| Property Taxes, School Funding issues | ||||||||||||
| ||||||||||||
March 22, 2009 Some Rich Districts Get Richer as Aid Is Rushed to Schools By SAM DILLON RANDOLPH, Utah
March 15, 2009 Dozens of Schools to Benefit From Funds in Corzine Budget By JOHN MOONEY Piscataway
March 15, 2009 The Jockeying Begins on Plan for Fiscal Pain By DUNSTAN A. McNICHOL TRENTON
March 22, 2009
Pension Cuts Rise; So Do Concerns
By DUNSTAN A. MCNICHOL
Trenton
March 22, 2009
Some Rich Districts Get Richer as Aid Is Rushed to Schools
By SAM DILLON
RANDOLPH, Utah — Dale Lamborn, the superintendent of a somewhat threadbare rural school district, feels the pain of Utah’s economic crisis every day as he tinkers with his shrinking budget, struggling to avoid laying off teachers or cutting classes like welding or calculus.
Just across the border in Wyoming, a state awash in oil and gas money, James Bailey runs a wealthier district. It has a new elementary school and gives every child an Apple laptop.
But under the Obama administration’s education stimulus package, Mr. Lamborn, who needs every penny he can get, will receive hundreds of dollars less per student than will Dr. Bailey, who says he does not need the extra money.
“For us, this is just a windfall,” Dr. Bailey said.
In pouring rivers of cash into states and school districts, Washington is using a tangle of well-worn federal formulas, some of which benefit states that spend more per pupil, while others help states with large concentrations of poor students or simply channel money based on population. Combined, the formulas seem to take little account of who needs the money most.
As a result, some districts that are well off will find themselves swimming in cash, while some that are struggling may get too little to avoid cutbacks.
Still, educators are accepting the disparities without challenge. Utah, which stands to get about $400 less per student than Wyoming, says it is grateful for the money and has no complaint. There is widespread recognition that the federal money is helping to avert what could have been an educational disaster in some places.
Democrats in Congress decided to use the formulas to save time, knowing that devising new ones tailored to current conditions could require months of negotiations.
“These formulas were the best vehicle for getting these emergency economic recovery funds out to school districts as quickly as possible, to help them immediately stave off layoffs,” said Rachel Racusen, a spokeswoman for Representative George Miller, Democrat of California, who is chairman of the House Committee on Education and Labor.
The education secretary, Arne Duncan, said that he, too, was aware of the disparities but that no formula was perfect. “In this case, people are just extraordinarily thankful for these unprecedented resources,” Mr. Duncan said in an interview. “So I’m aware of these disparities, but we’ve received zero complaints.”
Still, the occasional mismatch between educational needs and emergency financing can be striking.
Utah, where a $1.3 billion budget deficit has threatened deep school cuts, will get about $655 million in education stimulus money, or about $1,250 per student, according to the federal Department of Education. Wyoming, which has no deficit and has not cut school budgets in many years, will get about $1,684 per student.
North Dakota, which also has no budget problems, will receive $1,734 per student. California, which recently closed a $42 billion budget gap through July 2010 partly through deep spending cuts, will get $1,336 per student.
New York is a huge winner. With the nation’s second-largest budget deficit, the state benefits from a formula that sends extra money to concentrations of poor students, as well as one that rewards states for their own school spending. New York will receive about $1,724 per student, the most of any large state and roughly $400 more per pupil that than Connecticut and New Jersey.
The money in question is part of $97 billion to be administered by the Education Department under the stimulus law.
Within weeks, states will begin receiving a large part of the roughly $80 billion to be distributed over two years. Most of the rest of the $97 billion will go toward college grants to low-income students.
About $50 billion, which Congress labeled a fiscal stabilization fund, will flow to states based on a formula that takes into account population, as well as the number of 5- to 24-year-olds. The states have some discretion, but part of the money must go toward avoiding or reversing cuts.
About $25 billion will be sent to the nation’s 14,000 school districts for spending on poor and disabled students according to long-standing formulas. And Mr. Duncan will use $5 billion to reward states for exemplary systems.
Last month Mr. Duncan released state-by-state allocations of the education stimulus money. They were divided by Department of Education enrollment numbers to calculate the money on a per-student basis.
Washington, which is treated as a state under the stimulus, will get the highest allocation, $2,112 per student. Michelle Rhee, the schools chancellor there, said spending could be tricky.
“We don’t want to be in a position of bringing in this huge amount of money and then having to lay people off in two years after the money runs out,” Ms. Rhee said.
