, she believes it would relieve the political pressure. The state could divert the savings to special education program in the suburbs.
Sciarra, who's with the
If Corzine tries to freeze aid to the Abbott districts this year, as he may, you can expect that Sciarra will go back to court. That, he says, would shortchange the kids by forcing cutbacks in programs.
The tax argument concerns only who should pay the bills. And on that question, Sciarra is more flexible.
He doesn't represent Abbott district taxpayers, after all.
His clients are the kids.
Tom Moran's column appears Wednesdays and Fridays. He may be reached at tmoran@starledger.com or (973) 392-1823.
N.J.'s imbalance sheet
Corzine gives grim statistics at Shore forum
Posted by the Asbury Park Press on 03/9/06
BY MICHELLE SAHN
COASTAL MONMOUTH BUREAU
WEST LONG BRANCH — The state's use of one-time revenues to pay for recurring expenses is almost like "taking out a mortgage to buy this week's groceries,'' acting state Treasurer Bradley Abelow said.
Abelow and Gov. Corzine continued their public discussion of the state's "severe budget crisis'' Wednesday night in front of several hundred at Monmouth University. It was the second of three public mettings planned by Corzine before he presents his budget March 21. He has said the state is facing a $4.5 billion shortfall.
"We have a very big but very simple problem,'' Corzine said. "We spend more than we take in.''
On Wednesday, he said the state will look into buying generic drugs and prescription drugs in bulk for state Corrections Department inmates and other state programs, a move that could save the state millions.
On Tuesday, he warned that local schools and municipalities should not expect additional funding from the state this year.
Some 73 percent of the state's expenditures goes to state aid as well as grants for education and other programs at the county and local levels, Abelow said.
Abelow said the state's budget problems began in the late 1980s and continued under administrations of both political parties. In 1997, the state spent $16 billion, but in 2005 it spent $28 billion, he said.
Margaret Graf and Andrea Bakst, two school board members in Fair Haven, asked the governor about state law 1701, which forces districts to reduce surplus and give the balance to municipalities for property tax relief.
Corzine said that he will not ask for the repeal of that law but that exceptions for costs, such as energy, should be considered. He also suggested considering allowing districts to use reserve funds for capital improvements.
In
Catley said that not increasing state aid to municipalities will leave
"We depend on state aid to reduce the impact on our taxpayers,'' Catley said. "And obviously, if state aid is going to be frozen or reduced, we have to pass that along to our residents, who already feel they are already overtaxed.''
"We are looking at no increase in state aid to municipalities and no increase in state aid to public schools,'' Ocean County Freeholder Joseph Vicari said by phone. "If
Brick Mayor Joseph C. Scarpelli said by phone that, like municipalities statewide, Brick will have to make difficult decisions. The most difficult, he said, will be how much the municipality should use from its surplus and how large the tax increase should be.
"After all is said and done, the burden is back on the town,'' Scarpelli said. "Pensions are up, gasoline and salaries are up, and because the state isn't helping to cover those costs, the burden is on the backs of Brick's residents.''
Tonight, Corzine will be at
Staff writers Naomi Mueller and Joseph Picard contributed to this story.
Schools construction agency headed for more change Asbury Park Press on 03/10/06
BY GREGORY J. VOLPE
Peter E. Maricondo, hired as the agency's first chief financial officer last May, who's been acting chief executive officer since the last CEO quit in September, said he will leave in April for health and personal reasons.
Scott Weiner, Gov. Jon S. Corzine's special counsel overseeing the agency, will take over Monday as temporary CEO, while the agency searches for a new finance officer and chief executive.
Maricondo came to the agency last spring with a new board chairman, Alfred C. Koeppe, shortly after state Inspector General Mary Jane Cooper blasted the agency in a report for waste and inefficiency in spending nearly all of its original $8.6 billion.
"(Maricondo) was faced with having to build a financial control organization where one had not existed," said Barry Zubrow, who took over as SCC chairman last month. "I think he has done a terrific job at getting that job started. We all recognize that we still have a lot more to do."
David Sciarra, director of the
"Here's a complete failure in management," Sciarra said. "What needs to happen is we need a whole new management team."
The SCC also announced the state attorney general will no longer have a seat on its board because that conflicts with the office's investigatory task. In January, Cooper released another report saying there may have been criminal activity in the agency's dealings.
Zubrow said Corzine wanted the change and is not an indication Attorney General Zulima Farber's office is jumping on Cooper's latest report.
"We're already acting on the inspector general's report," Zubrow said. "They're unrelated. It's rather a matter of good authority governance and to make it clear that (Farber's) first priority is to make sure she is watching over the agency."
Sciarra called it a good first step but said the agency has to stop using the Attorney General's Office as counsel so it can "be the watchdog over this agency and be responsible for overall accountability."
David Wald, spokesman for Farber, said the office provides counsel to several agencies.
"There's no conflict here," Wald said. "It does not interfere with her charge to closely monitor what goes on at the SCC."
SCC officials gave conflicting answers whether next week's report by a group of education, treasury and school construction officials to the governor will recommend when the school construction program should be re-funded.
Weiner said "it's an issue being discussed," but Zubrow said there will be no timelines.
"The report will set out a number of predicates to occur before (Corzine will) be comfortable doing that."
Officials estimate it would cost $12 billion to complete projects in Abbott districts in today's dollars. Since September, voters in 35 non-Abbott districts have approved projects eligible for $163.9 million in state grants.
