More spending? More local taxes? School aid cuts may prompt both

TRENTON — State senators encouraged the Department of Education to be open to providing emergency aid to school districts losing state aid and floated the idea of allowing new taxes or bigger property tax hikes in some municipalities.

The proposed state budget increases formula aid by $206 million statewide – but also redirects $90 million in existing aid, meaning close to 200 districts are slated to see reductions. Jersey City has sued over the change. Other districts have moved to lay off teachers and other staff members.

Education Commissioner Lamont Repollet said his department has fielded 67 inquiries from school districts about funding and has worked with 20 to 30 of them, including more than a half-dozen for more intensive meetings.

“I know some of these districts are hurting,” Repollet said.

“Let’s really have those hard discussions,” he said. “Because we understand that to be fiscally responsible, at times you have to look at your budget to make sure it matches your needs, to make sure you have the personnel, to make sure you can provide a thorough and efficient education.”

Sen. Paul Sarlo, D-Bergen, who heads the Senate budget committee, said the DOE should consider providing emergency aid to schools, as allowed in recent budgets. Repollet said such decisions are made after July 1, and only after “a deep dive” to ensure districts are truly is fiscal distress.

“We want to make sure that we are being smart with New Jersey’s money, that if you’re saying it’s an emergent need, then I can go and advocate for you and make the recommendation,” he said.

Sarlo suggested that perhaps the Legislature will allow districts that lose state aid to increase their property tax levies by more than 2%, which is the current limit.

“I’m not saying take the roof off the cap, but provide some cap relief to these districts,” Sarlo said.

“Any time we provide additional tools for our districts, it’s an advantage to us as a state to make sure they can meet their fiscal needs,” Repollet said.

Sen. Teresa Ruiz, D-Essex, the Senate Education Committee chairwoman, also said the state needs to come up with creative ways to help soften the blow of aid cuts.

“Whether that means writing a bill to release the 2%, offering municipalities a payroll tax opportunity, the way we’ve done for some other districts in the state, loans, whatever they are,” Ruiz said.

Sen. Declan O’Scanlon, R-Monmouth, said the districts losing state aid because they were deemed to have been overfunded “have a fair beef,” as they were encouraged over the course of 10 years “to bake those extra dollars into their operations,” affecting their labor and contract negotiations.

“All of this effort is only worth as much as we really, genuinely reduce the impact of these cuts,” he said. “And it’s got to be this year. It’s not a next year thing.”

Assistant Commissioner Kevin Dehmer, the Department of Education’s chief financial officer, said the total amount of state aid is still about $1.2 billion short of what the formula would provide, if it were fully funded.

The goal is to full fund the formula over seven years. This is the second year of the phase-in.

He explained why the Department of Education has been reluctant to share the entirety of its aid calculations with districts, though he said each district receives a very detailed, step-by-step review of how their aid was calculated.

“It’s based on all public information. The actual, our calculation, is a proprietary calculation. It’s our version of it,” Dehmer said. “However, any person with – it’s publicly available data – can recreate that on their own. It’s outlined in statute how to do it. It’s just our specific work product is specific to the department, so we don’t share that.”

Sen. Sam Thompson, R-Middlesex, said that isn’t a good enough answer for school districts.

“I understand the department was asked about, ‘Well, how were these things derived?’ and the response that they got was, ‘Oh, that’s proprietary information and we can’t tell you anything about that.’ That’s totally unsatisfactory,” Thompson said.

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