On June 3, the Senate Education Committee held a hearing on the status of the “Securing Our Children’s Future Bond Act.” The act, which received voter approval during the November 2018 general election, authorized the state to borrow up to $500 million to fund school district and county college capital projects.

The committee invited several organizations, including the NJSBA, to testify on the status of the establishment of eligibility criteria for grants under the act.

As originally approved by the Legislature in July 2018, the “Securing Our Children’s Future Bond Act” would have permitted the state to borrow up to $1 billion to expand career and technical education programs in the state’s county vocational schools and county colleges while enhancing school security in public school buildings.

However, citing concerns over the state’s existing debt load, the governor conditionally vetoed the bill and cut the borrowing capacity proposed by the legislation in half. The Legislature concurred with the governor’s recommendations in August.  The borrowing under the bill required voter approval. It was placed on the ballot in November and passed with 54% approval.

Specifically, the $500 million will be allocated for the following purposes:

  • $350 million for 1) career and technical education (CTE) grants to fund the expansion or construction of county vocational-technical school facilities to increase capacity in CTE programs; and 2) project grants to fund security enhancements at K-12 schools.
  • $50 million for county college facility expansion projects.
  • $100 million for water infrastructure improvements in school district buildings.

Gary Brune, of the nonprofit organization New Jersey Future, testified on the need for water infrastructure improvement grants to clean up lead in school drinking water. He described strategies for tackling the problem in a cost-effective manner.

Michael Vrancik, NJSBA director of Governmental Relations, testified on behalf of the Association. Vrancik discussed funding that was made available to school districts in previous years to perform lead testing on their facilities’ drinking water.  A portion of that money was used to retroactively reimburse school districts that took a proactive approach in testing their water, rather than waiting for the Legislature to appropriate funds for that purpose.

Since at least a year will likely pass before the department distributes any resources to school districts, Vrancik urged the department to take a similar approach with the new water infrastructure grants, as well as the school security grants.  That approach would allow districts to apply for a reimbursement for any investments they may make before the bond proceeds are available.

Several other stakeholders participated in the hearing. Judy Savage, executive director of the N.J. Council of County-Vocational Technical Schools, said a “skills gap” and “workforce crisis” exists in New Jersey as employers struggle to find technically skilled workers to fill current vacancies and address a wave of anticipated future retirements.

She also addressed the concerns of the high cost of college and student loan debt, which increases the demand for educational opportunities that provide students a variety of career pathways, preparing them for well-paying jobs that don’t require a college degree. While county vocational schools try to respond to employer and student needs, they do not currently have the capacity to meet current demand as they receive approximately two applications for every available seat, Savage said. The purpose of the bond act is to increase that capacity by funding construction projects at the county vocational schools and therefore expand CTE opportunities for New Jersey students.

The Securing Our Children’s Future act tasks the state Commissioner of Education, in consultation with the Commissioner of Labor and Workforce Development, with developing procedures for the review and approval of the CTE project grants.

Applications will need to demonstrate how a proposed project will increase the capacity of the district to offer CTE programs, prepare students for high-demand, technically-skilled careers, and align with labor market demands or economic goals.

The law gives priority for funding to county school districts that offer stackable credentials programs and those that enter into partnerships with county colleges or employers to provide technical training and education.  The grants will support 75% of an approved project’s cost, while the district will need to provide 25%  in matching funds.

The N.J. Department of Education (NJDOE) Commissioner, in collaboration with the N.J. Schools Development Authority, will also establish eligibility criteria and application procedures for the school security grants.  The Commissioner of the N.J. Department of Environmental Protection will have responsibility for administering the water infrastructure improvement grants.  Both of these grant programs will be fully funded by the state and require no local financial effort.

The law also explicitly permits the school security grants to be used to offset the cost of alarms and silent security systems.  In January 2019, Gov. Murphy signed legislation, known as “Alyssa’s Law,” requiring that all public schools be equipped with a panic alarm for use in a school security emergency. The law, which goes into effect Sept. 1, directs the state to reimburse school districts for the full cost of the panic alarms or alternative mechanisms, including those installed prior to the bill’s enactment.  Proceeds of the bond act will be used to fund the full cost of these systems, and districts will be eligible for reimbursement for the costs of any installation that occurs before the law goes into effect.

Testifying on behalf of the NJDOE was Kevin Dehmer, the department’s chief financial officer and assistant commissioner, Division of Finance. Dehmer explained that the department is engaged in a multifaceted, collaborative effort with various state agencies as it moves towards implementation of the grant programs.  This interagency collaboration includes the Department of Labor and Workforce Development, the Department of Environmental Protection, the Schools Development Authority, Treasury, and the Attorney General’s Office.

A public outreach effort is currently underway, and will continue in the months ahead, which will guide the department’s decision-making moving forward. Stakeholder engagement will include roundtables with school districts, school security experts, water experts and CTE practitioners.

Labor market demands and key industries that would be best served by the CTE grants will be key considerations.  The department also plans to make an online survey publicly available to collect feedback on the school security and water infrastructure grant programs. Bond experts will be consulted throughout the process as a bond prospectus will need to be published before any debt can be issued.

The department anticipates that it will propose regulations in late summer that will outline the grant application process, including application specifications, and the department’s priorities in administering each grant program.  The department will also issue guidance to districts once those regulations have been introduced.

After the regulations are proposed, they will go out for public comment and department response before they can be adopted, with or without modification.  There is no set date for when school districts will be able to begin applying for the funds, and the bond act does establish a timeframe for implementation.

Sen. Teresa Ruiz, chair of the committee, questioned the department on exactly how the $350 million authorized for the CTE grants and the school security grants would be allocated between those two purposes.  Dehmer responded that this is part of the ongoing stakeholder involvement, but that there is a “working proposal” that would direct $275 million toward vocational-technical expansion with the remaining $75 million allocated for school security upgrades.  Regarding the issue of silent panic alarms, which will be funded through the school security grants, Dehmer stated that the department is working collaboratively with the Schools Development Authority, the agency leading the implementation effort for Alyssa’s Law.

The committee also received testimony on the status of the “New Jersey Library Construction Bond Act.” The “New Jersey Library Construction Bond Act” received voter approval on Nov. 7, 2017.  That law authorized the state to issue $125 million in general obligation bonds to provide grants to build, expand and equip New Jersey’s public libraries. The State Librarian is charged with establishing eligibility criteria for the grants, which will support 50% of project costs with the remaining costs funded from local sources. Regulations on the library bond act are expected to be proposed this summer and a competitive grant will begin accepting applications late this year or in early 2020.