Next Tuesday, four districts will hold elections on $45 million worth of projects eligible for $16 million in state grants — the smallest statewide totals since school referendums were limited to five days per year in 2001.
"March is traditionally a quiet month for referendums, but we've never seen it this quiet," New Jersey School Boards Association spokesman Mike Yaple said.
Legislators spar over Abbott schools' mission
Posted by the
BY MICHAEL SYMONS
GANNETT STATE BUREAU
TRENTON — Assembly members sparred a bit Thursday over one of the most pressing educational and fiscal issues facing the state, its investment in the Abbott school districts, at a hearing of the Assembly Education Committee.
David Sciarra, executive director of the
"Really at the end of the day, you as state legislators need to be seeing this as the biggest investment we can make in our cities," Sciarra said. "This is really about community revitalization of urban areas and making our cities economically competitive, better places to live."
"Respectfully ... no, Abbott is about education of children. The Abbott program needs to be about making sure kids can read and write and get jobs. The Abbott program is not there as a bootstrap program to solve every problem in urban
"I totally disagree," said Assemblywoman Nellie Pou, D—
"What's good for the kids of our state is good for our state,"
The
Other beneficial changes include better-qualified teachers and smaller class sizes, each of which was mandated by the court, and higher marks on standardized tests among elementary-school students.
But middle- and high-school students have shown less progress, and there are wide shortages of court-ordered supplemental staff, such as parent liaisons, tutors and dropout prevention officers. The DOE still hasn't created a student-level database, which would be able to track students as they move from one city to another.
School building panel CEO quits as audit details waste
Report questions 'high' fees to project management firms
Friday, March 10, 2006
BY DUNSTAN McNICHOL
Star-Ledger Staff
Change and charges of waste continue to plague
The latest chapter played out yesterday when the acting chief executive officer stepped down at the agency's monthly meeting and the state auditor raised questions about hundreds of millions of dollars in agency expenditures.
The auditor's critical report on the agency's first three years of operations added new detail to allegations of mismanagement and waste that had been outlined in earlier outside reviews of the agency.
In particular, the auditor questioned hundreds of millions of dollars in payments to 12 major construction companies that were hired to oversee the $6billion building program as project management firms.
The firms have been paid $283million of the $540million they are scheduled to collect under contracts that award them fees worth 11 percent of the work they oversee.
The auditor said those fees have been inflated by various factors, and the 11 percent rate "seems high" when compared with the 3 percent construction industry standard for project managers. Even accounting for additional tasks the state assigns to its PMFs, the auditor says, the fee should be no more than 7 percent.
Applying that 7 percent rate to the PMF contracts would reduce their costs by $199million.
In addition, the auditor questioned "mark-ups" of up to 192 percent for benefits, indirect costs and profits that the private firms add onto the salary charges they bill to the state.
While the SCC and its project management firms pay comparable salaries, the audit said, "the $182million staffing costs for the 14 PMF contracts reviewed exceeded the comparable costs of the corporation's staff (including benefits) by $59million -- or 48 percent."
In other areas, the auditor questioned why the SCC replaced a construction cost limit of $143million that was set by the Legislature with its own $218-per-square-foot standard -- and further noted that even that higher limit was largely ignored.
One school addition, for instance, cost $621 per square foot to erect, the auditor noted.
The auditor also cited millions of dollars wasted because of a "Fastrack" policy adopted to speed the construction of new schools in the needy communities. Under Fastrack, various project steps like land acquisition, design and site development were undertaken simultaneously to compress the time required for building a school by 20 months.
"Although the Fastrack Approach may have its theoretical benefits, its implementation on the corporation's projects was not successful because there were too many uncontrollable variables associated with the initial phases of the project which resulted in additional costs to the project," the auditor noted.
Ultimately, the Fastrack approach resulted in wasted design and construction costs of $65million to $105million, and led to the spending of another $90million on projects that have been suspended or canceled, the report notes.
In responses filed with the audit, SCC officials said they have stopped using Fastrack. They also said they are reviewing PMF payments and contract terms, and will seek refunds for any payments deemed inappropriate.
The auditor's review is the latest to find deep problems in SCC management and oversight.
Last year, after a Star-Ledger analysis that found the SCC's building costs were 45 percent higher than costs for other New Jersey school projects, the state inspector general reviewed the agency and found management problems that left the program open to "waste, fraud and abuse of taxpayer dollars."
Overseeing the agency beginning Monday will be Scott Weiner, a former state environmental commissioner who was named special counsel to the schools corporation by Gov. Jon Corzine a month ago. Weiner will be the agency's fourth CEO in just over three years.
The current chief, Peter Maricondo, is retiring about six months after he was named acting CEO upon the resignation of his predecessor, Jack Spencer.
Spencer's departure last September capped a turbulent year at the agency, in which officials announced they had allocated the entire $6billion that lawmakers authorized them to spend on a court-ordered makeover of decrepit public schools, even though hundreds of school projects remained unbuilt.
Maricondo was brought in to be the SCC's first chief financial officer last year as part of a sweeping overhaul by former Gov. Richard Codey. He is credited with setting realistic budgets and accounting standards for the 100 projects still in the works.
"We made some good progress," he said yesterday. "I just feel that this point in time is an appropriate time to retire."
Since his appointment to the board in February, Weiner has been working on a report scheduled to be delivered to Corzine next Wednesday on options for changing operations at the corporation.
Weiner said the agency hopes to complete an ongoing search for a permanent chief executive within several months.
Dunstan McNichol covers state government issues. He may be reached at dmcnichol@starledger.com or (609) 989-0341.