Legislative Hearing on School Funding

 September 25, 2003

Long Branch Middle School

Good afternoon, Mr. Chairman. GSCS appreciates this opportunity to talk with you on the ever-important and ever- unresolved issue of how to fund schools. Today you will be hearing from parents and school board members who reside in GSCS member districts. GSCS is most fortunate to have such active volunteers who care so much about quality education for all children and who can speak so well about the needs in their own districts. Appended to this brief testimony are some interesting statistics on these districts.

As you know, GSCS has been focused on the duel pillars of quality and equity for academic achievement, educational practices and school finance - since GSCS formally organized in 1992. We have an overarching theme for these two pillars and that is ‘public support for public education.’ Without the continued support of public education, quality will recede and mediocrities will emerge. While GSCS was bolstered by the recent Star Ledger survey indicating strong parental endorsement of the public schools, we feel that the increasing angst about how schools are funded can and will tip that support soon. The Ledger survey also pointed out that property taxes divide that support, even among parents. How we avoid that perilous tipping point, if we do, remains to be seen. We offer you some thoughts:

Shorter Term Issues that need to be addressed and seen through:

1. Full funding of the Special Education Extraordinary Aid law (70 % of the entitlement funding).

2. Provide substantial mandate relief to our local school districts. Fiscal note analysis should be required and appended to all legislation that is introduced. The Senate has already passed S. 2421 establishing a Mandate Relief Commission. GSCS is focused on seeing that this Commission not only becomes a reality in the near future, but that when it does, its results are productive and timely. Relief should be given from state mandates where reasonable, and federal mandates that do not work and/or are unfunded should no longer be passively accepted as “the way of it.” Let’s be specific about two federal mandates that are woefully underfunded: NCLB and IDEA. These programs as so underfunded that they threaten to pit quality education against valid need. The warlike constructs that arise due to the application and underfunding inherent in these laws is easily seen and should be held unacceptable. In the case of the NCLB process, the exception is disproving the rule when one to two students’ test results can label an entire school as a ‘failure.’  The federal government must hear from the state leadership, as well as from the stakeholders of public schools, school boards, educators, and parents on this.  GSCS and its Parent Network challenge you to join with us to bring this message to our Congressional delegation and education leaders in Washington D.C. Soon.

3. Start a serious review and revision to temper the health benefits cost spiral. Look to provide reasonable ways to relieve the costs, such as not mandating dual spouse coverage when both are insured; investigate contracting out to local area hospitals.

4.  Data gathering is vital to proposing informed and workable solutions. GSCS surveys have served policymakers in the past well, in school construction and special education especially.  GSCS plans to undertake 2 new surveys this year: 1) the cost of NCLB and 2) shared services in GSCS districts. We urge the legislature to request similar surveys and decision-making tools from the administration now.

5. Insist that the District Factor Groups are updated and held to a clear and definable standard of use. Understand that DFG’s are not a measure of district capacity raise revenue, rather a socio-economic scale originally used for test purposes. With the exception of the Abbott decision, DFG’s should never be used for school aid decisions. That would be an unfair measure and should not be perpetuated.

6. See that the promise originally made during this year’s budget crisis is kept. Ensure that the ‘last state aid’ payment that was delayed last year is included as an additional payment within this fiscal year.

Long Term: Stable and Adequate Funding for all Public Schools

Property tax overburden not only must be addressed this year, but it is past time to talk only, and time to actually try to test some ways to resolve the conundrum.

1. Maintain continued support of the school construction program. This one program has been a great help to schools and their communities and we appreciate it. In fact, it is the only way that the state supports all school communities directly. For the first time, all districts are entitled to this basic type of state aid. Without this help from the sate, many districts would not have been able to pass referenda to build the new schools so sorely needed.

2.  All districts want and need equity in funding and in educational opportunity for their children and for their communities. Stability and fairness must be at the center of any state funding formula.  Tinkering with CEIFA will not cut it in the end. When about 44% of the regular operating districts in this state are required to fund their regular programs locally and when there is not enough funding to provide for schools in general, you know the system is not working.

Define what really constitutes “municipal overburden” and local ability-to-pay and then apply those standards fairly to all districts. School districts are rapidly reaching a time when they can no longer adequately support the cost of a thorough and efficient education in their towns. Already many communities are failing to pass school budgets. The probable average for local taxes supporting GSCS district budgets is about 90% today.  It simply is not reasonable, nor responsible, for the state to increase that local share any higher. In fact, it is worthwhile to consider what could be a reasonable high and low ratio of state v. local support for our schools. For example, a scale from 15% to 85% where the local share to support T&E and mandated programs is benchmarked at 15% for a district with a minimum capacity to a possible 85% for a district with the highest capacity. It is understood that this is a suggested format and we recognize that anomalies/special circumstances will occur. The ‘power of the pursestrings argument’ could be applied to districts that may exceed those benchmarks: Above 85%, districts would be subject to reduced mandate load, given adequate student performance;  below 15%, districts would be subject to a higher degree of state control.

3. Find a way to fix property tax overreliance that does not undermine public support for public education. Ten years ago about 140 districts were deemed too wealthy to receive basic state foundation aid; today about 250 districts purportedly fit that definition. Ten years ago the combination of state and federal dollars supported special education programs on an approximate two-thirds to one-third ratio. Today that ratio has nearly reversed itself to where districts must pick up that cost via local property taxes up to two-thirds of that mandated cost.  The state and federal support has dwindled to about 0ne-third of the funding needed to maintain special education programs as required. Given that the state supports special education with about $1B now, the overall cost to New Jersey taxpayers can be estimated to be around $3B now.

4. Hold a special session on property taxes in this legislative year. It is certain that we all need to pitch in and be willing to not only find ways to garner enough funds for our schools, and to ensure that all school districts receive adequate state support, but also to explore ways to reduce expenditures where it can be done without hurting programs or over- regulating local districts. And, understand that legislators are now just as vulnerable for not addressing this issue as they used to feel they would be for talking about raising and rebalancing state revenues. GSCS members are willing to entertain raising revenues, given that some of the additional revenue would come back to their local communities.

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Mr. Chairman and members of this committee, attached to this presentation are two sheets: one is an overview of state aid from the 2002 school year. It cannot be updated meaningfully, since CEIFA has not been run for the past two years. But the picture it presents is informative.  The other sheet provides you with some statistical facts on GSCS member districts that are here today.

GSCS is prepared to assist with any information you may need to help make the decisions that will make a difference in New Jersey’s school financing problems.

These decisions require the will to lead.  Will you, please, join with your colleagues in Trenton, and start the decision making soon.    Thank you.

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Garden State Coalition of Schools
160 W. State Street, Trenton New Jersey 08608
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