No Surprise: The State Wants Only K-12 Districts

Since 1969, state-initiated studies have promoted the consolidation of school districts into K-12 units. Why it hasn’t happened so far, and why it’s not likely to happen now.

By Frank Belluscio

Is the current number of school districts the best way to deliver services? I don’t think it is.... I’m becoming increasingly convinced that the best model for delivering education is kindergarten-through-12th grade.

—Assembly Speaker Joseph Roberts, New Jersey School Boards Association, Annual Legislative Conference, March 6, 2004

For those who attended NJSBA’s 2004 Legislative Conference, the design of the state’s current blueprint for school district regionalization should come as no surprise. Almost five years ago when they spoke before the conference, Assembly Speaker Joe Roberts and the influential Assembly Budget Committee Chairman, Lou Greenwald, outlined goals, such as placing more power in the office of the county superintendent, consolidating school districts into K-12 units, and eliminating “send-all,” or non-operating, districts.

Clearly, the Assembly majority had an agenda, and that plan was carried out with the enactment of the CORE Act in 2007.

Where We Are Today The CORE Act, which emanated from the Legislature’s Special Session on Property Tax Reform, strengthened the authority of the state Department of Education’s county officials (rechristened, “executive county superintendents”). Significantly, the act assigned the executive county superintendents the responsibility to conduct studies and develop plans to regionalize school districts within their jurisdictions, with the express goal of eliminating elementary-only and high school-only districts in favor of Kindergarten-through-12th grade configurations. Those regionalization plans are now in the works, with individual executive county superintendents taking varied approaches in leading the studies.

The regionalization proposals are due to the commissioner of education by March 2010. However, the voters—and not the state Department of Education—will have the final word. As outlined by the CORE Act, a majority of voters in each affected municipality would have to approve a regionalization proposal for it to go forward. Referendums on the proposals are likely to take place during the special school election in September 2010.

Focus on K-12 What those plans will look like has been the subject of conjecture. “Unofficial” information about the county-level regionalization studies indicates that the executive county superintendents are painting some portions of the canvas in their own way. However, most of the picture has already been sketched by law and regulation. When the lines are filled in, the image should be a composite of proposals, the vast majority of which would eliminate elementary-only and secondary-only districts.

State administrative code (the Accountability Regulations) designed to carry out the CORE Act and other recent laws expanded the scope of the regionalization plans. The final regulations make it clear that existing K-12 districts will not be automatically exempt from the executive county superintendents’ regionalization proposals, especially if they educate other districts’ high school students as part of sending-receiving tuition agreements. Nonetheless, the regulations retain the primary goal of the 2007 legislation—realignment of as many school districts as possible into K-12 units.

The Accountability Regulations provision on school regionalization studies (N.J.S.A. 6A:23A-2.5) bear this out:

The study shall to the greatest extent practicable focus on the consolidation of existing local public school districts that receive students from school districts on a tuition basis with those sending school districts, and the consolidation of limited purpose regional school districts that receive students from constituent municipalities to create enlarged all purpose regional school districts.

Today, New Jersey has 282 elementary-only school districts, 47 high school regional districts, and 25 non-operating districts that send all of their students to neighboring districts under tuition agreements. In addition, some 220 districts are involved at either end of sending-receiving relationships. So the universe of communities that could be affected by the state’s current regionalization program is a large one.

Education Continuity Commissioner of Education Lucille E. Davy has cited an educational benefit of having all children attend school in continuous Kindergarten-through-12th grade systems. (See page 17) Yet, many educators in the state’s 47 high school regional districts and their 181 constituent elementary school districts would say K-12 alignment has not been necessary to attain educational goals. In fact, they could point to success in creating a seamless transition from elementary to high school. Indeed, for many regional high school districts, the most commonly used measures of achievement, such as standardized test scores and college admission rates, rank them among the state’s best.

Regardless of high academic achievement, delivering education through a hodgepodge of different-sized school districts of varying grade structures rarely made sense to state bureaucrats. Since 1969, state-initiated regionalization discussions, citing reasons of educational continuity, finances and ease of administration, have largely identified the K-12 alignment as the most advantageous.

• “Report of the State Committee to Study the Next Steps of Regionalization and Consolidation in the School Districts of New Jersey,” 1969. Known as the “Mancuso Report” after the committee’s chairwoman, former State Board of Education and NJSBA President Ruth Mancuso, the study recommended configuring all districts into K-12 units of at least 3,500 students each. Such a structure would maximize educational and financial performance. “Goodwill and cooperation among the professional staff may not be enough” to offset differences in philosophy and communications problems among separate elementary and high school districts, according to the report, produced by the state Department of Education.

• “Interim Report to Review the Recommendations of the State’s School Funding Law on the Organization Of Local School Districts,” 1980. The state education department study called for requiring small elementary school districts to prove that they are providing an adequate, cost-efficient education in order to continue their existence. While recommending case-by-case review to determine where regionalization should be required, the study deemed a K-12 approach to school district organization as essential.

• “A Vision for New Jersey’s Schools in the 21st Century,” 1991. Produced by the governor’s Quality Education Commission, the report called for merging districts into K-12 units, resulting in fewer than 250 statewide. The panel believed that such a system could give students more educational opportunity, while providing for parent and community involvement at the individual school level.

