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(The New York Times explores impact of S1701 on school budgets. A clear credibility gap is ever-widening between legislative 'take' and local reality. Parent & community family groups, such as the newly formed COFFEE [see "Links" on the sidebar] are rising up from the grassroots in response to Trenton's disconnect.) April 16, 2006 In New Jersey, Spending Cap Pinches Schools By DAVID W. CHEN
"As residents of New Jersey prepare to vote on their school budgets on Tuesday, educators and parents say that they are struggling with a major crisis forcing districts to cut programs, shed staff and charge fees for things that were once free.
The chief culprit, they say, is not a public opposed to public education, or an onerous federal mandate, but a recent state law ..."
April 16, 2006
In New Jersey , Spending Cap Pinches Schools
As residents of New Jersey prepare to vote on their school budgets on Tuesday, educators and parents say that they are struggling with a major crisis forcing districts to cut programs, shed staff and charge fees for things that were once free.
The chief culprit, they say, is not a public opposed to public education, or an onerous federal mandate, but a recent state law that limits the annual growth in spending by school districts to 2.5 percent or the increase in inflation, whichever is more.
The law also requires that budget surpluses exceeding 2 percent be returned to taxpayers.
In
In Marlboro, it has meant that parents had to swaddle their children in extra clothing during the winter because the schools lowered the heat to save tens of thousands of dollars, school officials and parents say.
And in the
The law, known as S-1701, was passed in 2004 with broad bipartisan support and signed by the governor at the time, James E. McGreevey.
Supporters say the law has imposed vigorous fiscal discipline, while easing property taxes.
They also say that by embracing such an approach, however unpopular, lawmakers have sent a powerful message at a time when the state is grappling with a $4 billion budget shortfall, and surging pension, insurance and debt-service costs.
"I think people are crying wolf," said State Senator Wayne R. Bryant, a Democrat from
"They want total freedom to do their budgets without the transparency," he continued. "But they just can't hoard money that is taxpayers' money."
But critics, including many parent organizations, say the law has shackled districts by preventing them from having enough money or administrative freedom to absorb unexpected costs, such as emergency repairs or exorbitant fuel and insurance bills. It has also stripped districts of some of their decision-making authority.
The fiscal problems have been compounded, school officials say, because state aid to all schools has remained flat for the last five years.
"You can call any district, and everybody is going to have something affected by this," said Alan C. Reiffe, business administrator for the
The outcry has prompted some legislators to introduce bills to loosen or even repeal the law.
State Senator Leonard Lance, a Republican from
The issue has also attracted the attention of Gov. Jon S. Corzine. At a town hall meeting on the budget last month at
"The answer is not that I wouldn't like to," Mr. Corzine said of scrapping the law, "but I believe that it would be very difficult to say that we're going to make all these other difficult choices and then not ask for discipline where there are large amounts of state aid."
In 2004, legislators tried to curtail the growth in education spending and came up with S-1701, as part of a broader package that increased taxes on incomes of more than $500,000 and called for a constitutional convention on property taxes.
"It's the only salvation the taxpayers have in the current out-of-control spending," said Jerry Cantrell, president of the Silver Brigade, a statewide grassroots group that seeks to reduce property taxes. "The schools always hide behind the 'it's for the kids' mantra and it's hard for the average citizen to mount a salable argument against it."
But Moody's Investors Service released a report in August 2004 warning that
In May 2005, the New Jersey School Boards Association, which supports a repeal, surveyed its members, and found that many reported that S-1701 had had a negative impact.
The bond rating for
State Senator Ellen Karcher, a Democrat from
This year, several districts, including
"What's frustrating about it to me is that supposedly it's to provide good government, but it seems like more of a political fix to artificially reduce tax rates by reducing surplus," said Andrea L. Kahn, a bond attorney and partner at McManimon & Scotland in Newark, who has worked on numerous municipal bond issues. "But by reducing surplus and taxes in a given year, and causing taxes to bounce back the following year, you're really hurting the ability of a local government to plan for tax stabilization."
Around the country, state and local governments often mandate spending caps for local school districts, but there have been more attempts of late to loosen existing caps, rather than create new ones, said Jason Wisecup, an education finance researcher for the National Conference of State Legislatures.
But it seems unlikely that S-1701 will be repealed any time soon. None of the top Democrats in the legislature — including Mr. Bryant, former Gov. Richard J. Codey and Assembly Speaker Joseph J. Roberts Jr. — have indicated much interest in doing so.
And in an interview after a recent budget hearing in
So S-1701, in his mind, is the right tool for school boards.
"I'm not saying that it's not a larger challenge for them," Mr. Greenwald said, "but it's a challenge that many of them need