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Jan 9th Governor Corzine delivered his State of the State Message, with a total focus on property tax issues: Notable to GSCS were (1) when talking of consolidation efforts, the Governor used the word 'voluntary' but did not define details or how voluntary consolidation could actually play out, and (2) that the Governor spoke of the need for a school funding formula sooner than later, even specifying in ad lib mode one should be ready for FY'07-'08. GSCS has made those points re voluntary and the need for a new school funding formula being immediate and we were glad to hear the Governor emphasize them in his speech. However, the county consolidation bills A4/S7 and A8/S49 continue to be pressed by the legislature, with another round of votes on them probable for next Monday, the 22nd; and, there is now talk of scrapping a new funding formula and starting all over again. While GSCS has concerns about some of the proposals in the Department of Education's approach to a formula, we do not see them as insurmountable; we are also very aware that the legislature might be very relieved not to have to deal with legislating a new funding formula in an election year - this would not be good for school communities in general, a formal structure for future school funding must be put in place this year or another 3 years may pass before a realistic opportunity to enact a stable funding formula occurs again. Further, and very important, property tax relief and reform cannot really be initiated without the state school aid piece of the puzzle on the table from the beginning. GSCS will continue to press on the need for the format and structure of a new formula to be in place, via legislation, this year.
Dept of Educ Website: Planning for a New School Funding Formula »Home
Frequently Asked Questions
Is the report based on outdated data?
The “costing out” portion of the report is based on data from the 2004 – 2005 fiscal year. This was done so the information presented in the report would be consistent with information presented to the Joint Legislative Committee on Public School Funding Reform as well as to the various stakeholder organizations before the report was written. Final recommendations on the cost of education will adjust the costs to the most current year.
Why does the report omit preschool programs, transportation costs and school facilities?
Preschool, transportation and school facilities will all be addressed separately and are not included in this report. The cost of full-day kindergarten is included in the data presented in the report.
Why are the costs based on hypothetical school districts?
From the numerous comments received on this matter, it is apparent that the use of the term “hypothetical districts” created an inaccurate impression of how the work was completed. The six districts used in the PJP analysis were created precisely to approximate the variation of districts that actually exist in the State. Specifically, Application for State School Aid (ASSA) data were used to assess the variation in district and school size as well as grade configuration. Based on a review of these data, Dr. Augenblick developed the six districts to represent the characteristics of
How are the costs for all students in a district addressed by the model?
The total enrollment of a district will be used for calculations of state aid. In the implementation of any funding formula, actual aid will be determined by the districts’ actual student enrollment, not the enrollment figures used in the representative districts. Pages 12 through 13 of the report outline the mechanism for applying the PJP results to all school districts based on their actual enrollment. Similarly, adjustments for student demographics will be determined by the actual number of students exhibiting special needs.
Should the report account for the fact that costs vary in different parts of the State?
The analysis described in the report does take into account variations in costs across the state.The Department included the Geographic Cost of Education Index developed by Dr. Jay Chambers in its analysis. The use of this index is discussed on page 17 of the report.
Monday, January 15, 2007
BY GEORGE AMICK
The outlines of the tax relief and reform package that State House Democrats hope to enact this winter became clearer last week when Gov. Jon Corzine delivered his State of the State message to the Legislature.
But if, as they say, the devil is in the details, too many essential details are missing.
The governor, Senate President Dick Codey and Assembly Speaker Joe Roberts have "a broad conceptual agreement on almost every im portant element of a plan," Corzine said.
Its centerpiece, he said, is a state-funded credit for New Jerseyans against their property tax bills. Some 1.4 million of the state's 2 million households would get a 20 percent credit, averaging a bit over $1,000. Another 500,000, with higher incomes, would get 15 percent or 10 percent.
That's pretty modest relief, given that the average property tax bite is around $6,000. As former state Sen. Bill Schluter of Pennington points out, it would put property tax bills back to where they were only three years ago. They were far too high then, too.
Most of the money for the tax credits this year would come from the existing homestead rebate program plus funds the state set aside from last summer's one-cent increase in the sales tax. After 2007, an additional $2 billion annually would be needed to keep the credits going.
Only a few brave souls at the State House have whispered that the best way to pay for the credits is by increasing the income tax. Corzine isn't among them. He said the money can be found by eliminating those perennial villains, waste, fraud and abuse (for which he's counting heavily on the creation of a muscular state comptroller's office) and what he calls "asset monetization," a.k.a. the sale or lease of the Turnpike and other state property. Details of that strategy also are lacking, but already the idea has encountered strong resistance from legislators and the public.
