Published Online: February 18, 2010

Poor N.J. School Districts Hit Hard by Cuts

The state's poorest school districts stand to lose the most money under New Jersey Gov. Chris Christie's plan to cut $475 million in school aid to help balance the state budget, an Associated Press analysis shows.

On average, those districts classified by the state as the poorest stand to lose $3.2 million each, while schools under the wealthiest classification stand to lose $557,000 each, according to figures released by the governor's office and nonpartisan Office of Legislative Services.

Poor districts are losing more dollars because they are generally larger and receive the most state aid. But suburban districts will lose a greater percentage of their state school aid, the analysis shows.

Newark, for example, loses nearly $14 million under Christie's plan, while Camden loses $8 million. That's less than three percent of their budgets.

Meanwhile, Totowa Borough will lose just over $260,000, but that accounts for 35 percent of its state aid.

On average, all schools will lose 13 percent of their total annual state aid as a result of last week's cuts, which Christie ordered to help close a $2.2 billion budget shortfall.

On Wednesday, Bret Schundler, Christie's nominee for Education Commissioner, said school districts have been told to budget for a 15 percent reduction in state aid next year on top of the cuts announced last week.

The deepest cut in terms of dollars last week was in Union City, which stands to lose $29 million, or nearly 19 percent of its annual aid.

"Our students should not be penalized as a result of school administrators acting in the interest of fiscal conservation," said Union City Mayor Brian Stack.

A large part of the cuts involve withholding money from schools that have budget surpluses. All but 17 of the state's 581 districts have surplus money. More than 100 districts will lose all state aid for the remainder of the year, and more than 100, mostly suburban, will lose 30 percent or more of their state aid, the AP analysis showed.

Seaside Heights, on the Jersey Shore, will lose $358,000, or 38 percent of its annual state aid, even though it is considered poor based on socio-economic factors that include education levels of adults, family income, and the unemployment rate in a given area.

The Republican governor last week announced his plan to freeze unspent money and cut hundreds of programs to keep the state budget balanced.

The governor's plan calls for schools to spend 98 percent of their budget surplus money and 25 percent of their reserves, which includes money for designated things like capital improvement projects.

Former Democratic Gov. Jon Corzine had proposed cutting $300 million in school aid before he left office in January. Corzine's formula would have affected the same districts, only to a lesser degree, because Corzine wanted them to use 75 percent of their surplus.

Other low-income districts losing big money include $15 million in Perth Amboy, $13 million in Vineland and almost $12 million in Paterson.

When asked if he was concerned that poorer districts were giving back more money, Christie said he was not. "It's state income tax money," he said.

Three districts classified as poor — Trenton, West New York, and Bridgeton — won't lose any state aid because they already have spent it all.

Without state aid, the districts will be forced to spend surplus money — money that otherwise would have been used for the next year's school budget or gone back to residents as property tax relief. At an average of $7,000 a year, New Jersey homeowners pay the highest property tax rates in the nation.

"The whole thing is really irrationally done," said Assembly Education Chairman Patrick Diegnan, D-South Plainfield, who didn't like the plan when Corzine proposed it.

New Jersey Education Association president Barbara Keshishian said many school districts use the surplus funds from one budget year as revenue to support programs or property tax reductions the following year. Some argue that taking money from school surpluses unfairly punishes schools that budget well.

Camden schools business administrator David Shafter said the cuts won't affect this school year but next year's programs could be affected.

"We knew last year that for the 2010-2011 school year were not getting an increase in state aid," he said, "and yet we know we'll have increases in costs."

To maintain the same level of programing, he said the district needed a $9.5 million surplus on hand, not to lose $8 million.

At Columbia Middle School in Berkeley Heights, where Christie spoke to school officials on Wednesday, parents and school administrators told him that they were concerned about were concerned about the $700,000 they would lose. "Next year we're definitely going to be looking at increasing class sizes," said Superintendent Judy Rattner, adding that elementary school guidance counselors and some arts programs could be affected.

Schundler called the cuts "as progressive a reserving of aid as you could ever hope for."

"We were forced to take action," he said. "If you run out of money, districts which do not have a surplus would have had to lay off teachers in the middle of a fiscal year."

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