N.J. in hole for $53M after vote on schools

A $2.5 billion fund set up to help suburban communities build public schools is running on empty after voters approved 21 construction projects that would draw almost double the amount of money remaining in the fund.

That leaves state officials facing a thorny math problem: How to cover $113.4 million in promised payments with $60 million in available funding, a $53.4 million shortfall.

Kevin McElroy, spokesman for the New Jersey Schools Construction Corp., the agency overseeing the school building program, said representatives from the governor's office, the Department of Education and the state Attorney General's Office are meeting to prioritize how the $60 million will be doled out.

"There's going to be some (districts) that are pleased and unfortunately some that are going to be disappointed," he said.

Lynne Strickland, executive director of the Garden State Coalition of Schools, a lobbying organization for more than 100 school districts, said she is not convinced the fund is tapped out.

"They can find the money," said Strickland, citing the history of accounting problems that have dogged the schools corporation. "It's pretty irresponsible of the state to let the districts go on without any certainty."

In the 21 communities where voters approved school building proposals on Tuesday, local officials said they expect state officials to make good on the promised support.

"We certainly are anticipating we are going to get the money up front," said New Providence superintendent Ann Marie Inzano, noting she keeps the letter confirming the award of $3.2 million in state aid. "It's a wait-and-see situation. But we're going to hold onto our letter. It's right on the top of my desk."

In addition to the 21 voter-approved plans, Summit's Board of School Estimate approved a $16.9 million package of additions and renovations, of which $4.3 million would be eligible for state funds.

In some communities where voters rejected school building proposals in elections held Tuesday, disappointed local officials laid part of the blame on uncertainty surrounding the status of the state aid.

In Blairstown, for instance, superintendent W. Michael Feeney said local voters who turned thumbs down on an $18.8 million construction plan were troubled by the state's decision to pull the plug on a $95 million high school project planned for nearby Phillipsburg.

"There were people in our community who questioned whether the SCC was ever going to come up with that money," said Feeney, who counted on $2.9 million in state funding. "They reneged on their promise to Phillipsburg and others, so why wouldn't they renege on their promise to Blairstown?"

Of the construction projects presented to voters on Tuesday, only 55.1 percent were approved, the New Jersey School Boards Association said. That is the lowest rate of approval since 2000, when state officials set up the $2.5 billion aid fund -- which has paid for 2,250 school projects since its inception.

In the past, state officials have said that if they can't cover the promised aid with an immediate grant, local officials should borrow the funds on the pledge the state will cover a portion of the payments as they come due each year.

That drew mixed reactions from local officials.

"It's been the plan all along to lobby for the full amount," said South Hunterdon schools business administrator Julie Mumaw. Voters there approved a $20.8 million building plan with $5.4 million in state aid. "We were informed that our share was there."

Earl Kim, superintendent in Verona, said he appreciated voters' approval of his $34 million construction plan, but said uncertainty over how the state would provide its $8.7 million share probably contributed to the narrow 10-vote margin of victory.

"One way or another we intend to get our $8.7 million," Kim said. "It's kind of like winning the lottery. In the SCC case, we get a lump sum payment. In the annuity case we get it on a yearly basis. ... Either way, we fully expect the Legislature to do the right thing."

The shortfall in the school aid fund mirrors the dilemma state officials faced in the summer, when a $6 billion pot of aid for urban communities was found to be oversubscribed.

Then, the SCC targeted 59 projects for completion, and shelved more than 200 others.

Supporters of the program have introduced legislation that would authorize almost $3 billion in new borrowing to replenish the urban and suburban funds. But prospects for new funding is dimmed by the fact that the SCC is in the throes of a top-to-bottom reform prompted by an Inspector General's report that found the agency riddled with waste and mismanagement.

That report followed an analysis in The Star-Ledger that found the six schools built by the SCC cost, on average, 45 percent more than 18 schools built without SCC involvement at the same time.