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CONTACT:        Frank Belluscio (fbelluscio@njsba.org)                                                     FOR IMMEDIATE RELEASE
                        Mike Yaple (myaple@njsba.org)
                        (609) 278-5202

NJSBA to Governor:
Delay Tax-Cap Bill to Correct Flaws

TRENTON, Feb. 8, 2007—The New Jersey School Boards Association today asked Gov. Jon S. Corzine to delay implementation of the new 4 percent new property tax cap by issuing a conditional veto of Assembly Bill 1.  The delay would allow time to correct flaws in the bill, but would not affect other provisions of the legislation, according to the organization’s executive director.

 “The New Jersey School Boards Association wants property tax reform, and we do not oppose reasonable spending caps,” said Edwina M. Lee, NJSBA’s executive director, in a letter to Gov. Corzine. “However, a preliminary review of Assembly Bill 1 shows that the proposed property-tax cap could result in unintended consequences that would damage our state’s excellent education programs and might even impede local school district efforts to control costs.”

Lee noted several concerns:

• The legislation would be a disincentive for local governments to share services because it would remove any budgetary flexibility that would be gained through shared services.

• The bill includes a provision that could penalize school districts that are now saving property tax dollars by using private health insurance carriers.

• The legislation has technical problems that place large school districts at a disadvantage when calculating adjustments for enrollment growth.

Correct Problems  “A one-year delay in implementing the property tax cap portion of A-1 would allow time to correct these issues without affecting the other provisions of the legislation,” Lee said in her letter to Gov. Corzine.

“Today, local school boards are at an advanced stage of budget development for 2007-2008,” wrote Lee.  “These proposed budgets are already constricted by the state’s existing revenue cap, as well as by restrictions on administrative spending, use of surplus and the inability to transfer funds without state approval.”

Placing the additional property tax cap on 2007-2008 school budgets is not necessary to meet the overall goals of Assembly Bill 1, according to Lee.

“The one-year delay we are seeking would enable local school districts to align the budget development process with the new property tax cap in 2007-08,” she added.

A-1 would impose 4-percent property tax caps on school, municipal and fire district budgets. It would also provide residents with property tax credits, funded through part of the new revenue generated by last year’s 1-cent sales tax increase. The Assembly and Senate passed A-1 in less than two weeks, without a single public hearing or review by legislative committee.

NJSBA also has serious concerns with a provision of A-1 that, starting in 2008, would require 60 percent of participating voters to approve proposals to spend above cap.

Supermajority Vote  “Such a super-majority requirement is without precedent in the New Jersey electoral process.  It is also not necessary,” said Lee.  “Only a small percentage of districts propose above-cap ballot questions each year, and voters have been extremely cautious in approving these expenditures.”

Last year, above-cap ballot questions were proposed in only 57 school districts—about a tenth of districts—and voters approved only 33 percent of those questions. An increasing number of over-cap questions involve curriculum and teaching staff, Lee explained.

By issuing a conditional veto, the governor would send the bill back to the Legislature with recommendations for amendments.

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The New Jersey School Boards Association, a federation of district boards of education, advocates the interests of school districts, trains local school board members, and provides resources for the advancement of public education.