Schundler: Expect Less Aid, Less Red Tape

Be prepared for a statewide decrease in school funding, Acting Education Commissioner Bret Schundler told more than 150 school board members and administrators at NJSBA’s Town Hall meeting on Saturday at Harrison High School. But exactly how that reduction will affect individual school districts may vary widely, he said.

Schundler balanced the discouraging school funding scenario with a commitment to provide boards of education with the tools they need to control costs at the local level.

Tools for Boards “I would prefer to talk about education vision, but we are facing serious issues financially,” said Schundler in his opening comments. “We have to talk about negotiations, pension benefits and how the Public Employment Relations Commission works. …we have to address problems that legislators have been reluctant to address before.”

Schundler said that school district options to control personnel costs are limited due to state law and regulation. For example, he noted that districts cannot offer retirement incentives. He also stressed the need for health benefits reform, pointing to a premium increase exceeding 20 percent for the state-run School Employee Health Benefits Program.

“The problem is not that we have spendthrift boards; it’s that local boards do not have the tools,” he said. “We want to change the system that drives up the costs.”

State Aid Picture Although the administration is trying to maintain level state aid, Schundler does not anticipate that it will be able make up all of the $1 billion in federal stimulus money that the previous administration used to plug a state aid hole in 2009-2010.

“I wish I had positive news about next year,” he said. “We’re already $1 billion in the hole, and the economy is not rebounding.”

If school funding is reduced statewide, the administration will not apply the same percentage reduction to every school district, according to Schundler. He explained that a percentage cut in a high-aid district could be overwhelming when compared to the same percentage cut in a district that receives little revenue from the state.

Significantly, Schundler said the state might also recalculate aid based on whether a district is spending at the amount that the school funding formula deems as necessary to provide an “adequate” education. Additional money would be directed to those districts spending below adequacy.

Under statute, the state must provide school districts with their 2010-2011 school aid figures no later than 48 hours after the governor’s annual budget message. Gov. Christie is scheduled to deliver his budget address on March 16.

School Budget Election Following his opening remarks, Schundler participated in a panel discussion with Senate Education Committee chair M. Teresa Ruiz and Assembly Education Committee member Mila M. Jasey.

 “We’re finally talking about the main problems and the main issues: health benefits, special education, and controlling costs,” said Jasey.

However, the administration and Legislature must cooperate, according to Ruiz. “Change has to come through a collaboration and cohesive discussion,” she said.

In addition to worrying about 2010-2011 state aid levels, districts are still reeling from a $475 million current-year aid reduction, which more than 500 of them will have to absorb through the use of surplus and reserve.

To help districts contend with the impact of the surplus reduction, the late release of 2010-2011 state aid figures and the tight budget development timelines, NJSBA has recommended suspension of the 2010 base budget elections. The action would provide additional time for local school districts to develop their budgets and for the state to review the proposals for efficiency.

Panel moderator Mike Vrancik, NJSBA’s director of governmental relations, asked the two legislators and Schundler for their reaction to suspending the budget election. Discussion, however, turned immediately to the longer-range prospect of permanently eliminating the vote on proposed budgets that are below the state-imposed tax-levy cap.

Up to now, many legislative proposals to eliminate the budget vote would also move school board member elections to the partisan November General Election. Schundler cited the administration’s support for the combined change.

Many NJSBA members, while supporting elimination of the budget vote, strongly oppose running for office in November. Ruiz and Jasey, a former three-term school board member, said they would raise the separation of the two issues in their committees, a strategy urged by NJSBA.

Standards-Based Reform While finances dominated the Town Hall discussion, the panelists also addressed broader education policy and school reform.

“My vision for public education, in many ways, is the same as the Obama Administration’s vision,” said Schundler in response to a board member’s question about the future direction of New Jersey public education.

The acting commissioner said he supported “standards-based reform,” which focuses on setting goals, rather than “top down” regulation. Such standards, however, must be clear and backed up by “sophisticated assessments.”

“We don’t want to burden you with so many reports that we don’t have the time to read,” he said.

“We want to move away from being the ‘chief harasser’ of school districts to being the chief supporter,” Schundler commented.

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