Early Look at OLS Report Reveals Many Districts Will See Net Loss in State Money

John Mooney | April 11, 2013 | Education
On eve of budget hearing, increased debt service on school construction grants blunts Christie’s funding promises

Under Gov. Chris Christie’s proposed fiscal 2014 budget, almost half of New Jersey school districts will see a net loss in the amount they receive from the state next year, according to a new legislative analysis.

The main culprit is the extra bill for debt service on school construction grants, said the nonpartisan Office of Legislative Services in its annual analysis of the governor’s proposed $13.3 billion education budget.

Factoring in that money, it found that about 270 districts — or 48 percent — will see net losses ranging from a few hundred dollars to more than $200,000 in Barnegat and East Brunswick.

Others on average will see about a 10 percent reduction in their publicized increases in direct formula aid, according to the report. The local assessments for the grants from the Schools Development Authority are rising from $21 million to $34 million next year, more than 60 percent.

NJ Spotlight obtained an advanced copy of the OLS report on the eve of today’s Assembly Budget Committee meeting, which will center on Christie’s education spending for next year. State Education Commissioner Chris Cerf is slated to testify, as is SDA executive director Marc Larkins.

The OLS analysis raises a number of the hot issues sure to be debated — or argued over — in the budget hearings. The SDA assessments already have the districts churning, but the agency’s assessment also trains the spotlight on planned spending on controversial programs liked charter schools and the school vouchers pilot.

Concerning the latter, the state Department of Education offers the first details of the planned $2 million pilot, including how the department is starting to set up the program for launch by next fall.

Under Christie’s plans, 200 low-income students attending low-performing schools could receive “scholarships” of up to $10,000 to attend outside schools, public or private. However small, it would be the state’s first school voucher program after years, if not decades, of heated debate.

But with little time between the final passage of the budget in June and the proposed pilot launch in September, the department said it has started to vet the private schools that would be eligible to create an application process that would screen students for income and need.

“In order to be ready to receive and process student applications and enroll students for the fall, should the program be established by the appropriations act, the NJDOE is beginning to develop [it],” the department wrote.

Meanwhile, the debt service assessments on districts for construction grants has already been a bone of contention for school administrators and some legislators — especially in light of Christie’s election-year pronouncements that no districts would see a loss in aid under his spending plan. The budget calls for an overall increase in state aid of $97.3 million, to more than $7.9 billion.

Yesterday, Christie spokesman Kevin Roberts reiterated previous responses that the assessments are not part of state aid that the governor was alluding to. And he said assessments have been in place since 2011, with the increases due to ongoing refinancing on the construction bonds.

“Any attempt to suggest that aid has been reduced is misinformation, per the above $97.3 million overall increase,” Roberts said in an email to reporters this week. “Districts are, however, required to pay their small share of these projects they requested to have.”

Whatever the arguments, the OLS report puts the first numbers to individual school districts, broken down by each senator and assembly member’s legislative districts.

And it could prove uncomfortable for Christie’s aid plan, especially in some suburban districts represented by fellow Republicans. Some of the hardest-hit counties are Bergen and Morris, while fewer South Jersey communities are seeing net losses due to the SDA assessments.