Archive for the ‘No Child Left Behind Act’ Category

Glen Ridge: Creating an Autonomous Public School District

Wednesday, July 14th, 2010

Whether to Secede?

Unfunded state and federal mandates are strangling the Glen Ridge Public Schools as well as traditional public school districts nationwide.  Unfunded mandates drive school district budgetary deficits, property tax increases, operational restrictions, and educational program and service reductions.  When the costs and consequences of these mandates are combined with a statewide 2.0% tax and expenditure limit (TEL) or cap, the Glen Ridge school district is compelled to consider whether (Read, 2010) “to effectively secede from New Jersey’s public school system.”   

Glen Ridge along with the majority of New Jersey’s public school districts can no longer afford to pay for state and federal unfunded and under funded mandates because the district is forced to spend disproportionately more to meet the requirements of these mandates than it receives in total state and federal financial aid.  This creates a budgetary deficit.  Making up for this mandate-created deficit annually forces Glen Ridge to make extremely difficult choices.  The challenges involved in the budgetary decision making process were exacerbated when the Glen Ridge school district along with dozens of others statewide lost all of its state financial aid.  Moreover, the state of New Jersey’s imposition of a 2.0% TEL further constrains the district’s financial outlook. 

While the state and federal governments force Glen Ridge to fully fund the unfunded portion of their mandates, Glen Ridge must make up for the mandate deficit and balance its budget annually.  There are, however, only two kinds of programs and services offered by our public schools:  those that are mandate protected and those that are not mandate protected.  The Glen Ridge school district like public schools nationwide, therefore, must choose between cutting non-mandate protected programs and services or raising property taxes.

Unfunded Mandates Drive Budgetary Deficits

When a school district experiencing increases in mandate-driven uncontrollable expenses becomes limited by a 2.0% TEL, it must cut expenses even more severely to stay within the cap.  There is no exemption for the ever increasing costs of the state’s special education mandates included within Governor Christie’s 2.0% TEL (Maxwell, 2010,) for example.  Public school districts, therefore, must allocate scarce financial and human resources to pay for the unfunded portion of mandates and spend disproportionate administrative time on external reporting.  A school district spends less time and money on core educational programs and services as a result.   

Because traditional public school districts such as Glen Ridge are required to fund the unfunded portion of all state and federal mandates over which it has no control, state and federal mandates drive the overwhelming majority of the district’s expenditures and, hence, property tax levies.  Cuts to state aid or especially the elimination of state educational aid as is the case for Glen Ridge may force a traditional public school district to increase class sizes so as to minimize its expenditures for teachers and aides.  But this will lead to lower test scores and likely No Child Left Behind Act (NCLB) operational and financial penalties. 

Reduced or zero state aid particularly when combined with a 2.0% TEL, therefore, gives a school district only one course of action:  hold property tax increases within the state imposed percentage point limit while simultaneously cutting non-mandate protected programs and services but fully funding the unfunded portion of all mandates.  That is, cutting regular education.  The ultimate irony is that property taxes could be slashed nationwide especially those funding our public schools and there would be no need for TELs, if the state and federal governments would just fully fund all of their mandates! 

A Question of Autonomy

Trenton continues to blame school districts such as Glen Ridge for their property tax and expenditure increases rather than take responsibility for its role in forcing district budgets to increasingly higher levels.  Instead of fully funding its mandates which drive up the cost of public education, Trenton focuses largely on constricting the funding, budgets, operations, and independence of local school districts. Given these state imposed burdens, costs, and constraints are most likely to become even more severe, what should a public school district do? 

How could Glen Ridge restructure its educational system such that the district would not only enable its public schools to increase the property taxpayers’ return on their investment but also greatly improve the quality of education while holding their schools accountable to these standards?  The question of how to achieve the proper level of autonomy, therefore, is the challenge confronting the Glen Ridge Public Schools.

What is autonomy?  Autonomy, in its most fundamental form, means that a school district is free to develop, design, and implement its own budget.  The budget is the financial representation of the district’s educational plan; therefore, the district must have full authority to acquire and allocate the financial and human resources necessary to providing those educational programs and services that fully meet the needs and priorities of the school district.  Indeed, if something is not in a school district’s budget, it will not be in any classroom!  This requires gaining control over all of a public school district’s financial, operational, pedagogical, curricular, and administrative functions so that the district is ultimately able to provide an academically rigorous learning environment that maximizes student achievement.  

Options for Autonomy

To achieve the proper level of autonomy for its school district, Glen Ridge is considering a number of options including (Read, 2010) “converting some or all of the four schools in the 1,932 student district to charter or private schools.”  The purpose of any conversion is to implement a new governance structure that will operate with much greater autonomy from state and federal mandates than the Glen Ridge school district currently enjoys.  Whatever form this new governance structure may take; it should provide the basis for financial soundness, operational flexibility, educational innovation, student achievement, and maximizing the taxpayers’ return on their investment in their local public schools, all of which are currently constrained by state control. 

Although (Read, 2010) “New Jersey will allow a public school to become a charter school if 51 percent of the teaching staff and parents sign a petition for it, according to the New Jersey School Boards Association.  That has never happened.”  The privatization concept is also being considered for which Dr. Bruce Baker, Associate Professor of Education at Rutgers University’s Graduate School of Education (Read, 2010,) stated that, “There are precedents in municipalities in Vermont and Maine. The towns raise tax dollars to send high school students to a private school.”  Another alternative is to transform the district into a set of private schools operated either by a locally elected board of education or by a private for-profit firm.  

