New Jersey’s Education Commissioner acknowledged during a legislative budget hearing that the state shares some responsibility for the ongoing fiscal crisis in the Lakewood Public School District, citing the role of state-appointed monitors who oversee local financial decisions.
Testifying before the Assembly Budget Committee, Education Commissioner Lily Laux was pressed by Assemblyman Avi Schnall on the extent of the state’s accountability for the district’s persistent deficit, which has now prompted an attempted takeover by the state Education Department.
During the exchange, Laux acknowledged that while local officials manage the district, the state’s oversight structure plays a significant role in approving key financial actions.
“If there is a district that has been found to be fiscally mismanaged, and that district [had a fiscal monitor installed by the state] who would hold the responsibility of the fiscal mismanagement? Would it be the the BA (business administrator), would it be the board (of education)? would it be the superintendent? Remember, not a nickel can be spent without the approval of the state monitor. Everything had to be approved by the state monitor,” Schnall noted, adding that Lakewood has had 11 state-appointed monitors over the last 12 years, with four currently stationed in the district.
Those monitors “have not made much of a difference,” he said. “If anything the fiscal deficit has grown by a lot.”
“I would … certainly say all of the above in terms of responsibility,” Laux answered, pointing to the involvement of fiscal monitors who review and authorize spending decisions made by the school board.
The comments come as Lakewood remains at the center of a high-stakes legal and political battle over a proposed state takeover of the district.
In January, the New Jersey Department of Education initiated formal steps toward full state intervention, arguing that years of financial instability and governance issues have deprived students of a constitutionally required education. The move would install a state-appointed superintendent with sweeping authority over district operations, effectively reducing the locally elected school board to an advisory role.
Local officials, however, have strongly contested the takeover. In a detailed response filed in March, the Lakewood Board of Education argued that the state has overstated academic deficiencies and failed to account for the district’s unique circumstances, including what it says are improving performance metrics that fall above thresholds required for state intervention.
The district has also emphasized that its financial challenges stem largely from structural factors — including state-mandated costs for transportation and special education, as well as a large nonpublic school population — rather than mismanagement by local officials.
Those same structural issues were echoed during the budget hearing, where Schnall argued that the state cannot both exert significant financial control through appointed monitors and simultaneously disclaim responsibility for the district’s deficits.
Lakewood’s public school system has faced years of budget shortfalls, driven in part by rising costs tied to legally required services for both public and nonpublic school students. The district’s unique demographics — with far more students attending private schools than public ones — have long complicated funding formulas and drawn scrutiny from state officials and lawmakers alike.
The dispute over control is now moving through an administrative and legal process that could ultimately determine whether the state assumes full authority over the district. Any final decision is expected to involve recommendations from the Department of Education and could face further legal challenges.
Lawmakers on the committee continued to examine the issue as part of broader deliberations over the state’s education budget, with Lakewood’s situation frequently cited as one of the most complex and consequential school funding challenges in New Jersey.
Watch the full exchange below:
What about cutting security funding from BMG? Do they admit that?
What does BMG security finding have to do with proper management at the BOE ?
Nobody is saying the simple answer.
1. All federal and state grants are not budget related as they are based on bith pulbic and non public student numbers and poverty level ,so they have no effect whatsoever on the deficit .
2. Just back out the costs of state mandated transportation and the mandated cost of SCHI and the costs of management of the above grants which is also state mandated. Then do a calculation of the remaining costs and divide that by the number of public school students. Assuming the per student number is in line with the average cost per pupil in NJ ,then where exactly is the big mismanagement ? It would take about 1 hour to do these calculations and show the State that when you remove the above mentioned outside non public school related expenses that are mandated or per student grants , the actual per public school student expenses are very in line.
The State knows very clearly that grants have absolutely no bearing on the budget. They also know that SCHI is mandated and totally not in control of the BOE . They also know that transportation costs are mandated and even if you went crazy and consolidated schools and buses etc ,you wouldn’t save any huge amounts . Any 5th grader knows that a 100 million dollar deficit has nothing to do with mismanagement ,especially when the average cost per public school students is lower than many other districts. All the Stare has to do is pick up the 2 mandated costs of transportation and special Ed and they will see that thete isn’t any serious mismanagement on the actual running of the public schools when compared to other districts.
Why everybody just ignores this , is a little mind boggling .
It’s easier to lie , blame the Jews, and keep kicking the can down the road. 134 million is spent on 4,500 public school students. 100 million for 50,000 private school students. Guess who is paying the bulk of the school taxes. Perhaps we should converge on city hall.