Once tax relief is granted, the governor said, the "absolutely critical" key to keeping it is to impose a 4 percent cap on local property tax increases. This "sustains the value of the credit by breaking the back of the almost 20 years of 6.5 percent to 7 percent average annual tax hikes," Corzine said.
Most New Jerseyans, no doubt, would cheer a cap on property taxes -- and complain that it should be lower than 4 percent. But a 4 percent cap, without other reforms, would put even the most cost-conscious mayors and councils in a painful squeeze.
Many of the forces that drive up local property taxes are beyond their control. These cost drivers, as League of Municipalities director Bill Dressel calls them, are created by state laws with powerful interest groups behind them that Corzine and the Democrats have yet to address.
A big one is binding arbitration for police and firefighter contracts. Arbiters give heavy weight to the salaries that cops in neighboring towns receive, which tends to ratchet up everybody's pay scales. They aren't required to consider either the present state-imposed cap on municipal budgets or the Consumer Price Index (in other words, the town's ability to pay), and they don't.
The result is that annual raises for
Because pensions are tied to the employees' highest active-duty salaries, the effects of this kind of taxpayer hit endure for decades. But local officials have no say over retirement and health benefits, huge cost drivers that are largely dictated by the state. Local governments were told last summer that they must contribute $650 million to the public employees' and police and firefighter's retirement systems this year -- an eye-popping $267 million increase over 2006. They will have to do this while coping with inflation, excessive arbitrated pay hikes and excessive mandated benefits.
If their state aid is frozen again, as it has been for five straight years, and on top of that they are required to deal with a hard cap on their only source of revenue, the property tax, it will be like lashing down the lid of a pressure cooker while turning up the heat. Something will have to give. The caps will collapse -- or else a lot of conscientious towns in which waste, fraud and abuse are in short supply will be forced into painful layoffs and service cuts.
January 10, 2007
Fiscal pain, and relief
Corzine calls for property tax credits, tight caps on local spending
Wednesday, January 10, 2007
BY DEBORAH HOWLETT
Star-Ledger Staff
Gov. Jon Corzine has a to-do list a mile long.
He wants to make health insurance available to all New Jerseyans, turn the state's universities into leaders in academic excellence, protect tens of thousands of acres of open space from development, reduce gang violence, increase affordable housing and offer all-day kindergarten in public schools.
The price tag could be staggering, although the onetime Wall Street wizard has a couple of controversial ideas to pay for them, including cashing in state assets like the New Jersey Turnpike.
But all of those goals will have to wait, Corzine told the Legislature yesterday in his first State of the State address, until lawmakers can provide New Jerseyans relief from the highest property taxes in the nation.
"The time to act on property tax relief and reform is now," Corzine said to enthusiastic applause. "Property taxes are the cork in the bottle that constrains
Corzine delivered his constitutionally required assessment of the state much like the chairman of a corporation might address an annual meeting of stockholders. He tried to be candid and emphatic without scolding.
He gave the speech at the Trenton War Memorial, rather than the Assembly chambers in the Statehouse, to allow a wider audience of invited guests beyond the traditional gathering of lawmakers, Supreme Court justices, Cabinet members and former governors.
He invoked a number of inspirations, from Albert Einstein to
And his bottom line was upbeat.
"In many ways, the state of our state is strong -- and it is far stronger than we often acknowledge," Corzine told the standing-room-only crowd of 2,000. "We ought to be damn proud of this state. I know I am."
As is tradition in such speeches, Corzine ran though a litany of accomplishments. He noted that lawmakers created a "world-class" stem cell research institute; enacted civil unions legislation that "struck a blow for equal justice" and created a clean needle pilot program to deter the spread of AIDS.
Corzine also highlighted what he called his "long to-do list," which includes health care and higher education.
"There is no shortage of pressing issues for us to address, sooner rather than later. And, my friends, I promise you we will get there," Corzine said. "But today -- right now -- there is one challenge we must meet."
From there, Corzine launched into the meat of his remarks: the necessity to ease the troublesome burden of taxes on the state's property owners.
All of the rousing applause he enjoyed through the first half of his speech died away when he took up the cudgel on taxes.
Corzine said he and the Democratic leaders in the Legislature, Assembly Speaker Joseph Roberts (D-Camden) and Senate President Richard Codey (D-Essex), are in synch on most of the major points of a tax plan.
"We may not yet be in total agreement on every detail of every issue. But the road we have traveled is much farther than stretch we have left," he said. "I am confident if we share the burden we will find the flexibility and courage to go the last mile."