Plank and Smith (2008) report that in the wake of Hurricane Katrina, “the Louisiana legislature created a Recovery School District” within which the “state intends to reopen most of New Orleans schools as charter schools, pioneering what stands to become the nation’s first all-chartered public school system.”  New York City has expanded its Empowerment Schools program (Plank & Smith, 2008.)  Chicago has implemented a more complex program (Plank & Smith, 2008) by “replacing up to 100 low performing schools” which can be operated as “district performance schools, charter schools or as contract schools.” 

But would any of the aforementioned options provide the proper autonomy such that Glen Ridge would gain control over its operating budget and, thereby, have the ability to provide a top quality education that meets the needs and priorities of the district rather than objectives set remotely in Trenton?  Glen Ridge should strive for the kind of governance structure that is worth the effort, if it is to confront the many challenges to achieving the proper kind of autonomy.  How, then, should Glen Ridge restructure its educational system?  

Autonomy and Self-Governance

To achieve the proper autonomy, Glen Ridge could reinvent itself by becoming an entirely unique version of a local public school district that is autonomous self-governing, self-funding, and as free as possible from state as well as federal mandates.  As an autonomous school district, Glen Ridge would eliminate the excessive financial and administrative burdens imposed by state mandates.  It would be much more cost effective and efficient for the district to provide educational programs and services without the administrative burden of state requirements.  Self-governance would increase the financial resources available for the classroom because the funds that are currently used for compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.  

Self-governance would empower the school district to improve the quality of education in ways more consistent with the priorities of the local community rather than state mandates.  Finding ways to legally opt out of the state system perhaps through a state sanctioned voter approved referendum would restore full decision-making authority to the local level.  Because decisions guiding the operations of Glen Ridge’s self-governing school district would no longer be made largely at the state level, parents, teachers, administrators, the board of education, and local taxpayers would be better able not only to shape the quality of education provided in the local schools but also to hold their local schools accountable for this outcome.  In this context, the conversion could be considered as achieving (Plank & Smith, 2008) “autonomy for accountability.”  

Becoming an Autonomous Self-Governing School District

An autonomous self-governing school district would be independent of the state system but would remain a public school district serving the same local community rather than a confederation of charter schools, private schools or schools run in full or in part by a private company.  But in return for the ability to become autonomous and, therefore, free from state mandates, a self-governing school district would forgo all state aid!  Self-governance would provide a public school district with the authority necessary to improve education consistent with the priorities of its local school community as well as the flexibility to innovate rather than be forced to march in lock-step to the state’s one size fits all mandates that fit no district.  Opting out of the state system would restore full decision-making authority to the school district. 

Once the process leading to independence is approved by the state, a public school district could possibly become self-governing when a majority of the registered district voters who voted in a district-wide vote approved of the change.  While these votes would comply with the laws governing ballot procedures, campaigns, and elections, they would be held in April so as to provide sufficient lead time to convert to self-governance by July 1, the beginning of the new fiscal year.  Once the district community voted to authorize the school district to become self-governing, it would be governed solely by its board of education without oversight from the County Executive Superintendent, Board of School Estimate or municipal government.  Board of education members would continue to be chosen from among the registered voters in the school district. 

Local property tax levies rather than tuition would continue to be the primary source of funding for a self-governing public school district.  An autonomous district would be eligible to receive appropriate state or federal grants.  The annual operating budget would be decided by its board of education rather than be subject to district-wide public votes so as to be consistent with the annual budget approval process for municipal and county governments which are not subject to approval through a vote of their respective electorates.  Alternatively, the annual operating budget would be subject to voter approval should municipal and county government budgets be similarly submitted for public votes. 

Taxpayers can vote on their local school district budgets in all but a handful of towns but no taxpayer is able to vote on the budget of his/her municipal or county government despite the fact that these two levels of government are funded almost entirely by local property taxes.  Because taxpayers can vote on school budgets, they can hold their school systems accountable but without a corresponding vote on municipal and particularly county government budgets taxpayers can not hold these levels of government accountable.  This is one of the chief reasons why county government costs New Jersey’s taxpayers more than $6.1 billion annually! 

Taxpayers choose the local public school district that best meets their needs and one that will contribute to their property values by exercising true Tieboutian choice (Tiebout, 1956) and voting with their feet.  But taxpayers vote not only with their feet but also on school district operating budgets, capital projects, and board of education members.  Through the exercise of these votes, taxpayers control the quality of education provided by their local schools as well as the level of property taxes levied.  Their collective decisions lead to a Pareto efficient allocation of local public education. 

Locality is crucial for accountability.  Because state policy makers especially as compared to the local board of education are more distant from those most affected by the state’s mandates, students, teachers, and schools, the impact of their mandates is more adverse on a public school district’s finances and the quality of education it provides.  Our public schools, therefore, must be given the choice of becoming autonomous, self-governing, self-funding local public school districts free from state mandates so that they can be liberated to provide a top quality education while held being accountable to this standard by those who are the most capable of doing so, the school district’s taxpayers. 

Optional Compliance

Many states pass legislation known as (Fix & Kenyon, 1990) “optional compliance” to force state government to fund its mandates.  Optional compliance provides public school districts and (Fix & Kenyon, 1990) “units of local government the right not to comply with state mandates” and “can place added pressure on the legislature to fund the cost of mandates if it wishes to ensure that all local governments comply.  This right of optional compliance, in effect, can give the local governments” and local school districts “new leverage in dealing with the state legislature to ensure that they do get funding.  If they do not, they are under no obligation to carry out the mandate.”  

Still, states often find ways to provide much less than full funding for mandates by circumventing optional compliance laws.  States regularly restrict their obligation to reimburse the unfunded portion of mandates by (Fix & Kenyon, 1990) having a “narrow definition of what constitutes a mandate.”  States often enable (Fix & Kenyon, 1990) “the legislature to exempt the state from providing funding under certain circumstances.”  In addition, states often manipulate the labeling of the source of funds to minimize their payouts.  Fix and Kenyon (1990) demonstrate that “funds are provided simply by earmarking some portion of what is considered local aid or general revenue sharing.  If a state merely earmarks funds that area coming from another source as opposed to providing new funds, then the state is really not accomplishing the objective of mandate reimbursement.” 

