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N.J. Lawmakers Pass School 'Bankruptcy' Bill

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Nearly two years of bitter feuding between New Jersey's Republican Governor and its Democratic-controlled Senate ended last week with the final approval of a compromise bill that will enable state officials to take control of "academically bankrupt" school districts.

The Senate, which defeated an earlier version of the bill in September, passed the compromise meassure Dec. 21 by a vote of 28 to 5. Last week's vote in the Republican-controlled Assembly, which had also approved five earlier versions of the bill, was 62 to 13.

Gov. Thomas H. Kean was expected to sign the measure before the end of the current two-year session of the legislature on Jan. 11. Passage of the proposal had been one of the Governor's top priorities.

In November, after Mr. Kean and a number of influential legislators had crafted a revised version of the measure that seemed to satisfy its earlier opponents, a new dispute erupted that threatened once again to kill it.

That dispute centered on a Senate amendment--which one legislator said "came from out of the blue"--that would have required the state to pay for improvements it mandates in districts being threatened with a takeover.

Senator Raymond J. Lesniak, who sponsored the amendment, argued that it was necessary to protect taxpayers in poor urban areas from having to shoulder the financial burden of implementing the state-ordered improvements.

Governor Kean immediately labeled the provision a "killer amendment," saying that it would reward failing districts plagued by patronage, incompetence, and corruption.

Senate Democrats, he said, had "placed politics above the needs of children."

The Democrats fought back. Senator Lesniak was quoted as saying he thought the Governor had "lost control of his senses on this bill." And John F. Russo, the Senate president, exchanged a flurry of verbal attacks with the Governor in the press.

Several days later, however, aides to the senators and the Governor, along with the Republican sponsors of the bill--Assemblyman Joseph A. Palaia and Senator John H. Ewing--were back at the bargaining table.

"We found some common ground, and came up with an agreement," Mr. Palaia said last week.

Details of Compromise

Under the compromise, a district in the final stage of state monitoring prior to intervention can get additional state money for necessary improvements, but only if the state commissioner of education determines that the district's remediation plan cannot be financed under its current operating budget, according to Jeanne Oswald, a policy coordinator for the state education department.

The amount the state will pay will be calculated under the equalization formula for districts, and thus would equal only a portion of the additional money needed.

Normally, the equalization aid is distributed to districts the year after costs are incurred. But under the compromise, Ms. Oswald said, the state will give the district its share of the aid immediately.

Ms. Oswald said officials in the education department and the Governor's office are pleased with the compromise because it gives the department a greater say over a district's budget in the final stage of state monitoring than it had under the initial bill.

"This was a very difficult piece of legislative work, but the Governor is satisfied that he has achieved what he intended to achieve," said Richard P. Mills, special assistant to the Governor for education.

The legislation requires state officials to take complete control of academically failing districts for at least five years and to dismiss all of the systems' school-board members and top-level administrators.

Opposition to the initial version of the bill had been led by the powerful state affiliate of the National Education Association, which argued that the measure would undermine "the principle of tenure."

When the bill was resurrected in November, a compromise had been reached on the tenure issue, and the measure had gained the support of the union.

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