Common Budget Cap Law Questions

NJSBA has received several inquiries from its membership on the budget cap law and its impact on school district operations. To follow are some of the common questions received from districts:

What are the negotiation implications of the new law?
The new law governing budget caps and the use of surplus funds is expected to have a profound effect on all aspects of school operations, including local negotiations. Click here for information on S-1701 and the negotiation implications or call NJSBA’s Labor Relations Department at 1-888-886-5722, extension 5219.

What is the feasibility of a class action lawsuit?
While there is always a remote possibility of litigation success, it appears that the likelihood of success is limited and the road to that success is costly in both time and money. A legislative solution appears to be the better alternative. NJSBA has prepared a full analysis of S-1701 litigation inquiries. For further information, call NJSBA’s Legal Department at 1-888-886-5722, extension 5254.

As we move forward, what impact will the law have on our board operations this year, next year and the year after?
Boards will be faced with many decisions. Policies regarding financial procedures, such as transfers, will need review and revision. Board actions regarding monthly financial reports will change. Careful planning and identification of priorities will be essential for all boards of education. These and other issues need discussion and clarification as soon as possible. Your NJSBA field service representative will be a great resource for you in the coming year. In addition, several county school boards associations have planned programs in early fall on the budget cap law. For dates and times, call your NJSBA county program coordinator at: 1-877-294-6416 (northern field office); 1-877-294-6418 (central office); or 1-877-294-6417 (southern office).

What effect will the governor’s resignation have on the law?
Senate Bill 1701 is now law and therefore must be implemented as written. All actions to amend or repeal laws begin in the Legislature. Any litigation to amend or repeal the law will follow the usual legislative process: identifying sponsors; being referenced to a committee; voted out to the floor for a vote; and, if passed, sent to the other chamber to begin the process again. Only after both the Senate and the Assembly have passed the measure would the governor have to act.

NJSBA’s goal is to bring the S-1701 discussion back into the legislative arena and seek its repeal. It is for this reason that we have asked all school districts to respond to our online survey. Armed with the facts and data of your board’s situations, we will be able provide legislators with actual examples of the negative impact this law has had on New Jersey’s public school districts. NJSBA needs your input to begin the repeal process.