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Doubts About State Aid, as School Budget Decisions Loom

The budget process is just beginning, but public schools are trying to prepare for all eventualities.

It’s still early, but as New Jersey’s public schools begin crafting their budgets for next year, the guessing games have begun as to whether the state aid picture in 2011 will be a repeat of 2010.

The budget preparations of 2010 included more than $1 billion in state aid cuts from Gov. Chris Christie and the legislature, the biggest reductions in New Jersey history and a big factor in widespread program and staff cuts.

Now with 2011-2012 budgets due to the state by late March and up for vote in April, local districts have begun drafting different scenarios of where the revenue will come from, with conflicting signals already emanating from Trenton as to what to expect from the state.

Prepare for Possible Cuts

The state Department of Education said in an internal memo to districts last week that they should prepare for possible cuts again, albeit stressing that actual aid numbers won’t be announced for another month with Christie’s proposed budget.

"For purposes of developing your preliminary budgets, districts should make allowances for the possibility of a reduction in state aid from your 2010-2011 amounts," wrote Yut'se Thomas, assistant commissioner for finance, in budget instructions to districts.

She added: "This guidance is for planning purposes only and is no indication of the final state aid allocation for 2011-2012."

At the same time, Christie on Monday at a town hall meeting in Chesilhurst announced that he would be making unspecified changes to the state’s school-funding formula, possibly to drive more money toward suburban communities.

"We’re going to come out with something that is going to be a little different in our budget this year," he said to one question from the audience.

That has left districts wondering, to say the least, albeit recognizing these early signals have not always turned out to be accurate. Last year, then-Commissioner Bret Schundler forewarned districts they could face cuts of up to 15 percent, only to see dozens of districts end up losing all their aid.

This year poses other challenges as well, including the first year of Christie’s and the legislature’s 2 percent property tax cap that school officials said could lead to deeper cuts to offset increases in fixed costs.

In the face of all that, one superintendent was more optimistic about state aid -- but also hesitant to put too many bets on it just yet.

"Everything else we have heard is that the expectation is the aid will be the same as last year," said Jim O’Neill, superintendent of Chatham's schools. "But everyone is afraid to commit in light of the governor's style."

Shutting Down Schools

And some have started planning for the possibility that reductions could even be steeper than last year. In Montclair, where the district has reportedly considered closing entire schools, one scenario put out this week was for no state aid at all.

"Any state aid, even if it is a reduction, will be welcomed and will most likely be used to offset taxes," wrote superintendent Frank Alvarez in an email.

The governor’s spokesman played down any decisions having been made about state aid for schools, saying the memo was a standard guidance letter sent out by previous administrations as well.

"It's prudent to have all concerned thinking ahead, that's all," said spokesman Mike Drewniak. "It's budget time."

Such guidance is common but usually hasn’t been quite so dire.

"They have given out parameters before, but typically to maybe be ready for flat funding," said Frank Belluscio, spokesman for the state’s school boards association. "And of course, last year was totally confusing."

In Morris Plains, a district of about 900 students, the school board is laying out three scenarios in preparation: no cut or increase in state aid, a 5 percent cut, and no aid at all.

The last option would mean the loss of the remaining $177,000 in state aid, all that’s left over after more than $700,000 -- or 80 percent of the district's aid -- was cut last year. "That’s not a lot left, I know, but that’s still two teachers," said Lee Connor, the board’s vice president.

Connor said it’s a frustrating set of options, and she lamented that suburban schools like her own have been lumped into Christie’s stated campaign to improve the lowest-improving schools.

"We’re not failing schools, but successful schools," she said.

Coupled with the 2 percent tax cap, the options left to districts like hers are what she said is the 15 percent of the budget that remains discretionary, for programs like foreign languages, fine arts, building maintenance and technology purchases.

"I’m just hoping we don’t look back to these as the good old days when we actually had art and music in the schools," she said.

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