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On State Budget for Fiscal Year 2007
Testimony before the Assembly Budget & Appropriations Committees
March 28, 2006
Overview
Public support for public education in
To keep
- develop and implement a new public school funding formula ; one that is unified, fair and responsive to student and community needs;
- revisit the rationale for property tax support of schools, seeking ways to offer relief to local taxpayers, while being wary not to destabilize the constancy of revenue support that property taxes best provide; the legislature should tackle this conundrum now.
- make gathering of accurate, up-to-date, transparent, complete school finance and district data a number one priority. Current data is out of date in many instances and incomplete – it is too often not possible to make quality decisions based on what is ‘out there’. It is acknowledged that there are two systems of funding
- seek legislative action in the areas that can improve efficiency; base legislation on factual evidence and fiscal notes before moving it ahead. For example, on-going conversation about regionalization being an effective and efficient avenue to improve cost and delivery of education falls flat when existing tax laws are an immediate disincentive to districts’ seeking to combine; it is also known that the combining of districts will impose higher salaries on the district[s] salary guide that is/are not the highest in the potential regional district….Move mandate relief legislation to the Governor for signature.
- address cost drivers of school budgets are beyond local district control but are within the state’s purview to varying degrees: health benefits, utility costs; pensions; insurances to name a few – state action in these areas is required if substantial change is to occur to stabilize the cost of education in New Jersey.
Governor Corzine’s Proposed Budget for Fiscal Year 07: Some Positives
- Above Average Enrollment Growth Aid
The proposed budget breaks new – and helpful - ground in that it provides enrollment growth aid up front. Districts can make practical plans for programs within their budget process; while this type of aid has been forthcoming via the Appropriations Act in the past few years it is only a known at the end of June, after property taxes have already had to be raised to support enrollment growth.
- Special Education Grant Funding
GSCS has long argued that required special education programs require additional state funding to support our most vulnerable children, and to reduce pressure on regular education programs. By including grant funding for programs for autistic children and for special education programs in general, the Governor acknowledges the import of state support in this regard as well as endorsing districts to take a lead in providing and combining in district special education programs.
- Commitment to developing a new school funding formula
The Governor recognize that it is time to address the inequities that exist in the school funding system and intends to work with the Legislature and stakeholders to develop a new school funding formula.(Budget in Brief, p. 26)
- Abbotts are asked to contribute a reasonable local ‘fair share’
As the excerpts from a Star Ledger column below demonstrate, the Governor understands that things can change in positive directions and that it is time for some (8) Abbott districts to begin to share in the support of their schools where their property values have increased to such an extent that it is viable and fair to ask them to do so.
Excerpts from 3-10-06 Star Ledger/T Moran ‘Time is ripe for poorer districts to contribute’ …Sciarra now believes that some of the healthier Abbott districts should lighten the state's load by raising their own property taxes… So now Sciarra, the man who brought billions of dollars to the cities, says some of them are making out a bit too well…"If an Abbott district can contribute more funds because property values have gone up, they need to do so," Sciarra says. "We have to adjust."…..…Gordon MacInnes, the assistant education commissioner charged with running the Abbott programs, recommended recently that Corzine take the leap. "There are a number of districts that can afford to raise their taxes," MacInnes says…"This is not a fair system now. I don't think it's sustainable over time. …….…Strickland and her coalition have been remarkably supportive of the Abbott programs over the years. But it's getting harder for her to hold that alliance together. "Things have gotten better in a lot of Abbott districts," she says. "They need to contribute more. Fair is fair."
Excerpt from 23-24-06 Star Ledger/Mooney …” Superintendent Marion Bolden said she didn't have a problem with local taxpayers bearing some of the additional costs, conceding that
Governor Corzine’s Proposed Budget for Fiscal Year 07: Some Problems
- Property taxes will continue to rise at high rates
Three governors later and going into the sixth straight year of ‘flat formula aid’, schools and their communities will compete more than ever to remain stable and – very important as well - comfortable with one another. Fiscal Year 07 brings nothing new in terms of formula change and cost drivers continue to outpace allowable growth that local taxpayers must foot on their own.
These concerns are supported by data: Since state formula aid was frozen in FY02, property taxes have grown by $2.378B; special education costs and health benefits costs combined take up approximately 62% of that growth alone. (See attached tax and enrollment charts.)
- Special education remains inadequately supported
Enrollments have grown by approximately 17K since FY02; as the legislature did in FY04, the category of special aid extraordinary aid needs to be updated by current enrollment and costs.
- School construction
State school construction funding is direct, measurable and meaningful property tax relief to our towns and cities. Voters in suburban and other towns approved 60 additional projects last year with the understanding that at least 40% of eligible project costs would be paid by the State. These communities continue to wait for information as to how the state share of their costs will be realized. To date, there is no practical word from the state on how it will proceed in this regard.
To conclude, we end where we did last year: we hope the state keep its promise, expressed both by legislators and the governor, to develop a school funding formula, and corollary revenue-raising system, that does not divide but that works to provide support and quality education for all our school children, and stability and comfort to all our communities. Thank you.
Attached: Chart - Health Benefits costs + Special Educ costs v. local levy increases in *regular operating districts FY02 - FY06; Enrollment growth charts for resident enrollment and special education enrollment FY02 - FY06 for *regular operating districts only [*excludes Abbott, charter schools, vo-techs, service commissions, non-operating districts]; Chart - statewide resident enrollment growth FY02 - FY06.
