Overview
On March 16, 2010, New Jersey Governor Chris Christie delivered a historic speech demanding serious if not unprecedented budget cuts in response to the lagging economic conditions. There are serious implications for New Jersey public schools as we expect an $820 million reduction in state support for education. In order to help offset budget reductions, the Governor proposed additional legislative changes as follows:
1) A proposal that would require all employees to contribute a percentage of salary to their health benefits;
2) A proposal that would assist districts in contract negotiations by helping to sustain the last best offer;
3) A proposal that would affect pensions for anyone retiring after August 1, by proposing changes to the way pension benefits are calculated, and also by requiring contribution to health benefits for retirees.
Please note that these proposals would require legislative approval and therefore are not certain to be passed (but are likely to be passed in some form or another).
The Governor has also proposed a Constitutional Amendment that would require voter approval that would reduce the current 4% tax levy cap to 2.5%. This reduction would not only affect school districts, but also municipalities and the state budget as well.
Implications for Suburban School Districts
The Governor made no apologies for his stance and was clear about the need to halt the spending in New Jersey. We applaud him for demonstrating fiscal restraint at a difficult period of time, but are very concerned for the disproportionate means utilized to calculate funding cuts to localities that depend upon a significant portion of state aid for operational purposes. Hopatcong ranks 2nd of forty-nine area school districts in the percent of state aid to the district (38% of total budget). Eighty per cent of our school budgets account for salaries and benefits with the balance toward supplies, transportation, energy costs, maintenance, etc. Any reduction in state aid will have a devastating impact on our overall bottom line for 2010-2011.
The problem with the approach that the New Jersey Governor has outlined is that suburban districts like Hopatcong will suffer the lion’s share of budget cuts. Over the past several years the Hopatcong School District exercised serious restraint and cut its administrative team by 1/3 and implemented several other significant cost saving measures.
In the past two years Hopatcong’s budget has only grown by a little more than 1% in 2008 and less than ¼ of 1% in 2009 while expenses have increased by 22%. The gap promises to be much wider this year as our funding tanks into the negative digits (thanks to the state funding cuts). On the other hand, expenses in fuel, electric, textbooks, supplies, maintenance, health insurance, buildings and grounds insurance, liability insurance, paper, ink, pencils, crayons, markers, out of district tuitions, services for special needs children, charter school expenses, and yes, salaries & benefits continue to rise.
The only way to produce a balanced budget when you are operating as lean and mean as possible (as Hopatcong is) is to reduce expenses. The only expenses that can be controlled will result from the dismissal of employees. We have no ability to increase the revenue stream. So if Governor Christie and the New Jersey State Legislature impose a 2.5% tax cap on localities, every school district in the state that depends on state aid will begin a process of lay off employees to balance budgets. (Remember the effect of Proposition 13 on California’s public schools?) We are not empowered to reduce the number of days we operate, we cannot suspend the thousands of state mandates imposed on us, we cannot decide not to teach anyone, we cannot reduce services to our student population of special needs for example.
The Governor and Legislature assumes that there is excess in school budgets and thus we can afford to cut 5%, 10%, 15% or even 20% of our budgets. But this is where they are absolutely wrong. Every penny Governor Christy is determined to extract from our state aid budget will find its way to the classroom. This means that our teachers will have classes much larger in future years, they will have less resources with which to practice their craft, they will be accountable for more results, and will have to work with less technology. But the same number of students will enter our classrooms with the same needs as they always have. So, how can we produce the same results with less funding, less resources, or with less teachers?
If we cut our budget input and in balance were able to cut our product output this would make sense. But the Governor wants to cut input (revenue) and expects the same output (results: number of students taught, number of days worked, exceptional state test scores, etc.) without regard to consequence. Let’s use a business model: If one cannot produce a balanced equation (input vs. output) and revenues do not match expenditures the only logical choice is bankruptcy. That is the cumulative effect of the current state reductions and may be where public education is heading.
I agree that the State of New Jersey must restrain spending but object to the “quick fix” that will certainly take its toll on the children of public education. A much more mature approach will be to reduce expenses incrementally over time and not place our most valuable resource at risk: our children.
The Hopatcong School Board will continue its analytical and thoughtful options as more budget information is revealed. Our business team is doing an excellent job of complying with all state regulations and mandates and produces accurate and accountable public records that are recognized by our auditors as exceptional. We will produce a balanced ledger as we finish out the 2009-2010 school year, as we have done every year for the past several decades. Unfortunately, the state has not been as fiscally responsible as school districts have over the years. The State of New Jersey is about to change the face of public education in forever.
One last thought for Governor Christy and the State Legislature: The teachers are not the enemy- you are. Our teachers are hard working individuals who have pursued multiple college degrees and thousands of hours of professional development in order to work in an honorable profession of service to our community and to America. They deserve to be compensated adequately, to have health benefits, to look forward to retirement, and to raise families. For years the teachers of this country were underpaid and expected to produce exceptional results when the whole of society was failing American children.
The American teaching force endured and persevered many decades as undervalued and underappreciated professionals in our society. They negotiated their status into a highly respectful professional and competitive one over the years. I respect all of them for their achievements in American education.
No other society on earth can educate the diverse population that exists in these United States in public schools. We are a heterogeneous mix of the world’s population and the diversity of individualism is the greatest challenge in America’s classrooms. When critics of American education make international comparisons they would be wise to remember this.
American education has been the envy of the world and over the course of the last hundred years our country has led the world into the 21st century. When foreign dignitaries visit American schools they wonder and marvel at the level of differentiation that exists and variations in our learners. We have excelled at leveling the playing field for children from all walks of life in our public schools.
When state or local officials publically discredit our teachers for the excellent work that they do and then decide to summarily dismantle public education they need to be aware of the damage that they will do-now and in the future.