Little Movement These studies represent only three of many government reports on the subject of regionalization. In fact, with the possible exception of the Kean Administration (1982-1989), every governor since Brendan Byrne (1974-1981) has promoted some type of regionalization initiative. In the end though, these state-produced recommendations, which usually contained an element of forced regionalization, went nowhere—as have most locally initiated regionalization discussions.

Since 1982, only four locally initiated regionalization proposals have succeeded:

• Bordentown Regional (1982)—merger of the Bordentown Regional High School District with the constituent Bordentown City and Bordentown Township elementary school districts.

• School District of the Chathams (1986)—combining of the K-12 Chatham Borough school district with the K-12 Chatham Township district.

• Somerset Hills Regional (1994)—merger of the K-12 Bernardsville school district with two non-operating districts (Far Hills and Peapack-Gladstone) that already had sending-receiving relationships with Bernardsville.

• Great Meadows Regional (1995)—merger of the two Warren County elementary school districts, Liberty Township and Independence Township, into one K-8 unit.

Of the four, the mergers that produced Bordentown Regional and Somerset Hills Regional most closely fit the mold foreseen by the CORE Act. And along with the Chathams, they appear to have resulted in relatively happy unions among the partners. A 1995 study by the Rutgers Bureau of Government Services and the Public Affairs Research Institute indicates that there were “substantial savings” in three of the six K-12 regional districts (including Bordentown Regional) created between 1965 and 1987. In the four years following its creation, Bordentown Regional experienced a 4.4 percent drop in spending per pupil relative to statewide average spending, according to the report. In the Chathams, relative spending increased only slightly, by 1 percent, during a similar time period.

What Stops Regionalization? If there are regionalization “success stories,” why have there been so few attempts to merge school districts?

The answer can be found in a 1991 New Jersey School Boards Association staff task force report, which showed that regionalization is rarely a win-win situation for the communities involved. In a 2006 opinion article, submitted to The New York Times, then-NJSBA President Kevin E. Ciak cited the findings:

“Many communities have considered expanding educational and extra-curricular offerings by merging with their neighbors over the years. But something stops the plans dead in their tracks. And it’s not home rule; it’s property taxes.

“New tax rates result from adjustments to each town’s contribution to the newly formed regional school system… Invariably, one of the towns in the proposed regional district discovers that the merger would result in higher property taxes. Historically, the plans die on the vine or, if they do reach the voters, they meet defeat at the polls.”

Ciak also noted increased employment costs for teachers, as well as possible increases in transportation and administrative costs.

“If the Legislature is at all serious about encouraging consolidation of school districts, it needs to address financial obstacle[s]” he wrote.

The premise of financial incentives to encourage voluntary regionalization (or at least to ease financial burdens after forced regionalization) has appeared in several government studies. Such financial incentives are absent from the CORE Act.

Financial Obstacles In a September 2006 letter to state Sen. Robert Smith, chairman of the Joint Committee on Government Consolidation and Shared Services, the executive directors of the New Jersey School Boards Association and the New Jersey Association of School Administrators cited the impact of financial obstacles on recent regionalization discussions:

“The reason why more school district consolidation has not occurred is often due to concern about property taxes. After regionalization, new tax rates result from adjustments to each town’s contribution to the newly formed school system, based on varying levels of property wealth and/or student population.”

“Financial factors have played a role in stopping recent regionalization initiatives, including those involving the following school districts: Andover Regional and Green Township (Sussex); and West Morris Regional, Chester Township Consolidated, Mendham Township, Mendham Borough and Washington Township (Morris County). Recently, the Farmingdale Borough school district (Monmouth County) responded to residents’ suggestions and explored the potential impact of a merger with neighboring Howell Township. The district found that the merger would result in sharply increased costs for Farmingdale property taxpayers.

“Other studies have found savings so limited as to not make the change in governance worth the effort. This experience was shared by Lakeland Regional High School, Ringwood and Wanaque (Passaic County) and by Boonton Township and Mountain Lakes (Morris County).”

The ‘Reock Clusters’ No research has been more influential in setting the course of recent statewide discussion of regionalization than that of Dr. Ernest Reock, director emeritus of the Rutgers Center for Government Services. Collectively, his studies in 1995 and 2003 illustrate the increased costs involved in operating separate high school regional and elementary school districts and the savings possible by configuring all New Jersey school districts into K-12 units.

Reock’s studies looked at the potential financial impact of realigning New Jersey’s more than 600 local school districts into 264 K-12 units. The reduction in the number of districts would result from merging all high school regional districts with their constituent elementary districts and by consolidating all districts involved in sending/receiving relationships. The end result: a $65 million savings in administrative costs statewide, and roughly $365 million savings in educational costs statewide. (Total New Jersey spending on kindergarten-through-12th grade education exceeds $25 billion in local, state and federal funds.)

At a 2006 NJSBA-sponsored forum on consolidation, Reock cautioned that his studies did not take into account the impact of regionalization on staff salaries. “Salaries always go up,” he said at the time.

