Early this year, there was an ambitious plan taking shape behind the scenes in Trenton to create a $7 billion bond initiative — $4 billion for court-mandated school construction projects and $3 billion to replenish the state’s crumbling, lead-contaminated water infrastructure.
Then COVID-19 hit, tax revenues tanked and the good intention became another casualty of the pandemic, according to Senate President Steve Sweeney, who shared the unpublicized plan with NJ Spotlight News on Wednesday for the first time.
Pandemics and fiscal crises notwithstanding, David Sciarra, executive director of the Education Law Center (ELC), is about to haul Gov. Phil Murphy and the Legislature back into court to comply with a long-standing state Supreme Court order to build and renovate school buildings in the state’s 31 poorest districts and bring them up to par with the rest of the state.
“They can’t simply ignore it. They’ve got to find the funding,” Sciarra told NJ Spotlight News. “We are not going to walk away from this.”
Seeking relief from state Supreme Court
Sciarra made his intentions clear in a letter issued Tuesday to Murphy, Sweeney and Assembly Speaker Craig Coughlin: “The state’s ongoing failure to authorize additional school construction funding — in the face of the Supreme Court’s clear expectation of executive and legislative action — leaves plaintiffs with no alternative but to seek further relief from the court.”
The governor’s office offered this written response:
“This administration is committed to ensuring that New Jersey’s school children have safe and modern school facilities. While we remain focused on the safety of children returning to the classrooms, we look forward to working with the Legislature to advance support for needed school facilities construction.”
Sweeney was more candid.
“I respect David Sciarra, and what he’s doing. I’m on his side,” said Sweeney (D-Gloucester), “but does he realize what COVID-19 has done? How are we supposed do it? … We are hoping for the federal government to help, but we just don’t have any money.”
Sciarra said he is well aware of the state’s fiscal situation, but that does not absolve them from acting in good faith. “They’ve got to find the money. We are completely open to compromise. It can be stretched out over time … I can’t tell you how many letters we have sent, proposing we sit down and discuss this … We hear nothing.”
In his letter, he points to a request he made regarding COVID-19:
“The state’s failure is even more alarming given the urgent need for facilities improvements triggered by the COVID-19 pandemic. In this regard, on September 18, Plaintiffs requested that the governor and Legislature utilize a portion of the funding authorized under the COVID-19 Emergency Bond Act for projects to ensure school buildings meet the health and safety standards mandated by the DOE for safe school reopening. No such action was taken … and plaintiffs have received no response to their written request.”
Four-decade struggle for equitable school funding
This is the latest in a protracted legal battle between Sciarra and a succession of governors — ranging, in his view, from inept to reluctant — on the issue of equitable school funding. It began in 1981 when the state Supreme Court issued its first in a series of landmark decisions arising from ELC’s case Abbott v. Burke.
The first decision mandated the state to invest in poor urban school districts so that those students can receive the “thorough and efficient” education their wealthier, suburban counterparts enjoy. Since then, ELC has sued the state more than 20 times to enforce the court’s remedial orders.
The school construction element of the court order emerged in a decision known as Abbott IV in 1997, which stated that the 31 special-needs urban districts in New Jersey had school facilities that, on average, were much older than those in non-Abbott districts and required more maintenance and renovation.
That gave rise to the Schools Construction Corp., which was grossly mismanaged during the administration of Gov. Jim McGreevey. “He did a horrendous job,” Sciarra said. The Schools Construction Corp. was shut down by Gov. Jon Corzine, who established the Schools Development Authority. The two agencies have been awarded a total of $12 billion in bond proceeds, the last infusion of capital ($3.9 billion) coming in 2007. All of those funds have either been spent or dedicated to current projects.
In other words, the SDA is broke.
Like its predecessor, the SDA has been racked with scandal. Last year, its CEO Lizette Delgado-Polanco, a politically connected Murphy appointment, resigned under pressure. Just a few weeks after taking office in 2018, Delgado-Polanco launched a dizzying succession of improper initiatives, according to a recent report by the State Commission of Investigations.
“Delgado-Polanco’s brief tenure at the SDA featured questionable administrative actions, suspect hires and outright managerial malfeasance. These included the firing of more than a dozen long-time employees, the rewarding close friends and relatives — some with little to no qualifications — with high-paying government jobs and the exclusion of top staff and the board leader in major management decisions,” it said.
The report also found several people in the governor’s inner circle were aware of the CEO’s actions.
Investigation not yet complete
SCI officials assert the entire SDA story has yet to be told, and have promised to continue their investigation and issue updates until the agency submits a final report. The stakes are high.
“The bottom line is this: the SDA may cease to exist altogether unless the state can restore lost public trust that will enable it to obtain a new round of large-scale public financing,” according to the SCI.
