Would consolidating school districts reduce taxes and improve education?

More than 130 local school board members and administrators turned out for NJSBA’s forum on Shared Services and Consolidation last Saturday to hear experts from academia, education and government weigh in on the question. NJSBA’s County Association Leadership sponsored the forum at Monroe Township High School in Middlesex County to provide information on a key issue being considered during the Legislature’s special session on property tax reform.

With New Jersey Network’s Michael Aron moderating the discussion, seven panelists talked about the educational, financial and social impact of consolidation.

Dr. Ernest C. Reock, Jr., retired director, Rutgers Center for Government Services
A leading expert on local government organization, Reock conducted studies of the potential impact of consolidating all New Jersey school districts into K-12 systems. The reorganization would reduce the total number of school districts from 617 to 264, he found. Administrative cost savings would total $65 million statewide. Reock also cited a “highly speculative” estimate of $365 million in total educational savings statewide, based on the experience of three regionalization efforts in the 1970s and 1980s.

New Jersey, however, spends more than $25 billion in local, state and federal funds on education. Therefore, the estimated savings “may be significant or may not be significant, depending on your point of view,” he quipped.

Reock also cautioned that his studies did not take into account the impact of consolidation on staff salaries. “Salary scales almost always go up,” he said.

Jon Shure, president, New Jersey Policy Perspective
New Jersey’s relatively low state aid levels contribute to high property taxes, according to Shure who heads the think tank devoted to government research. He did not discount consolidation, however.

“Even if it only saves a little money, we can’t turn our back on it,” he said. “Fragmentation limits our horizons. We have the fourth most segregated schools in the country, not because of laws, but because of boundaries. Towns compete for tax ratables, leading to overdevelopment. ”

“My fear is that if the right people don’t fix this, the wrong people will,” warned Shure. There is a danger of “pulling the rug out from under public education” as occurred in California and Colorado.

David Hespe, former commissioner of education
“Why, if there are so many benefits of regionalization, don’t districts do it? Uncertainty over the educational ramifications, fiscal ramifications and local control,” said Hespe.

“There is value to consolidation, including increased breadth and depth of curricular offerings, more easily managed school systems, cooperation with higher education and business, and more diversity, which is good for all children.

“Consolidating will save money, but only over a period of time,” he observed. “If there is an expectation and pressure to reduce costs immediately, it may hurt our children.”

Assemblyman Upendra J. Chivukula (D-Middlesex, Somerset)
“Educational quality is the key issue, followed by transparency for the taxpaying public. Special education costs also need to be addressed,” Chivukula said. The state must look at K-12 education, higher education and lifelong learning as a single concept. “Are our children prepared to work in a global economy?” he asked.

Christine Mosier, aide to Senator Bob Smith (D-Middlesex), chairman of the Joint Legislative Committee on Government Consolidation and Shared Services
“Some of the proposals being discussed by the committee raise the hair on peoples’ necks,” she said. “The committee members are looking for solutions to existing problems, not resistance to change. We want to deliver quality education.”

Gary Lane, school business administrator, Northern Highlands Regional
The regional  high school district serves four communities that operate their own elementary school districts. Over the past two decades, the communities studied consolidating into a single K-12 system or expanding the size of the high school regional.

“Each scenario had winners and losers with respect to tax impact,” said Lane.

Operating under the current structure has not inhibited cost efficiency, according to Lane. He gave examples of cooperative purchasing, joint insurance funding and other shared services that save money for Northern Highlands, its four feeder districts and surrounding Bergen County communities.

Dr. Angelo Vilardi, superintendent, Morris County Educational Services Commission
Vilardi described the range of benefits that the ESC provides to its member school districts at low cost. Examples include transportation, child study team services, speech and occupational therapy and shared insurance.

The ‘ESC solution’ was developed through state law in the 1970s, Vilardi explained. “Over the years, we’ve found solutions for districts.” Today, ESCs function in 11 counties.

During the question-and-answer session, many of the board members and administrators in the audience echoed Vilardi’s and Lane’s observations about efficiency and shared services.

NJSBA plans to present the entire forum through its Web site. School Board Notes will announce the program’s availability.