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N.J. Coalition Advocates Less Reliance On Property Taxes

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A broad-based education coalition in New Jersey has proposed a new school-funding strategy that substantially reduces districts' dependence on local property taxes and eliminates voting on most local school budgets.

The plan by the New Jersey Association for the Public Schools Coalition calls for the state to assume a much larger proportion of funding for the vast majority of school districts.

But the plan does not address the thorny issue of how the state would raise the revenue to pay for its increased share of education costs.

The last time state taxes were raised substantially to fund education and other services, in 1990, voters retaliated the following year by sweeping many veteran lawmakers out of office.

"The coalition would be very happy to work with other organizations or state government to explore revenue sources,'' said Frank Belluscio, a spokesman for the New Jersey School Boards Association.

Continuing Challenges Foreseen

Since 1990, the state has been under court order to reform its funding system so that poor urban districts, known as "special needs'' districts, achieve financial parity with wealthier schools, thus satisfying the constitution's guarantee of a "thorough and efficient'' education for all students.

In August, a judge declared the latest funding plan unconstitutional. (See Education Week, Sept. 8, 1993.)

"The current mix of state funding and local property taxes will produce more 'special needs type' districts whose students could someday argue they are deprived of their constitutional right to a thorough and efficient education,'' said Harry Galinsky, the superintendent of the Paramus schools, in presenting the coalition's plan to a state commission late last month.

The commission is slated to recommend a new funding scheme to lawmakers on Nov. 15--two weeks after the state's legislative and gubernatorial elections.

The coalition itself is made up of organizations that occasionally feud among themselves. Late last year, however, the groups came together to hammer out a temporary funding solution for the 1993-94 school year.

Members include both the school boards association and the New Jersey Education Association, the state's largest teachers' union. Also a member is the Education Law Center of Newark, the advocacy group that brought the lawsuit on behalf of poor districts.

Although not members of the coalition, groups representing middle- and upper-income districts participated in developing the proposed formula.

Cutting the Property Tax

Under the plan, per-pupil spending for regular education would be set at $8,051, which is the average that wealthier districts spent per pupil in the 1992-93 school year.

Communities would have to tax at a rate no lower than $0.75 per $100 of equalized property value to pay their share of education.

The state would make up the difference for those districts that could not reach the foundation level at the mandated tax rate.

The coalition estimates a property-tax cut of more than 30 percent statewide, since many districts currently have tax rates well above the proposed level.

The added cost to the state would be an estimated $1.5 billion.

Because of the shift in reliance from local to state government, the plan calls for ending the current practice of public voting on local school budgets.

The coalition also proposed that districts receive a 6 percent funding increase each year.

Categorical aid for special education and other programs would be provided at current levels until the state education department determined the average additional costs of providing such services.

The change in funding would be implemented over a five-year period, except for the special-needs districts, which would have their phase-in completed by 1996-97.

Despite the coalition's intent to equalize funding, the plan includes a way for communities to raise spending by more than 6 percent a year. They would be allowed a 2 percent "local leeway,'' which would have to go to the voters for approval.

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