Little Things Are Often What Really Count in State Budget Line Items

Language changes tucked into appropriations act drastically hike what some districts will have to pay toward charter school costs

Gov. Chris Christie, just like other governors, focuses on broad themes in his annual state budget address.

But some of the really significant details can be found tucked into the arcane language of the voluminous appropriations act that accompanies each year’s proposed budget.

One of those details surfaced last month with language that extended the time that Christie has to pay off the state’s whopping pension liability, as estimated by actuaries, by three years — reducing the actual pension costs in his next budget by more than half.

And several more of those small but significant items surfaced yesterday when the Christie administration went before the state Assembly’s budget committee for the first hearings on proposed education funding for next year – at more than $12 billion, the single largest slice of the budget.

None of the budget details carry the billion-plus dollar price tag of pension payments, for instance, but they were substantial enough to get the attention of legislators and their staff.

One example is new language that would protect charter schools from severe funding cuts that state officials and advocates said could lead to the closing of several of the schools.

The revised wording would see a handful of school districts transferring over $100 million more – over a two-year period — than what would be required under the state’s charter school law.

Under that 1995 law, districts must pay out 90 percent of their per-pupil costs for each student in a charter school. But that percentage is often actually significantly lower for many charter schools, since not all state funding is counted in a school district’s calculations.

The new language would require charter schools to be funded at least at 2013-2014 per-pupil levels, resulting in an additional $70 million in funding this year and $38 more next year for the charters.

[related]The move caught the eye of the Office of Legislative Services, the Legislature’s bipartisan staff, in its annual analysis of each department’s budget. In this case, the OLS devoted a full report to the charter language change, laying out the impact on every district that includes a charter school.

For a vast majority of districts, it will mean a small blip in their payments, and in some cases charter payments will actually be slightly reduced. But in a dozen districts with big charter school presences, the impact will be significant.

Newark will see the biggest impact, with a $38 million difference this year and $24 million next year. Jersey City sees a $4 million difference this year, while Camden would pay out $9 million more this year and an additional $2 million next year, according to the OLS report.

Charter school advocates are quick to point out that the state’s formula has left many charter schools underfunded in those cities. For instance, while Jersey City spends $17,000 per student overall, the public school district gives their city’s charter schools only about $8,000 per student.

“This was an effort to mitigate what would have been a disaster,” said Rick Pressler, the interim director of the New Jersey Charter Schools Association.

“And these still won’t repair the disparity that charters are facing (in terms of funding),” he said.

State Education Commissioner David Hespe was asked about the language change at the budget hearing yesterday, and said that as the state’s funding formula has been frozen for school districts, charters have only suffered. He said the move was meant to strike a middle ground.

“The freezing of the formula has forced us to make some really tough decisions for fiscal 2016,” Hespe said.

“Some charter budgets are very, very frail, and we don’t want them shuttering because we made a bad decision,” he said. “But we also don’t want to hurt district schools and only help charters.

“It’s imperfect, but it’s the best of the worst scenarios.”

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