March 2, 2006 • Vol. XXIX • No. 27
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NJSBA Calls for Shared Services Michael Vrancik, NJSBA’s director of Governmental Relations, testified before the panel, which invited selected education, government and business organizations to address ways to save taxpayer dollars and increase state government efficiency and effectiveness. These efforts would include incentives to create more shared-service arrangements and eliminate many unnecessary state mandates. “New Jersey’s local boards of education have a long history of working collaboratively to share services and reduce the costs borne by local taxpayers,” Vrancik told the Assembly committee. Long History He cited an NJSBA survey done 25 years ago that found 178 districts engaging in shared-service arrangements with other school districts. Efforts range from child study teams and remedial education to transportation and technology services. By 2001, the Regional Efficiency Aid Program (REAP) identified an additional 677 shared-service arrangements statewide, the majority (352) of which involved school districts. REAP, a state incentive to promote sharing of services by local governments, only recognized shared-service agreements created or expanded since 1997. It no longer operates, but is the type of program that could encourage more cost efficiency at the local level. Recent Examples In 2002, Vrancik noted, an NJSBA publication an NJSBA publication identified a number of examples of shared services in school districts. • In Bergen County, Northern Valley Regional High School shares special education services with seven elementary school districts and also operates a pre-school program for autistic children, which saves 22 districts significant money over private placement. • In Salem County, the Pittsgrove school business administrator’s staff provides services to more than a dozen districts in four counties with costs savings of nearly half of what a district would pay individually. • In 10 New Jersey counties, school districts share services through “educational services commissions” that provide a wide range of services including special education programming and transportation. Energy Cooperative “Local school districts have responded enthusiastically to the Alliance for Competitive Energy Services (ACES), an energy-buying cooperative for the public schools,” said Vrancik. ACES is coordinated by NJSBA and other state education associations. “The energy-deregulation bill passed into law by the state Legislature authorized NJSBA to form a statewide purchasing cooperative for local school boards. The effort has paid off,” he noted. In previous years, ACES districts (over 400) have saved an average of 13.75%, a cumulative total of $5.9 million, off their entire electric bills. “This past January, the ACES program was expanded to include natural gas purchasing following the dramatic price increase for this commodity that resulted from Hurricane Katrina,” Vrancik explained. “Thus far, 225 school districts have signed on as members of the ACES natural gas procurement program. This is just one example of an instance where the State Legislature paved the way for local school boards to operate more efficiently and reduce the burden on local taxpayers.”An Invitation from Governor Corzine So I invite you to take part in these dialogues and to help New Jersey be the best place to live, work and raise a family. Please chose which of the three dialogues would be most convenient for you to attend and RSVP by calling or visiting us online by clicking on the RSVP link. South Jersey Region A Bad Idea: Forcing All Districts Such a move would immediately impose sharp cost increases on school districts and property taxpayers. Although no legislation has been introduced, the requirement could be implemented simply as a footnote to the 2006-07 state budget. NJSBA urges you to tell members of the Assembly Budget Committee — • The proposal would affect premium costs in districts that now purchase coverage from private carriers. • It would rescind all health-benefit cost savings negotiated between school boards and employees in those districts. • The concept runs directly opposite to recommendations made late last year by the state’s Benefits Review Task Force. Cost-containment not possible Currently, approximately 60% of the state’s school districts do not provide benefits through SHBP, opting instead to secure coverage through private carriers. For these districts, the advantage of private carriers may include not only lower premiums but also the ability to negotiate cost-containment provisions. These provisions—such as changes in deductible and co-pay levels, tiered coverage, employee contributions to individual employees’ premiums, and incentives to waive duplicate coverage—are not available to school districts under current SHBP rules. Competition eliminated With the creation of a state-driven health insurance monopoly, competition to reduce costs would be eliminated—along with any impetus to reform the SHBP. Contradicts blue ribbon panel The NJEA proposal runs directly opposite to recommendations made late last year by the state’s Benefits Review Task Force. That panel examined the pension system and SHBP. Its recommendations include— • Giving school districts the ability to negotiate cost-control measures, such as changes in deductible and co-pay levels. • Immediately applying to local school districts that obtain coverage through SHBP the same cost-saving measures now available to state government—such as negotiating premium-sharing arrangements and different benefit packages with different bargaining units at the same location. |
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