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Cash-strapped schools beseech N.J. for relief
District tax hikes, program cuts possible
Tuesday, March 07, 2006
By LARRY HANOVER
Staff Writer
And Hopewell Valley Regional school board members said their music program, winner of national acclaim, faces cuts, while vice principal jobs at all district elementary schools face elimination.
Local legislators got an education yesterday at a New Jersey School Boards Association conference on the mounting effects of years without increased state aid to schools, with some calling it the worst budget season in recent memory.
"It's sort of a little taxation civil war," Ewing Superintendent Raymond Broach told Sen. Shirley Turner, D-Lawrence, during a session with the lawmaker at the State House.
In a letter to districts Friday, the state Department of Education told school leaders to prepare 2006-07 budgets as if state-aid levels were to remain stable but warned that cuts were possible.
In unscheduled remarks yesterday, Gov. Jon Corzine told the school boards association he would try to keep aid as close as possible to current levels as he deals with a projected $4.5 billion revenue gap.
But lawmakers, who later held sessions with small groups of school board members in their legislative districts, heard repeatedly that consequences will be severe if aid is cut in 2006-07, with level funding providing only minor solace.
"I hate to be begging for flat funding, but I really am," said
"Maybe that's the game, so you'll be happy that it's flat," Turner responded.
Aid levels, now at $6.9 billion, have not been cut since 1990. For all but the poorest districts, 2006-07 will mark the fourth year in the last five with no significant aid increases.
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Many districts not represented at yesterday's conference face severe budgetary challenges as well:
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-- Princeton Regional is considering laying off 10 employees, none of them teachers.
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"With cuts in state aid, if they do come to pass, you will see cuts to programs," said Frank Belluscio, president of the New Jersey School Boards Association. "You will see higher property taxes. It's a very serious situation out there."
Lynne Strickland of the Garden State Coalition of Schools said districts across
The board pledged to try to hold the line on the school tax rate but faces tough choices in cutting jobs and programs, said board member Mary Lou Kramli.
"We're afraid the ire's going to be taken out on us," Kramli said.
This year, elementary schools went from full-time vice principals to individuals who split time between those duties and others. Now, the district plans to have no elementary school vice principals at all, meaning less supervision, said board member Linda Mitchell. Job cuts are possible, too.
"That's a scary, scary thing," Mitchell said.
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In a session with Assemblywoman Linda Greenstein, D-Plainsboro,
"We're raising our property taxes to give the same quality of education as four years ago," she said.
To get down to the surplus limit, the district used $4 million for property-tax relief, said board member Martin Abschutz. Now, the district must continue to find that $4 million each year, yet it has no surplus to tap, he said.
Greenstein agreed with board members' calls for a special legislative session, constitutional convention or both on the property tax issue.
In the meeting with Turner,
Afterward, board member Garry Feltus said Turner's point was legitimate. Yet, he said, he doesn't feel anyone should point fingers at the so-called Abbott districts for causing a property tax imbalance. Districts such as
"Every year we have a fight with the Department of Education (over aid)," Feltus said. "They cut us, and (the district winds up) in court."
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Contact Larry Hanover at lhanover@njtimes.com or at (609) 989-5726.
March 7, 2006
Spending Cuts Alone Won't Balance the Budget, Corzine Says
NEW BRUNSWICK, N.J., March 6 — In his strongest hint that New Jersey residents and business may soon face higher taxes, Gov. Jon S. Corzine said on Monday that the state would be unable to cut spending enough to compensate for a projected multibillion-dollar budget shortfall.
Mr. Corzine made his remarks at a daylong conference on the budget here at
The governor said rooting out waste was the preferred route to balancing the budget. A former co-chairman of Goldman Sachs and
Even so, he cautioned, the state would be unable to hold the growth in its spending to "zero," because of the rising costs of pensions, health benefits and debt service.
"Yes, there are cuts available, and we're going to work at that in the most serious manner possible," Mr. Corzine said. But "anybody who's reasonable would have to say," he continued, "the probability of that being enough to close that gap, on a structural basis, is not likely."
Mr. Corzine is scheduled to unveil his first budget on March 21. Since taking office on Jan. 17, he has warned that the state is in precarious fiscal health because of misbegotten decisions made by previous administrations, both Democratic and Republican.
In his planned statewide tour this week, Mr. Corzine, a Democrat, hopes to accomplish three things: to explain just how grim the state's finances are, to solicit suggestions to improve those finances, and to hint at what solutions he may have in mind so the public is prepared.
"There needs to be a dialogue so that people understand these choices that we're talking about are not free," he said. "They come with real costs."
He scheduled the first town hall meeting on Tuesday night at
The meeting here, billed as a "budget summit" and titled "Restructuring New Jersey's Government," attracted nearly 400 policy experts, educators and business executives.
There were PowerPoint slides, complete with pie charts and bullet points. One slide, from Bradley I. Abelow, the new state treasurer, read, "More than $16 billion of onetime revenues and pension contribution deferrals cannot and should not continue."
Another chart, with the dire words "The budget gap is not a one-year phenomenon," estimated that absent any policy changes, the state's expenditures would grow by $750 million to $1.25 billion each year.
Even so, Mr. Corzine noted that his budget would constitute only the first move before a balanced budget is due on July 1, the start of the fiscal year.
"The real work ahead of us is negotiating with the Legislature, which undoubtedly is not going to like a lot of the things that we lay down at the table," he said.
