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New Jersey's state education budget would be spared major reductions, despite cuts in the state income tax, under the fiscal 1995 budget Gov. Christine Todd Whitman proposed last week.

But the $4 billion budget, whose total is nearly identical to this year's, would shift $28.5 million from wealthier districts to poor urban ones.

State education officials characterized the shift as a "good-faith effort'' toward satisfying the state supreme court's order to close the gap between rich and poor schools.

The court is expected to order more aid for the "special needs'' districts later this year.

The plan would likely force some districts to seek property-tax hikes or slash programs and personnel.

Governor Whitman promised to cut the income-tax rate by 30 percent over three years without raising property taxes. A 5 percent cut has taken effect, and she proposed an additional 10 percent reduction for the next fiscal year.

The budget plan also calls for teachers to increase their individual pension contributions.

The budget proposal would also eliminate a desegregation-grant program that Commissioner of Education Leo Klagholz had found fraught with irregularities. Last month he released $14 million that had been withheld from districts since last August, but he vowed to dump the program, which he called a political creation.

Mrs. Whitman also recommended cuts in higher-education funding and scrapping the state department of higher education.

Vermont Reform: The Vermont Senate's Finance Committee last week was considering a sweeping reform bill that includes provisions for public school choice, charter schools, testing of new teachers, and the adoption of state standards for what students should know and be able to do.

Under the version of the bill submitted to the committee, the school-choice plan, which would allow students to enroll in any public school in the state, would not take effect until the state achieved financial equity among districts.

The original legislation, introduced more than a year ago in the House as a school-finance-reform bill, would also have mandated a statewide teachers' contract. (See Education Week, Jan. 26, 1994.)

That element--unpopular with both the Vermont Education Association and the Vermont School Boards Association--was killed by the Senate Education Committee.

Although the Finance Committee was expected to substantially revise the finance-reform provisions--which would eliminate residential property taxes and offset the loss with a local income-tax and a statewide property tax on nonresidential property--some observers predicted that the final version will include some finance reform.

Quake Relief: Gov. Pete Wilson of California last week signed a measure passed by state lawmakers that approves about $4 billion in bond issues, including $2 billion for rebuilding and retrofitting schools damaged in the January earthquake in Los Angeles.

The bill includes about $1 billion for public school construction and $900 million for higher-education facilities. The measure goes before the voters on June 7.

Observers said that Mr. Wilson, who is running for re-election, would prefer financing repairs through bonds to passing a temporary sales-tax increase, as lawmakers did after the 1989 earthquake in the San Francisco area.

Abortion Notification: Hours before Virginia's General Assembly adjourned its 1994 session, legislators approved a controversial parental-notification amendment requiring a physician to notify a family member before performing an abortion on a girl under age 16.

The vote marked a major victory for the state's new Republican Governor, George F. Allen, who thwarted the efforts of the Senate Education and Health Committee to kill the measure. (See Education Week, March 16, 1994).

Opponents succeeded, however, in exempting 17-year-olds from the notification requirement and in giving doctors the option of notifying a grandparent, stepparent, or sibling older than age 21 instead of a parent.

Finance Suit: A nonprofit organization that is protesting the use of property taxes has filed a second lawsuit challenging the constitutionality of South Dakota's education-finance system.

State aid is supposed to make up for any difference between the amount of property taxes each district can raise and the amount of funds needed to run the schools. But James Wehde, the executive director of Better Education for South Dakota Inc., which filed the suit, said the ability of rich districts to raise extra revenue results in inequities.

A similar suit, filed two years ago by 28 school districts, is scheduled to go to trial later this month.

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