Two current state laws would have an immediate impact on employment costs after regionalization: one requires that the salary of all staff in the newly formed regional school system be increased to the levels in place in the largest (and usually highest-paying) district prior to regionalization; the other requires the newly created regional district to preserve all seniority rights, meaning that, even if regionalization enables a reduction in staff, those employees who are retained would likely be the ones at the highest salary levels.

State regulations to implement the CORE Act recognize the impact of these laws. And, at the very least, they would require the executive county superintendents to consider the impact of these statutes when determining the feasibility of possible regionalization proposals.

Salary Impact In 2006, before it settled on the CORE Act as the blueprint for regionalization, the state Legislature’s Special Session on Property Tax Reform flirted with a proposal to create 21 county-based school districts. NJSBA performed an analysis of existing salary guides in two counties to clarify the impact on staffing costs that would result from such a radical restructuring of school district boundaries. The analysis projected significant pay increases at various steps on the salary guide. In Morris County, for example, the average entry-level salary would increase by $6,756 after consolidation; in Union County, the average maximum salary for teachers holding bachelor’s degrees would jump by $15,055 after county-wide regionalization.

While NJSBA’s analysis projected the impact of county-wide consolidation on teacher salaries, it also provides a glimpse of what would result from regionalization on a smaller scale.

Low Administrative Costs In many ways, the current push toward regionalization has been triggered by perceived savings that may never materialize. It is also prompted by the all-too-common misperception of high administrative spending in New Jersey schools.

In fact, New Jersey spends below the nationwide average on central office and school administration—9.7 percent of current expenses versus 10.8 percent nationally, according to the U.S. Department of Education’s National Center for Educational Statistics. Thirty-nine other states and the District of Columbia devote a larger share of education expenditures to administration than does New Jersey.

The state Department of Education’s own database presents compelling statistics on how local school boards are directing funding to the classroom, and not to the central office. From 1989-1990 to 2005-2006, public school student enrollment jumped by 29.5 percent; the number of teachers increased by 35.2 percent, but the number of administrators rose by only 2.6 percent.

Not the Best Fit Not every state-generated study has concluded that regionalization holds educational and financial promise in all situations. The most recent state report, published in 1999 by the state Assembly Task Force on School District Regionalization, cited the potential educational, financial and administrative benefits of voluntary regionalization. At the same time, it offered the following findings and recommendations:

• “Not every school district is conducive to a regionalized arrangement.”

• “Small school districts can produce excellent results and should not be regionalized simply because their enrollment falls below a certain number.”

• “School regionalization does not automatically reap major savings or improve the quality of education.”

• “Shared services consolidation for non-instructional purposes may accomplish savings.”

• “Some financial incentives are necessary to encourage districts to regionalize when economic and educational benefits exist for regionalization.”

• “The decision to regionalize should be made on a case-by-case basis since it is apparent…that school district regionalization does not necessarily result in cost-savings across the board.”

These findings are in line with NJSBA’s long-standing position on the issue. The Association does not oppose regionalization, but it believes that the communities involved must have the final say at the voting booth—and after feasibility studies determine the educational and economic impact of the proposals.

For the moment at least, the CORE plan—a state-driven, but not state-mandated, process—appears to reflect the principles of educational benefit, economic feasibility and voter authorization when pursuing regionalization.

Frank Belluscio is the director of NJSBA‘s Communications Department. He can be reached at fbelluscio@njsba.org.

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Regionalization and Labor Relations

It will be interesting

By Curt Wary

In these fiscally challenging times, school districts have given renewed attention to both the possibilities and pitfalls of entering into some form of regional relationship with other districts. In assessing the pros and cons, school boards must consider a whole range of issues involving educational programming, staffing, real, potential or imagined dollar savings, tax implications, and much more. Many of these issues are covered, in depth, elsewhere in this magazine. Since school boards are dealing with a unionized work force, labor relations will heavily influence any decisions involving regionalization. An assessment of the labor relations implications must begin with what is required under the law.

Legal Requirements There are currently two major 1995 statutory requirements in education law involving regionalization that impact labor relations:

• Under N.J.S.A. 18A:6-31.4, whenever a regional district is formed, the terms and conditions of employment from the former constituent district with the largest number of teaching staff members applies until a successor agreement is negotiated with the majority representative of the new school district.

• Under N.J.S.A.18A:6-31.5, whenever a regional district is formed, all statutory and contractual rights to tenure, seniority, accumulated sick leave, leave of absence and pension of all affected employees shall be recognized and preserved by the new school district.

In addition, N.J.S.A. 18A:13-42 preserves the tenure and pension rights of high school and junior high school teachers transferred to a regional district and N.J.S.A. 18A:13-49 transfers the tenure, pension and accumulated leave rights of principals, teachers and employees moving to a regional district. Both of these statutes date back to the late 1960s.

