Could ‘Monetization’ Impact Schools?

Could ‘Monetization’ Impact Schools?

When the state considers a new method of funding public schools, a key issue will be the revenue source. Earlier this year, the governor raised “monetization of assets” as a method to free up more money in the state budget.

Monetization has yet to be fully detailed. Its proponents say it has the potential to alleviate persistent state revenue shortfalls and, possibly, allow for increased school aid.

The limited information about the monetization concept revealed to date involves either the sale of some state assets (most notably, state-owned toll roads) to a private entity or the use of anticipated revenue from those assets (for example, tolls) to back the refinancing of current state debt at lower payments. The result would free up funds in the state’s annual operating budget for a variety of purposes, perhaps even school aid.

The downside may be increased tolls to secure the refinancing.

The governor recently connected monetization to reviving the state’s depleted school construction program. At no point, however, has he or any other state official said that the new revenues would be used to increase formula aid – that is, annual state aid provided to school district operating budgets. Most likely, the money freed up would be directed to a variety of new and existing programs, which may or may not include increased school aid.

The formal proposal will likely be unveiled after the November elections. NJSBA is closely monitoring all developments that may affect school funding and state revenue.