States also manipulate the timing of when local school districts receive funding rather than pay local schools districts in advance of the mandate’s implementation.  Fix and Kenyon (1990) use California’s experience to demonstrate, “In California, however, funding is provided on a reimbursement basis; funding can occur long after the mandate is implemented.”  School districts and “local governments carry out mandates, submit claims, and hope to get paid.  In the meantime, they must carry out the mandate; they have no option.”  This forces California’s public school districts to either borrow or cut regular education programs to fund the unfunded portion of mandates while hoping for full state reimbursement which does not include the refunding of any incurred interest expense. 

Unfunded Mandates Force Cuts to Regular Education

While the State of New Jersey is increasingly mandating programs and services to be provided by the state’s public schools, its level of financial aid and the portion of the mandates for which it provides funding are declining rapidly.  But public school districts have no control over many of the major cost drivers resulting from under funded mandates such as the expenses associated with increases in enrollment, transportation, legal actions, and the number as well as the mixture of special education students.  The range of state and federal under funded mandates includes but is not limited to No Child Left Behind (NCLB,) Individuals with Disabilities in Education Act (IDEA,) Quality Single Accountability Continuum (QSAC,) Core Curriculum Content Standards (CCCS,) bilingual instruction, free and reduced price breakfasts and lunches, incremental state special education requirements, special education related law suits, biohazard training, radon testing, state and federal standardized testing as well as programs to prevent bullying, teasing, and taunting.  

School districts are required by state and federal laws to provide the special education programs and services included in a student’s Individual Education Plan (IEP); therefore, special education budgets cannot be cut and the under-funded portion of special education’s costs must be made up from other budgetary sources.  To offset the increased costs of under funded special education mandates, districts are increasingly forced to significantly reduce programs for regular education students because property tax increases have been limited largely through state legislation.  Under funded state special education mandates not only have sharply increased the competition between regular and special education programs for funding within a school’s budget but also have created sharp divisions within a school’s community because they pit the parents of special and regular education students against each other in the fight for funding.

In 2005, New Jersey state aid covered less than one-third of state mandated special education programs and services while the federal IDEA is funded only at approximately five percent of its cost to local school districts nationwide.  Since January 2008, special education financial aid has been further and significantly reduced for most districts statewide based on the new state funding formula that reduces a district’s special education aid calculation to the extent that its classification rate is above the state average.  In addition, wealthy districts have been losing entitlement aid for at-risk children, particularly special education as these and other categorical financial aid funds are now subjected to the formula’s wealth-equalizing local share calculation.

All of this comes at a time when the costs for special education are skyrocketing.  Increased costs for mandated preschool programs including intensive services for autistic students and lower special education student to teacher ratios are a major part of the problem.  But more importantly there are also increasing numbers of costly out-of-district placements as well as parental lawsuits against public school districts for the purpose of obtaining private school placements for their children at the public’s expense.

New Jersey has the highest proportion of special education students in out-of-district placements as well as the fourth highest classification rate for special education eligibility in the country.  Many of New Jersey’s school districts find that out-of-district placements can consume as much as 50% of the special education budget despite covering approximately ten percent of special education enrollment.  The students placed in out-of-district schools tend to be the most expensive because they are usually the ones most in need of special education programs and services.  Depending on the student’s disability, the annual cost of sending a student to an out-of-district private school can range from roughly $70,000 to over $250,000 especially for the most educationally and physically challenged students.

The legal costs arising from parental special education-based law suits are another major expense for schools.  As parents have become more knowledgeable about what constitutes special education programs and services, they have increased their demands to have their children receive not only more intensive services as well as increasing their children’s classification but also more placements in private schools which have resulted in more parents suing school districts for these additional benefits. 

New Jersey’s legal system operates according to a fee shifting principle in which a school district losing in an administrative court not only must pay all of the judgment costs but also all of the plaintiff’s legal costs including those for their attorneys and expert witnesses regardless of the length of the trial.  Litigation for special education proceedings often takes longer than civil law suits; increasing both legal fees and court costs.  There is the additional cost resulting from the amount of time required of teachers, child study teams, and administrators to appear in court rather than in school.  While school districts do settle a number of cases rather than run the risk of potentially more expensive outcomes, these settlements fuel the cost of providing special education.  Holding New Jersey school districts harmless from such law suits could be another way in which to enable school districts to allocate more of their scarce resources to student instruction.

The State of New Jersey requires special education programs for children with educational disabilities ages three to five, particularly autistic children.  While the only difference for preschool aged children is the state requirement to have a speech pathologist on the child study team, the same IEP, evaluation, eligibility, due process, and least restrictive environment requirements apply for all special education students regardless of age.  These mandated pre-school programs put an additional expense burden on local school districts as long as the mandates continue to come without the requisite funding from the state. 

The special education students to teacher ratios are set by the State of New Jersey and they are, necessarily, lower than the student to teacher ratios for regular students.  These staffing ratios are based primarily on the student’s IEP, classification, and intensity of services required.  The student to teacher ratio for a class for children with the lowest level of disabilities having one teacher has a maximum of eight while the maximum is twelve for a class with one teacher and one aid.  Although ratios usually range from four to seven depending on the severity of the student’s disability, class sizes exceeding six students require two aids in addition to the teacher.

