A fresh-faced Republican governor comes into office during the worst economic downturn since the Great Depression. New Jersey’s billion-dollar deficit seems insurmountable. Talk of across-the-board spending cuts is in the air — including a mid-year slice to aid in schools.
Sound familiar? The year was 1982, and the newly elected governor was Thomas Kean.
Close to 30 years later, it is Chris Christie who is new to the governor’s chair. And he is contending with an even worse recession that has left an even deeper deficit of $11 billion. The only similarity with Kean: Talk of significant cuts in state funding to schools.
But this time, Christie’s proposed cuts would be the largest in history —- a total of $1.1 billion, according to his plan – and would mark a striking shift from how the state has funded its schools for the last quarter-century.
‘No Options Left’
Of course, things are different today than they were in 1982.
Then, Kean responded with a one-time increase of the income and other taxes -— “holding my nose,” as he said in the oft-quoted line at the time.
The decision helped set the state on a steady path of ever-growing support for its public schools, a pattern that persisted for close to 30 years —- through five school finance laws, seven governors, two more recessions, and countless court cases.
But this time, Christie is backed into a corner: Federal stimulus money for schools is used up, and he has pledged not to raise state taxes at any cost. Kean, a former history teacher, said he for one can see why.
“Why it’s so different this time is we have the recent history, where the state’s pension and debt problems have built up, and we’re maxed-out on taxes like we are,” Kean said.
“When I was in office, we had some room there,” the two-term governor said. “Right now, there are not any options left.”
Stability in Spending
Looking at 30 years of spending numbers from 1980 onward, New Jersey’s overall contribution to K-12 education, including pensions and benefits, has been a third of the total state spending virtually every year, rising with the budget on average about 7 percent a year.
As public schools’ total spending has also gone up, along with local taxes to pay the balance, the state’s contribution has remained at about $4 of every $10 in the total education bill.
None of this came without a fight in Trenton. In fact, the state Supreme Court has been a central player in pushing governors and legislatures from both parties toward higher spending, especially for urban schools.
There were some exceptions, too. The highs were double-digit increases under Gov. Jim Florio, with the expansion of the income and others taxes in the early 1990s. The Kean years were more generous in aid increases as well.
There have also been some slight drops in aid, such as when Gov. Christine Whitman rolled back some of Florio’s largesse. Reduced pension contributions especially have become a political football for governors seeking to save cash, bringing down totals in some years. But even so, those reductions were nothing like what Christie has proposed for next year.
“Really, the trend over that time is stability,” said Ernest Reock, the venerable Rutgers school finance expert. “It’s been like this for years and years.”
That may soon change. With legislative hearings on Christie’s budget under way and the education portion on center stage, the numbers are indeed daunting to consider.
Under the governor’s plan, nearly $1.1 billion would be trimmed out of more than $8 billion in direct aid to schools. About $819 million is reduced in total when all education aid is added up. Another $400 million was also already cut back by the state this year.
The impact has already been felt. Layoffs and cutbacks of favorite programs are all but certain in many districts, and that was before the April school budget votes that saw nearly 60 percent of budgets rejected — another record. More cutbacks are sure to come.However, this is nothing that the governor or those in his administration shy from. Just the opposite, they point out that it is the result of a history of unabated increases on both the local and state levels that need to be checked.
At the opening Statehouse hearing on the budget, Treasurer Andrew Sidamon-Eristof pointed out local spending has risen 69 percent in the last decade alone.
“We have a state spending problem, and we have a local spending problem,” he said. “I would say it is more serious at the local level. It is out of control.”
Christie a day after the unprecedented school votes was equally blunt.
“To go from 73 percent approved last year to 42 percent this year is a seismic change,” he said. “This further girds our resolve to stand up against more taxes and spending.”
Tracking the Funding
Reock has been crunching the school finance numbers for decades as a researcher at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, and then at its Center for Government Services.
Although officially retired, he still gets into his New Brunswick office nearly every day to pore over new data or comb through his meticulously kept binders of spreadsheets and audits.
Reock can rattle off the different school finance laws and how funding has fluctuated within each of them, names like the Comprehensive Educational Improvement and Financing Act in the 1990s and the law simply known as Chapter 212 in the 1980s.
The center of the debate was often the role of Abbott v. Burke, the epic school equity case that for decades has led to millions more in funding each year to New Jersey’s poorest districts, including Newark, Camden and Trenton.
Every year, how that money was to be divided with suburban districts was a prime point of contention in the Statehouse budget tug-of-war.
As recessions and fiscal crunches came and went, there were stops and starts in Abbott funding—but there were also years in which suburban schools saw less from Trenton.
“In a lot of those years when total spending went up, a lot of it was in the Abbott districts, and you didn’t necessarily see it in the others,” Reock said.
The court could very well have a say this year as well, with advocates for poor districts expected to contest the cuts—and some suburban districts likely to join them.
Still, depending on one’s perspective, it could be said that Christie is spreading the pain somewhat equitably, with every district losing amounts equivalent to 5 percent of their overall budgets.
For 60 mostly upper-income districts, that’s all of their direct state aid. For a large urban district like Newark, it’s a far smaller share of the total, but still $40 million less than it had this year. That could lead to as many as 700 layoffs and the potential closure of two schools.
It’s nothing Reock has ever seen in his years following school finance. But he points out it was almost inevitable after the one-time help from President Obama’s stimulus package last year, money that is now no longer available.
“Not only did the bottom drop further out of the income tax than ever in the past, but the stimulus money came in with a bang and left with a bang,” Reock said. “That screwed everything up.”
Former Gov. Jon Corzine spent nearly $1.1 billion from the federal funds to keep state aid stable for this year, but left none for a second year. If Corzine had been reelected, Reock and others said the Democratic governor might very well have been in the same position as Christie is now.
A More Modest Track?
Traveling around the state, Christie has said he hopes this is a one-time emergency that will put the state back on a more modest track of school spending. He has called for new local spending and property tax caps, as well as pension and collective bargaining reforms that he said would ultimately save districts money. Christie is expected to present a package of bills to the legislature later this month.
Along the way, he has also heard his share of history lessons — some going a lot farther back than Gov. Kean.
Earlier this spring, he made a well-chronicled stop at Montclair High School to praise the district and its teachers for agreeing to wage concessions that froze salaries for half the teachers for the year.
But the district still expects to have to lay off about 80 staff, and as Christie stood before an advanced placement government class, senior Molly Bangs asked how these unprecedented cuts jibe with the lessons taught in school about Thomas Jefferson and his warnings that the citizenry be well-educated for the republic to survive.
“Don’t you believe we will lose the quality of our education?” Bangs, 18, asked the governor.
The question caught Christie a little off-guard, but he was undaunted.
“What I’m saying is if we don’t address this, things will get worse and worse, and what Thomas Jefferson fears, that will happen,” Christie said.
Afterward, Bangs wasn’t so sure.
“He definitely didn’t shy from the questions, but what he answered wasn’t direct solutions, either,” she said. “The fact is, we’re still getting cut.”