It’s Flat Funding—Again!

Facing a $4.8 billion deficit, Governor Corzine on Tuesday proposed a $30.9 billion state budget for 2006-07 that would provide flat funding for most categories of direct education aid. Pre-K through grade 12 public education is the only area of the proposed budget that did not experience actual cuts from current-year levels.

Under Corzine’s proposal, school districts would receive more than $7.58 billion in direct aid. The amount reflects small increases in special education aid, funding for districts with above average enrollment growth, and Abbott preschool programs.

“I appreciate that flat-funding in an inflating environment is a real cut,” said Corzine. “Reality and necessity must be the mother of invention. Just as the state must find spending reductions, other units of government must as well.”

Impact on Districts  Statute requires the state Department of Education to issue aid figures to school districts within 48 hours of the budget message. While statewide aid levels would remain constant, individual districts—particularly those that experienced enrollment declines—may receive less state aid.

The governor’s budget recommendation also includes an $832.2 million increase in funding for the Teachers’ Pension and Annuity Fund and related categories. It would also provide a total increase of $113.1 million for the school construction and renovation fund, which pays debt service on the state’s school construction bonds.

Reality Strikes “The situation could have been far worse for our public schools…but the reality is that flat state aid will make 2006-07 another year of property tax increases and service cuts,” said NJSBA Executive Director Edwina M. Lee.

“Governor Corzine is facing enormous difficulties in balancing the state budget and redressing past financial practices. His proposed budget makes a good-faith start toward remedying previous under-funding of the pension system and correcting abuses of the system.

 “However, 2006-07 also marks the fifth consecutive year that schools have received either flat funding or negligible increases,” she continued. “During this period, statewide enrollment has increased and the costs of fuel, utilities and insurance have risen. The result will be school budgets that reflect cuts in services, increases in property taxes or, more likely, both.”

Situation Facing Boards “We hope that citizens appreciate the situation facing their local boards of education. The school budget proposals on the April 18 ballot will be the product of state financial decisions, as well as local education goals. The current situation underscores the need for a new school funding system that is adequate, stable and sustainable.”