Classes for children with autism and other profound cognitive disabilities are limited to a ratio of three to one.  While providing a good education for students with special needs, without the requisite state funding for these mandated levels, the higher costs of such low student to teacher ratios are often offset by higher student to teacher ratios for regular education.  Because smaller class sizes have been shown to improve learning for all students, the under-funded state mandates for special education can have a deleterious effect on regular student education.

When the State of New Jersey requires its public schools to pay for an ever increasing proportion of special education costs through its under funded mandates, the state is not only forcing property taxes to increase but also pressuring districts to find the missing funds by reducing the regular education budget.  Such forced cuts to the regular education budget may cause school districts to reduce the number of regular education teachers which would result in much larger class sizes for regular education students.  Larger class sizes have been shown to lead to lower test scores which make it more difficult for students to achieve adequate yearly progress (AYP) as required by NCLB.  As a result, school districts are much more likely to be subjected to many of NCLB’s more stringent financial penalties.  This further reduces the financial resources available to support quality education. 

Unless the people of New Jersey wish to have not only higher property taxes but also a downward spiral in the quality of their public education, then the State of New Jersey should pay the full costs of its mandated school programs and services particularly special education.  If all of New Jersey’s special education mandates were fully funded, the quality of the education of all of New Jersey’s public school students, both regular and special, would be the greatest beneficiary. 

Conclusion   The consequences of centralizing most of the control over the allocation of a school district’s financial and human resources at the state level gives rise to many unintended obstacles for local school districts.  Chief among them is the contradictory challenge of trying to hold local school districts accountable to standards made remotely at the state level that do not reflect and often conflict with unique local educational requirements and priorities.  As a result, when the state imposes a one-size-fits-all approach to local school district resource allocation, funds tend not to be used as efficiently as they could be under local control.  School systems are more accountable when decision making over financial and human resources is made at the district level. 

A local school district can improve student and school performance best when the district is empowered to allocate its financial and human resources according to its educational plan rather than being required to follow state directives.  The school district would have all the tools it would need to hold its schools and students accountable because it could make real time decisions based on specific measurable performance goals for each school and student.  The school district is the most qualified to continually calibrate local performance goals because only the school district can combine a keen understanding of local educational necessities with the timely and specific assessment of individual school and student achievement.  State control is too remote which causes not only inappropriate delays but also decisions that tend to be inconsistent with the district’s educational plan.  

In response to the shortcomings of the state dominated school system, Glen Ridge needs to adopt a new model for the control structure of its local school system that is largely free of state domination.  Because a local school district’s control structure affects how all of the school system’s stakeholders combine to produce a quality education, Glen Ridge needs the most appropriate control structure that will provide the highest level of accountability.  As a result, Glen Ridge might consider adopting a control structure that provides for maximum autonomy and self-governance. 

What matters most in terms of maximizing autonomy and self-governance is that Glen Ridge employs the control structure that fosters the greatest public support for the maximum public funding of its autonomous public schools.  Glen Ridge would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on its educational investment if it became an autonomous self-governing school district by opting out of the state system. 

References

Fix, M. & Kenyon, D. A., (1990). Coping with Mandates:  What are the Alternatives? Washington, D.C.:  The Urban Institute Press. 

Maxwell, L.A., (2010). N.J. Property Tax Cap Sparks Funding Concerns. Education Week, 29(36). Retrieved from http://www.edweek.org/ew/articles/2010/07/12/.

Plank, D. N. & Smith, B., (2008). Autonomous Schools:  Theory, Evidence and Policy in The Handbook of Research in Education Finance and Policy, Ladd, H. F., & Fiske, E. B., (Editors) (402-424). New York, New York:  Routledge Taylor & Francis Group. 

Read, P., (2010, July 4).  Glen Ridge Considers Big Change to Schools. The Star Ledger, pp. 1, 4.

Tiebout, C. M., (1956). A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, 416-424.

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TELs take their Toll on Education

Tuesday, June 29th, 2010

Tax and Expenditure Limits (TEL)

The major question confronting New Jersey’s educational system is most likely whether the state should implement a 2.5% cap on local public school districts’ annual operating budgets which is otherwise known as a tax and expenditure limit (TEL.) This question seems to arise from the most compelling issue facing public office holders, legislators, and policy makers as well as taxpayers statewide which is how to limit the amount and growth rate of New Jersey’s taxes especially its property taxes.  Governor Christie’s answer is to implement a 2.5% TEL on local property taxes and expenditures similar to Massachusetts’ Proposition 2.5 or California’s Proposition 13.

Why should taxpayers allow the passage of legislation that would enable the state of New Jersey to limit a local school district’s ability to determine the amount of property taxes it levies as well as its level of expenditures?  Voters currently have more control over their local school district’s property taxes than they have over any other form of taxation whether the tax is levied by their municipal, county, state or federal government.  Why then should the state be able to set an arbitrary one-size-fits-all limit on the amount of property taxes local school districts can levy when property taxes are set according to local needs and priorities?  Such a one-size-fits-all cap will fit no district because districts are unique.

Taxpayers can vote on their local school district budgets in all but a handful of towns but no taxpayer is able to vote on the budget of his/her municipal or county government despite the fact that these two levels of government are funded almost entirely by local property taxes.  Because taxpayers can vote on school budgets, they can hold their school systems accountable but without a corresponding vote on municipal and particularly county government budgets taxpayers can not hold these levels of government accountable.  This is one of the chief reasons why county government costs New Jersey’s taxpayers more than $6.1 billion annually! 

All Local School District Property Taxes are Invested in the Host Municipality

All of a local school district’s property taxes remain and are invested in the schools of the host municipality so that the taxpayers benefit fully from the property taxes levied.  County property taxes differ sharply from those levied to fund our public schools because they are redistributed to support an unaccountable, wasteful, and duplicative layer of government.  This leads many researchers, most notably O’Sullivan, Sexton, and Sheffrin (2007,) to conclude that “local governments” and public school districts “must have access to a revenue source that they can adjust to meet varying demands.” 