Most recently, under N.J.A.C. 6A:23A-2.5 of the Accountability Regulations, the executive county superintendent is empowered, in conjunction with an advisory committee, to study the consolidation of districts and submit a plan to the commissioner of education. Part of this plan includes an analysis of administrative staffing, collective bargaining agreements and compensation guides of the constituent districts, with recommendations and guidance for the proposed regional. More specifically, the plan will provide a report on details of the constituent guides and a “recommended framework for negotiation of a new collective bargaining agreement in the proposed regional school district.” Once the plan has been approved by the commissioner, the executive county superintendent requires each board of education from the constituent districts to submit the regionalization plan to the voters for approval (N.J.S.A. 18A:7-8).

The implications of these statutory and regulatory requirements are significant in terms of negotiations, staffing and costs. Of course, all such implications are interrelated. It should be further noted that the new broad role of the executive county superintendent and the commissioner are not yet fully understood in the context of regionalization and labor relations.

Staff Composition The tenure and seniority requirements in education law have fiscal, educational and operational implications for a proposed regional school district. As all affected employees of the existing constituent school districts retain their legal protections, the resultant work force of the regional district may be greatly influenced by these protections. For example, any affected tenured employees will be able to exercise “bumping” rights into the new regional district over less senior or non-tenured employees. Thus, depending upon the number of available positions and staffing requirements at the new regional district, the resultant work force will be based, to a large extent, on seniority determinations rather than qualitative assessments. For employees in the constituent districts who are non-tenured, or are in job classifications that are not tenure-eligible, qualified staff may not be able to migrate to the new regional district.

If seniority entitlements result in a regional district having a more senior work force, this may present both financial and labor relations complications. For example, a new regional district could incur a greater overall salary cost, as a result of more advanced placement of senior staff on the salary guide, and possible entitlement to longevity payments. Boards may also find that a senior staff is more resistant to changes in terms and conditions of employment, such as managed health care plans, professional development requirements, salary guide restructuring, and limitations on payment for unused sick leave.

School districts exploring regionalization will need to carefully consider the likely composition of the new regional work force and what it may mean to both short- and long-term economic and educational goals.

Bargaining Unit Composition/Resultant Union Once the new regional work force is assembled, a new collective bargaining unit or units will need to be determined. If the work force of the new regional district largely mirrors the work force in the previous constituent district with the largest number of teachers, the bargaining unit configuration, union organization and union leadership are likely to remain in place. For example, a previous “wall-to-wall” unit (in which all employees are covered by a single contract) would continue with the same unit configuration, organization and leadership.

If the regionalization/consolidation effort includes the migration of a significant number of employees from other constituent districts, the new workforce may produce an entirely different labor relationship. In that circumstance, teachers may select a different union or union leadership. Support staff employees in the new regional could organize into separate bargaining units with their own individual unions and union leadership. Further complications may involve the inclusion of employee classifications that may not have been organized in their previous constituent districts now being included with organized employees. Would the department of education play a role in making these determinations for the new regional district? If so, would these state determinations trump existing labor law rights and requirements? The answers to these questions are not yet known.

The Controlling Contract Under the law, the existing collective bargaining agreement that covers the largest number of teaching staff members will control until its expiration and until a new agreement is negotiated. This existing agreement represents the status quo as the school board of the new regional district and the majority representative of the new bargaining unit enter negotiations. Any changes to the existing status quo will need to be bargained. These negotiations may be more difficult and protracted as the union seeks to accommodate the concerns of a new unit of staff members who have different needs, priorities, or even pre-existing levels of benefits.

From management’s standpoint, the need for significant contractual modifications to the status quo may be essential. An existing agreement covering the largest number of teachers may include language that is more extensive, restrictive and expensive than prior existing agreements in the smaller constituent school districts. For example, the controlling agreement may provide for more generous health benefits, leave benefits, tuition reimbursement, and salaries. The controlling agreement may include more restrictive and intrusive language on the workday (e.g., preparation time, student-contact time, duty-free time), work year, and employment procedures (e.g., assignments, transfers, promotions, evaluations). Maintaining inefficient controlling contract language may be cost prohibitive.

Placement of the new workforce on the controlling contract’s salary guide will present some interesting challenges. As previously mentioned, there will be the financial implications of a more senior workforce. Beyond that, determining salary guide placement of employees who migrate from the smaller constituent districts could lead to confusion, disputes, and greater costs. Clearly, no tenured staff member can be reduced in salary; but there will be issues of whether to “red-line” staff, place them at the same step as on their previous guide, move them to the step closest to their existing salary, “freeze” them until a new salary guide is negotiated, or any number of other possible permutations.

Once again, it is not clear what role will be played by the executive county superintendent and the commissioner in reconciling the constituent salary guides and in providing a framework for the negotiations of a new collective bargaining agreement.

Current Negotiations Considerations For districts that are contemplating regionalization or consolidation, one immediate assessment should be the impact of possible future action on existing, or upcoming, negotiations with their current unions. Unions facing the prospect of future regionalization may present negotiations proposals to protect, enhance or position their membership in the event regionalization does, in fact, occur. While the decision to regionalize is outside the scope of bargaining, the impact on terms and conditions of employment may be brought to the bargaining table. Thus, a union anticipating regionalization may bring proposals to the bargaining table on issues such as notification procedures, severance pay, seniority provisions for employees who do not have statutory protection. A board facing these union proposals must, as always, carefully consider the impact on the district’s current and future bargaining goals.

