School District's State Aid Slashed by 80.9%

The South Orange-Maplewood school district will receive 80.9 percent less state aid for the 2010-11 school year than it did for the 2009-10 year. That equals a cut of $5,297,580—from $6,546,360 in 2009-10 to $1,248,780 in 2010-11.

Across the state, the news was hitting districts hard. Fifty-nine school districts lost 100 percent of their state aid, including Madison, Millburn, Summit, Livingston, Caldwell-West Caldwell, North Caldwell and Ridgewood.

The South Orange-Maplewood school district will need to re-evaluate its proposed budget, since it had been based on an assumption of a 15 percent cut in state aid, not an 80.9 percent cut. Superintendent of Schools Brian Osborne has already cut $1.5 million from non-personnel costs and proposed eliminating 29 positions (while hiring six new teachers) to close the current budget gap caused largely by increases in insurance and health care costs.

Osborne released this statement this evening: "This is an unprecedented blow to the district and to public education statewide. Yet we are a resilient community with strong schools, a caring staff, great kids. We will all need to sacrifice and come together to put our children first." The Board of Education next meets on March 22, with a budget workshop planned for March 24.

The Department of Education released the numbers at 3:30 p.m. Wednesday. New Jersey Education Commissioner Brett Schundler held a press conference with reporters following the announcement, saying, "[School districts] are going to face extremely difficult times financially."

Commissioner Schundler also said while current law allows for districts to propose waivers over the current 4 percent property tax increase cap, he will be working with county superintendents to urge districts not to exceed the current cap. Gov. Christie also proposed a constitutional amendment for this fall to reduce the 4 percent tax cap to 2.5 percent with no waivers, although that would not affect the 2010-11 school budget process.

Osborne has been asked by Board of School Estimate members from Maplewood (Kathy Leventhal) and South Orange (Michael Goldberg) not to exceed a 3 percent increase in the school levy.

Perhaps to soften the blow, Schundler emphasized the potential savings to school districts if Gov. Christie's benefits reform plans are passed soon. The reforms would allow districts to save money by requiring teachers to contribute at least 1.5 percent of their salaries towards health care as well putting a cap on the amount of sick pay retired public employees can redeem. If passed within the next few weeks, schools could theoretically factor in the additional savings toward the upcoming school budget, though the overall effect remains to be seen.

In a letter accompanying the numbers, Schundler said that the Department of Education "reduced staffing for the third year in a row and eliminated funding for many valuable, but ultimately non-core programs—all so we could maximize the dollars available for school district aid."
 
Schundler wrote that the following formula was used to arrive at state aid amounts for districts: "[A]id increases were capped at 0% for all districts and education adequacy aid was held at fiscal 2010 levels. Given the absence of federal stimulus funding, and the consequent reduction in the total of funds available for distribution, each district's aid amount under the above calculation was then reduced by an amount equal to 4.994% of the district's original fiscal 2010 general fund budget."
 
Finally, the letter stated that the governor "is working to balance the State's budget because it is his constitutional obligation. But beyond fulfilling that duty, the Governor is striving via his proposed reforms to dramatically improve public education in our state."