Funding our public schools through local property taxes is essential because county government siphons away crucial local property taxes and state governmental financial aid is unreliable.  O’Sullivan, Sexton, and Sheffrin (2007) demonstrate that “the property tax can be administered by local government” and public school districts “with relatively little fear of its tax base migrating to other jurisdictions, thus providing local governments with the needed fiscal autonomy. The property tax has been the source of economic independence of local units of government” and local public school districts for generations. 

Unfunded State and Federal Mandates Cause TELs to Cut Regular Education

There are only two kinds of programs and services offered by our public schools:  those that are mandate protected and those that are non-mandate protected.  Because school districts are forced by the state and federal governments to fully fund the unfunded portion of their mandates, public school districts must choose between cutting non-mandate protected programs and services or raising property taxes.  School districts have no control over many of their major cost drivers such as the costs resulting from increases in unfunded mandates, enrollment, utilities, transportation, health insurance, legal actions, and the number as well as the mix of special education students.  When a school district that is limited by a 2.5% TEL experiences increases in these uncontrollable expenses, it must cut expenses in other areas to stay within the cap. 

One major fallacy in the cap advocacy argument is that local school districts are required to fund the unfunded portion of all state and federal mandates over which local school districts have no control.  State and federal mandates drive the overwhelming majority of local school district expenditures and, hence, property tax levies.  Property taxes could be slashed nationwide especially those funding our public schools and there would be no need for TELs, if the state and federal governments would just fully fund all of their mandates! 

A TEL may force a typical school district to increase class sizes so as to minimize its expenditures for teachers and aides.  But this will lead to lower test scores and likely No Child Left Behind (NCLB) operational and financial penalties.  A TEL, therefore, gives a school district only one course of action:  hold property tax increases within the state imposed percentage point limit while simultaneously cutting non-mandate protected programs and services but fully funding the unfunded portion of all mandates.  That is, cutting regular education. 

There is No Such Thing as a Free Lunch

Governor Christie along with the proponents of TELs purport that school districts will be become more financially responsible because of the state imposed limit on their expenditures and tax levies.  TEL proponents argue that if school districts are left to their own devices, they would continue to spend and tax at ever increasing rates while the TEL’s implementation will force school districts to hold down expenditures and property taxes.  TEL proponents seem to expect units of local government and our public schools to provide the same level of public goods and services if not a higher quality of education but at a lower price. 

TEL proponents and policy makers disaffected by the seemingly ever increasing size and cost of public education assert that the TEL will lower property taxes and, therefore, make the provision of public education more efficient rather than cutting essential educational programs and services.  Although most people realize there is no such thing as a “free lunch,” TEL advocates claim that school systems could provide at least the same quantity of education without lowering the quality of education because the TEL would compel districts to eliminate waste.  But no TEL can guarantee that any school district will not cut non-mandate protected programs and services or regular education before eliminating any waste or inefficiency.  

The passage of the major TEL’s, Proposition 2.5 in 1980 in Massachusetts and Proposition 13 in 1978 in California, shows how voters frustrated with state governmental inefficiency, waste, and overspending resorted to a cap which they perceived as the only means available to remedy their situation.  Voters in both states believed prior to the vote that the imposition of the TEL would substantially eliminate inefficiency, waste, and overspending but it would do so without lowering the quality or quantity of public goods and services such as education.  But once the TELs were imposed in Massachusetts and California, however, taxpayers acted “consistent with the (O’Sullivan, 2001) regret theory of tax limits” or buyers’ remorse. 

The history of TELs, budgetary caps or even the wage and price controls imposed under former President Nixon demonstrates that placing arbitrary limits on revenues and expenditures results in a corresponding reduction in the quantity and quality of the public programs and services such as education provided by the TEL affected entity.  Indeed, Downes and Figlio (2008) describe the TEL proponents who assert that “constitutional constraints like Proposition 13 could reduce the size of local governments and, at the same time, have little or no effect on the quality of public services provided” as seeking a “free lunch.” 

Apples versus Oranges:  Massachusetts’ Proposition 2.5 versus Governor Christie’s 2.5% Cap

Contrary to Governor Christie’s 2.5% cap proposal, Massachusetts imposed its 2.5% TEL during an economic boom and provided significant amounts of incremental state aid to school districts to make up for the loss of local property tax revenue.  But New Jersey is mired in a deep recession with seemingly ever increasing state budget deficits which have already resulted in severe cuts to state educational aid.  Because state aid is declining and no additional state financial aid is forthcoming to offset lost property tax revenues, school districts would be forced to cut non-mandate protected educational programs and services much more deeply than was experienced in Massachusetts. 

State aid is unreliable.  Massachusetts educational aid fluctuates while California has not complied with Proposition 98’s constitutional guarantees to provide state aid to local school districts to make up for the property tax revenues lost under Proposition 13.  As a result of Proposition 13, California’s per pupil spending fell precipitously to an average of approximately $7,500 per pupil as compared to an average of $47,000 per inmate at its state penal institutions while its average class sizes became the second highest in the nation.  Also, Massachusetts imposed its 2.5% cap during a period of declining student enrollment while New Jersey’s enrollment levels continue to increase.  Hence, Massachusetts’ lower school district expenditures were largely offset by a much lower level of student enrollment which helped to greatly minimize the cuts to educational programs and services which would not be the case in New Jersey. 

