Best explanation I've read for NJ's school financing/tax mess.

The following appeared in the Wall Street Journal yesterday and it is one of the most concise and informative explanations I've seen for New Jersey's school funding mess -- and how we got here.

Click here to read it on its source site.

New Jersey's Suburban Tax Blues
By PAUL MULSHINE

Newark, N.J.

With Rush Limbaugh fawning over him on talk radio and Fred Barnes comparing him to Ronald Reagan, New Jersey Republican Gov. Chris Christie is being hailed a conservative hero. But conservatives here in the Garden State aren't sold. Mr. Christie has been in office just a few months and is kindling comparisons not to President Reagan, but to the last governor named Christie.

In 1993 Christie Whitman, like Chris Christie in 2009, won the Republican nomination for governor by tacking to the right in the primary. In the general election she promised to cut income taxes in every tax bracket and implement an initiative-and-referendum process to give voters direct input on public policies. Mr. Christie made the same promises last fall.

But here the comparison gets interesting. Ms. Whitman actually cut state income taxes across the board—before losing favor with conservatives thanks to her spending policies and judicial picks. But Mr. Christie hasn't mentioned cutting income taxes since election night. He's blasted runaway spending, for which he's received due credit. Yet his proposed state budget all but guarantees suburban homeowners a property-tax hike this year.

The most important political issue in New Jersey—the one that drives debates about income taxes, property taxes, and local government power—is public education. The core of the problem is a string of state Supreme Court decisions, the most sweeping of which were issued by judges Ms. Whitman put on the court.

These rulings have directed an ever larger share of state income taxes to a handful of urban school districts. Suburban homeowners pay income taxes to support the urban schools while also paying some of the highest property taxes in the country to support local schools.

Getting a better break for the suburbs has been Republicans' goal since the state income tax was instituted in 1976. And they were optimistic when Gov. Christie appointed Bret Schundler, a former Jersey City mayor and a strong supporter of school choice, as the state's commissioner of education. But Mr. Schundler shocked fellow Republicans by proposing a new education funding formula that tilts spending further in favor of cities.

In legislative hearings, Mr. Schundler said the formula had been fashioned to comply with past rulings of the state Supreme Court. The first such ruling came in 1976, when the court shut down the state's schools to demand that the state send more money to the cities. That crisis spurred then-Gov. Brendan Byrne, a Democrat, to push the legislature to create the state's income tax. He promised the money from the income tax would be used to cut property taxes statewide.

And it did—until 1985. That year the State Supreme Court, claiming that the constitution required the state to spend more money on schools in poorer communities, ordered New Jersey to pump large sums into what turned out to be 31 districts now known as the Abbott districts. Four years ago, the Abbott districts were receiving 56% of the income tax money that had been meant to relieve local property taxes, while the suburban districts got 44%. Under Mr. Christie's budget for next year, that 56% rises to 60%.

The Abbott districts get about $4.8 billion in aid, while the 500-plus other districts must split up $3.2 billion. Thus Asbury Park will receive $28,232 per-pupil from the state next year while Mendham, the governor's hometown, will get $2.32 per pupil.

The Christie formula zeroed out state aid to 59 towns, many of which gave him the largest pluralities in last year's elections. Many such towns send tens of millions in income taxes to Trenton, and also face endless property tax hikes to fund their own schools. West Orange resident Adam Kraemer, who spoke at an antitax rally in his North Jersey town recently, owns a four-bedroom home on a small lot and pays $25,972 a year in property taxes. Mr. Kraemer said he expects his tax bill to hit $27,600 under Mr. Christie's budget.

Mr. Christie has a habit of evading questions about what he would do for homeowners like Mr. Kraemer. So far, the governor has done little more than endorse a promise also made by Ms. Whitman: a proposal to create voucher programs. The governor argues that vouchers and charter schools would alleviate some of the financial pressure the Abbott districts place on the rest of the state. Fine, but in the meantime New Jersey homeowners are crying out for the sort of comprehensive reform Californians got under Proposition 13, the 1978 ballot measure that addressed a similar court takeover of school funding.

