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N.J. Senate Approves Bill To Divert School Funding

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Ignoring bitter opposition from state educators, the New Jersey legislature last week moved toward final approval of a revised finance-reform bill that would divert $350 million from school aid to property-tax relief.

The Senate last Thursday passed on a 22-to-18 vote a compromise bill aimed at breaking a stalemate over school finance that has crippled districts' budget planning for months. 3

The Assembly was expected early this week to give its backing to the plan, although observers said the vote on the measure could be close. Under the compromise, worked out last week by legislative leaders and Gov. James J. Florio, school districts around the state--in particular the 30 urban districts slated for massive aid increases under a controversial finance-reform and tax-increase law enacted last year--would lose millions of dollars they say they need to implement reform plans drafted last fall.3

The plans were required by the state to ensure that the 1990 law, known as the Quality Education Act, would translate into tangible school improvements.

"We were ready to take the ball and run with it," said Kirk Smith, a spokesman for the Newark schools, "and now it's like getting the carpet ripped from under you."

According to revised aid figures released last week, the state's largest and poorest urban districts stand to swallow the biggest single chunk of the education cuts.

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Districts slated for cuts include Jersey City, $20.4 million; Camden, $19.2 million; Paterson, $16 million; and Newark, $15.6 million.

In all, the 30 districts--specially selected for extra aid to bring them to parity with affluent suburban districts--would lose some $150 million.3

"They can't keep putting money out to education with the left hand and taking it back with the right," said Betty Kraemer, president of the powerful New Jersey Education Association/NEA.

The NJEA and organizations representing school boards, administrators, business officers, and principals and supervisors in the state held a joint press conference Thursday to blast the new bill.

"This really destroys the original concept of the Quality Education Act," Ms. Kraemer charged.

But leaders of the Democratic majority in the legislature say they made two promises last summer when they pushed through $2.8 billion in new and increased taxes, in part to finance the $1.1-billion levy: to improve education and to lower property taxes, which are among the highest in the country.

Only with the proposed revisions could they make good on both commitments, lawmakers say.

Massive tax protests erupted last summer after the tax package was approved. Since then, Democratic leaders have been searching for a tax-relief plan to avoid further political damage to their party, which faces legislative elections this fall.

Democrats insist that education will not be hurt by the changes, pointing out that the $830 million left in the levy is still the largest infusion of education aid in New Jersey history. Of the amount going to tax relief, about $120 million would come from transition aid originally slated for 146 affluent districts, whose state support is scheduled to dry up by 1995-96.

In fact, the lawmakers say, a "floating cap" provision in the new bill would go further than the original law in bringing about parity between rich and poor districts within five years. Parity was mandated by the state supreme court last June in its decision in Abbott v. Burke, which prompted passage of the levy.

The new measure places budget- growth caps of between 7.5 percent and 9 percent on all but the 30 poor urban districts. Spending by the 30 districts would be allowed to grow by between 9.7 percent and 22 per cent, with the extra flexibility allowing them to catch up to their more affluent neighbors.

According to a statement released by President of the Senate John A. Lynch and Speaker of the Assembly Joseph V. Doria Jr., the cap provision "will ensure that the constitutional mandate of Abbott v. Burke is met."

While the new act would take some money away from the most affluent districts and could cap their growth, it also gives back a substantial amount by returning responsibility for teacher pensions to the state.

Because affluent districts have more and better-paid teachers, the levy shifted pension costs to the districts, on the grounds that state payment of pensions only added to inequalities between poor and rich districts.

With the pensions back in the state budget and included in the revised aid figures, numerous districts, especially the wealthiest, would actually receive more money. Affluent Princeton Township would gain $160,564, while the New York City suburb of Englewood Cliffs would gain $219,945.

But while the NJEA and other education organizations had demanded the return of pension costs to the state, the groups remained opposed to the new legislation.

As for districts, confusion still reigns. The new aid figures are the fourth set to emerge from the State House since the original law was passed. District administrators say they will not believe the numbers until Mr. Florio makes them official by signing a bill.

Leon Freeman, business administrator of the Camden schools, said district officials drafted reform plans in January without knowing how much money they would have to work with. Aid figures were sup posed to be released Dec. 15; the new official release date is March 15. "We're putting together the bud get now and just hoping that when we get the bottom line, it comes close to what we need,'' he said.

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