Christie’s Depleting Of School District Savings Has To Result In Increased N.J. Property Taxes

property tax money houseBy Dr Richard Boza. Deficit spending, a federal budgeting tactic to ease today’s problems by tapping future resources, is frequently defined by politicians as a compromise on the futures of our children. Although New Jersey is constitutionally not allowed to consider deficit spending, another financial budget balancing tactic being discussed on the state level will compromise children’s educational futures as early as next year, according to the NJASA, the New Jersey Association of School Administrators.

As Governor Christie prepares for his budget address on March 16, his preliminary plan continues to emphasize a possible reduction of currently budgeted state aide to districts. This follows his February announcement to cut $475 million in aid to schools to balance the state budget. Going forward, Christie proposes that districts use their own surplus, or saved funds, to continue this school year’s programming, curricula and extra-curricular plans set in place in September 2009 based on expected state support. The result, according to the New Jersey Association of School Administrators (NJASA), will be a depletion of district savings as they pull out reserve funds set aside by law to offset tax increases for the 2010-2011 school year budget cycle.

The term ‘surplus’ is misleading. It implies unnecessary extra funds. In fact, surplus dollars represent money saved in one school year through prudent budget management and set aside to fund future district needs without requesting or requiring a tax increase.

Surplus is a Misnomer

The concept of surplus dollars is very confusing to parents. By State guidelines, New Jersey’s school districts are required to manage their budgets to create 2 percent in reserves each year. These savings, called “surplus,” are funds set aside to meet emergencies such as a needed roof repairs, not unlike family savings put aside should the boiler break during the winter. If, through prudent purchasing programs or other cost-saving measures, more than 2 percent is saved, the difference is mandated for use in providing property tax relief for a district’s residents in the next school year’s budget cycle.

By depleting each district’s savings this year, the result has to be increased property taxes and decreased services next year.

The role of Chief Education Officers, superintendents of schools, will be ever more critical as school district leaders will be called upon to make difficult choices that parents are not going to like.

Perspective and Leadership Required

As an association, we understand the Governor’s budget dilemma. Our challenge is to face the hard realities presented and figure out the best compromises going forward to protect the quality of our public school educational system and not decimate already strained programs.

Similar to the state, school district budgets are required to balance each year. To do so, Chief Education Officers take a proposed budget representing the best hopes and wishes of a district and then ‘peel back the onion,’ first decreasing the least essential of services.

Communication and understanding about the issue are key. As school district leaders, Chief Education Officers run one of the biggest organizations in town, keep school district budgets balanced, and move education forward through instructional leadership. This means they need to provide the highest quality education; establish and preserve the financial stability and integrity of the district; ensure the health and safety of children; maintain the morale and retention of teachers and staff; and have the overall oversight of facilities in a school district. That is a tall order in this situation and requires the highest levels of leadership, financial and communication skills.

Each community has its own preferred special programs and these deep cuts are never desirable, nor popular. It’s one of the no-win decisions that make the Chief Education Officer’s role so difficult. In times like these, he notes that the leadership provided by Chief Education Officers is critical in helping a community manage its way through the tough choices.

Dr. Richard Bozza is executive director of the New Jersey Association of School Administrators. NJ Newsroom.

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