Taxpayers’ Expectations for TELs

New Jersey taxpayers generally seem to believe that much greater accountability, efficiency, and transparency at all levels of government will lead to lower spending and, hence, lower taxes.  But voters do not want fewer public goods and services; just a much lower price for the public goods and services that they enjoy today.  Government at all levels tends to overtax, taxpayers contend, because governments waste financial resources and are inefficient.  Governor Christie’s 2.5% TEL, therefore, seems to be a tempting way to accomplish these goals.  

In addition, Governor Christie’s 2.5% TEL lacks the flexibility for state and local governments as well as our public schools to respond appropriately to unforeseen circumstances or a declining economy.  For instance, public schools tend to experience an increase of students transferring from private schools when the economy declines and parents are more challenged to find ways to pay for tuition in addition to property taxes.  Governor Christie’s 2.5% cap proposal, therefore, can not guarantee that any level of government will operate at peak efficiency before cutting the public goods and services including education that they provide. 

Governor Christie’s 2.5% cap proposal would enable the state to determine the budgetary and property tax policies of local governments and school districts through its state imposed limitations.  If enacted, the 2.5% cap would lead, therefore, to increased centralization of educational funding along with its concomitant increased control over local school districts’ operations.  The 2.5% TEL would lead to limitations on local school district expenditures and property tax levies which in turn would lower the quality of public education. 

TELs’ Impact on Education and Student Achievement

TELs not only limit the amount of property tax revenue available to school districts but also and more importantly adversely impact how a typical school district provides educational programs and services.  Downes and Figlio’s (1999a) findings explain how “the imposition of tax and expenditure limits results in the long-run reductions in the performance of public school students.”  Students attending schools in TEL affected districts (Figlio, 1997; Downes, Dye, & McGuire, 1998; Downes & Figlio, 1999b) not only experienced much larger class sizes but also scored significantly lower on mathematics, language arts, and social studies standardized tests.  When it comes to education, therefore, TELs lead to a reduction in the quantity as well as the quality of education, an increase in class sizes, and a leveling down of student achievement. 

TELs seem to adversely impact student achievement disproportionately to the amount of property tax revenues lost or expenditures cut.  Downes and Figlio (2008) conclude that TELs “lead to reductions in student outcomes that are far larger than might be expected given the changes in spending.”  Possible explanations for this result include disproportionate cuts in instructional rather than administrative expenditures, higher student-teacher ratios, and a shift especially of the more talented students to private K to 12 schools.  Because teacher salaries and benefits generally account for more than approximately 70% of a typical school district’s budget, it stands to reason that these expenses would be cut more severely.  Reductions of teachers under the constraints of a TEL often lead to larger class sizes which when combined with the loss of regular educational programs and services tends to result in the transfer of many students especially the more gifted ones to private schools (Downes & Figlio, 2008.) 

Conclusion

While Governor Christie aims to limit local public school districts’ property tax revenues and expenditures to no more than a 2.5% annual increase, this cap will most likely lead to a leveling-down of the quality of public education.  Indeed, our nation’s two major TELs, California’s Proposition 13 and particularly Massachusetts’ Proposition 2.5 on which Governor Christie’s proposal is modeled, demonstrate the downside of such caps.  These TELs (Fishel, 2001) destroyed the connection among local control, property taxes, school district budgets, educational quality, and taxpayer support because taxpayers essentially lost their ability to hold local school districts accountable to their goal of maximizing their property values. 

The fundamental problem with trying to hold all of New Jersey’s public school districts’ property tax revenues and expenditures to annual increases not exceeding 2.5% is that it leads to a one-size-fits-all approach for education but one that fits no district.  Baker, Green and Richards (2008) explain, “The local property tax empowers local voters to express what they want for their local public schools.”  But when the artificial budgetary constraints of a TEL are imposed by the state, as Baker, Green and Richards (2008) conclude, “the political advantages of empowering local citizens and promoting competition and sorting among jurisdictions is lost.”  Thus, the TEL leads to school district budgets that are incongruous with the needs and priorities of local school districts. 

Governor Christie’s proposed reduction in local school district control over the levying of property taxes and determining the operating budget decreases local school district accountability and adversely affects public school quality.  Because reductions of property tax revenues through the 2.5% TEL will reduce the level of local investment in the school district; the stake held by local taxpayers is similarly reduced.  Fischel (2001) explains this using the motives of taxpayers without children in the public schools, “At the local level, they are willing to support, or at least not oppose, high levels of spending because better schools add to the value of their homes.”  Through the imposition of a TEL, “At the state level, voters without children do not perceive such an offsetting benefit to their taxes.”  Having a lowered sense of ownership in their schools, taxpayers become more complacent without local control over their school district’s property taxes.  This causes a corresponding reduction in the level of accountability required by the stakeholders and, therefore, the quality of their public schools’ education declines.

Taxpayers choose the local public school district that best meets their needs and one that will contribute to their property values by exercising true Tieboutian choice (Tiebout, 1956) and voting with their feet.  But taxpayers vote not only with their feet but also on school district operating budgets, capital projects, and board of education members.  Through the exercise of these votes, taxpayers control the quality of education provided by their local schools as well as the level of property taxes levied.  Their collective decisions lead to a Pareto efficient allocation of local public education. 

But a TEL, such as Governor Christie’s 2.5% cap proposal, would destroy the Tieboutian equilibrium (Tiebout, 1956) enjoyed by local public school districts.  It would do so by artificially limiting budgets below the levels congruent with the needs and priorities of local school districts.  Because the quality of a taxpayer’s local public schools as well as his/her property taxes are capitalized in the value of their home, the consequence of Governor Christie’s 2.5% TEL would be to lower educational quality and, therefore, property values.  

References

Baker, B. D., Green, P., & Richards, C. E., (2008). Financing Education Systems, Upper Saddle River, New Jersey:  Pearson Education, Inc. 