Indeed, legislators and several watchdog organizations have already criticized Mr. Corzine's first major fiscal proposal, unveiled two weeks ago, to replenish
On Monday, Republican legislators unveiled their own plan, which taps the general fund. In addition, the Regional Planning Association blasted Mr. Corzine's proposal, saying it "mortgages
But when Mr. Corzine was asked by a reporter whether he was concerned about being "vilified" for his decisions, he seemed unfazed.
"You get to do the kind of thing that I'm doing once in life, and you try to best job you can," he said.
Corzine out to brace state for fiscal pain
He hit the road for a weeklong series of "budget dialogues" to prepare the public for difficult choices.
Inquirer
Phila Inq:
Two weeks before presenting what will certainly be a painful budget, Corzine launched a weeklong road show yesterday to spell out the state's ugly financial situation for the public.
"There should be no question in people's minds that there's a gap to fill," the former Wall Street mogul told several hundred lobbyists, educators and special-interest representatives at a summit at
Panelist Michael Horn, who was state treasurer from 1984 to 1986 under Republican Gov. Tom Kean, said some kind of permanent or temporary tax increase was inevitable.
"There will be pain," he said to the gathering. "Adjustments in revenue will absolutely be necessary."
Corzine would not say which tax increases he might be considering. He did repeatedly emphasize, however, that cutting government waste alone would not fill a projected budget gap of more than $4 billion.
State Treasurer Bradley Abelow, a former Goldman Sachs colleague of Corzine's, added that even eliminating the entire state payroll would not plug the hole.
The state must reexamine its biggest expenditures - health care, education, and employee benefits, Abelow said in a financial presentation.
Corzine's "budget dialogues" this week will include one Thursday in Glassboro. He plans to present his budget to the Legislature on March 21.
"There's a real problem here, and it needs to be addressed... . It needs to be spelled out so people understand the choices you're making," Corzine told reporters.
Cost-cutting measures the administration is studying include slashing inefficiencies in Medicaid and using the state's purchasing power to cut better deals for pharmaceuticals, he said.
Corzine also said he still hoped to fully fund the state's pension system this year - as he pledged during the campaign - though some lawmakers do not believe the state can afford such an expenditure.
To address the budget challenge, the governor's advisers have recommended expanding the sales tax to legal services and online purchases and potentially taxing 401(k) contributions.
William Dressel, executive director of the New Jersey State League of Municipalities, called the day "a very harsh reality check. It was the first time I've ever heard the chief executive of this state have a frank conversation with the public" about its difficult financial picture.
Dressel said he was concerned that Corzine would reduce state property-tax relief to municipalities, which he said would result in a greater burden on lower-income taxpayers.
George Hawkins, executive director of the smart-growth group New Jersey Future, said Corzine's presentation left him with too many questions.
"You didn't get a notion of what the solutions were," Hawkins said.
Corzine at Rowan
Gov. Corzine plans a "budget dialogue" at 7 p.m. Thursday at
budget06/dialogues/.
Contact staff writer Elisa Ung at 609-989-9016 or eung@phillynews.com.
Corzine gets an earful on budget
The Record Tuesday, March 7, 2006
By ELISE YOUNG
STAFF WRITER
On Monday, it was his turn to listen. Before an audience of 250, a handful of his own Cabinet members told him they could do little to reduce spending in individual departments. And audience members told the former Wall Street chief executive a thing or two about money management.
"If aid to municipalities is cut, towns can do two things: They can increase property taxes, they can cut services," said Susan Bass Levin, commissioner of the Department of Community Affairs.
Lisa Jackson, commissioner of the Department of Environmental Protection, said the state Forest Fire Service has too few employees and outdated equipment. Fish and wildlife programs, once sustained by user fees, no longer are self-sufficient.
"If we eliminated [charity care], we would push urban hospitals toward fiscal collapse," said Fred Jacobs, commissioner of Health and Senior Services. As for disaster preparedness, "there's no room in there for any deductions."
Corzine wasn't swayed.
"There are things that can be cut," he said.
The governor was presiding over the first of this week's four forums on the 2007 budget crisis. The goal is to engage policymakers, elected officials and everyday taxpayers on the looming financial disaster -- and to solicit their ideas for fending it off for good.
Part of the forum focused on expanding the economy by bolstering the tax base. That's when the audience -- mostly policymakers and academics -- told Corzine that
Rutgers workforce expert Carl Van Horn said employers interested in moving to
"We've got a real image problem," he said.
Larry Miller, a Department of Environmental Protection program specialist, said he has tried for three years to bring a solar-energy manufacturer to
An audience member said the products of the state's poorly performing urban schools likely won't hold good jobs. Another said the pay-to-play political system, even if curbed at the state level, continues to operate in "petty fiefdoms," driving up costs for all but the well-connected.
The current budget is about $28 billion. Corzine has said the state could fall short by as much as $6 billion, but Treasury Commissioner Bradley I. Abelow on Monday estimated the figure is closer to $4.6 billion.
Corzine, who is to give his budget address in two weeks, gave no specifics on where cuts will be made.
Participants said they were grateful just to be heard.
"I like this no-holds-barred approach. No one's going to feel this isn't a real tough process," said Karen Clark, president and chief executive of Horizon New Jersey Health, the insurer.
"I enjoyed the openness," said Gloria Frederick, director of
Another budget forum is set for 7 tonight at
E-mail: younge@northjersey.com
