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6-5-06 Editorials on school funding & State Budget articles

Trenton Times

Plain speaking to the schools

Friday, June 02, 2006

BY EDITORIAL

Lucille Davy, acting state education commissioner, had some candid words for representatives of suburban New Jersey schools Wednesday. She repeated Gov. Jon Corzine's promise to develop a more equitable formula for state aid to school districts not covered by the state Supreme Court's Abbott vs. Burke rulings. But she also rightly criticized the practice of some districts, as detailed in a State Commission of Investigation report earlier this year, of giving administrators excessive salaries and other benefits, including big payments for unused sick and vacation time.

"It is not enough anymore to say that these benefits were negotiated with their school boards, were signed off by the board attorneys, and that's just the way it is," Commissioner Davy said. "The bottom line is that the climate we are living in today does not justify getting huge payouts for sick time anymore."

Not all districts are guilty, of course. And, realistically, lavish settlements for school administrators don't constitute a major chunk of education spending in New Jersey. Nevertheless, as towering symbols of official disregard for the taxpayer, they breed widespread resentment. That's why there's great merit in Assembly Speaker Joseph Roberts' proposal to broaden the power of county superintendents of schools to approve or disapprove the hiring, pay and benefit plans of all local superintendents, and to sign off on school budgets, veto excessive non-instructional expenses and authorize audits of administrative costs.  

Star Ledger

Don't raid the fund

Saturday, June 03, 2006

The $107 million sitting in the urban enterprise zone fund is awfully inviting to lawmakers scouring the budget for available money. Some can't resist. They've drafted a proposal to tap the fund for a little bit of property tax relief.

But before lawmakers snatch that money, they ought to consider the consequences. Grabbing those funds to help pay for special education programs will only compound the state's structural deficit be cause the plan calls for funding an ongoing program with money that won't be available in the future. Such schemes, employed year after year, have contributed significantly to the state's budget woes.

The urban enterprise zone program, begun in 1983, is in tended to revitalize distressed areas by providing businesses with an incentive to locate in the zones or expand operations. It does this by providing tax breaks. Companies are reimbursed for the sales tax on supplies and materials they buy. And customers pay a 3 percent sales tax rather than the usual 6 percent. The revenue is deposited in a fund used for various projects including job training, business expan sion or sprucing up commercial areas. The program is generally lauded by local government and businesses.

But there are problems. A recent state audit found there's no oversight to determine whether the millions are spent properly. And the Corzine administration is examining whether some companies abuse the program by not paying the sales tax on supplies and materials used in offices, stores and facilities outside the zones.

The legislative effort to divert money from the fund is headed by Sen. Barbara Buono (D-Middlesex), who is well in tentioned but wrong. She figures the fund has enough sur plus to keep going for a few years. In the meantime, she reasons, why put more money into the fund until the accountability questions are resolved?

Each year the fund collects about $80 million and spends around $50 million, Buono says. The fund's balance is $231 million, but approximately $124 million is allocated for pending projects. That leaves about $107 million, which should be good for two years of projects.

Under her proposal, the money coming into the fund during those years would be sent to the general treasury to help pay the $174 million in special education costs that school districts face. That, she says, would have a direct im pact on property taxes. That's true, but it would be an imperceptible one.

Without a doubt, urban enterprise zone problems should be cleared up and quickly, but the fund shouldn't be drained. Raiding fund surpluses is not the way to balance a budget. For nearly a decade, the state has not contributed what it should have to pension funds, leaving the retirement plans significantly short of what's needed to cover all enrollees. And several administrations diverted money from the unemployment fund to cover hospital charity care costs. Gov. Jon Corzine's budget proposal reflects the fiscal pain of trying to end those practices. A large portion of the budget increase comes from his intention to put more than $1 billion into pensions and pay $350 million in charity care out of the general treasury.

Experience clearly demonstrates that if the need for special education funds is urgent, a recurring revenue source should be found. If this temporary revenue source is tapped for special education costs, what happens when the enterprise zone money is no longer available? The answer, of course, is that the structural deficit expands.

The search for a fund with a surplus to raid has become a routine practice during June budget deliberations in Tren ton. It's time to call off the search.


© 2006  The Star Ledger

© 2006 NJ.com All Rights Reserved.

 

 

Star Ledger

Scrutinize Abbott budgets

Monday, June 05, 2006

New Jersey's poorest school districts were told to cut their budgets for the coming fiscal year because there will be no increase in the court-ordered funding they receive from the state. The state budget is under too much stress.

The state Supreme Court provided an important safety valve: Districts may appeal to the court if they can show that flat funding would do academic harm.

Only 10 of the 30 so-called Abbott districts have indicated they plan to appeal. The others brought in budgets that hold the line on spending. That is good -- if they reached the bottom line by making appropriate cuts. The Education Department says it does not have the resources to make sure academic needs were not sacrificed to keep administrators and perks happily tucked away in those budgets.