Downes, T. A. & Figlio, D. N., (1999a). Do Tax and Expenditure Limits Provide a Free Lunch? Evidence on the Link Between Limits and Public Sector Service Quality. National Tax Journal, 52, 113-128. 

Downes, T. A. & Figlio, D. N., (1999b). Economic Inequality and the Provision of Schooling, Federal Reserve Bank of New York, Economic Policy Review, 5, 99-110.   

Downes, T. A. & Figlio, D. N., (2008). Tax and Expenditure Limits, School Finance and School Quality in The Handbook of Research in Education Finance and Policy, Ladd, H. F., & Fiske, E. B., (Editors) (373-388).  New York, New York:  Routledge Taylor & Francis Group. 

Downes, T. A., Dye, R. F., & McGuire, T. J., (1998). Do Limits Matter? Evidence on the Effects of Tax Limitations on Student Performance, The Journal of Urban Economics, 43, 401-417.

Figlio, D. N., (1997). Did the “Tax Revolt” Reduce School Performance?, The Journal of Public Economics, 65, 245-269.

Fischel, W., (2001). The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies, Cambridge, Massachusetts: Harvard University Press.  

O’Sullivan, A., (2001). Limits on Local Property Taxation:  The United States Experience in Property Taxation and Local Government Finance, Oates, W. E., (Editor) (177-200). Cambridge, Massachusetts:  Lincoln Institute of Land Policy.

O’Sullivan, A., Sexton, T. A., & Sheffrin, S. M., (2007). Property Taxes and Tax Revolts:  The Legacy of Proposition 13. Cambridge, Massachusetts:  Cambridge University Press. 

Tiebout, C. M., (1956). A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, 416-424.

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Accountability: An Argument for Local School Districts

Sunday, January 24th, 2010

During the past 40 years, the locus of school district control has gradually shifted from a tradition of home rule or local control to state control.  Control over the decisions governing such areas as funding, budgeting, human resources, standards, capital projects, operations, curriculum and assessment that were once the sole province of local boards of education has been superseded largely by the state.  Increased state control has reversed the traditional operating philosophy of school systems that was based on limiting the power of any centralized remote governmental entity could exert over local school districts.  Historically, Americans wanted school decision making to be as close as possible to those citizens who were most affected.  School district residents realized that by being able to control what and how their children were taught as well as how and who administered and governed their schools plus how their taxes were used that they were able to enjoy the maximum of democratic accountability. 

 

The rising power of the state (Fusarelli and Cooper, 2009) grew from the states’ increasing domination of school finance and, therefore, policy making because of the strings the states attached to funding.  Legal challenges to funding inequities and disparities led to court decisions such as Serrano v. Priest establishing financial neutrality as the basis for school funding.  States remedied the disparities among districts with the infusion of incremental state funds and regulation.  Subsequent rulings focused on adequacy and required state governments to provide resources to disadvantaged districts such that the provision of education adequately met their constitutional requirements.  New Jersey’s state constitution was deemed to go even further because of its provisions guaranteeing a thorough and efficient education or a “T&E” education as it became known and manifested in the Abbott v. Burke court decision. 

 

The No Child Left Behind Act (NCLB) accelerated the trend toward adequacy with its national educational standards. Under NCLB, the federal government holds states and school districts accountable for improving performance.  As a result, states are forced to define an adequate level of student and school achievement as well as the level of financial resources that would be constitutionally adequate.  NCLB, therefore, marked a pronounced policy making shift to an accountability model within which the allocation of school district financial and human resources was made largely at the state rather than the local level largely according to federal guidelines. 

 

But the consequences of centralizing most of the control over the allocation of a school district’s financial and human resources at the state level gave rise to many unintended obstacles to improving accountability. Chief among them was the contradictory challenge of trying to hold local school districts accountable to standards made remotely at the state level that did not reflect and often conflicted with unique local educational requirements and priorities. As a result, when states imposed a one-size-fits-all approach to local school district resource allocation, state funds were not used as efficiently as they could have been.  School systems would be more accountable if decision making over financial and human resources was made at the local district level. 

 

A local school district can improve student and school performance best when the district is empowered to allocate its financial and human resources according to its educational plan rather than being required to follow one-size-fits-all state directives. The local school district would have all the tools it would need to hold schools and students accountable because it could make real time decisions based on specific measurable performance goals for each school and student.  The local school district is the most qualified to continually calibrate local performance goals because only the local school district can combine a keen understanding of local educational necessities with the timely and specific assessment of individual school and student achievement. State control is too remote which causes not only inappropriate delays but also decisions that tend to be inconsistent with the district’s unique educational plan.  

 

State control especially over a district’s financial and human resource use creates barriers for achieving accountability. When a local school district is limited by the state’s one-size-fits-all approach, it is prevented from developing more innovative approaches to accountability.  In order for local school districts to innovate, they must be empowered to deploy more effective approaches for increasing accountability that are best suited to local needs. Improving accountability, therefore, requires the adaptation of new models for the control structure of local public schools that are largely free of state control. 

 

In response to the shortcomings of state dominated local school systems, communities need greater local control over their schools so that they can benefit from increased accountability.  Because a local school district’s control structure affects how all of the school system’s stakeholders combine to produce a quality education, school districts nationwide are searching for the most appropriate local control structure model that will provide the highest level of accountability.  As a result, local school districts are increasingly adapting a local control structure that provides the maximum accountability possible according to their unique characteristics.  What matters most in terms of maximizing accountability is that a school district employs the model that fosters the greatest public support for the maximum public funding of its public schools.  

 

 

References: 

Fusarelli, B. C., & Cooper, B. S., Editors.  (2009). The Rising State: How State Power is Transforming our Nation’s Schools, first edition, SUNY Press. 