Mr. Christie's fortunes will rise and fall depending on whether he can take back control of school funding from the courts and give suburban towns an equal share of state aid. But if taxes continue to rise, his prospects will fall—no matter how much he pleases commentators who don't pay Jersey property taxes.

Mr. Mulshine is a columnist for the Newark Star Ledger.

Don't look to Massachusetts as a guide!

Glenn Koocher of the Massachusetts Association of School Committees recently sent this message to Dollar$ & Sense advocacy group (of which Ridgewood is a member). It was originally written for the New York State School Boards Association during a better economic time, but it remains appropriate.

"In theory, tax caps sound great. They promise to relieve taxpayers of a financial burden and force government to maximize their economies and efficiencies. They also transfer to the state many financial responsibilities for public education - which, if managed properly, could increase equity.

In real life, tax caps don't work. Here is what happened in Massachusetts:

1) The state hasn't picked up the slack. The revenue that schools lost as a result of Massachusetts' tax cap has been largely unrecovered. The Massachusetts Legislature didn't make up the difference in lost funds, then, or now. School districts have effectively lost the ability to budget at the pace of inflation, or even close to it. Economic growth has benefited public education, but schools compete with dozens of other legitimate public policy priorities at the state level.

2) We've been overwhelmed by climbing costs. Supplies, fuel, special education, employee health insurance and retiree benefits don't have to comply with tax cutting mandates. Also, tax caps exacerbate the impact of spiraling costs of state and federal regulatory compliance with voluminous mandates from accountability systems, No Child Left Behind, and special education legislation.

3) We have been fighting more among ourselves. Tax caps pit segments of the community against each other. An unfortunate inter-generational battle is being fought between students and older people. Teachers battle firefighters and police for the hearts, minds, and money of the voters. Meanwhile, the social services infrastructure that helps make up the 'children's services safety net' struggles for their resources.

4) We've hurt the weak. Tax cuts hurt low-income districts much more than wealthier ones. Economically disadvantaged communities struggle harder because they don't have the property and income tax bases to keep up with the richer districts whose budgets start and remain higher, even in a crisis.

5) We've lost talent. Over the long term, tax caps cut critical positions that are not only important today, but essential for the future. Massachusett's schools lost half a generation of future teachers who were laid off 25 years ago or who never got an opportunity to be public educators in the first place. Today's principal and superintendent shortage is, in part, the result of the absence of those potential leaders who left the profession and never came back.

Schools aren't the only victims. We have a crisis in social services and have seen a loss of community support for children and families, which has many ramifications for public education. It all relates to diminished tax revenue.

A bad public policy, once implemented, becomes entrenched and is difficult to rescind. If saving taxpayers money is now your priority, tax caps may be for you. But if maintaining a socially responsible education policy is important, New York policy makers would be well advised to be extremely cautious as they consider a tax cap. A poorly crafted proposal will sacrifice the future for many in exchange for short term benefits for some."

Mr. koocher's e-mail included these words of wisdom:

Proposition 2 1/2 was a fine theory brutalized by a vicious gang of facts.

"There is no greater tyranny than a poorly written law." (Edmund Burke, 1780)

Explanation (again) of what we currently spend on facilities and why...

For those who missed it when I wrote before (click here), it is true that a school district may budget to put money into a capital reserve account, creating a fund that is accumulated for a “rainy day.” Our District established a capital reserve fund in 2000. We have funded it and, most recently, we used money from this account last year to do repairs on the 1919 roof at RHS. But in recent years, we have not been able to budget additional funds for capital reserve, nor have we been able to end the year with as much surplus as in the past.

Also, yes we are allowed to spend more on capital projects and maintenance within our operating budget. The only thing stopping us is...everything else. After paying our contractual obligations for salaries and benefits, and dealing with cost increases in transportation and other expenses, and staying within the state's budget growth cap of 4.0% of the tax levy (approx. 3.6% budget), the most we've been able to put toward the facilities is $2 million per year. That's a significant amount of money -- except when you consider that we have 11 old buildings to maintain totaling one million square feet. $2 million doesn't go very far. If the community wants to spend more on facilities, we will have to take the money from somewhere else. It's as simple (and as complicated) as that.