The governor outlined a plan to provide tax credits to 1.9 million
Corzine, however, warned he would not sign off on credits without a strict 4 percent limit on annual increases in property tax levies. He said capping spending by local governments is essential to long-term tax relief.
"The credits and caps work off each other," Corzine said. "They are a tandem, like Lewis and Clark or Batman and Robin, breaking new ground and protecting the public."
Paying for tax cuts and the myriad other projects -- as well as up to $60 billion in unfunded liabilities for public employee pension and retirees' health care -- will require new thinking, Corzine said. One possibility is "monetizing" state assets: selling or leasing properties such as toll roads, the Lottery or naming rights to buildings.
Saying it was "premature" to talk about specifics, Corzine said cashing in state assets offers the "greatest potential" to "achieve a multitude of policy goals."
The state's largest asset is the Turnpike, but some lawmakers have considerable trepidation about selling or even leasing the toll road and its nearly endless revenue stream for a lump sum.
"Leasing the state toll road for 99 years or 75 years, whatever the term may be, and getting a pile of money is really the mother of all one-shot deals," said Assemblyman John Wisniewski (D-Middlesex), who is chairman of the Transportation Committee.
But Democrats largely cheered the governor's speech, and vowed to get the work done.
"He zeroed in on what is the No. 1 challenge facing our state, laid out a road map for us to achieve it, and I don't think he could have been more direct or more forceful," Roberts said.
"If we don't do it, we don't come back in the majority. Simple as that," Codey said. "That's the priority that the people that we represent have: property tax relief. I think we see some light at the end of the tunnel, but if we don't get it done, the train's going to run over us."
Republicans found the speech repetitive. Assemblyman Joseph Malone (R-Burlington) said he heard the same things a year ago in Corzine's inaugural address and again in July before the special session on property taxes. "It's the same old nothing, over and over again. We all know exactly what the problems are," Malone said.
Corzine acknowledged the six-month effort to deal with property tax reform had faltered in December, but said the state is closer than ever to real reform.
"Some might have said it was more likely for a meteor to hit a house in Brick than for all of us to take on a sacred cow or touch a third rail. Well, the meteor hit, and we are on the threshold," Corzine said.
Never mind that the house hit by a meteor is actually in Freehold; the point was made.
He ended his address by offering lawmakers one final incentive. Corzine warned that if elected officials "stand down" on property taxes, he would have little alternative but to call for a citizens convention to tackle the issue.
Deborah Howlett may be reached at dhowlett@starledger.com or (609) 989-0273.
Corzine: Tax hike cap likely to be full of holes
Friday, January 12, 2007
BY DEBORAH HOWLETT
Star-Ledger Staff
Gov. Jon Corzine tried to allay concerns about the effect of a proposed 4 percent limit on property tax increases, saying at a town hall meeting in
"A hard cap is not going to be put in place," Corzine said. "I'm actually fearful that it's going to be so holey that we won't get the savings we are looking for."
Corzine spoke for more than 90 minutes at the gathering at
Nearly 400 people turned out for the meeting, including town officials, school superintendents, state workers and average citizens to quiz the governor on his plans.
Foremost among the concerns was the plan to limit property tax increases by capping annual growth in the taxes that local governments may levy at 4 percent.
Several local officials expressed concerns the caps would put them in severe financial binds.
Judy Ferguson, superintendent of the
Corzine said every consideration would be made but insisted limitations are needed.
"We need to break the back of how cost structures are going up," Corzine said, pointing out that the average local tax levy has risen by 7 percent in each of the past six years. "We will create some escape valves and some exclusions that will still allow us to have some discipline over these rising costs."
Corzine also said he would ad vocate that the limits "sunset" after five years, meaning lawmakers would have to re-enact the measure in order for it to continue. "I don't think we need a lifetime cap," he said.
The governor also fielded questions from a number of state workers. Christine Firman, a Department of Labor employee who lives in
"When you hear that pensions are going to be taken away, that's just not consistent with the facts," Corzine said. He said a 1997 law made all earned benefits such as pensions "non-forfeitable" rights. "People who think we're going to balance the budget on the backs of state workers, they're just hallucinating."
Perhaps the most poignant mo ment came when Fatima Aziz, a small, elderly woman in a long down coat, asked in a strong but quiet voice if, amid all the talk of taxes, pensions and budgets, the governor had forgotten those most in need, such as the homeless.
