For information about the Coalition of Families For Excellent Education, e-mail info@coffeenj.org

Critics: Tax savings won't last

Posted by the Asbury Park Press on 01/29/06

BY LARRY HIGGS
STAFF WRITER

RUMSON — The fifth-grade students at Forrestdale School filed into teacher Joe Novellino's classroom and filled all but two of the 26 seats in the room.

Two clusters of students, who sit in groups of fives, had a little more elbow room Thursday afternoon because two children were absent.

It's not that Rumson school officials didn't have the money or desire to hire another fifth-grade teacher to start another class. What has come to be known as state law 1701 — adopting the number of the Senate bill — prohibited them from transferring cash from other places in the budget to hire that teacher last fall.

In school districts across the state, 1701 has put the squeeze on everything from hiring teachers in Rumson to heating classrooms in Marlboro to buying computers in Lacey this term.

Now education officials say the law — intended to lower property taxes by reducing school district surplus accounts and limiting transfers between budget accounts — is going to lead to increased property taxes.

"It was a very short-term approach to the issue. The intention was to provide property tax relief," said Frank Belluscio, New Jersey School Boards Association spokesman. "In reality, it provides very little relief, and property taxes will increase in a majority of districts this year."

Last year, schools were required to reduce the amounts in surplus accounts and turn that money over to municipalities to be used to lower property tax bills, Belluscio said. Now, that one-shot infusion of cash is gone, and as schools face increases in health insurance, fuel and utilities, property taxes will increase, he said.

"That money is no longer there, and now there is a gap," Belluscio said. "We'll see increases in property taxes result from that."

In addition to the specter of higher taxes, 1701's consequences are being felt in classrooms, Belluscio said. Educators such as Novellino agree.

"A bigger class size means less time to each child," said Novellino of Red Bank, preparing a lesson about fractions. "I can give each kid more attention if there is a smaller class size."

The law's effect on the classroom sparked outrage from parents such as Kimberly Newsome of Rumson, who formed a grass-roots group last year. The group demonstrated at the Statehouse last September to change 1701.

"It didn't make sense, and it wasn't working," said Newsome, who has four children. "The parental movement is still in the beginning stages."

Newsome spent last year reaching out to parents, predominately in Monmouth County, after she learned about 1701 in spring 2004. Now she is forming a statewide parental group, the Coalition of Families for Excellent Education, to repeal 1701 and educate parents. A native New Jerseyan, Newsome grew up in Mountain Lakes and has lived in Rumson for 12 years.

"We need to repeal it and start from scratch — 1701 was an attempt to lower taxes, and it doesn't work," Newsome said. "This isn't a Monmouth or Morris County issue, it's a statewide issue."

In Lacey, officials abandoned plans to buy new computers and hire more teachers in the 2005-06 school year. However, taxes still increased, and officials blamed 1701 and state aid, which has been flat since the 2001-02 school year.

One problem with 1701 is it doesn't limit spending; it limits savings used by districts for unexpected emergencies, said Roger Caruba, Rumson superintendent of schools.

"They (the Legislature) robbed all the little piggy banks of all the schools to make it look like they were delivering tax relief," Caruba said. "All districts need surplus, like every business or household."

Generally districts have held a surplus of 6 percent of their operating budget for emergency repairs, an unexpected increase in student population, increases in heating costs or to cover the cost of a special education student who moves in at mid-school year, he said.

State law 1701 forced them to reduce surplus to 2 percent in school year 2005-06 and will only allow them to carry a 3 percent surplus in the 2006-07 budget, Belluscio said.

In Rumson, officials were saving money in surplus to replace roofs on school buildings, Newsome said. Now the district will have to hold a referendum to raise that money, which Newsome said will cost taxpayers more than the $25 that 1701 reduced her taxes by over two years.

However, the law does let districts set up reserve accounts to set aside funds for maintenance and future capital projects, said Michael Foster, business administrator for the Ocean County office of the state education department.

"Maintenance is for the unexpected repair, while capital reserve is for future projects," Foster said. "There is a limit done by formula. The problem for districts is having the money to put in those reserves."

Last school year, five of the 30 schools districts in Ocean County requested permission to make budget transfers, Foster said. So far this school year, there has been only one request — from Brick, he said.

The law requires state permission for school districts transferring funds greater than 10 percent of a given line item, which Foster said caused some confusion.

"Because of the newness of the law, officials thought they had to request our permission for all transfers, he said.

In Freehold, borough school officials have recommendations to help students meet academic standards set by the federal No Child Left Behind law, but no money to implement them, said Phil Meara, superintendent of schools.

"We have host of recommendations . . . for an additional guidance counselor, a world language teacher, for calculators, for workbooks," Meara said. "We have no money to fund it and no additional funding from the state or federal government."

Taxpayers approved last year's budget, which contained a tax increase, he said. But following a reassessment of properties, residents defeated a referendum in December for renovations and to build new space at schools.

School officials in neighboring Freehold Township said they're preparing a list of potential cuts for this year's budget for the Board of Education to make.

"We haven't finalized areas to be cut, but we'll need to do cutting that will affect staffing and some other aspects," said Catherine Snyder, superintendent of schools. "We're going to have to cut back on things as a result of 1701."

For a lot of districts, increases in utilities, fuel and insurance will push budgets above the 3 percent spending cap. That means cuts will have to be made elsewhere, she said.

Meanwhile, more districts are taking their case to parents and state legislators.

"We have spoken with our Parent-Teacher Organization, and they are aware," Snyder said. "Until it directly affects them, then people will pay more attention to it."

State education officials said they've offered technical help to school districts having trouble meeting the provisions of 1701.

"We have a standing offer for any district saying they're experiencing hardships due to 1701," said Rich Vespucci, state Department of Education spokesman. "We'll review budgets, identify areas where districts have flexibility in spending, and if they need to reduce programs or staff, (help them) to minimize the impact of those things."

Parents such as Newsome and school officials have worked with the Garden State Coalition of Schools to change 1701 and other school funding issues, said Lynne Strickland, coalition executive director.

Rumson officials were denied permission by state education officials to transfer money in the budget to hire another fifth-grade teacher after enrollments increased before school started last fall.

"Rumson was feeling an unintended consequence of 1710 a year ago, and they sought me out," Strickland said. "These are the things that grabbed the parents' hearts."

Newsome said she supports a bill proposed by Assemblywoman Jennifer Beck, R-Monmouth, to repeal 1701 and form a task force to look at better ways to limit spending and reduce property taxes.

"Parents are getting it more and more," Newsome said. "It (1701) takes away local control."

For information about the Coalition of Families For Excellent Education, e-mail info@coffeenj.org