(Added 12/4/09 @ 10:50 AM)
What kind of capital and maintenance projects does the District undertake as part of our regular budget? As I wrote previously, here's a partial list of projects from this past summer/fall:

Ridgewood High School
Renovation of Guidance Suite and Grade Advisor area; Rooms 207, 211 & 112. (Note, the Guidance area had water damage, crumbling plaster, dingy paint...now it's a great showcase for visiting college admissions folks and parents.)
Renovation of North Stair Tower (the one I used to say looked like a ghetto movie set)
Repair of Lockers in Boys' Locker Room
Installed flooring in ancillary weight room
Installed 600+ new lockers
Locker room showers, more roof replacement and bathroom renovations going out to bid

Hawes
New fencing
New lighting in gym

Orchard
Fencing
New lighting in gym
Sidewalk (donated by HSA)

Willard
Renovation of art room
Outside lighting improvements

Travell
Gym renovation -- tile & lighting
Outside lighting improvement

GW
Replaced 4 classroom carpets with tile floors
Refinished Gym and Band Room floors
Roof repairs
Fencing
Bathroom renovations -- going to bid

Glen
Gym window wall replacement -- going to bid
Exterior door and electrical upgrades -- going to bid

BF
Roof repairs
Improved electrical in library and computer labs
Fencing
Roofing & door projects to be bid

Ridge
Renovated gym (floor and lighting)
Drainage in front of building
Door project -- going to bid

Somerville
Renovated cafeteria
Removed wall between 2 classrooms; replace with foldable wall
Fencing
Partial roof replacement (over gym)

Any questions, please comment or email me directly lauriegood@mac.com.

Want to ask the state WHY or tell them what you think about their disastrous funding formula?

The public is invited to a "Conversation with Education Commissioner Lucille Davy," moderated by NJN's Senior Political Correspondent Michael Aron, joined by panelists Dunstan McNichol (Contributing Reporter, NY Times/NJ Section and former Star Ledger Statehouse Reporter covering finance & state budget issues), Jim O'Neill (President of GSCS and Superintendent of School District of the Chathams), and Lynne Strickland (GSCS Executive Director).

Many Ridgewood residents are talking about attending. If you can go, please do! This is a good chance to show Ms. Davy -- by our numbers, at the very least -- what we think, and to hear her explain some of the state's actions.

March 18, 7:00 p.m.
Leonia High School Little Theater

NJ Commissioner of Education will speak...

The Leonia Public Schools invites the public to a "conversation" with Lucille Davy, New Jersey Commissioner of Education, on February 25 at 7:30 p.m. Apparently Ms. Davy will attempt to speak about educating our children -- and funding our schools -- during these economic times. Based on things I've heard her say and the regulations coming out of her office, I'm not sure Ms. Davy has a sense of reality here in Ridgewood, but I encourage you to seek her out yourself and see what she has to say, perhaps even question her directly. For more information and directions, click here or call 201-302-5200.

Stimulus $$ for Education

Wondering what kind of money has been pledged for "education" items in the federal stimulus plan? Here's the list (from ProPublica.com). It's a LOT of money. And yet -- who wants to take bets on how much, if ANY, will make its way to Ridgewood?

