There are limits to how much school aid can be reduced, however, because the federal stimulus law tied education support to spending guidelines..."

Posted on Wed, Feb. 10, 2010

Schools are likely targets for N.J. budget cuts

By Jonathan Tamari and Adrienne Lu

Inquirer Trenton Bureau

TRENTON - A key Republican lawmaker says he expects school-aid cuts when Gov. Christie lays out his budget plans tomorrow.

"I would expect some significant impact on school aid as a result of his updated message on budget," said Assemblyman Joseph Malone (R., Burlington), the ranking Republican on the Budget Committee.

Christie inherited a deficit of more than $1 billion in the current budget, which runs through June 30. According to two other sources with knowledge of the budget, Christie is expected to propose from $1.2 billion to $1.5 billion in spending reductions tomorrow when he addresses the Legislature in the first major policy speech of his tenure.

The sources cautioned that decisions on how to balance the spending plan had not been finalized. But they acknowledged that aid to schools was one of the few big pots of money left for Christie to draw from as he tries to balance the budget more than halfway through the fiscal year.

Malone said he met recently with Christie and the state treasurer. New Jersey's fiscal picture, he said, remains bleak.

"There are no miracles left, and people just need to stand up and say, 'OK, this is what we have to do, and we'll just proceed from here,' " Malone said.

He did not say how large school-aid cuts might be, but based on the budget gap and proposals left over from Gov. Jon S. Corzine, they are likely to be hundreds of millions of dollars. Corzine had proposed a $300 million school aid cut, targeting districts with surpluses that go above the 2 percent allowed under state law. Christie is likely to go beyond that figure.

He has few options. Much of the $29 billion budget has been distributed. Most aid to towns has been sent. Property-tax rebates have been mailed. Medicaid spending is tied to federal rules. Laying off state workers would take time and might require negotiations.

But roughly half the school aid in the budget - $3.5 billion to $4 billion - has yet to be paid, making it one of the largest targets available.

School-aid payments are sent in 20 installments each fiscal year, and 11 have gone out, according to the Department of Education.

There are limits to how much school aid can be reduced, however, because the federal stimulus law tied education support to spending guidelines.

Christie, at an unrelated news conference yesterday, would not comment on the possibility of school aid cuts.

He will make an unusual mid-fiscal year speech to the Legislature tomorrow to lay out his plans for the current budget. He also will have to close an $8 billion to $11 billion gap in the budget set to be proposed by March 16.

It was unclear yesterday which districts might get hit by aid cuts. Christie could make across-the-board reductions, or he could make targeted cuts that would force districts with extra money to do with less state support.

Any cuts must respect "the sanctity of education and . . . the financial reality of it," Malone said.

The prospect of aid reductions worried school boards and their advocates. Aid from the state offsets pressure on local taxpayers, who fund schools through property taxes.

Frank Belluscio, a spokesman for the New Jersey School Boards Association, said state aid made up 38 percent of the average district's budget, though the amount varies widely.

Belluscio said he did not want to panic before any official announcement. But he added that a mid-year cut "could have the serious impact on [districts'] ability to provide programs to children."

A worst-case scenario would include layoffs and increased class sizes, Belluscio said.

Collingswood Superintendent Scott Oswald said an aid cut could force the district to dip into its surplus.

"Cutting our state aid will absolutely impact programs and services to students this school year and beyond. We will be forced to use our surplus to retain some programs this year," Oswald said.

Haddon Heights Superintendent Nancy Hacker said before word of the potential cuts in state aid that funding reductions could lead to "anything from a serious cutback in instructional supplies and materials, to elimination of athletic programs, to cuts in staffing. All of these possibilities could severely limit our ability to provide the high quality of services that our residents have become accustomed to." 

Contact staff writer Jonathan Tamari at 609-989-9016 or jtamari@phillynews.com.

Inquirer staff writers Rita Giordano and James Osborne contributed to this article.