New Jersey’s Budget - Reasons to be Pessimistic

On Monday, Governor Jon Corzine signed his $29 billion state budget that lays out how the state will spend taxpayer dollars over the next year. The budget leaves many to question the future of our state, especially the fiscal footing of the education community. Press reports place the structural deficit for the following year’s budget at $6 to $10 billion due to the non-recurring revenues contained in the newly adopted budget.

Not all was washed with the Governor’s budget; the NJASA is pleased to see that there will be an increase of $374 million in direct aid for K-12 school districts - $74 million more than proposed during the Governor’s March budget address.

However, the NJASA is disappointed that many districts scheduled to receive up to a 20% increase in aid under the new funding formula were capped at 5%. Also disappointing is the cut of direct state aid in the amount of $31million to New Jersey’s municipalities. This is a 2% decrease from last year’s spending levels – 2% that now needs to be addressed by local communities and their taxpayers.

Nothing has changed from the Governor’s State-of-the-State address with his use of the public pension system as a vehicle to control the state’s run-away expenses – he did so by deferring $940 million in pension payments, with $560 million being directly related to school employee pensions.

The NJASA has been strongly opposed to this type of shell game, a maneuver that has been passed down from other administrations. As we stated previously, the pension payment deficit is nothing more than a near-sighted solution to a far-sighted problem.

We are pleased to see the use of federal monies from the stimulus package being utilized to stabilize education funding. Yes, we recognize that this is a one-time solution that was necessary to prevent large local tax increases or much deeper cuts in school board budgets. We remain hopeful that the state and national economies recover sufficiently during the upcoming year to generate the needed state income to fully support the schools funding formula.

The leadership of NJASA will continue to work with our elected officials to assist them with creating and implementing sound education policy that will lead to an effective and efficient system of New Jersey public schools.