A major failing of the Abbott funding program has been the state's inability to provide true financial oversight and make judgments about which kind of spending buys the best academic results.

That failure must stop. The state budget cannot afford it. The more than 200,000 children in the 30 districts cannot afford it.

Newark, which has a budget of nearly $1 billion, is one of the districts slated to appeal. It says it will have to make cuts, including closing two schools, to make ends meet. That plan deserves intense scrutiny.

One of the schools targeted is Clinton Avenue Elementary. Yet it is one of the Newark schools that is not on the "in need of improvement" list for the federal No Child Left Behind program. Newark wants to send the 279 students at Clinton Avenue to two schools that are on the list: Belmont-Runyon, which has an enrollment of 431, and Avon Avenue, which has 542 kids. Both average 18 students per class compared with Clinton Avenue's 15.5.

Why aren't the kids at the schools needing improvement going the other way, to the bet ter, smaller school?

Newark plans to keep the "closed" school buildings open and fill them with other programs. How much of a savings is there in that?

Since 2002, the state Schools Construction Corp. has made a substantial investment in renovations in order to make Clinton Avenue a safe, sound neighborhood school. Why not let it serve that purpose?

We do not presume to have all the answers. But it is time that the state and the court go through each Abbott district's budget, ask good questions and demand good answers.


© 2006  The Star Ledger

© 2006 NJ.com All Rights Reserved.

 

 

 

State budget battle rumbles into home stretch

6/4/2006, 10:17 a.m. ET

By TOM HESTER Jr.

The Associated Press

 

TRENTON, N.J. (AP) — For all the legislative gabbing and jabbing, nothing has yet been decided about Gov. Jon S. Corzine's proposed budget with its tax increases and program cuts, but New Jerseyans should pay close attention in the coming weeks.

New taxes almost certainly will be approved. Relief for the state's highest-in-the-nation property taxes is at risk. Leafy state parks and sunny beaches might not be open for July Fourth. And the local hospital might not survive, depending which argument one accepts.

Here's five things to watch:

_The July 1 deadline.

The state constitution requires a balanced budget by July 1. With the Legislature and Corzine clashing over taxes and far from an agreement, many predict the deadline will be missed this year.

But does that matter? The constitution sets a deadline but doesn't detail what happens if the deadline isn't met. The state has missed it before — as recently as last year — without any consequence.

Last year, Attorney General Peter Harvey told Gov. Richard J. Codey the state had to shutdown on July 1 if a budget wasn't passed, closing beaches and state parks and requiring an emergency order to keep prisons and state police operating, but Codey kept government operating without problem.

_Is the sales tax increasing?

Corzine's plan to increase the sales tax from 6 percent to 7 percent lacks the votes to clear the Legislature, but opponents haven't found an alternative other than calling for more spending cuts.

Some legislators prefer an income tax increase, but Corzine opposes that approach. This philosophical dispute could prove the major obstacle to a budget agreement.

The sales tax increase would raise $1.1 billion, nearly the same amount Corzine proposed contributing to the public employee pension fund. Lawmakers have suggested decreasing it, but Corzine maintains a major pension contribution is necessary.

Sen. Wayne Bryant, D-Camden, the Senate budget chairman, wouldn't rule out a half-cent sales tax increase.

Still, it seems certain Corzine's plan to expand the sales tax to more services will be approved. It's meant to raise $250 million and Corzine and legislators can push it as a fairness issue. For instance, video rentals are taxed but video downloads aren't. The sales tax could be expanded to golf and health clubs, landscaping, shipping and handling, self-storage, private investigators and downloaded music and videos. Some legislators suggest expanding it to accountants and attorneys.

_What about other tax increases?

The water tax, which would cost most New Jersey families $4 per year and pay for water improvements, is dead, a victim of the fallout legislators fear from taxing water. Since it would raise $12 million annually, few are worried about losing that money.

Corzine's plan for a $1,400 monthly tax on each hospital bed appears dead, but legislators haven't replaced the $430 million it would raise. Corzine proposes using half that money to help balance the budget and the rest to attract federal money to help hospitals that treat the most uninsured patients.

The tax would cost 49 hospitals and help 25, and the hospital industry contends it could force several hospitals to close. Legislators seem to agree, but administration officials argue hospitals can operate more efficiently.

While legislators have discussed new business taxes as alternatives, Corzine is loath to impose new business levies, concerned they could erode the state's business climate.

_What about property tax relief?

It will be paltry. Corzine proposed increasing state-funded rebates by 10 percent, giving disabled and senior citizens $120 more and others $30 more. But the state would save about $70 million by keeping rebates at last year's level. Bryant said that might happen, though Assembly Democrats oppose cutting property tax relief.

Despite pleas by local officials, state aid for municipalities and schools won't be increased, but Assembly Speaker Joseph Roberts Jr. has made restoring an emergency municipal aid fund a priority.

_What surprises are in store?

