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Wealthy N.J. Districts Assail Spending Categories

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Seventy mostly well-to-do New Jersey school districts are up in arms over a state plan that will penalize them for "excessive" spending.

The districts are raising objections to the state's definition of administrative costs, a category they say unfairly counts spending on school libraries, counselors, and other services that directly benefit students.

"'Outrageous' is the best term for it," argued Lawrence Feinsod, the superintendent of the Madison district, which stands to lose about $450,000 in state aid next year. "To label nurses, guidance counselors, librarians, and their accompanying costs as administration or part of a school system's management team is preposterous."

Backed by Republican Gov. Christine Todd Whitman, Commissioner of Education Leo Klagholz used the education department's regulatory authority to impose a new management-efficiency program that will reduce state aid to districts where administrative costs are more than 30 percent above the state average. The sanctions will fall on districts beginning in the state's fiscal 1996 budget.

The penalties are the first step in a larger plan to reduce wastefulness and promote bureaucratic efficiency among New Jersey's more than 600 school districts, state officials say.

"It is well known that we spend more per pupil than any other state," Governor Whitman said during her budget address late last month. "But it is embarrassing that we rank 49th in the percentage that reaches the classroom."

Late Library Hours

Although the notion of "excessive administration" may conjure images of urban districts with bloated central offices, the majority of the 70 New Jersey districts about to be hit with penalties are in wealthy suburban areas. The districts are scheduled to lose about $11 million under the plan.

The Livingston Township district, in a suburb of Newark, would be the hardest hit. It faces a loss of $1.2 million, or roughly 2 percent of its $50 million budget.

Robert Kish, the superintendent of the 4,100-student district, maintained that the state is on the wrong track.

"Fighting excess administration is the kind of thing that gets immediate public approval," he said. "The fact is, we're being punished for the things we do for children."

Mr. Kish said the district regularly passes school budgets that include funding for services such as keeping its libraries open until 8 P.M. and making sure all high school students get adequate college counseling.

Changing the Rules

The state has suddenly begun counting those types of services as non-instructional, Mr. Kish said.

District officials say they had little warning about the sanctions, hearing about them only when Governor Whitman announced her budget on Jan. 23.

"It was thrust upon school districts without any warning. That reflects a change of the rules in the middle of the game," said Mr. Feinsod of the Madison district, who is also the president of the Garden State Coalition of Schools, a group of suburban districts.

The superintendents suggested that the plan was designed to reduce spending in wealthy districts as a way to help meet a mandate from the state supreme court to bring funding of rich and poor districts more in line.

"In order to diminish the state's liability to urban districts, it is in their fiscal interest to lower the level of spending in suburban districts," said Mr. Kish of Livingston.

The controversy has attracted the attention of state lawmakers. Some Republican legislative allies of the Governor, including the president of the Senate, have called for hearings to consider changing or postponing the sanctions.

Peter Peretzman, a spokesman for the education department, said district officials have misinterpreted the program.

About $8 million of the $11 million the state will keep is to be redistributed to other districts, regardless of their wealth, in the form of rewards for targeting money on classroom spending, Mr. Peretzman said.

"By and large we are penalizing districts that spent well beyond the median in the area of administration," he added. "It's not the libraries and guidance counselors that are driving those costs."

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