P.O. Box 909 ● Trenton, NJ 08605-0909 ● Phone: 609.695.7600 ● Fax: 609.695.0413 ● Web: www.njsba.org/PI

NEWS RELEASE

CONTACT:        Frank Belluscio (fbelluscio@njsba.org)                                                     Published in the Star-Ledger
                        Mike Yaple (myaple@njsba.org)                                                              August 10, 2006
                        (609) 278-5202

We Can Have Tax Reform and Quality Schools
By Kevin E. Ciak, President
New Jersey School Boards Association

New Jersey is entering an historic period, as the state Legislature opens its special session on property tax reform—a forum that will produce debate over education funding, the structure and authority of school districts and sharing public services across municipal lines.

The debate must be serious. Citizens expect substance. They also expect solutions that are balanced and, yes, even visionary. New Jerseyans have invested in high-caliber public schools. They are fundamental to the quality of life.

At this critical juncture in our state’s history, our leaders can adopt numerous strategies that will produce genuine property tax reform, while preserving and enhancing the quality of our schools.

Overhaul employee benefits
Last year, half of the new teacher contracts in New Jersey’s schools included clauses to contain the rapidly escalating costs of health benefits. These provisions included employee contribution, adjustments to deductibles, and varying coverage levels for new workers. They reflect practices common in the private sector.

However, for those districts in the New Jersey State Health Benefits Program—the largest insurer in the public schools—those same cost-saving strategies are not available because of restrictive state regulations. The problem was identified by the governor’s Benefits Review Task Force in December. As an example, the study panel noted that, if school boards and other local government employers in the state health program had the ability to negotiate employee contribution to health benefits of just 5%, taxpayers would save $52 million a year. It called for easing the restrictive SHBP rules.

The New Jersey School Boards Association has developed legislation reflecting the Benefits Review Task Force recommendation. The concept should be part of the special session’s efforts to control local government spending.

Encourage shared services
In 2001, a previous state incentive program recognized 352 new shared-service arrangements involving school districts. Just last year, the Somerset County Business Partnership estimated that shared services among schools and municipalities saved the county’s taxpayers $13.6 million. Throughout the state, school districts share maintenance, administrative and financial office functions and curricular services—providing long-term savings to residents.

But there is room for much more growth and creativity in this area, which the special session could help school districts tap into with financial incentives and the funding of feasibility studies. NJSBA will begin a comprehensive study of shared services this September that will identify success stories and obstacles. We will share our work with school districts and state leaders to encourage new approaches to this important strategy.

End the addiction to property taxes
New Jersey state government, on average, pays 38 percent of the cost of public education, with some districts receiving less than 10 percent of their revenue from the state. We cannot achieve tax reform until the state government takes on at least half the operating costs of our public schools. That’s what most other states contribute. The 50-percent state-support level could be achieved through a dollar-for-dollar shift from the local property tax to a state-level revenue source.

Remove the financial obstacles to voluntary regionalization
Since 1986, only three regional school districts have formed. But that small number of consolidations does not reflect the degree of interest in the concept. Unfortunately, communities that study possible regionalization invariably find that one town’s property taxes would increase after the merger.

Moreover, the most-recent state study of school district consolidation, by an Assembly Task Force in 1999, recommended that regionalization remain a local choice, rather than a state decision, because of cost factors. It found that, in many instances, consolidation could increase costs, and would not automatically improve student achievement.

If the Special Session is serious about encouraging consolidation, it must eliminate the financial obstacles that have stopped regionalization proposals dead in the tracks. It must also allow the local citizenry to make the final determination based on financial considerations and the educational needs of their students.

Citizens of New Jersey can take pride in their schools. New Jersey ranks among the top five states in the nation in the percentage of its students scoring at the highest two levels in reading and math in the National Assessment of Educational Progress (the “Nation’s Report Card,” which compares test results among states). We’re also among the top five states in the proportion of public high schools (96%) offering Advanced Placement (AP) courses through which students can earn college credit, and our students’ tests scores on those AP exams are third in the nation. Our high-school graduation rate is second to none.

It’s a record worth preserving. Solutions to our state’s property-tax woes must involve cost-efficiency and the balancing of revenues, while safeguarding the quality of our schools.

Kevin Ciak, NJSBA president, is a member of the Sayreville Board of Education, Middlesex County.

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.