3-13-14 Education and Related State Budget Issues in the News
(FYI Note re: Context - Good News, Hard News: 2010 $1B Federal Recession Stimulus Boost to School Aid Limited to that One Year Only)

NJ Spotlight - Is Record-High State Aid to Schools Really Just a Numbers Game?

Star Ledger - NJ property taxes climbed an average of 1.7 percent last year

Courier Post - Camden schools face large deficit for 2014-15 budget

The Record - Analysis: State budget gap could cost N.J. for years

NJ Spotlight - Is Record-High State Aid to Schools Really Just a Numbers Game?

John Mooney | March 13, 2014

Nonpartisan analysis shows districts getting less than total received in 2009-2010

 

In touting his proposed state budget for next year, Gov. Chris Christie is quick to say that New Jersey, under his watch, is providing more state aid to public schools than at any time in history.

But while that is true for the total aid package, a new analysis by nonpartisan legislative staff finds that four out of five school districts would continue to see less state aid under the new budget than what they received in 2009-2010, when Christie took office.

Related Links

School Aid Analysis by the State Office of Legislative Services

Maybe more damning politically, two of three legislative districts would see their schools losing a significant amount of aid over that time, according to the analysis, including aid drops of more 20 percent in some North Jersey school districts.

The annual analysis by the Office of Legislative Services is not a big surprise. It has been a long-running point of debate, and previous analyses by OLS have found the same reality for a majority of school districts over the past several years.

Christie’s proposal in his next budget to boost state aid to districts by less than 1 percent was not expected to change that picture much.

Nonetheless, the new report provides an updated backdrop for the start of the budget deliberations, with the state Assembly’s budget committee holding its first hearing yesterday at Montclair State University.

Among a flurry of concerns expressed by more than two dozen people testifying before the committee, several advocates yesterday contended the Christie administration continues to shortchange public schools.

Whether much will change, however, is an open question. The state faces a mounting fiscal crisis as it tries to meet its pension obligations, leaving little to no discretion in the budget.

But the Assembly committee’s chairman, Assemblyman Gary Schaer (D-Passaic), said after the hearing that the budget process is an open one that could bring changes from the Legislature.

Nonetheless, he acknowledged the tight constraints on the state’s finances.s

“The question is how much will there is to do more for education,” he said an interview. ”These are critical issues … these are vital issues. But do we have the wherewithal, that is an open question.”

The Christie administration continued to defend its budget yesterday and emphasized that state aid remains at a record high. It said the only reason that most districts continue to see less aid compared to 2010 is that federal stimulus that year gave a one-time boost to what districts received.

“When it comes to state funding for public schools in New Jersey, there is one undeniable, undisputable fact: State aid for education is at the highest level ever,” said Mike Yaple, spokesman for the state Department of Education. “This is true in the governor’s recent budget proposal, it was true the year before, and it was true the year before that.

“When people compare the state’s current school-funding levels to fiscal 2010, they sometimes conveniently forget that New Jersey had a billion-dollar cushion in federal stimulus money that year,” Yaple wrote in a statement.

 

Star Ledger New Jersey Property Taxes Climbed an Average of 1.7 Percent Last Year

By Associated Press on March 13, 2014 at 7:45 AM, updated March 13, 2014 at 8:21 AM

TRENTON — Gov. Chris Christie will announce that the average property tax increase in New Jersey last year was a relatively modest 1.7 percent, a fact he will use to claim sustained progress on one of the state's perpetual political issues, a state government official told The Associated Press.

Christie will announce the preliminary income tax data during a town hall meeting in Mount Laurel on this morning, the official said. The official was not authorized to disclose details before the governor's remarks and spoke to the AP on the condition of anonymity.

According to the administration's data, more than 80 local governments and school boards out of more than 1,100 decreased taxes last year and 160 had increases of less than 1 percent.

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N.J. Assembly Democrats vow to fight property taxes during swearing-in ceremony


Property tax burden up 13 percent under Christie, AP analysis shows

The bill for a home assessed at the state average of about $300,000 was around $8,200 — the highest in the nation.

Christie signed a law in his first term capping property tax increases at 2 percent but allowed governments to exceed that limit for a handful of reasons, including paying debt service.


In 2011, the average bill went up 2.4 percent, and in 2012, the increase was 1.6 percent — a contrast with a 2004 through 2006, when the bills went up at least 7 percent each year.

Bills under Christie have risen more slowly than in the past, but many homeowners have seen their liability increase significantly because Christie has not fully restored a rebate program that was gutted by his predecessor during the Great Recession and made available to fewer people.

An AP analysis last year found that the average property tax burden, when taking rebate and other relief programs into account, rose by 13 percent in Christie's first three years in office. That compared with a 15 percent increase during Jon Corzine's first three years in office. Corzine emphasized rebates more, while Christie has focused largely on controlling spending by local governments.

