What happens when the budget is defeated?

Defeated school budgets are reviewed by the municipal governing body in consultation with the board of education. Generally, the municipality may – but is not required to – reduce the size of the school tax levy requested by the board. If it makes a cut, the municipality must back up its decision by identifying corresponding reductions in school expenditures. The school board is not bound by these particular spending cuts, but it must live with the tax levy certified by the municipal governing body.

Under the School Funding Reform Act, a municipality may not reduce the tax levy below the district’s minimum tax levy – that is, the amount of money that a community must provide toward the public education program. Therefore, when voters reject a budget with a tax levy no higher than the state-required local share, the municipality cannot make any reductions. This scenario occurred in a handful of school districts last year.

Restoration Criteria School boards may apply to the state Department of Education’s Division of Finance for restoration of reductions made by the municipality.  The school funding act provides the following bases for such applications:

• A school district with a proposed budget above the state-determined adequacy level of spending may apply for restoration only on the grounds that the municipality’s reductions would negatively affect the district’s long-term financial stability.
• A school district with a proposed budget at or below adequacy may apply on the grounds that the municipality’s action would negatively affect its long-term financial stability and/or would prevent it from providing a thorough and efficient education. The municipality, in turn, must document “by clear and convincing evidence” that each proposed line-item reduction would not have an adverse impact on the district.

Copyright © 2010 New Jersey School Boards Association. All rights reserved.