September 20, 2010

Assembly Environment and Solid Waste Committee
Testimony: Education Mandates Hearing

Good morning. My name is Michael Vrancik, and I am here today representing the New Jersey School Boards Association, a non-partisan federation of 588 local boards of education and 44 charter public schools. Approximately 4,800 men and women serve without pay on our state’s boards of education. They govern the school districts that serve 1.4 million children.

NJSBA trains the state’s local school board members and charter school trustees. We also provide consultation and direct on-site services in areas such as labor relations, school law, policy, superintendent evaluation, communications and education goal-setting.

When the cost of any service in New Jersey is examined, especially in difficult financial times, as now, schools typically lament about “unfunded mandates.” Our association policies on new state mandates are clear: the state must pay for any new requirements placed on school districts. In fact, on two occasions NJSBA has successfully argued as amicus before the state’s Council on Local Mandates, turning back unfunded requirements that would have violated the 1995 Constitutional Amendment prohibiting new, unfunded mandates.

While there is a clear path to evaluate new requirements, the state has not yet fully addressed existing mandates.

In the mid-1990s, the New Jersey School Boards Association conducted a review of all education mandates based on state and federal law and regulation. The State and Federal Mandate Project identified 234 specific requirements affecting school district operations. Some come with a degree of funding, many do not. Most significant, we found that not all mandates are bad. Some serve a distinct purpose in promoting sound school district governance, such as the statutorily required annual performance evaluation of the chief school administrator. Others benefit the health and safety of students, such as the installation of swing-arms on the front of all school buses, probably the most effective safety enhancement to our pupil transportation systems.

Today, however, we come before you to talk about mandates that are costly, which do not yield effective results, or which need adjustment to better balance the interests of New Jersey students and taxpayers.

One of the greatest cost-drivers in public education has been special education. No one will dispute that the education services provided to our state’s disabled students represent a success story for New Jersey education. However, part of that story is chronic under-funding by the state and federal governments and laws that weigh heavily against school boards when there is a dispute over the student’s Individualized Education Program.

In 2007, the New Jersey School Boards Association conducted a study, called “Financing Special Education in New Jersey,” which found the growth in special education costs, which then totaled $3.3 billion for roughly 240,000 special education students, could be largely attributed to tuition and transportation for out-of district programs. Over the previous decade, the intensity of special education programs had increased, with more students placed in out-of-district autism programs and related services. These placements result from a student’s Individualized Education Program, which is developed in response to federal and state requirements, as well as court decisions.

For local school districts, that’s a critical trend because 57% of special education costs are borne by local property taxpayers, according to NJSBA’s study. The remainder comes from state and federal aid.

The smallest pot of funding, approximately 9% of the total, comes from the federal government. Yet, the major body of mandates governing and protecting the education of children with disabilities is the federal Individuals with Disabilities Improvement Act of 2004. All requirements must be met in “the least restrictive environment” for the student, which encourages the inclusion of special education students in the local public school. Identification of the services, however, depends on the child’s Individualized Education Program, determined by the school’s child study team. Often, the IEP does not meet the expectation or desires of the student’s parents or guardians.

Parents are given a strong voice and a right of appeal in the development of their child’s IEP. A 2007 New Jersey statute (N.J.S.A. 18A:46-1.1), however, gives them an even stronger position—one that sets the IEP process out of balance and results in districts being obligated to provide placements that are more costly than necessary.

That state law places the burden of proof in special education disputes on the local school district, rather than on the party bringing the complaint. This is contrary to typical legal process, in which the party bringing the complaint is required to prove its case. This state-imposed requirement was a reaction to a U.S. Supreme Court decision, which determined that the burden of proof in these matters rests with parents unless state law indicates otherwise. For local school districts, the state’s reaction means increased legal fees and increased staff time and costs to review and prepare documents. It also creates an atmosphere in which school districts’ fear of litigation becomes a major factor in the agreement over an IEP.

NJSBA urges the state Legislature to repeal this statute (N.J.S.A. 18A:46-1.1), an action that would balance the rights of special education students and the rights of taxpayers.

In 2008, New Jersey enacted a new school funding formula, which made several changes in how the state provides aid for special education. The School Funding Reform Act bases one-third of special education funding on the average percentage of students who receive special education services statewide, 14.69%. In fact, the number of classified students in an individual district could be far greater. In addition, the new formula also distributes two-thirds of state funding on ability to pay, rather than the number of students served, thereby, driving up costs locally.

