N.J. Lawmakers Adopt Florio’s School-Finance Plan

By Michael Newman — August 01, 1990 4 min read

With unusual speed and over the bitter opposition of some state educators, the New Jersey legislature has approved a school-finance plan proposed by Gov. James J. Florio.

The new system, which takes effect with the 1991-92 school year, allocates some $1 billion in additional state aid to districts in poor and lower-middle-class areas. The plan cuts funding to more than 200 of the state’s wealthier systems.

The Florio administration had released its finance proposal May 24, in anticipation of a ruling by the New Jersey Supreme Court that the state’s school-funding formula was unconstitutional. The court on June 5 ordered the state to bring spending in the state’s poorest urban districts up to the level of its wealthiest ones. (See Education Week, June 13, 1990).

After making minor changes, the legislature gave final approval to Mr. Florio’s bill June 21.

Signing the measure into law July 3, Mr. Florio stressed the need for state officials to work to ensure that districts use the new funds wisely.

“Without the right tools, the right safeguards, indeed the right attitudes, additional money alone may not improve our schools,” he said. “We have to make sure our children, their parents, and their teachers keep their end of the bargain.”

The state’s largest teachers’ union and the New Jersey School Boards Association opposed the plan during legislative debate, and remain sharply critical of some of its key provisions. But the groups have pledged not to try to impede its implementation.

“We did not support the bill,” said Frank Belluscio, spokesman for the n.j.s.b.a. “But our task now is really to inform our membership about what it means for them.”

Even more vocal criticism of actions taken by the Governor and the legislature this summer has come from state taxpayers’ groups, which have bitterly attacked a total of $2.8 billion in tax increases approved by lawmakers to fund the education bill and reduce a $600-million state deficit.

‘Intolerable’ Pension Changes

Both the school boards’ group and the New Jersey Education Association opposed the bill because it changes the funding mechanism for teachers’ pensions.

Under the new plan, the state’s 220 or so wealthiest districts will gradually absorb the cost of teachers’ pensions. Currently, such costs are borne by the state.

Betty Kraemer, president of the n.j.e.a., called the elimination of state aid for pensions to some districts “intolerable.”

In its June ruling, the state supreme court had criticized the current system of state pension aid, arguing that it was “in effect counter-equaliz8ing” and “constitutionally infirm.”

As Ms. Kraemer pointed out, however, the court did not declare the pension aid illegal. The court withheld outright judgment on the program’s status, saying it would abide by a previous decision that upheld such aid.

Mr. Florio’s plan goes too far, Ms. Kraemer added. “The Governor didn’t have to take the initiative and move on this,” she said. “We interpret the court as saying, ‘At this time, [pension aid] should not be tampered with.”’

But a spokesman for Mr. Florio said the Governor had proposed elimination of pension aid to wealthier districts because the court “strongly indicated” that such aid was unconstitutional.

And the plaintiffs’ lawyer in the school-finance suit said she agreed that the state should stop subsidizing pension costs in rich districts.

“It’s a very strong move toward equity,” said Marilyn J. Morheuser, director of the Education Law Center in Newark and chief lawyer for the plaintiffs.

But Ms. Kraemer said state funding of pensions was “sacred.” She also maintained that the n.j.e.a. had supported Mr. Florio in last year’s gubernatorial campaign in part because he had agreed to continue state funding of pensions.

“I believe the Governor has been very deceitful. He’s blindsided us,” she maintained. “Looking at it as a report card, in the last marking period the Governor got an F.”

Too Far Too Fast?

Others criticized the Florio administration for moving the bill too quickly through the legislature.

“This bill was rushed entirely too much for something that has such a long-range effect,” said Senator Joseph A. Palaia, a member of the Senate education committee. “I’ve never seen anything like it.”

“There’s chaos, confusion, and frustration out in the districts--and in Trenton,” said Mr. Palaia, who voted against the plan.

To meet the court’s mandate, Mr. Palaia said, the legislature needed only to increase spending in the state’s 30 poorest districts. The plan approved last month increases state aid to more than 350 districts.

“The supreme court didn’t ask us to do all this now,” he said.

But Senator Matthew Feldman, chairman of the education panel, disagreed.

“You’ve got to face facts sooner or later,” he said. Although many districts in lower-middle-class or middle-class areas were not explicitly identified by the court as deserving more aid, he noted, many of them did need additional state funds.

Mr. Feldman defended the plan’s timing, saying the joint legislative committee on education made several adjustments to the bill based on five days of testimony by educators.

He also pointed out that local school officials will have to begin the budgeting process for the 1991-92 school year this fall. The legislature had to adopt the new formula quickly, he said, so that local officials could calculate their share of state aid accurately.

But the two legislators, along with others in the state, were in accord with the Governor on the need for educators and state policymakers to focus on accountability in those districts receiving aid increases.

“The bottom line is, this is a done deal,” said Mr. Palaia. “Now we’ve got to have some accountability in schools that we’re pouring thousands of dollars into.”

A version of this article appeared in the August 01, 1990 edition of Education Week as N.J. Lawmakers Adopt Florio’s School-Finance Plan