Controlling property taxes has been a major theme for Christie since he first ran for governor back in 2009. But talking it up now gives him a way to change the subject from scandals that have dogged his administration for the past two months.

A legislative committee and federal prosecutors are separately probing apparently politically motivated lane closures near the George Washington Bridge last year that were ordered by Christie aides and associates as well as claims that members of Christie's cabinet tried to tie Superstorm Sandy relief funds in one town to a mayor's support for a real estate development project.

 

Courier Post - Camden schools face large deficit for 2014-15 budget

Camden City school administrators are blaming past mismanagement for a projected deficit of tens of millions of dollars in the 2014-15 budget .

A memo from Interim Business Administrator John C. Oberg indicated the district must chip away at a budget gap that is based on projections of decreasing revenues, rising costs and a waning surplus.

Meanwhile, Superintendent Paymon Rouhanifard said at a recent Courier-Post editorial board meeting that early projections show the district will overspend the budgeted $23,000 per pupil cost for the current year by about $4,000 per pupil if the surplus is not correctly managed.

“While we had this funding (surplus), it was possible for the district to take in less money (revenue) than it spent (costs) each year, and that’s what we did,” Oberg wrote in a letter to principals. The carryover funds covered the gap.

“However, as we plan for the 2014-15 school year, we are facing a projected gap of tens of millions of dollars because fewer carryover funds remain.”

Rouhanifard called the situation a “critical issue we are grappling with in real time.

“I would argue in the past, the district hasn’t made significant moves as far as reducing personnel and aligning it to correspond with the decline in enrollment.”

Enrollment in Camden public schools has been on a steady decline since 2003. More than a decade ago, the daily enrollment was about 17,300; that number dropped to about 12,500 in 2012.

An influx of charter schools is part of the reason for the decline. The district budgeted $65 million to fund area charter schools this year. School officials did not have an estimate for the 2014-15 school year.

“The situation is not ideal,” noted Rouhanifard. “I deeply believe there is a path forward, but we are going to have to make some critical decisions this year to right size the budget.”

Oberg wrote in his letter to principals that the district must begin to make “hard choices” now in order to balance the budget and prevent a real deficit in the next fiscal year.

“While the exact size of the gap is still being determined, it is clear that it is large enough so that no single solution will close the projected gap,” he added.

“Instead, a number of actions must be taken simultaneously: the implementation of spending controls for schools and central offices, cost reductions and the identification of new revenue.”

For now, a spending freeze will help to prevent next year’s situation from growing worse, according to Oberg.

Rouhanifard said the district has yet to make a final decision on potential cuts. He did not, however, rule out the prospect of cutting staff.

“We haven’t made any determination yet as to where we prioritize the cutting, but we do know there is a lot of inefficiency in the district,” he added.

“We need to start at the central office and think about the size of the bureaucracy and then work our way down.”

Reach Phil Dunn at (856) 486-2456 or pdunn@cpsj.com. Follow him on Twitter @philmdunn.

Courier Post - Camden schools face large deficit for 2014-15 budget

Camden City school administrators are blaming past mismanagement for a projected deficit of tens of millions of dollars in the 2014-15 budget .

A memo from Interim Business Administrator John C. Oberg indicated the district must chip away at a budget gap that is based on projections of decreasing revenues, rising costs and a waning surplus.

Meanwhile, Superintendent Paymon Rouhanifard said at a recent Courier-Post editorial board meeting that early projections show the district will overspend the budgeted $23,000 per pupil cost for the current year by about $4,000 per pupil if the surplus is not correctly managed.

“While we had this funding (surplus), it was possible for the district to take in less money (revenue) than it spent (costs) each year, and that’s what we did,” Oberg wrote in a letter to principals. The carryover funds covered the gap.

“However, as we plan for the 2014-15 school year, we are facing a projected gap of tens of millions of dollars because fewer carryover funds remain.”

Rouhanifard called the situation a “critical issue we are grappling with in real time.

“I would argue in the past, the district hasn’t made significant moves as far as reducing personnel and aligning it to correspond with the decline in enrollment.”

Enrollment in Camden public schools has been on a steady decline since 2003. More than a decade ago, the daily enrollment was about 17,300; that number dropped to about 12,500 in 2012.

An influx of charter schools is part of the reason for the decline. The district budgeted $65 million to fund area charter schools this year. School officials did not have an estimate for the 2014-15 school year.

“The situation is not ideal,” noted Rouhanifard. “I deeply believe there is a path forward, but we are going to have to make some critical decisions this year to right size the budget.”

Oberg wrote in his letter to principals that the district must begin to make “hard choices” now in order to balance the budget and prevent a real deficit in the next fiscal year.