NJSBA policy supports full state funding of extraordinary special education costs. As a step toward that goal, we ask that the Legislature to consider a change in the implementation of special education funding to reflect the actual number of students receiving special education services.

In 2008, the state Department of Education adopted Accountability Regulations (N.J.A.C. 6A:23A, et seq.). While the purpose of these regulations was to implement laws aimed at efficiency in budgeting, they actually created additional costs to school districts in terms of funding and administrative burden. We were heartened by the Education Transition Team Report, which finds many of these regulations to be overly burdensome and onerous. We agree with the conclusion of the report—that is, it makes no sense to require endless reports, especially for districts that are high performing and successful.

NJSBA, in collaboration with the New Jersey Association of School Business Officials, surveyed local school districts about the costs of the Accountability Regulations to local districts in May 2009. Approximately 37% of the state’s school districts responded.

Among the survey’s findings:

• Participating districts incurred $4.6 million in staffing costs and non-staff expenditures when implementing five of the “conditions for receipt of state aid,” set out in the regulations.


• A majority of school officials fear that some of the regulations’ “efficiency standards,” which are being used by the state’s executive county superintendents to review proposed school district budgets, may be leading to diminished quality of services.


• Districts questioned the value of requirements, such as implementing legal services record-keeping systems and issuing requests for proposals for all professional services annually, regardless of current vendors’ performance. The financial cost and administrative burden of meeting these requirements exceeds any savings, according to many of the school officials responding to the survey.


• School officials’ optional comments often focused on the fact that the vast majority of districts are accountable and efficient, but that, under the regulations, they are being penalized due to infractions by a only a few. Moreover, the regulations are distracting school personnel from concentrating on educational programming and other essential operations.

In May, the state Department of Education proposed revisions to the regulations. NJSBA’s survey addressed the regulations as finalized in December 2008, not the proposed revisions, which went into effect after July 2009. The Association, however, analyzed those proposed revisions and submitted its analysis to the state Department of Education.

NJSBA supports the Transition Team’s recommendation to suspend onerous and impractical aspects of the Accountability Regulations.

Shared services represent a proven way for local school districts and municipalities to control costs, improve delivery and help taxpayers. A 2007 study by NJSBA and Rutgers-Newark identified best practices, as well as changes in law and regulation to promote shared services.

A section of the report, titled “Ambiguities, Disincentives and Other Impediments to Shared Services in School Districts,” noted conflicting laws that could impede cost-saving efforts. These include wording of the Uniform Shared Services and Consolidation Act of 2007 (N.J.SA. 40A:65-3), which could be interpreted to exclude school districts from many shared-services arrangements; the lack of express authorization for school districts to participate in the state’s SHARE assistance program (N.J.S.A. 40A:65-30), which has led to the Department of Community Affairs disqualifying school districts from participating in the program unless a municipality were involved in the shared service arrangement; and conflicting statutes that would discourage school districts from sharing business administrator services.

While not requirements per se, many of these statutes create red tape that serves as disincentive to sharing of services.

NJSBA recommends changes in applicable laws and regulation to remove procedural requirements and conflicts that discourage the sharing of services among local school districts.

For your reference, we are providing the committee with the 2007 NJSBA/Rutgers-Newark study, “Shared Services in School Districts: Policies, Practices and Recommendations” and NJSBA’s 2007 report on “Financing Special Education in New Jersey.”

In April 2010, the Lieutenant Governor’s Red Tape Review Group issued its report on needed changes in state law and regulation that impede economic development and the delivery of government services. NJSBA strongly supports several of the Red Tape Group’s recommendations that addresses unfunded education mandates. Important recommendations made by the Lieutenant Governor’s study group include—

• Restoration of a school board’s ability to implement its “last best offer” when contract negotiations are fully exhausted. This change would restore balance in collective bargaining and service as an impetus for school boards and unions to negotiate agreements that reflect the community’s ability to pay.
• Requiring factfinders, third-party neutrals, who enter contract negotiations after they reach impasse, to weigh heavily current economic conditions when issuing their recommendations for contract settlements.
• Providing more flexibility in the administration New Jersey QSAC, the state’s school district monitoring process, so that successful school districts do not need to go through the process as frequently as they now do.

The New Jersey School Boards Association thanks Assemblyman McKeon and the Environment Committee for this opportunity to address the various compliance requisites that school districts must observe. We believe that eliminating some mandates, while amending others, would provide needed relief to school districts and taxpayers.

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