Consolidation of school districts is not the cure-all for high property taxes, and in fact could increase costs, an NJSBA official told the Joint Legislative Committee on Consolidation and Shared Services on Oct. 18.

“School district consolidation must be evaluated on a case-by-case basis. Otherwise, we may incur higher costs and higher taxes,” said Eva M. Nagy, NJSBA’s vice president for Legislation/Resolutions.

Nagy cited factors that would increase costs after regionalization:

• Salaries: Whenever a school district regionalizes, state law requires the largest district’s salary guide to be the one used for all teachers. This presents a problem when forming K-12 districts out of separate elementary and high school districts.

“When smaller districts (e.g., K-6 and K-8 districts) are compared to the larger ones, larger districts consistently have higher salaries,” she said.

• Tax Increases: When districts consider regionalizing, it is almost certain that the amount of taxes each community pays toward education will change. “Consolidating school districts—whether into county units or other structures—will drive up property taxes for at least some of the districts,” said Nagy. She termed the issue a “political land mine.”
  
  
• School district debt: Consolidating districts could also mean that they inherit the neighboring district’s debt from school construction.

Nagy noted that NJSBA supports regionalization, when it is decided by voters and when feasibility studies demonstrate a financial and educational benefit. She said cost-saving shared-service agreements among schools and municipalities “can be implemented through current school district configuration—without forcing consolidation and risking higher costs and changes in tax rates.”

Because consolidating districts does not automatically yield tax savings, Nagy said the state should encourage, but not mandate, regionalization.

The most recent statewide study of regionalization, a 1999 report by the state Assembly Task Force on School District Regionalization, recommended that school district mergers remain a local decision.

The panel’s final recommendation states: “The decision to regionalize should be made on a case-by-case basis since it is apparent... that school district regionalization does not necessarily result in cost-savings across the board.”

Sen. Bob Smith, D-Middlesex, has unveiled two proposals dealing the issue. The first bill would create county administrative school districts, and the second bill furthers that proposal. Please review both bills to learn how Smith wants to change the way school boards operate and how they are structured.