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N.J. Educators Assail Florio's School-Finance Plan

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New Jersey educators last week sharply criticized Gov. James J. Florio's new school-finance proposal, but gave him credit for advancing a plan aimed at reducing the wide disparities in school spending within the state.

Under the new system, which Mr. Florio unveiled last month, state aid to schools would increase by $1 billion. The revised formula would funnel more money to poor, urban districts.

At the same time, however, the proposal would cut state funding to more than 200, largely suburban, districts--most of which would eventually see their main form of state aid entirely eliminated.

In addition, several programs that are currently funded separately--such as bilingual education and money for teachers' pensions--would be subsumed within the new formula.

Jeremiah F. Regan, president of the New Jersey School Boards Association, told a joint meeting of the legislature's education committees last week that his organization "cannot support the bill in its present form."

Although the n.j.s.b.a. endorses many aspects of the bill, he said, ''we are very concerned about the loss of aid in many districts."

Betty Kraemer, president of the New Jersey Education Association, termed the plan "intolerable."

"The proposal as it stands cannot be enacted," she said, because it shifts costs for teachers' pensions from the state to local districts.

But Ms. Kraemer also praised the Governor "for having the guts and courage to get up and do something" about the state's school-funding formula.

The New Jersey Supreme Court is expected to rule soon on a lawsuit (Abbott v. Burke) challenging the equity of the state's current system.

More hearings on the proposed plan are scheduled for this week, according to Gerard S. Naples, chairman of the General Assembly's edu4cation committee. He said thee may be reported out of committee as soon as next week.

Mr. Naples voiced objections to some parts of the plan, and said they would probably be amended in committee. But Mr. Florio's proposal is "a step in the right direction," he added.

Mr. Florio's plan, released May 24, "is a fairly traditional foundation program," said John Augenblick, a Denver-based consultant who advised the team that drafted it.

The proposal is similar to finance-equity plans adopted or under consideration in such states as Kentucky, Louisiana, and Nebraska, he noted.

In such a program, the state sets a "foundation" level of education, and calculates a per-pupil cost for that education. It then measures the ability of each district to meet those costs and provides aid if a district cannot meet them through local taxes.

Under Mr. Florio's plan, all education programs except transportation, special education, and debt service on school bonds would be funded through the foundation formula. Currently, such programs as bilingual education are funded through separate categorical grants.

The foundation levels of funding for the 1991-92 school year would be $6,835 per pupil for grades K-5; $7,519 for grades 6-8; and $9,091 for grades 9-12. The figures would be slightly higher for at-risk, bilingual, or vocational students.

The foundation levels would be far more than those of other states with similar programs, Mr. Augenblick noted. New Jersey's per-pupil spending is currently the highest in the nation, according to the National Education Association.

"Costs are high in New Jersey," explained Thomas B. Corcoran, Mr. Florio's education aide. In addition, he said, the proposed foundation program "maybe provides a few more services than do other states."

"We really wanted a formula that responded to the characteristics of New Jersey," Mr. Corcoran added.

In measuring a local district's capacity to pay for its schools, Mr. Florio's proposal would factor in the personal income of residents of thect. Usually only the property value of a district is used to calculate its capacity, Mr. Augenblick said.

"We feel property wealth alone does not always reflect people's capacity to pay," said Mr. Corcoran.

If a community has a high proportion of residents on fixed incomes, he suggested, increases in real-estate prices may not improve that district's ability to pay for the schools. In other areas, however, personal income may be higher than real-estate values indicate.

Personal income would be used only to measure a district's wealth, Mr. Corcoran noted. Property-tax levies would continue to be the source of local school funding.

Mr. Florio's proposal would allow districts "local leeway," permitting them to use their own resources to spend beyond the foundation level if they choose to do so.

The plan would tie yearly increases in state aid to increases in the Consumer Price Index or the state's per-capita income, whichever is greater.

At the joint legislative hearing last week, educators and lawmakers focused their objections to the plan on two key points: its definition of "wealthy" districts that would be subject to deep cuts, and the inclusion of state payments for teachers' pensions in the formula.

Under the plan, wealthy districts would receive no increase in state aid in the first year. Their aid would then be reduced by 25 percent a year for four years, until it is eliminated.

But many of the districts that would lose foundation funding "are not wealthy," argued Mr. Regan of the n.j.s.b.a.

For some districts, he said, the loss of state aid--coupled with the assumption of teachers' pension payments--would be a "double whammy.''

Senator Matthew Feldman, chairman of the Senate education committee, vowed to resist the cuts in state aid. The bill "will not leave the committee in the same shape that it came in," he pledged.

Inclusion of the state's teacher-pension payments in the foundation was "a sham," argued Ms. Kraemer of the n.j.e.a., who warned that it would eventually force districts that receive no foundation aid to raise their property taxes.

Another critique came from Herbert T. Green, director of the Public Education Institute in Newark, who attacked the part of Mr. Florio's proposal that would allow local districts to spend more than the foundation level. Limits on excess spending by wealthy districts are a goal of some school-finance reformers, he noted.

"The plaintiffs [in Abbott v. Burke] are asking for more than the Governor is giving right now," he said. "They're asking for a cap on local leeway."

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