Corzine pointed out that in the current state budget he boosted to $4 million the $365,000 the state had previously spent on feeding the homeless. "I hope people don't think that just because we talk about budgets and just because we talk about property taxes means that somehow we've lost our heart," he said.
Veterans up in arms over change in school holiday observances
Wednesday, January 10, 2007
BY MARY JO PATTERSON
Star-Ledger Staff
Pity Commodore John Barry, the long-dead Irish-born Revolutionary War hero.
It seems the poor fellow no longer has anyone to stand up for him.
Last month, state lawmakers passed a bill relieving all public school districts of a mandate to observe Commodore Barry Day, as well as Arbor Day and patriotic holidays such as Memorial Day and Veterans Day.
The measure, unanimously enacted, got little notice at the time. But veterans groups have since taken notice, and opposition to the bill is gathering steam. The New Jersey VFW has fired off a letter to Gov. Jon Corzine, asking him to conditionally veto the bill and keep Memorial Day and Veterans Day programs in the required school curriculum.
So far, though, no one has writ ten Corzine on behalf of Commo dore Barry.
No one has written the governor, either, on behalf of Arbor Day,
Anthony Coley, a spokesman for Corzine, said the governor is aware of objections from veterans groups, but has made no decision.
"We're in the reviewing phase," he said.
Coley did not mention the fact, but Corzine is himself a veteran, having enlisted in the U.S. Marine Corps Reserves after college.
Some veterans, meanwhile, are incensed.
"Why not have it mandatory veterans come in, two days a year, and talk personally with kids?" asked Albert J. Bucchi, 59, legislative director of the New Jersey VFW and a
The American Legion feels the same way.
"We haven't had time to bring it up officially, but I would think all vets would be insulted. We don't like this," state commander Chuck Robbins said.
Neither does Dennis Levinson,
On the surface, the reaction by veterans groups looks like a footnote to a minor bill. But a closer look shows that's not quite true.
The bill is actually a watered- down version of a much broader, earlier legislative proposal to eliminate costly school mandates and thus reduce local property taxes, said Lynn Strickland, executive di rector of the Garden State Coalition of Schools.
Strickland also is a former member of the Education Mandate Review Study Commission, which the Legislature created in 2003. Its job was to figure out what school mandates could be eliminated, without harming kids, to help districts save money.
The Commodore Barry Day mandate was on the top of the commission's list, Strickland said.
State education bureaucrats had been trying, unsuccessfully, to get rid of Commodore Barry observances in schools for years. "Barry Day" had become shorthand for "stupid school mandate," Strickland said.
But many other mandates were recommended for elimination, including rules on data collection and record keeping, she said.
The legislative proposal that came out of the commission's report "couldn't get passed," but it gained a new life this year when the Legislature tackled property tax reform, Strickland said.
"Education advocacy groups all around said, 'At least pass the education mandate review legislation,'" she said.
Lawmakers recessed for the year Dec. 14 without passing significant reforms. But it did pass the holiday mandate bill.
Strickland called the effort "minimal" and "symbolic."
"The commission intended something much larger and far- reaching," she said. "We intended to give schools tools to save time, labor and money."
Mary Jo Patterson may be reached at (973) 392-4215 or
mpatterson@starledger.com.
Half-measures on mandates
Friday, January 12, 2007
Veterans are complaining about legislation awaiting Gov. Jon Cor zine's signature that would remove Memorial Day and Veterans Day from the mandatory school curriculum. Their concern is understandable. But the change, part of a recent bill to trim state mandates to schools, isn't what should be the most worrying to taxpayers.
Originally, the Legislature set out on a much more aggressive mission to eliminate wasteful and unnecessary school mandates, ones that could be trimmed without hurting educational quality.
That the bill ended up tak ing only symbolic baby steps toward reform -- making it optional for schools to teach about Arbor Day, Columbus Day and other celebrations -- says a great deal about how dif ficult it will be for
A gubernatorial study commission almost three years ago identified a host of unnecessary requirements that had been loaded on the schools over the years, things such as outdated and duplicative data collection rules.
No one is exactly sure how much money getting rid of these requirements could have saved individual districts, but, according to experts, the statewide total might have reached millions.
That is exactly the sort of reform property taxpayers de serve. But somehow along the way the legislative initiative was trimmed of more substantive reforms to get votes. The result was the namby-pamby elimination of the mandate for teachers to lecture on an as sortment of holidays. This is a change that, no offense to veterans, accomplishes little and saves less.
Sen. John Adler (D-Camden) says the holiday bill can work to build momentum for more substantive reform. Taxpayers should hope so.