“While the exact size of the gap is still being determined, it is clear that it is large enough so that no single solution will close the projected gap,” he added.

“Instead, a number of actions must be taken simultaneously: the implementation of spending controls for schools and central offices, cost reductions and the identification of new revenue.”

For now, a spending freeze will help to prevent next year’s situation from growing worse, according to Oberg.

Rouhanifard said the district has yet to make a final decision on potential cuts. He did not, however, rule out the prospect of cutting staff.

“We haven’t made any determination yet as to where we prioritize the cutting, but we do know there is a lot of inefficiency in the district,” he added.

“We need to start at the central office and think about the size of the bureaucracy and then work our way down.”

Reach Phil Dunn at (856) 486-2456 or pdunn@cpsj.com. Follow him on Twitter @philmdunn.

 

The Record - Analysis: State budget gap could cost N.J. for years

Wednesday, March 12, 2014    Last updated: Thursday March 13, 2014, 9:23 AM

BY  JOHN REITMEYER

STATE HOUSE BUREAU

Governor Christie was in the Washington area last week, promoting fiscal prudence in a speech before the Conservative Political Action Conference. Back in New Jersey, his administration was hammering out a convoluted financial transaction that could cost more in the long run, but right now freed up millions of dollars to help close a state budget shortfall.

For Christie, a Republican who has talked repeatedly about spending discipline since taking office in early 2010, it was the latest move to help deal with a revenue gap the state constitution requires to be closed. Others have included de­laying property tax relief, raiding clean-|energy funds and breaking promises to rely less on new borrowing for transpor­tation projects.

Christie has said those things are necessary to make sure the state is able to cover debt service, to make payments into the public pension system and to increase aid to schools.

The revenue shortfalls — the current state budget had a gap estimated to be around $400 million before the governor announced a series of changes along with a new state spending plan last month — are not the result of declining state tax collections. Instead, the gaps have opened up because the growth in tax collections hasn’t lived up to spending increases Christie has authorized in his last three state budgets.

That’s a top concern for lawmakers as they begin a new round of hearings this week on the Republican governor’s latest spending plan, a $34.45 billion budget that would set a record for state spending if approved unchanged later this year.

The first public hearing on the budget was held on Wednesday at Montclair State University. A second hearing is scheduled Thursday at Paramus Borough Hall.

Lawmakers have until July 1 to put forward their own spending plan or adopt the governor’s proposal. Christie struck a budget deal with Democratic legislative leaders before the deadline last year, but they have signaled 2014 will be different as recent public opinion polls show the governor’s approval rating has dropped amid the controversy of the lane closings at the George Washington Bridge last September.

“Clearly, you have revenue shortfalls, due to overly optimistic revenues, which creates a structurally imbalanced budget,” said Senate Budget and Appropriations Committee Chairman Paul Sarlo, D-Wood-Ridge.

“We just keep putting on Band-Aids,” said Sarlo, who added that education funding, the public employee pension system and a dedicated funding source for transportation projects are other big issues as the committee hearings get under way.

State debt is another concern, according to Assemblyman Gary Schaer, D-Passaic, who takes over as chairman of the Assembly Budget Committee this year after serving as its vice chairman the last six years. Borrowing increased by more than $3 billion during Christie’s first term in office to more than $40 billion.

“From four years ago to today, the only thing we have to show for ourselves is significant additional debt,” Schaer said.

He also questioned the wisdom of the state Department of Treasury’s latest transaction, which involved restructuring bonds related to revenue the state is receiving as a result of the 1998 settlement with cigarette companies.

The complicated transaction will generate about $92 million for the general fund in the current fiscal year ending June 30. Treasury officials denied the tobacco bond transaction was consummated to help close a revenue shortfall.

“In light of current market conditions, we believe we have an affirmative obligation to identify and pursue appropriate and often routine opportunities to realize debt service and other savings,” said Treasury spokesman Christopher Santarelli.

But Schaer said the state may have given up about $400 million in future revenue from the tobacco companies to get the short-term relief. He also faulted the Christie administration for “not banking it for the future, but spending it all today.”

And Sarlo questioned whether the tobacco bond transaction ran afoul of another budget requirement in the state constitution, a provision that prohibits the state from borrowing to sustain annual spending.

Republican lawmakers have taken prior Democratic administrations to court over similar refinancing issues in the past, he said.

“Why are my Republican colleagues on the budget committee not jumping up and down?” Sarlo asked.

But Santarelli said generating revenue for the general fund off the restructuring was not comparable to the prior borrowing schemes, and he said it will shore up the tobacco bond issue in the long run.

“This transaction meets the same sound policy test this administration has taken in evaluating any such financial transaction throughout the last four years,” he said.

Email: reitmeyer@northjersey.com