• State grants for adult job training: $500,000,000
• State grants for youth job training and summer employment opportunities: $1,200,000,000
• Dislocated worker job training: $1,250,000,000
• YouthBuild program for high school dropouts who re-enroll in other schools: $50,000,000
• Job training in emerging industries: $250,000,000
• Job training in the renewable energy field: $500,000,000
• Head Start programs: $1,000,000,000
• Early Head Start program expansion: $1,100,000,000
• Education for the disadvantaged - elementary and secondary education: $10,000,000,000
• Education for the disadvantaged - school improvement grants: $3,000,000,000
• Education impact aid: $100,000,000
• School improvement programs: $650,000,000
• Innovation and improvement of elementary and secondary schools: $200,000,000
• Special education funding under the Individuals with Disabilities Education Act: $12,200,000,000
• Pell grants for higher education: $15,840,000,000
• Institute of Education data systems: $245,000,000
• Institute of Education state data coordinators: $5,000,000
• Dislocated worker assistance national reserve: $200,000,000
• School improvement grants awarded based on the number of homeless students identified in a state: $70,000,000
• Student aid administrative costs: $60,000,000
TOTAL: $48,420,000,000

Protest NJ's messed up school funding formula

Following is the latest from Dollar$ and $ense and the call for a new school funding formula that will meet the needs of all students:

RALLY AND PRESS CONFERENCE

MONDAY, SEPTEMBER 22
9-10 A.M.
RICHARD J. HUGHES JUSTICE COMPLEX
MARKET STREET, TRENTON

Join parents, students, education activists and child advocates at the NJ Supreme Court in support of adequate resources for public school children.

Let the Court, NJ legislators and the statewide press know that the SCHOOL FUNDING REFORM ACT OF 2008 (SFRA) is a threat to educational standards and a “thorough and efficient” education for all children in New Jersey.

What Is the SFRA?
The SFRA is a new law passed by the NJ Legislature in early January 2008 by the slimmest of margins. It determines how much State aid school districts will receive and how that will be calculated.

The SFRA limits the amount of money NJ school districts can spend on their students – in most cases this number is below (sometimes well below!) what many districts spent in 2007-8.

What’s Wrong With It?
The SFRA has many flaws. Here are just a few:
• The SFRA-imposed " adequacy budget" for school expenditures is below the current level of spending for 383 of the state's 595 operating districts.
• The adequacy standard is a dramatic step down from what school districts throughout New Jersey have found to be essential for the provision of the “thorough and efficient” education the NJ Constitution guarantees to every child.
• The level of State aid directed to many districts under the SFRA won’t be enough to cover rising fixed costs or ease the pressure on local property tax payers.
• School districts will be forced to make cuts in academic year 2008-9 and beyond.
• The SFRA, combined with recent legislation, will have the long-term effect of reducing expenditures in high performing districts, regardless of the needs and desires of local schools and communities. The SFRA will also severely limit a district's ability to provide the high quality education currently in place.

What Can Be Done About It?

On September 22, the NJ Supreme Court will hear oral argument in the Abbott v. Burke case regarding the SFRA. While the specific focus of the case is the 31 special needs districts, this provides an excellent opportunity to focus attention on the impact of the SFRA on all NJ schoolchildren, including those in suburban districts.

A rally and press conference have been planned for September 22 to let our legislators and the press know that we are not done fighting the SFRA, and that we want a sensible school funding formula that is balanced with a sensible school spending formula.

Almost a decade ago, the NJ Supreme Court determined that the gold standard for an excellent education was the high-achieving suburban districts. The justices connected funding for the special needs districts with the level of expenditure in suburban districts. Now, the State Legislature has decided that link means that high performing districts must spend less, regardless of the level of success they have achieved.

Dollar$ and Sense, an organization representing the interests of these suburban districts, submitted an Amicus (“friend of the court”) brief in the current case. The brief states:

"SFRA may ultimately reduce the disparity in expenditures between the DFG I and J districts and the Abbott districts, but only at the price of denying all children the constitutionally mandated 'thorough and efficient' education."

Dollar$ and Sense will participate in the rally and press conference on September 22. All New Jersey parents and anyone who cares about education is invited.


Send the message that the SFRA’s leveling down is not acceptable for New Jersey schoolchildren.

JOIN together with representatives from suburban and urban school districts on Monday, September 22, at 9 a.m., at the Richard J. Hughes Justice Complex in Trenton, for a RALLY and PRESS CONFERENCE.

For more information, contact: info@ourchildrenourschools.org