NJSBA: Stable School Funding System is Crucial

In School Leader...

A-1 Not Law Yet, but Already Posing Problems

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Legislative Update

Spending Guide Released

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Members Invited to Breakfast at NSBA Conference

NJSBA Online

Workshop Housing Forms Coming April 5

Conference Notes

Passaic County SBA Annual President’s Forum

Calendar

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The 4-percent property tax cap and tax credit bill, A-1, is still awaiting action by Gov. Jon S. Corzine. State Department of Education sources indicate that the bill, which has served as the model for 2007-2008 school budget development guidelines, is expected to be signed prior to the April 17 school election.

Even though A-1 is not yet law, school districts are already feeling its unintended consequences.

Surplus Penalty A major concern is the lack of a cap adjustment in 2007-2008 for the appropriation of one-time revenue.  An example would be the use of surplus in the current school year. Without an adjustment, districts cannot include the surplus appropriation in next year’s base budget. As a result, the district’s permissible school property tax would reflect a 4 percent increase over last year’s budget, minus the appropriated surplus.

What results could be a difficult choice: cutting staff, programs or services, or asking voters to authorize expenditures through a separate ballot question. The absence of a cap adjustment for non-recurring revenue could affect up to 200 school districts.

Ironically, A-1 provides such a cap waiver for 2008-2009.

Meeting with Corzine Staff On March 16, NJSBA and other state education organizations met with the governor’s staff to discuss a possible solution: Sending A-1 back to the Legislature with a recommendation to add an adjustment for the use of non-recurring revenue.

Such a change would reflect a bill proposed by Sen. Ellen Karcher in response to a situation in East Windsor Regional, one of the most severely affected districts.

The governor’s staff, however, was non-committal about making such a change.

Data Collection In the meantime, NJSBA is collecting information on the impact of A-1, including:

• Cuts in courtesy busing or other services.
  
  
• Staff reductions.
  
  
• Academic program cuts.
  
  
• Elimination of extra-curricular activities.
  
  
• The need to present second ballot questions to maintain existing programs.

“We will use this information to address school finance for 2007-2008 and how the department of education will process cap waiver requests in future years, as well as in discussions of a new school funding formula,” explained Mike Vrancik, NJSBA director of governmental relations.