In Maryland, Prince George’s County, which borders Washington, appears likely to receive less than $1,500 per student. “I can tell you we’re not complaining,” said John White, a spokesman for the county schools. His district had been planning to cut 1,000 of its 17,000 employees and to furlough others to save money, he said, but the federal money will reduce the layoffs and make the furlough unnecessary.
Things are also working out better for Mr. Lamborn, whose district is in Rich County in northeastern Utah, where 450 children of coal miners and ranchers attend four austere rural schools. The Utah Legislature, facing a deficit of more than $1 billion, was preparing to cut school spending statewide by 17 percent. Last week, it reduced that cut to 5 percent.
Mr. Lamborn said a 17 percent cut in his district, where the starting pay for a teacher is $32,000, would have been devastating. “I didn’t even want to think about it,” he said.
Even a cut of 5 percent may result in the elimination of a teacher or two, Mr. Lamborn said. He snorted last week when he read a federal guidance letter that said, “Spend funds quickly to create and save jobs.”
“We won’t be creating any,” he said. “We hope to save some.”
Across the state line in Evanston, Wyo., where Dr. Bailey is superintendent, the Uinta County District 1 has enjoyed years of growing budgets. Students attend new or updated schools with plenty of computers; high-tech smart boards have replaced blackboards. The starting pay for a teacher is $41,500. Achievement is improving, especially in math, and a teacher training program is enriched by outside consultants.
In a meeting last week, some educators questioned whether the district could spend the $1.5 million in new federal money wisely, without losing focus on its goals, which include improving adolescent literacy skills.
“Out of the blue this money has dropped in, and it’s kind of a distraction,” Dr. Bailey said.
|
|
|
|
|
|
| |
|
|
| |
March 15, 2009
Dozens of Schools to Benefit From Funds in Corzine Budget
By JOHN MOONEY
Piscataway
WHEN Gov. Jon S. Corzine signed a new school financing law for New Jersey last year, the school district here was just the kind the new formula was meant to help.
With its high property taxes and relatively low spending for schools, the Middlesex County district, situated on the edge of Rutgers University, won a 20 percent boost in state aid, or about $2.7 million.
“We brought down property taxes, while able to hold down class sizes,” said Robert Copeland, the district’s superintendent. "It stopped us from having to cut programs.”
A year later, all the economic rules have changed, especially after last week, when Mr. Corzine presented his austere $28.9 billion state budget plan for next year. School officials throughout the state have been worried that any gains from last year could prove fleeting in the next.
Over all, Mr. Corzine’s budget will make almost no one happy, especially many homeowners who will not be able to deduct property taxes on state income tax returns for at least a year. But schools have been spared the worst cuts, and indeed dozens of public school districts will benefit from Mr. Corzine’s proposal, including Piscataway.
The budget includes $300 million in additional aid to public schools, virtually all of it to more than 170 districts like Piscataway that spend less than the new school financing formula deems “adequate.” Those districts could see budget increases of as much as 5 percent under Mr. Corzine’s plan.
“There are certain parts of our government’s work that we must sustain,” Mr. Corzine said Tuesday in presenting his budget. “In New Jersey, we recognize the importance of our children, they are our bright hope for the future. To that purpose, in this budget, we have increased, rather than cut, classroom funding for K-12 education.”
Yet that still leaves about 400 districts that will see no increases at all, including those in Cape May and Sussex Counties and all but one district in Hunterdon. And even places getting small increases may be hard-pressed to go to the local voters for property tax increases to make up the difference.
Still, reaction from educators and others was mostly relief that the outlook wasn’t worse.
“Dodged a bullet? I’d say the schools dodged a cannonball on this one,” said Assemblyman Joseph Cryan, a Democrat from Union County, who is chairman of the Democratic State Committee.
Child advocacy groups said they were grateful that Mr. Corzine also saved at least some money for preschool. With New Jersey set to receive at least $1 billion in federal stimulus funds for education, Mr. Corzine was able to avert overall cuts in school aid, and he proposed spending $25 million of that money to start the state’s planned preschool expansion into more than 80 working- and middle-class districts, where 3- and 4-year-olds will be entitled to full-day programs.
Districts are still awaiting word on whether they will receive additional federal funds for students with special needs and disabilities.
With a tough re-election campaign ahead for Mr. Corzine, those steps should help the governor with some core constituencies, political observers said.
“It’s not just the teachers union, but there are lots of parents out there, and most importantly, it will help with controlling the property taxes that fund the schools,” said Ben Dworkin, director of the Rebovich Institute for New Jersey Politics at Rider University.
