Public Testimony
Proposed FY12 State Budget

Montclair State University
March 16, 2011

I am Michael Vrancik, director of governmental relations for the New Jersey School Boards Association. NJSBA is a non-partisan federation of the state’s local boards of education.

Our members view the proposed fiscal year 2012 state budget with a sense of relief and resignation.

First, we are relieved that there will be no cut in state school aid from last year’s reduced funding levels. In January, the state Department of Education advised school districts to plan for such a reduction as they developed their 2011-2012 budgets. Therefore, the small increase in state aid—even if it restores only one-fifth of last year’s cut—comes as a somewhat pleasant surprise. State school aid not only helps local school district efforts to maintain adequate programming, it also provides a degree of property-tax control.

Second, NJSBA recognizes the financial situation facing our state. And our members are resigned to certain facts: the poor economy, lagging state revenues, and the new 2-percent property tax levy cap. These financial realities mean difficult choices for local school boards.

However, one option that seems to have few takers—at least among local school boards—is seeking voter permission to exceed the tax levy cap. On March 4, school budget proposals were submitted to the state’s executive county superintendents. Under the law passed by the Legislature in 2007, those budgets will undergo comprehensive state review before they can be presented for public hearing.

In late April, 538 school boards will put proposed base budgets on the ballot. Only seven of those districts are planning to propose so-called “second questions” for additional expenditures, according to the New Jersey Association of School Business Officials. And not every one of those seven requests would bring district budgets above cap.

Clearly, local school boards understand their responsibility to balance education goals with the communities’—that is, the taxpayers’—financial resources.

Under the proposed state budget for FY 2012, state aid to regular public school districts would increase by $219 million. Last year, however, school districts experienced an $820 million cut in state funding. The reductions followed a $460 million mid-year reduction in 2009-2010, which generally consisted of eliminating school district excess surplus.

In the past, members of this committee have told education advocates that they approach budget hearings with warnings that the sky will fall. We’re not going to play Chicken Little. However, it is critical that you be aware of the situation that districts have faced over the past two years. An NJSBA member survey, for example, showed that over 80 percent of school districts reduced classroom teaching staff positions as a result of aid reductions in 2010-2011. And while we appreciate the bump-up in state aid proposed for 2011-2012, school districts will still have tough choices to make. Here are examples of the situation facing local school districts and how some districts are meeting the challenges:

• The Trenton Public Schools will see an increase in state school aid of 1.2 percent, or $2.5 million. But enrollment increases at publicly funded charter schools will require the district to transfer an additional $2.8 million to the charters, effectively cutting funding for the district’s regular public schools by $300,000.
• In Paterson, nearly 80 percent of the district’s art teaching positions have been eliminated.
• In Franklin Township, Somerset County, school officials have unveiled a preliminary budget that includes two options, both calling for the outsourcing of the jobs of about 100 custodians, groundskeepers and bus drivers.
• In Deptford Township the mayor and council met with members of the board of education, municipal utilities authority and fire commission Monday evening to discuss more ways in which the entities could share services and save money. Board of Education representatives discussed partnerships for copy contracts, trash pick-up and technology, as well as energy procurement that could reduce costs by as much as a quarter million dollars.
• Here in Montclair, the board of education voted unanimously to approve a $110 million budget that cuts spending and lowers the school property-tax rate. The new budget includes a provision to outsource the district's 240 full- and part-time teacher aides.

As you can see, to preserve programs, while complying with the 2-percent levy cap, school districts are implementing a variety of strategies.

Of course, contract negotiations must play a role in controlling costs and, over the past year, average teacher salary settlements statewide have dropped from 3.57 percent to just above 2 percent. Other strategies include outsourcing non-instructional services, implementing alternative energy systems, and establishing activity fees for student participation in sports and clubs—an unfortunate reality for districts that want to maintain extracurricular programs.

A very positive trend involves shared services. In 2007, NJSBA sponsored a study by Rutgers-Newark, which showed that 97 percent of New Jersey's school districts engage in some type of shared services. Most frequently shared are transportation, insurance, supplies and special education services. The major benefit of sharing services is savings, cited by 79 percent of school districts. Improved service was identified by another 36 percent.

The report also identified changes in law and regulation that would encourage greater sharing of services.

NJSBA looks forward to working with the Governor and the Legislature to ensure that local school districts have adequate resources to provide the educational opportunities our students need to compete in the global economy of the 21st century. Local districts stand ready to do their part by implementing cost-effective strategies that enable them to meet their responsibilities to their students and their communities’ taxpayers.

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