Meanwhile, school districts are still under the 2% tax levy cap that was instituted in 2010, a year when the inflation rate was 1.5%.
Boards of education, as they are developing budgets for next year, are contending with higher costs for items such as classroom materials, transportation, gas and fuel, electricity, and food for the school cafeteria. Many districts have been hit, mid-year, with dramatic increases in health insurance premiums for their school employees. Chapter 44, which was supposed to help districts rein in health insurance cost increases, has not demonstrated the savings for boards of education that we all hoped for.
Our teachers and school employees are also feeling the pinch of inflation and, not surprisingly, contract settlement rates are higher. According to NJSBA’s labor relations unit, teacher contract settlements that cover the 2022-2023 school year are averaging 3.24%. With school districts having difficulty —in varying degrees—filling openings for teachers, boards do not have much leeway to cut back on those contract settlement rates. In fact, our boards tell us that districts are losing teachers, who are in some cases abandoning their tenured positions, to go to other school districts offering higher salaries.
Boards enter negotiations with a keen eye on compensation (as a result of the aforementioned rising costs) and an awareness that they lack flexibility in budgeting. This inflexibility can lead to reductions in staff, increased class sizes, and an overall inability to provide proper compensation; all of which may have a direct nexus to employee morale. As a member of the governor’s Task Force on Public School Staff Shortages in New Jersey, I discussed this issue in my remarks to the group.
NJSBA has been advocating for additional state funding for schools, and for tax levy cap considerations for districts. In November, NJSBA President Irene LeFebvre and I were part of a group of education group leaders that met with Gov. Phil Murphy.
Our message to him at that time was that unless districts receive additional financial consideration, the innovative programs that schools have instituted during his time as governor will have to be cut. That includes programs designed to help our students recover from the effects of the COVID-19 pandemic, including mental health support systems and additional academic support.
We need to work together to help mitigate the problems resulting from the joint effects of a 7% inflation rate and a 2% tax levy cap, whether that be moving the cap higher, providing waivers for certain types of expenses, or using other strategies. And we’re under a time crunch to do something, as we move closer to the date in the spring when local board budgets must be finalized.
An article in this edition of School Leader, which begins on page 36, looks at the timely topic of how school districts are dealing with increased costs. It is our hope that this resource will help board members better understand and cope with this challenge.
Very truly yours,
Dr. Timothy J. Purnell