“So many people are going to be affected negatively by this budget,” Mr. Dworkin said. “The fact he’s able to find some money for public education, that’s a political winner.”
That’s not to say that schools will be immune from the hard times befalling towns and cities all over the state. In Piscataway, whose main streets are lined with many shuttered businesses, the local school board had hoped for no property tax increase in the next budget, the superintendent said, but that has yet to be determined.
If the district does not get more money from the federal stimulus package, Mr. Copeland said, he may need to make about $1 million in spending reductions, likely leading to bigger class sizes again.
“When you get into the big dollar numbers, teachers are almost the only place you can go,” Mr. Copeland said.
Christine DiCanto, a chemistry teacher, has relished the smaller size of her advanced placement classes, saying the personal attention is critical. “You need it to get to that level of instruction,” Ms. DiCanto said.
She said everyone in the schools understands that the bad economy is bringing extraordinary pressures. Her husband lost his job as an electrical engineer and she said students are also talking about the economy, including one top-flight senior who said he might have to give up on the Ivy League.
“He came to me and said Rutgers would give him a free ride,” Ms. DiCanto said. “He’s worried about his parents’ ability to retire.”
March 15, 2009
The Jockeying Begins on Plan for Fiscal Pain
By DUNSTAN A. McNICHOL
TRENTON
BALANCING the state budget with deep cuts and an estimated $1 billion in tax increases, Gov. Jon S. Corzine used his budget address last week to portray himself during this election year as the politician who will make unpopular choices during difficult times.
To drive home his point, he surprised most lawmakers by announcing his plan to eliminate the property tax deduction for state income taxpayers for at least a year to save the state about $400 million. The proposed change on a sacred tax deduction to help balance the state’s $29.8 billion budget would cost the typical homeowner hundreds of dollars next year.
“That was a fastball that went over a lot of heads,” State Senator Kevin J. O’Toole, an Essex County Republican, said moments after the governor’s speech.
As Republicans prepared to use the property tax deduction and other elements in Mr. Corzine’s plan against him during what is expected to be a competitive governor’s race this year, Democratic lawmakers argued that the budget plan was a realistic response to the upheaval in the economy.
“The message we need to carry to constituents and citizens is this is an honest budget, and everyone is sharing in the pain,” said Assembly Speaker Joseph J. Roberts Jr., a Camden Democrat.
How that message is received by residents of a state already known for its high taxes will serve as a backdrop during the campaign and the budget hearings over the next 15 weeks, and will go a long way in determining whether Mr. Corzine can reverse declining poll numbers as he and all 80 members of the State Assembly face re-election in November.
“I think his job is to tightrope-walk his way through November,” said Brigid C. Harrison, a political science and law professor at Montclair State University. “It’s a balancing act, and it’s going to be tricky.”
Mr. Corzine offered plenty of pain in the spending plan he laid out for the state budget year that begins July 1. Even supplemented with $2 billion in federal funds, the budget was $5 billion in the red.
To close the gap, Mr. Corzine proposed $4 billion in spending reductions and $1 billion in new revenues, raised primarily through a $380 million income tax increase on the state’s 44,000 wealthiest residents and the $400 million suspension of the homeowners’ income tax deduction.
Mr. Corzine proposed raising another $136 million by extending a corporate tax that was scheduled to expire, increasing the tax on cigarettes by 12.5 cents a pack, raising taxes on wine and liquor by 25 percent and taxing lottery winnings that exceed $10,000.
Ross K. Baker, a political science professor at Rutgers, said Mr. Corzine would probably not suffer politically for his austerity, so long as he convinces people that he has spread the budget pain evenly.
“It’s likely to be greeted with sullenness rather than rebellion,” Professor Baker said. “You have to be living the life of a hermit to deny how hard the economic situation is in the state.”
Senator Bill Baroni, a Republican whose Mercer County district is home to thousands of the state workers who would incur unpaid furloughs and a pay freeze under Mr. Corzine’s plan, said the governor had a difficult case to make.
“The governor talked a lot about New Jerseyans at their kitchen tables,” Mr. Baroni said. “And as New Jerseyans learn what’s in this proposal, they are banging on their kitchen tables, because they are angry.”
Mr. Corzine framed his plan as a form of fiscal triage.
It called for business owners to pay $370 million in additional taxes to support benefits for the unemployed. It eliminated $900 million in homeowner rebates and tax credits in the name of preserving benefits for the poor and elderly. And it cut support for the arts and recreation in favor of money for hospitals and prescription drug benefits.