Careful Assessment Ultimately, in assessing the viability of a regional configuration, all of these labor relations and legal considerations must be weighed along with all of the other important educational and fiscal issues. Needless to say, this examination will be a lengthy and exhaustive process and the district’s administrative, fiscal, legal and labor relations resources must be fully engaged.

At this point in time, it would appear that the present laws, at least as they impact labor relations, may serve as an impediment, rather than an inducement, to regionalization. Further, the role that the executive county superintendent and the Commissioner will play in resolving labor relations issues is not yet clear. While the current economic and political climate demand that boards consider all options in providing a quality educational program within constrictive and diminishing means, the uncertainties, barriers and disadvantages of regionalization must be part of every district’s assessment.

Curt Wary is director of NJSBA’s Labor Relations Department. He can be reached at cwary@njsba.org.

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The Legal Issues of Regionalization

Consolidating school districts involves confronting several legal issues. Here is a rundown of what’s involved

By Michael F. Kaelber, Esq.

It was on April 3, 2007 that Gov. Jon Corzine signed into law the measure commonly referred to as A-4. This legislation implemented the Uniform Shared Services and Consolidation Act, established user-friendly budgets, created the position of executive county superintendent of Schools (ECS) and established the authority and requirements of the ECS office. Each ECS is required, no later than three years following A-4’s enactment, to recommend to the commissioner a school district consolidation plan to eliminate all districts, other than county-based districts (such as vocational-technical and special services districts) and kindergarten (or preschool) through grade 12 districts in the county, through the establishment or enlargement of regional school districts.

Under the law, after commissioner approval of the ECS regionalization plan, each board of education covered by the plan will submit the ECS regionalization proposal to the voters for approval. For the ECS regionalization plan to be adopted, the voters in each affected community must approve the plan.

In regulations specially adopted Dec. 18, 2008, the commissioner clarified that the executive county superintendent plan, due March 15, 2010, would seek to consolidate all local school districts within the county, other than county-based districts and existing all-purpose regional school districts (pre-K or K-12), into one or more all purpose regional school districts. It’s important to note that with this clarifying regulation, the scope of the regionalization net has been broadened. Small K-12 school districts, which were not part of the legislative A-4 enactment, are now being considered for regionalization as part of the ECS plan.

The ECS plan will primarily focus on existing sending-receiving relationships and the consolidation of limited purpose regional school districts (such as K-8, 7-12 or 9-12 districts) with their respective constituent school districts. If the creation of an all-purpose regional school district is not feasible or is not the most cost-effective option, the consolidation or sharing of administrative or management services will be considered.

While the ECS plan is not due until March 2010, with the resulting potential regionalization elections not occurring until September 2010, regionalization discussions have spread like wildfire around the state. Executive county superintendents, with the March 2010 plan deadline looming, have been meeting with local districts, encouraging them to investigate voluntary regionalization efforts. Discussions have ensued, questions have been raised, and clarifications sought.

The prospect of regionalization brings up several legal issues with which board members should be familiar when considering school district consolidation.

What is a regional school district?

A regional school district is a school district organized to provide public education services for multiple municipalities. It can be an “all-purpose” regional school district, serving all of the educational purposes of the municipalities (pre-K or K-12) or it can be a “limited purpose” regional school district, providing specific educational services, most commonly grades 9-12 or 7-12. A separate board of education, made up of representatives of each of the constituent municipalities, governs the regional school district. To the extent that educational services are no longer provided by each of the local constituent school districts, governance by those boards is eliminated.

How is a regional school district formed?

The classic voluntary regionalization process, the process that remains in place until the ECS proposals go to voters report in September 2010, is set forth in statute. Curiously, while administrative code sets forth the process for deregionalization in specific detail, no such code for voluntary regionalization exists. Instead, the process is set forth in a series of Department of Education memoranda, the most recent being issued in November 1998. The current process works like this:

• Informal meeting. The first step is an informal fact-finding meeting with the interested school districts and the ECS. The purpose of the meeting is to identify issues and review the regionalization process. This meeting is usually attended by the officers and central office administrators of each interested board of education.

• A second fact-finding meeting. The ECS will review the feasibility study process, identify the financial responsibilities of the interested districts in conducting the study and will request a resolution from each board to proceed. Classic voluntary regionalization is a fragile process. Should a district decide not to participate at any point in the process, the process ceases.

• Formal feasibility study. Usually done by an educational consultant, the feasibility study consists of an analysis of the constituent districts, including enrollment data and projections, educational plan, racial composition, fiscal information, facilities, effects on existing schools, legal considerations, public awareness/input and a transitional budget. The cost for the study is shared among the interested school districts. While no funding for feasibility studies is directly available for school districts, SHARE grants are available to municipalities through the Department of Community Affairs.

• Advisory Committee formed. The advisory committee consists of two board members, the chief school administrator and board attorney from each interested school district and community representatives appointed by each board of education. The advisory committee selects a chairperson, develops a plan of action to implement the feasibility study, reviews and critiques the study as it develops, and develops and implements a plan to report the content and progress of the feasibility study to the respective boards of education and constituents.

