Lawmakers in N.J. Seek Relief in New Finance Plan

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New Jersey Republicans, who gained control of the legislature last year as a result of a voter revolt against increased taxes for education, have produced a preliminary plan aimed at offering some fiscal relief to middle-income school districts while slowing new funding to disadvantaged ones.

The "concept document,'' which was first leaked to a local newspaper this month, provides a glimpse of the direction legislative leaders hope to take in reformulating state aid.

The document also describes education reforms that G.O.P. lawmakers would tie to funding.

"From a political point of view, it should make it easier to sell the overall package because it's not just purely dollars and cents,'' Sen. John H. Ewing said.

Republicans swept into office last November on a campaign promise to lower the tax burden, which voters blamed on Gov. James J. Florio and his Quality Education Act.

The Q.E.A., which was passed by the legislature in 1990 after the state supreme court struck down the existing school-finance system, channeled additional state aid to 30 poor, urban districts, with funding provided in part by an increase in the state sales tax.

The law also shifted funds to the "special needs'' districts at the expense of some 200 middle-income districts. On top of the new state taxes, taxpayers in those areas ended up paying higher property taxes to offset the loss of state aid to local schools.

The Matawan-Aberdeen school district, for example, lost more than $5 million in state aid. In response, officials had to cut 80 jobs, reduce programs, and raise local taxes 40 percent, according to Superintendent Kenneth D. Hall.

Campaign Promises To Keep

Keeping part of their campaign promise, legislative Republicans rolled back the sales tax and trimmed $1 billion from Mr. Florio's budget.

But the Republicans decided to hold extensive hearings before addressing the Q.E.A. aid formula.

The Republican plan calls for basing equalization aid on two factors: countywide average per-pupil spending and a district's property wealth. The Q.E.A., by contrast, based aid on district per-capita income.

The other base-aid component in the G.O.P. proposal would be a $200 per-pupil allotment. Districts would have to spend the money on innovative programming, and not for current or contracted expenses.

Disadvantaged districts would have to use the money to establish all-day kindergarten and pre-kindergarten programs for all 4-year-olds and some 3-year-olds.

The disadvantaged districts also would be required to set up elementary school centers that would provide health and social services to the children and their families.

In addition, the proposal calls for a spending cap based on such factors as the growth in state gross income. Because the economy is expected to remain sluggish, a 2 percent cap would be in place for 1993-94.

Special-needs districts would continue to get extra funding, but less than they would under the Q.E.A.

Under the plan, a 15-member reform commission would be created to identify goals, programs to achieve those goals, and effective programs for disadvantaged students.

The commission would also recommend to the state a program-equity plan aimed at ensuring that students throughout the state received an equitable course of study.

"We're aiming toward parity in the courses students take, not parity in the spending,'' Mr. Ewing said.

Reform Corollary

Educators' reactions to the plan, which has not been officially released, have been mixed.

Mr. Hall of Matawan-Aberdeen said he was pleased that income would be eliminated as the determinant of base aid. But he said he opposes both the spending cap and the $200 per-pupil allotment because of the strings that would be attached.

Once the per-pupil allotment is subtracted from overall base aid, he said, districts could end up with less money for current obligations than they had previously.

Robert A. Bonazzi, the executive director of the New Jersey Education Association, said the discussion of reform was an important element that has been missing in the Q.E.A.

"If we're going to have increased funding,'' Mr. Bonazzi said, "we're going to have to have reform issues as a corollary to that.''

But an analysis of the G.O.P. proposal by Robert J. Swissler, the assistant state commissioner of education for finance, maintains that the proposed formula will both prevent poorer districts from catching up with other districts and force middle-income districts to raise local taxes.

"The aid cap results in distribution of aid arbitrarily without regard to wealth, enrollment, or educational needs,'' he argued.

The analysis also suggests that the plan may be unconstitutional because it offers a minimum-aid program, which the supreme court has already ruled against.

Vol. 12, Issue 04

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