For that reason alone, Sweeney said he is reluctant to throw more money to an agency that has proven to be incapable of performing its mission — especially in light of how its employees are paid.
“Remember, all of SDA’s funds come from bond proceeds. We have to pay interest on every salary. (SDA has 174 employees.) So, for each $100,000 salary we pay, it’s costing us $300,000,” Sweeney said. “We’ve spent at least half a billion dollars on interest for salaries and operating expenses since 2003.”
Sweeney has not been shy about his view that “we simply haven’t done a good job building schools” and “the SDA has outlived its usefulness.”
Sweeney’s solution? Disband the SDA. Put the administration of school construction funds back into the state Economic Development Authority and return control of building projects back to the individual school districts, with appropriate oversight.
“We have returned local control of education to Paterson, Newark and Jersey City. If we trust them with the education of their children, why can’t we trust them to build schools,” he said.
Sciarra believes it is “a terrible idea” to put the program back into the EDA. “There is a wealth of expertise in the SDA. If it needs fixing, then the governor needs to roll up his sleeves and fix it.”
SDA’s uneven track record
The news isn’t all bad.
“At various points of time, they have done a very good job,” Sciarra said. “We have done a pretty good job, compared to other states.”
Since the program’s inception, the SDA has built 90 new schools and carried out 78 rehabilitation projects, affecting over 1 million of the state’s less advantaged students
But these successes seem to be primarily the result of relentless vigilance by ELC and the power of the Supreme Court.
Every five years, the state is required to update its capital plan for construction projects.
“They just wouldn’t do it,” Sciarra said of the Murphy administration. So, last year, he sued again to force compliance. Murphy replied by submitting a statewide strategic plan, two years late, but with no cost estimates and no source of funding. Sources familiar with the issue say it’s $4.5 billion.
The court ruled that ELC should wait and see what the governor and Legislature would provide in the budget that was just passed and signed into law.
“As you know, the delayed Fiscal 2021 state budget was enacted on September 29, 2020. Neither that Appropriations Act, nor any companion or supplementary legislation, authorized additional funding for the school construction projects in the 2020 capital plan,” Sciarra wrote in Tuesday’s letter. “Thus, the State has not taken the requisite action that the Supreme Court anticipated it would take to comply with the Abbott school construction orders and to fulfill its constitutional obligation.”
In short, the Legislature did nothing, and according to Sciarra, “The governor never even made an ask for the funding.”
Assembly Speaker Craig Coughlin’s office offered this written response: “We had been discussing the issue for the past few years, but the pandemic and economic challenges have certainly diverted our attention. Nonetheless, the Assembly takes its role of ensuring an equitable education system for all students very seriously.”
Sweeney put it this way: “I’m happy to talk to David Sciarra. He’s got my number; he doesn’t need to send me a letter.”
Kudos for Corzine
In Sciarra’s view, Corzine’s was “the only administration that truly embraced the mission … He did a really good job. He put in good people. … the program was in fairly good shape when Christie took over.
“The Christie Administration was well aware of the need for more (construction) funding back in 2015, but took no steps to address while he was in office,” Sciarra said.
When Murphy took office in 2018, Sciarra said he expected a willing and progressive partner, one who had ridden into office with the support of labor and education unions and a promise to restore school funding that had been dramatically reduced by Gov. Chris Christie, a Republican.
Murphy inherited an agency that was well-run, but broke. “It is surprising that this administration has dragged its feet,” he said. To make matters worse, “Murphy is doing a poor job running the agency. He has brought back problems we saw during McGreevey — a return to the bad old days of waste, mismanagement and corruption.”
“They took no real, meaningful action — until we asked the Court to intervene in late 2019,” Sciarra said. The SDA was still broke, but no longer well-run.
“Unfortunately, it’s a pattern we’ve seen over decades by governors and legislatures,” Sciarra said.
Scott Weiner was one of the “good people” Corzine put in the SDA. His public service resume is lengthy, serving in various positions under four governors. He was president of the New Jersey Board of Public Utilities, commissioner of the New Jersey Department of Environmental Protection and Energy and chief Counsel to New Jersey Gov. Jim Florio. He was a special assistant attorney general and special counsel to Corzine before he was tasked with overhauling New Jersey’s crippled school construction program, forming the SDA.
“The one job I’m the proudest of is CEO of the SDA,” Weiner said. “There is absolutely nothing like standing at the door of a newly built elementary school and watching the kids walking in.”
The program is existentially imperative, he said, and its problems are solvable.
“There was a time (in the 1980s) when we conceded we had lost a generation of school children,” he said. “We are now facing another lost generation. It is inexcusable.”