• Formal feasibility study to the executive county superintendent for review. Based on the results of the feasibility study, each board takes final action to approve the regionalization plan through the adoption of a formal board resolution, which is submitted, along with the feasibility study to the ECS.

• If the executive county superintendent agrees with the plan, the ECS submits a request for approval through the Division of Field Services to the Commissioner of Education. The Departmental Review Committee (Commissioner, State Board Member, State Treasurer, Director of Division of Local Government Services) decides whether the plan is feasible or not. If the plan is deemed not to be feasible, the ECS notifies all the affected school districts. If the Department Review Committee finds the plan to be feasible, the final report, with recommendations, is forwarded to the Commissioner.

If the Commissioner approves the plan, a special election is held, between April 15 and December 1. Given the statutory limitations on special election dates, the regionalization election will be held on the last Tuesday in September. If the voters in each potential constituent district approve the plan, the executive county superintendent will set the date for the formation of the new regional school district; usually July 1 of the following year. The ECS appoints the number of qualified board members for each constituent school district, creating the first regional board of education. The first elected regional board members will be chosen at the next annual school election following the special election which created the regional school district.

How does the executive county superintendent plan differ from the voluntary regionalization process?

While voters have the final say, the March 2010 plans developed by the ESC and approved by the Commissioner, could involve school districts even if the district has no interest in the proposal. While there has been much discussion among executive county superintendents and local school districts to get agreement and buy-in, ultimately the ECS plan is the plan.

The regulations provide for the establishment of a School District Regionalization and Consolidation of Services Advisory Committee in each county for the purpose of providing advice and consultation to the ECS. Every school district in the county has representation on the Committee, which meets monthly. At least quarterly, county representatives of the Leadership in Educational Excellence (LEE) group will be invited to attend and participate in the Advisory Committee meetings. The LEE Group consists of representatives of the various New Jersey education associations, including the NJSBA.

The ECS, in consultation with the Advisory Committee will study the consolidation of school districts within the county, other than county-based school districts and existing all-purpose regional school districts, into one or more all-purpose regional school districts. The study will focus on consolidating existing sending-receiving relationships and limited purpose regional district and their constituent districts into enlarged all-purpose regional school districts. Small K-12 school districts will be considered for regionalization as well.

The March 2010 ECS plan will, not unlike the feasibility studies in the classic voluntary regionalization process, address the following: the structure of the new board of education; an analysis of staffing, the collective bargaining agreements and salary guides; an analysis of each constituent district’s educational program and guidance for the regional district program; transportation cost-efficiencies; finance, technology, food services and facilities efficiencies; an analysis of socio-economic and demographic information; a comparison of state aid and property tax impact; a comprehensive financial analysis including current and projected spending, local wealth and debt limits and debt burden; aggregated income, household income and current and projected borrowing margin.

Once the ECS plan is approved by the commissioner, it follows the same path to the voters as would a classic voluntary regionalization plan.

How is the apportionment of seats on the regional board determined?

If there are nine or less constituent districts, each constituent district will have at least one board member, with the remaining members being apportioned by the executive county superintendent, according to the number of residents in each community. The number of residents in each community is established by the federal census. If there are more than nine constituent districts, the number of board members is equal to the number of constituent districts plus one, with voting rights being apportioned by the ECS according to the number of residents, through a representative ratio and equal proportions process. This apportionment results in a weighted voting process whereby board members may have fractionalized votes, depending on their community’s population; e.g. 1.2 votes, .75 votes, etc. This fractionalized voting process, in regional districts with more than nine constituent districts, is the result of 1970s litigation involving the North Hunterdon Regional school district and its then-15 member board of education. The New Jersey Supreme Court found that the existing structure violated the federal “one person, one vote” voting rights rule. The Legislature’s response was a change to the existing voting structure.

While similar litigation occurred in 1998 in a regional school district with eight constituent districts, resulting in a court approved settlement, which included fractionalized voting; there has been no similar legislative response for school districts with nine or fewer constituents. Whether a community will maintain majority political control of a regional school district can often be a factor in a community deciding whether to proceed with regionalization. This can be especially true when districts in an existing sending-receiving relationship are considering regionalization. The receiving district, which holds a majority of seats on the board of education, may be reluctant to give up its existing political control.

Does the seat apportionment among districts on the regional board ever change?

Yes. With the official promulgation of the next federal census, seat apportionment can change, if the resident population has changed significantly. In the 2002 school election, 16 regional school districts saw seat apportionment changes because of changes in resident population identified in the 2000 census. When seat apportionment changes are necessary, existing board members continue in office for their elected/appointed terms with increased representation taking effect at the next annual school election.

How are costs apportioned in a regional school district?

It depends. In the formation of a regional school district, the plan, which is placed before the voters for approval, may apportion costs among constituent districts in three basic ways:

• Equalized valuation, otherwise known as property values;

• Pupil enrollment

• Any combination of equalized valuation and pupil enrollment.