When budget votes are tight legislators can try to force action on their priorities. Sen. Ronald Rice wants action on school construction. Sen. Sharpe James feuded with Corzine over Newark city spending. Sen. Barbara Buono wants property tax reform. Many Democrats want the state to distribute clean needles to combat HIV and AIDS. Assembly Democrats held up last year's budget over rebate cuts.

 

 

3 lawmakers seek union givebacks

Democrat trio, proposing way to freeze sales tax, expect to be 'vilified' -- and they are

Friday, June 02, 2006

BY DUNSTAN McNICHOL

Star-Ledger Staff

Putting themselves on a collision course with organized labor and leaders of their own party, three Democratic lawmakers said yesterday unionized state workers should forgo a scheduled 5 percent pay raise and give back millions of dollars in benefits before residents are asked to pay a higher sales tax.

"We cannot afford this government," said Sen. Stephen Sweeney (D-Gloucester), himself a business official with the Ironworkers union. "We need to get realistic with what we offer. We need the real world."

Sweeney, Assemblyman Gerald Green (D-Union) and Assemblyman Paul Moriarty (D-Gloucester) proposed saving about $700 million by cutting employee costs for New Jersey's 70,000 state workers by 15 percent, including sweeping reductions in pension benefits, longer working days without additional pay, and limits on vacation and sick time.

Yesterday's proposal was accompanied by a 34-page packet of statistical highlights the lawmakers said show state workers enjoy premium pay, benefits and vacation time in a period when private workers and taxpayers are being asked to cut back and pay more.

"This is not an attack on unions or employees, but we deal with reality," said Green. "The state of New Jersey cannot afford the luxury we had in the past."

Gov. Jon Corzine's proposed budget calls for raising the 6 percent sales tax to 7 percent, something that would generate $1.5 billion over a full fiscal year.

The three Democrats' proposal puts them squarely at odds with major state worker unions, which are mounting an advertising and lobbying campaign in support of the sales tax and the state worker benefits it would help support.

It also lines them up against other state Democrats, including Assemblyman Joseph Cryan (D-Union), chairman of the State Democratic Committee. During a budget hearing after Sweeney's news conference, Cryan criticized any suggestion that the state seek union givebacks before state worker contracts expire next year.

"We all know the cost issues, but we all have an obligation here," Cryan said.

Anthony Coley, Corzine's spokesman, said the governor has no plans to tamper with the provisions of current contracts.

"The budget is not the time or place for contract negotiations," said Coley. "The governor inherited the contract and he intends to honor it."

The Democrats who proposed the plan said they were anticipating criticism. "We totally expect to be picketed, pilloried and vilified," said Moriarty.

In fact, before they left the Statehouse meeting room where they had held their news conference, the lawmakers were confronted by officers of two of the state work force's largest employee unions: the Communications Workers of America and the American Federation of State, County and Municipal Employees.

Sweeney spent 15 minutes in a heated private discussion with two AFSCME officers: Sherryl Gordon, executive director of the union's New Jersey Public Employees Council 1, and Don DiLeo, the union's legislative and political representative, immediately after the news conference.

Gordon and DiLeo left the Statehouse without comment. "They're mad at me right now," Sweeney said simply.

Bob Master, a legislative director for the Communications Workers of America, was also angered. "I think it's an outrageous comment for a guy who purports to be a friend of working people," he said. "It's the kind of thing you would expect to hear from a Bush Republican, not a labor Democrat."

Robert Regan, treasurer of CWA Local 1037 and the first union representative to confront Sweeney, later denied claims that state workers have any special benefits.

"We have, over the years, done our share by not getting raises, by increasing our (pension) contributions," he said.

Legislative leaders gave only a tepid endorsement to the proposals.

"In the coming months we'll be investigating numerous ways to save the state and taxpayers money and, as we do so, we will certainly be taking these recommendations into consideration," said Senate President Richard Codey (D-Essex).

Assembly Speaker Joseph Roberts (D-Camden) said in a statement he will "'look forward to reviewing it and fully discussing its elements with Assemblymen Green and Moriarty."

Republicans were more receptive.

"Please allow me to be among the first to congratulate you on the set of proposals announced today by you and Senator Sweeney concerning public employee compensation," Assemblyman Kevin O'Toole (R-Essex) wrote in a letter to Green and Moriarty released to the media yesterday. "'I would like to offer my assistance to you in this endeavor, and specifically I would like to become a co-prime sponsor on the legislation."

By proposing $700 million in state worker savings, Sweeney and his Assembly counterparts have struck a populist bargaining position as debate over Corzine's proposed $30.9 billion state budget enters its final month. In the Senate, where Democrats have 22 of 40 seats, the loss of just two votes would jeopardize passage of the sales tax increase, which has little Republican support.

The Associated Press contributed to this report. Dunstan McNichol covers state government issues. He may be reached at (609) 989-0341 or dmcnichol@starledger.com.