“We are making the tough choices to do the right thing,” Mr. Corzine said repeatedly during his budget address. He called his spending plan “a budget that values children, seniors and the most vulnerable, and asks a little more from the rest of us.”
Mr. Corzine also acknowledged that he has been forced to retreat from the sound fiscal management policies he declared to be priorities when he took office three years ago.
His spending plan includes little new financing for the state pension system, which was underfunded by $28 billion before last year’s stock market collapse siphoned off billions more. It would divert $116 million from specially dedicated accounts even as Mr. Corzine denounced past governors for bankrupting the state’s Unemployment Insurance Trust Fund through similar diversions. He followed his address by signing an executive order that essentially negates an order he signed last June requiring state spending to match the money raised through recurring taxes.
“Make no mistake,” he said. “Because of where the world is right now, we must move in directions we might not otherwise choose.”
But before Mr. Corzine had even made his way from the legislative chambers where he delivered his address, critics were complaining that they had been singled out for more than their fair share of sacrifice.
“We think the governor really asks too much,” said Robert Master, political director for the state’s largest state employees’ union, the Communications Workers of America. “He asks state workers to close 10 percent of the budget gap.”
Specifically, Mr. Corzine’s budget counts on state workers to save $420 million by taking 12 unpaid furlough days and forgoing a 3.5 percent raise scheduled to take effect July 1.
The alternative, Mr. Corzine said in his speech, is layoffs.
“I believe it is far better for employees to share in these reductions and continue working than it is for savings to be achieved by the layoff of up to 7,000 workers,” he said.
Mr. Master suggested a third alternative.
He said Mr. Corzine should increase the temporary .75 percent increase in state income tax rates he has proposed for residents who earn more than $500,000 a year.
“We believe that increasing the tax burden on the wealthiest people is a fair way to make it possible to minimize the cuts in all other areas,” he said. “I think the time is long past to pit one needy constituent group against the other.”
Mr. Roberts, the Assembly speaker, said such complaints were inevitable, but did not necessarily signal a flaw in the governor’s strategy.
“I think everyone will say, ‘I’ve done more than my share, go see the other guy,’ ” he said. “That gives you a good sense the pain is fairly distributed.”
March 22, 2009
Pension Cuts Rise; So Do Concerns
By DUNSTAN A. MCNICHOL
Trenton
REDUCING contributions to New Jersey’s $56 billion public pension system is central to Gov. Jon S. Corzine’s budget-trimming strategy in these recessionary times, but some legislators and others say they fear for the system’s ability to cover its growing retirement obligations to teachers and public employees.
“The day of reckoning is coming,” said State Senator Bill Baroni, Republican of Mercer County, whose district includes more public employees than other lawmakers’. “They’re doing all they can to hurt the pension system.”
In the last few weeks, Mr. Corzine has proposed withholding about $1.5 billion in state payments into the pension accounts, lawmakers have approved a plan to let local governments defer millions more in scheduled pension support and the state has ordered a study of the very structure of the retirement system.
“It’s a systemic attack on the pension system by wizards who are supposed to know better,” Mr. Baroni said.
Mr. Corzine said he could not justify spending billions on long-term retirement commitments when the state is scrambling to find money for schools, property tax relief and other priorities.
“About one hour’s movement in the stock market is more than any of these changes,” he said about the declining state support for the pension system. “I would hope we would make a first priority of getting back to putting these dollars in the pension system when the revenues allow.”
In a typical month, the pension funds pay out $300 million to $400 million more than they take in through contributions from employees and employers, William G. Clark, director of the state’s Division of Investments, told the funds’ oversight board recently.
The State Investment Council, which monitors the pension funds, is so concerned that on Thursday its members took the unusual step of voting to send a delegation to lobby Mr. Corzine and legislators for better funding of the pensions.
Mr. Corzine included about $3 billion in pension contributions in his first three state budgets. But this year, as the economy soured and tax revenues plunged, he cut his proposed payment by $784 million, opting to pay only $500 million into the system this June, said Tom Vincz, a Treasury Department spokesman.
For the fiscal year that begins July 1, Mr. Corzine has proposed a smaller contribution of $400 million, Mr. Vincz said.
On Monday, lawmakers narrowly approved a measure that would let local governments defer up to half the $1.2 billion they are scheduled to pay into the pension accounts next month.
The measure passed without a single Republican yes vote.
“It doesn’t make sense for us to continue to dig the hole that is clearly so deep we don’t know how we’re going to get out,” said Senator Jennifer Beck, a Monmouth County Republican.