With the 1975 passage of Chapter 212, the “Thorough & Efficient” law, all existing regional school districts apportioned costs on an equalized valuation or property value basis. Legislative amendments in the 1990s created the pupil enrollment and combination options. In 1993, the Liberty and Independence school districts in Warren County combined to form the Great Meadows Regional (K-8) school district, the only school district in New Jersey to apportion costs 100 percent by pupil counts. The Somerset Hills Regional (K-12) district, comprised of Bernardsville, Far Hills, Peapack and Gladstone, apportions costs on a 95 percent equalized valuation, 5 percent pupil enrollment basis.

How costs are apportioned in a regional school district can often be a factor in a community deciding whether to proceed with regionalization. Whenever a regional school district plan is developed and the cost apportionment deck is shuffled, winners and losers result. In most circumstances, the winners will vote yes and the losers will vote no, precluding regionalization. The challenge for school districts, which want to proceed with a regionalized structure and for the state to implement its regionalization initiative, will be to find a way to offset this financial disincentive.

Can cost apportionment in a regional school district be changed?

Yes. Regional school district cost apportionments can be modified by approval by the voters in each constituent municipality upon the occurrence of one of the following: ten years have elapsed since the last voter approval; 10 percent change in equalized valuation; 10 percent change in pupil enrollment counts; enlargement of the regional school district; the regional district was formed before 1993 and never changed its apportionment. Great Meadows Regional submitted a proposal for a 50/50 split between equalized valuation and pupil enrollment to the voters in 2007. Liberty, which would have benefited financially from the change, approved the proposal. Independence, which would have been financially disadvantaged by the proposal, rejected the proposal. The 100 percent pupil enrollment apportionment has remained in place.

Yes. Should an all-purpose regional school district not be the most cost-effective option, the ECS may recommend to the commissioner as an alternative, the required consolidation of administrative services where it would be economically advantageous and there would be no negative impact on the education program. The ECS will focus on opportunities for consolidation of administrative services in the following types of school districts; 1,000 students or less; five school buildings or less; two contiguous districts in the same county with less than 2,500 students; sending-receiving relationships with less than 5,000 students; limited purpose regional districts and their constituent districts with less than 5,000 students; and districts where administrative costs are in excess of 125 percent of the county median.

Can the commissioner mandate regionalization?

Although mandatory regionalization is not part of the state’s current plan, the commissioner does have such powers under other laws. In 1971 the commissioner of education mandated regionalization between the school districts of Morristown and Morris Township, creating the Morris School District, in fulfillment of New Jersey’s educational and desegregation policies in the public schools. The commissioner’s authority for mandating the formation of the regionalized Morris School District was established by New Jersey Supreme Court. While it has been suggested on several occasions during the subsequent 38 years that the commissioner once again invoke that authority, the commissioner has chosen not to exert her political will in this area.

The commissioner’s authority to mandate regionalization received a boost with the enactment of the School Funding Reform Act of 2008 on January 13, 2008. As part of the new school funding law, the Legislature established broad powers for the commissioner. Codified at N.J.S.A. 18A:7F-60, the Legislature established that:

“The Commissioner shall be authorized to take any affirmative action as is necessary to ensure the effective and efficient expenditure of funds by school districts.”

It would appear that for the immediate future, the executive county superintendents will continue to encourage school districts to explore regionalization. Given the impediments of cost allocation with winners and losers, the political power of seat apportionment on the regional board of education and New Jersey’s long standing tradition of home rule, the prospect of voluntary regionalization on a large scale is unlikely. It is significant that there have been only four regional school districts formed in New Jersey in the past thirty years (Bordentown Regional, School District of the Chathams, Great Meadows and Somerset Hills).

Come March 15, 2010, the ECSs will submit their regionalization plans, with resulting regionalization elections in September 2010. Unless the State comes up with a way to eliminate the losing aspect of cost apportionment, it is unlikely that many of the regional school district proposals will be approved. What then? Will the commissioner mandate regionalization over the express will of the voters? While legal, that would require the expenditure of a lot of political capital by the governor and commissioner and would appear to be unlikely. The more likely developments will be in the area of consolidating or sharing administrative and management services, balancing cost savings with the staffing levels necessary to get the job done.

Buckle your seat belts and stay tuned. It should be an interesting, if bumpy, ride.

Michael F. Kaelber, Esq., is director of NJSBA’s Legal and Policy Services Department. He can be reached at mkaelber@njsba.org.

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The Outlook on Regionalization

A discussion with some of New Jersey’s experts

By Janet Bamford

On Nov. 22, New Jersey School Boards Association held a panel discussion on school district regionalization. The discussion, which followed the November Delegate Assembly meeting, was moderated by Michael Aron, the Emmy-award winning senior political correspondent for New Jersey Network. Panelists included:

• Dr. Gerald Vernotica, Assistant Commissioner in the Division of Field Services at the N.J. Department of Education. Vernotica formerly served as an Executive County Superintendent, as well as a school district superintendent.

• Vito Gagliardi, Jr., an attorney and expert in school law and regionalization disputes.

• Assemblyman Scott Rumana (District 40). Prior to joining the Legislature, Rumana was mayor of Wayne, and a councilman. He is a member of the Assembly Education Committee.

• Michael Vrancik, NJSBA’s Director of Governmental Relations.

Below are excerpts from the discussion.

