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N.J. Target of Another School Finance Lawsuit

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Another corps of combatants leapt into New Jersey's school finance fray last week, when 25 middle-income districts sued the state on the grounds that its funding system creates intolerable disparities in local property-tax rates.

The lawsuit filed in state court in Trenton argues that, because of the state's strong reliance on property taxes to pay for public schools, many districts must tax homeowners excessively to meet state educational standards.

"There's no question that the state has abrogated its responsibilities," argued Kenneth D. Hall, the president of the Association of Middle Income Districts, a group of about 100 school systems that organized the suit.

A spokesman for state Commissioner of Education Leo F. Klagholz disputed that view. "This administration has made a substantial financial commitment to public education," said Peter Peretzman, who declined to comment on the substance of the case.

The lawsuit creates a third front in the Garden State's school funding wars.

Advocates for students in poor urban districts have litigated for nearly 30 years in pursuit of more money. This spring, the state supreme court is weighing whether to order a new round of spending on programs and facilities in those cities.

And last December, a group of 17 poor rural districts sued the state, arguing that they deserve the same special funding as the urban systems. That case is awaiting assignment to an administrative-law judge.

Unfair Burden Alleged

As a result of the urban suit, the supreme court has forced the state to raise spending in 28 needy districts to the same levels as the state's wealthiest suburbs.

The middle-income districts seek no such spending parity. Nor do they overtly claim that their students' right to an adequate education is being infringed.

Instead, they argue that the funding system "does not spread the property-tax burden in a substantially equal manner" among taxpayers in different districts. Thus, the suit alleges, the system violates the state constitutional guarantee of equal protection under the law and the requirement that the state operate a "thorough and efficient" public education system.

"We say that many districts are providing an excellent education, but our taxpayers are having to pay extraordinarily high tax rates to do that," Mr. Hall said.

After adjusting for differences in local taxing systems, more than 70 middle-income districts in New Jersey levy school taxes of at least $1.70 per $100 of assessed value, while more than 90 other districts have rates below 75 cents, Mr. Hall said.

The association says the state should cap local tax rates at the current statewide average and then make up the difference with state aid. Such a limit would add about $1 billion to the $5.9 billion that Gov. Christine Todd Whitman has proposed spending on K-12 education in the next school year, Mr. Hall said.

Frank Belluscio, a spokesman for the New Jersey School Boards Association, noted that the problem of tax-rate disparities has surfaced frequently in previous school finance litigation in the state. But he said it had never been satisfactorily resolved.

"They're raising some really valid issues that have yet to be answered," Mr. Belluscio said of the middle-income districts.

Voters OK Most Budgets

The middle-income districts filed their suit on the eve of last week's annual school elections in New Jersey, in which residents vote on their local districts' budgets, as well as candidates for school boards. School leaders often complain that the state's reliance on property taxes makes it harder to get budgets approved by voters.

Preliminary results from last week's polling showed that about three-quarters of budgets passed statewide, a historically high rate that is down only marginally from last year. But turnout was only about 14 percent--down from last year's level of more than 17 percent and the lowest since 1993.

Republican Gov. Christine Todd Whitman said the turnout underscored the need to adopt her proposal to move school balloting to November. Mr. Belluscio said his group was also concerned about low turnout. But he argued that switching the vote would politicize elections that are now ostensibly nonpartisan.

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