Democrats' Budget Plan Richer for Some Districts than Others

June 28, 2011

Now on an 11th-hour collision course with Gov. Chris Christie, the Democratic leadership of the legislature has advertised its state budget proposals as ones that will provide property tax relief to every community by way of new school aid.

Yet a breakdown of how each district will fare shows that there will be a lot more relief for some than for others, due, in part to the disparate ways that schools have been funded for years. Some districts would get double, even triple, their expected state aid under the Democrats’ plan, while others would see just a small fraction of an increase.

Both the Assembly and Senate yesterday moved one step closer to approving their versions of a new $30.6 billion state budget for next year, including an additional $1.1 billion in school aid. Both budget committees approved their respective appropriations bills along party lines, setting up votes in both houses on Wednesday.

And both budget committees also approved a separate bill for a new millionaire's tax that would add another $458 million in aid to schools next year, virtually all to suburban districts. Christie has already indicated he would veto such a measure, which could mean an override vote later this week.

"In my opinion, education funding is property tax relief in this state," said Sen. Paul Sarlo (D-Bergen), sponsor of the Democrat's budget bill.

But a closer look at the local impact of each bill shows the wide range of dollars that will come with both the budget proposal and the additional revenue from the millionaire’s tax, depending on what the Democrats and Christie finally agree on.

The Abbott Half

Under the Democrats' appropriations bill which legislators took pains to stress does not include the millionaire's tax almost half of the new aid, or $446.9 million, would go to the state's 31 high-poverty schools under order of the state Supreme Court in this spring’s Abbott v. Burke ruling.

While he disagrees with the ruling, Christie has conceded he must abide by the court and has said he would agree to pay the bill. The amounts range from $734,000 in Keansburg to nearly $82 million in Elizabeth.

The next piece is trickier. The Democrats under their budget plan have said that they would also be able to fund an additional $574.3 million to 215 non-Abbott districts that fail to attain what the state considers "adequate" funding under the School Funding Reform Act (SFRA) of 2008. That amount is determined through a complicated formula that determinesa what a district should be paid for its students, weighing enrollment and disabilities, language skills and other factors.

That list of 215 districts has proven a disparate group of urban and suburban communities, struggling and high-performing alike, with each getting vastly different amounts of money to meet the "adequacy" standard.

The Biggest Winners

According to an analysis by the non-partisan Office of Legislative Services (OLS) provided to legislators yesterday, the biggest winners would run the gamut.

They would include suburban districts like the Chathams, Westfield and Bernards Township, each seeing about $2 million more in aid, close to doubling what Christie proposed. Many of the county vocational school districts would get big double-digit percentage bumps. And the largest dollar increases include $11.9 million to Little Egg Harbor, a 33 percent increase, and Pennsauken’s $8.6 million, a 20 percent jump.

Yet for some, the amounts would be relatively small. Hamilton would see a 8.4 percent increase, Lacey 4.5 percent, and West Deptford just 2 percent. Brooklawn would see just $7,000, one of the smallest increases and a fraction of the price of a teacher.

When asked why the Democrats were moving first after the Abbott districts to address the “below-adequate” districts when the amounts were so varied, state Assemblyman Lou Greenwald (D-Camden), a sponsor of the Assembly bill, said he wanted to address those districts that the state’s own formula deemed were the most underfunded.

The state Supreme Court took up the same question in the latest decision, and stopped short off ordering funding to non-Abbott districts. "But we looked at the whole lineage of the Abbott cases and where we wanted to be," Greenwald said in an interview.

"The adequacy issue was the constitutional issue," he said. "That was the first hurdle we needed to clear."

The second hurdle and maybe the more critical one politically was to provide at least some money to the balance of the state’s districts, even if not very much. The budget includes another $85.8 million that would be divided among 358 more districts.

The money would distributed based on how much the districts are currently below full funding under SFRA, with larger districts seeing many of the biggest bumps. For them, the amounts range from lows of $10,000 in Bethlehem and $18,000 in Avon to highs of $2.4 million in Cherry Hill and $1.9 million in East Brunswick, according to the OLS analysis.

Taking the two revenue streams together, the Democrats yesterday sought to put Republicans in a political bind if they voted against a budget that provided additional aid to public schools.

Sarlo repeatedly quoted the numbers to each Republican speaking against the bill, pulling them from the OLS analysis for each legislative district.

"Your towns do pretty good in this budget," Sarlo said to state Sen. Joseph Pennacchio (R-Morris), quoting about $27 million for his legislative district.

The Millionaire's Tax

The last component of additional state aid to schools may prove the most elusive. In a separate bill and likely the biggest battle of the next few days, the Democrats have proposed the millionaire's tax to provide an additional $458 million to 423 mostly suburban schools. With that revenue, it would bring all districts up to full funding under the Democrats plan.

Again that would mean different amounts to different districts, according to the OLS analysis. Linden would see the most in all, or $12.2 million, followed by another $7.6 million in Edison and $6.1 million in Hillsborough. Yet there are also more than 60 districts that would see increases of less than $100,000, from Corbin City to North Caldwell.

Greenwald said that would be the ultimate way to serve every district as equally as possible, meeting the spirit and the letter of the school funding law of 2008. But few think it will get far with this governor, and voting against the local aid even if ultimately vetoed could prove a thorn for Republicans seeking reelection this fall.

On the eve of today’s signing of a pension and benefit reform in which he struck a compromise with the Democrats, Christie didn’t sound so conciliatory on the millionaire's tax as his office put out a statement again decrying the new revenue plan.

"This is the same old tax-and-spend policies of New Jersey Democrats," said Christie spokesman Michael Drewniak in a statement late yesterday. "This is not the fifth year of the Jon Corzine administration. It is the second year of the Christie administration, where disciplined fiscal policies and lower taxes will continue our state on the road to recovery."

"With this proposal, the Democrats want to drive that recovery head-on into a stone wall," he said.

Whatever the eventual sums, the legislature also added some late language that would earmark all the additional money to classroom costs and programs, saying none of it could be spent on administrative expenses.

The Christie administration is also looking to put its own conditions on at least the Abbott districts and maybe others, requiring the money be steered to certain reform measures, according to one administration official.

Legislative leaders said they at least wanted to make sure that the money went to personnel and programs with the most impact on schoolchildren.

Specifically, the Democratic requirement says the money must be used to restore "classroom and support personnel and services eliminated during the 2010-2011 school year. Including but not limited to expenditures to rehire personnel, reduce class sizes and eliminate school participation fees."