Q: The CORE Act, enacted in March, 2007, created the position of Executive County Superintendent and directed them to develop regionalization proposals within three years. Could you estimate how many of the state’s 603 school districts could be affected by these proposals? What type of district would be affected?

Dr. Gerald Vernotica: It’s difficult to estimate how many districts will be affected.

I would think all of them would be affected to the extent that they would play a role in the advisory council on regionalization that the executive county superintendent (ECS) would create.

It’s difficult to say what kind of district would most likely be affected, but the intent of the law is clearly to create K-12 districts. But the advisory council would assist in the planning to see if it is practical and see whether these regional organizations are going to be effective.

One of the things our Commissioner stressed is that it is expected that we will have K-12 districts and we will have 3,500 to 6,000 students in a district. That’s what the research and the efficiency model is based upon. But we have been encouraging the ECSs to tell us what obstacles are preventing us from providing richer programming for our children and reducing the number of school districts in the state.

Q: Assemblyman Rumana, more than half of the municipalities in your district could be affected by the regionalization proposals. How essential do you view the communities’ ability to determine the governance structure of the schools?

Scott Rumana: Before I was an assemblyman, I was a councilman, a freeholder and a mayor. I believe in a strong local government. I absolutely believe that with any change, the people must decide what’s right for their community. I don’t believe the state should direct you in how to run your school board and your district.

Q: The 1999 Report of the Assembly Task Force on School District Regionalization addressed the value of regionalization but recommended against forced regionalization. The report stated. “Regionalization does not automatically reap major savings or improve the quality of education. In fact, some studies have shown the converse. For example, expenses related to teachers’ salaries and transportation costs may actually increase.” Has anything changed since 1999?

Michael Vrancik: Frankly, not much has changed. There is a sentiment on the part of many legislators that bigger is better in terms of saving the taxpayer dollars. In many instances, consolidation of districts creates additional cost burdens that have to be borne by constituent districts and to this day, the biggest obstacle to regionalization really has been the fact that in the apportionment of taxes, which has never really been addressed, some districts end up paying more. Part of that is because they would pay more anyway and part of it is because costs have actually increased.

One of the issues touted as the reason to consolidate is to reduce administrative spending and, in fact, that may occur. But that is more than offset by the fact that when districts consolidate, there is an equalization of salary guides. The default salary guide used is that of the largest component district of the districts that consolidate.

During the special session of the legislature where they studied consolidation, there were estimates that going to 21 county school systems in this state would cost, statewide, an extra $400 million.

Q: Since 1986 there have only been three instances of school districts regionalizing. Have there been any changes in state law that would remove the financial obstacles to regionalization?

Vito Gagliardi, Jr.: The short answer is absolutely not. The simple reality is that the funding formula needs to be changed or we are not going to see regionalizations because they are and should be should be subject to local voter approval.

Almost every time you try to regionalize, it’s like a Rubik’s Cube. You can’t find a scenario where each town saves money even when the overall savings are very real. You’re never going to get there until something is done about the funding formula.

In the places you are going to see increased costs, it is because of the salary guides. But there is a vehicle in the law that I don’t think is sufficiently understood.

Even in these new regulations, the talk is about expanding limited purpose regional school districts, where you have a couple of K-8 districts and then a 7-12 or 9-12 district. If you expand these districts to simply take over the smaller ones, their salary guides will survive. You almost always end up giving an increase to the teachers in the smaller grammar school districts. There should be no talk about expanding existing regional districts. But what if you were to dissolve the existing regional structure and create a new one? The law says that you can’t reduce the salaries and compensation of tenured employees, but you can create a new salary guide that doesn’t require you to give increases to everyone. So if you want to see regional district structures that save money you should talk about creating new regional structures that would not be subservient to existing salary guides that force raises on teachers who are otherwise not entitled to them.

Q: Looking at the lack for voter support for regionalization in the past, do you see the state proposing financial incentives for regionalization or penalties for rejecting regionalization?

Gerald Vernotica: When all of this became law, we were in a completely different economic environment. That said, I do see that there has to be some implementation money or incentive for those districts based upon the apportionment methods.

That money is not available if you are one of the losing communities and you don’t want your taxes to increase. Absent that there are real concerns with actually moving towards that regionalization. We all know there are winners and losers in these plans; once we’ve identified those obstacles to regionalization, that’s when we have to talk.

Q: What laws should be eliminated, changed or enacted to foster regionalization?

Scott Rumana: Again, I am committed to making sure whatever we do is completely within the control of local communities and school boards.

Law should change to allow districts that want to deregionalize. Every district needs to try to find the best and most efficient way of operating. We should encourage shared services, like shared purchasing services.

Q: Where in the state would it make sense to encourage regionalization?

Michael Vrancik: I think you look at the places that would benefit from consolidating transportation systems or some part of the educational delivery system. Ultimately we all serve the taxpayer, and what has driven this discussion for the last 10 years is that we want to lower property taxes. Until you can make the case that this is going to benefit the taxpayer without hurting the educational system, we’re just going to keep going around and around.

Janet Bamford is editor of School Leader. She can be reached at jbamford@njsba.org.