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Florio Offers Olive Branch to Republicans, Taxpayers

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Holding out an olive branch to the new Republican majority in the legislature and to the middle class, Gov. James J. Florio of New Jersey last week laid out plans to help stimulate the state economy and ease the burden on taxpayers.

In his first State of the State Address since his fellow Democrats were pummeled in the November elections, Mr. Florio proposed a number of economic steps, including the creation of a $200-million fund aimed at putting 100,000 people to work.

He also called on lawmakers to pass legislation that would offer tax breaks to middle-class home-buyers and low-interest loans to middle class college students.

Although the Governor made only fleeting reference to precollegiate education, it loomed large on the agenda of the opposition. Republican leaders last week pledged to dismantle the Quality Education Act, the school-finance-reform initiative that has been at the core of Mr. Florio's and his party's political woes.

The Q.E.A. is "a grossly expensive, failed social experiment," the new Senate president, Donald T. DiFrancesco, said in a speech preceding Mr. Florio's. "It has thrown our school systems into disarray; it has ruined public confidence in education; but worse, the Q.E.A. threatens to compromise our children's education .... "

Passed in 1989 in response to a state supreme court order overturning the existing school-funding system, the Q.E.A. increased state aid and redistributed it to the state's low-wealth urban school systems. The law was funded by a massive tax increase, which led to a voter rebellion against the Democrats.

Tax Rollback Planned

The state's "most important job is to restore economic opportunity," the Governor contended, adding that doing so would require changing the way government works. Mr. Florio said he would consider such fundamental changes in state governance as creating an initiative and referendum process.

"Our two parties have worked together before to support our people in times of crisis. It's time again for a balanced government that works, not a paralyzed government that self-destructs," Governor Florio said.

After two decades as the minority in the legislature, however, the veto-proof Republicans have made it clear that they intend to set the agenda for the state.

"Starting today, the New Jersey Senate will take the lead in making the government work for all of us," Senator DiFrancesco said. "We are going to reshape state government, making it leaner, more efficient, and more responsive."

The Senate president said one of ' the first orders of business would be to roll back the sales tax from 7 percent to 6 percent, which had been a G.o.P. campaign promise.

The future of other tax measures is uncertain, however. In an effort to embarrass the Republicans, members of the lame-duck Democratic majority had tried unsuccessfully to repeal the tax package during the waning days of the previous session, which did not end until last week.

Scrutinizing the Q.E.A.

On the education front, Mr. DiFrancesco said lawmakers would review every regulation affecting education and eliminate them if need be. Moreover, he said, Senate Republicans would ensure that money was spent properly.

"If Senator Jack Ewing and his education committee have to camp out in the cafeterias and auditoriums of every school in New Jersey to make sure tax money is being spent wisely, they will," Senator DiFrancesco vowed.

Both Senator John H. Ewing and Assemblyman John A. Rocco, chairmen of the education committees in the two chambers, said in interviews that their first priority would be to examine every aspect of the Q.E.A.

They left little doubt that the law's funding formula would be changed significantly to prevent the current kind of situations in which predominantly middle-class districts have been faced with cutting programs or raising property taxes to compensate for the loss of aid.

"The early indications are that both the Governor and the legislature are inclined to strike a deal where they can work together," said Richard W. Roper, director of Princeton University's Program for New Jersey Affairs.

"The critical issue is the Q.E.A.," said Mr. Roper, who anticipates there will be disagreement over how it is changed. "I just don't know how loud [Mr. Florio] will protest."

Tom Corcoran, the Governor's education-policy adviser, said Mr. Florio is willing to work with the lawmakers to modify the school formula. "There are some broad parameters we need to keep in mind when we work on it," said Mr. Corcoran, citing cost and the supreme court's mandate.

Outlook: 'Anyone's Guess'

The Senate education committee plans to hold hearings after the Quality Education Committee releases its full report next month.

Two weeks ago, the Governor-appointed commission announced 20 recommendations for improving education, including revisions to the Q.E.A. Among its more controversial and costly proposals, the commission urged that the school year be increased from 180 to 220 days.

Betty Kraemer, president of the New Jersey Education Association, said she had been disappointed that Governor Florio had neither mentioned the commission's report nor addressed K-12 education.

"What is going to happen with education is anyone's guess," said Ms. Kraemer, whose powerful teacher's union backed many Republican candidates last fall. (See Education Week, Oct. 23, 1991.)

Robert E. Boose, executive director of the New Jersey School Boards Association, praised the Governor's proposals to increase health care, social services, and preschool funding, as well as his continued support for moving to site-based management.

But educators voiced concern about the Governor's willingness to consider initiatives and referendums. Both the teachers' and school boards' groups oppose the idea, which among other things would enable voters to establish a stringent tax cap similar to Massachusetts' Proposition 21/2.

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