 

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Posted in accountability, autonomy of schools, bigger is not better, Bruce Cooper, Capitalization of property taxes, Capitalization of school district quality, Charles Tiebout, county run school districts, deregulation of schools, education, educational leadership, home rule, local schools, mandates, New Jersey, New Jersey Property taxes, No Child Left Behind (NCLB) Act, No Child Left Behind Act, property taxes, property values, public education, public finance, school finance, school funding, school governance, school reform, state financial aid, state mandates | No Comments »

Smaller is Better when it comes to Running Our Schools

Thursday, January 29th, 2009

Since the publication of A Nation at Risk, there have been numerous efforts to try to find the right mixture of ways to improve student achievement while lowering the cost of education involving five major policy making levels (i.e., federal, state, district, school and classroom/student.)  Many of these efforts have looked at the decision making process and how politics impacts that process in terms of the educational policies that result.  Using test scores as a measure of student achievement and local property taxes as a measure of the cost of education, a number of states as well as the federal government have advocated through various means for larger class sizes as well as for school consolidations.  Federal and many state governments have also advocated for the centralization of policy making at their respective levels as ways in which not only to improve student achievement but also to lower the cost of providing education. 

 

These federal and state level stakeholders whose motto might conceivably be described as “bigger is better” seem to base their belief on presumed economies-of-scale that will lead to lower operating costs and thereby lower property taxes as well as to perhaps improving test scores through the application of nationally determined standards at the state level.  One of their arguments seems to be based on the belief that having larger class sizes requires fewer teachers which in turn lowers operating costs.  In addition, larger class sizes mean fewer class rooms would be used thereby minimizing the demand for new or expanded school facilities.  Another argument advocates for school district consolidation as a way in which to achieve improved operating efficiency primarily through presumed lower administrative costs. 

 

National standards such as those imposed by the No Child Left Behind Act (NCLB) with its mandated tests are also seen as a way in which to drive the formulation of educational policy at the federal and state levels while the federal level includes an aggregation of state data.  Such national educational policy is believed to help “raise the bar” for student performance.  While NCLB is mandated by the federal government, the states force their school districts to comply with its regulations.  The NCLB test scores are used to determine adequate yearly progress (AYP) for students, schools and districts alike. 

 

But the combination of federally-determined educational policy implemented through state governments and departments of education has often resulted in decisions seemingly made more in favor of special interest groups than local schools as well as in higher costs.  Consolidating local school districts into countywide or extremely large regional districts removes decision making authority from those levels most affected by educational policy decisions:  the individual student, school and district.  It also concentrates policy formulation and decision making at centralized levels where special interests have greater leverage on the policy makers and, as a result, greater control of the policy outcomes.  Moreover, consolidation of local school districts into county level districts while fewer in number with supposedly less combined administrative expense has often resulted in higher state-wide total administrative costs due to the lack of accountability, excessive political patronage hiring at the county level and reduced local taxpayer input. 

 

Because the federal and state levels are too distant from where education actually takes place and are more easily influenced by special interest groups, accountability declines at these levels where it is needed most.  Consolidation of local school districts into county level districts also tends to result in more of a traditional military-type command-and-control decision making model.  In this Theory X model the federal level develops the strategy for policy implementation, the state governments and their departments of education translate the strategy into tactics for deployment, and the school districts are responsible for making sure that the federal and state mandates are implemented accordingly at the individual school and student level. 

 

Because countywide or regional school district consolidations lead to increased education costs, lower student achievement especially as measured by test scores and less accountability such combinations should be prevented.  Eliminating units of consolidation such as county level departments of education will not only remove an unnecessary layer of bureaucracy and cut administrative costs but also improve accountability particularly to local taxpayers as well as to parents.  Moreover, without county level departments of education or large regionalized school districts overburdening our educational systems, our schools will be better able to provide quality instruction. 

 

The majority of research on class size has demonstrated that when qualified teachers teach students in smaller class sizes, the students not only learn more but also these students retain this advantage over other students who attend larger classes.  One leading study is the longitudinal class size reduction initiative conducted over a number of years in Tennessee called the Student Teacher Achievement Ratio (STAR) project.  The STAR project demonstrated that students, who were enrolled in small classes beginning with kindergarten and continuing through third grade, were significantly more likely than their counterparts who attended larger classes, to: 

  • Demonstrate better reading and mathematics skills
  • Complete more advanced mathematics, science and English courses
  • Complete high school 
  • Graduate high school on time 
  • Graduate with honors. 

 

The STAR project also found that even after the students returned to larger classes in the fourth through eighth grades those students who attended smaller class sizes for their first three or four years maintained an advantage over students who had attended the larger classes from kindergarten through third grade.  The findings of the STAR project are echoed by other projects such as Wisconsin’s Student Achievement Guarantee in Education (SAGE) project, which was a statewide initiative in Wisconsin that increased student achievement, and Indiana’s Project Prime Time.  In addition, the research demonstrates that having a smaller class size not only increases student achievement but also helps to minimize the achievement gap among different groups of students particularly among majority and minority students.  

 

“Smaller is better” and it should not be surprising that research supports this.  Having fewer students in the classroom enables the teacher to dedicate more time to each child.  Consequently, students pay more attention to class work and participate more in academics.  Because the students are more involved with their studies they learn more and behave better.  Is it any wonder then that test scores are significantly higher for students who attend small classes?   Based upon the findings of the STAR project and other studies there seems to be little doubt that students taught in small classes enjoy significant and lasting educational advantages. 

 

The greater is the shift to larger class sizes nationwide, the more teachers will probably be let go.  However, larger class sizes often lead to lower test scores and make it more difficult for students, schools and districts to achieve adequate yearly progress (AYP) as required by NCLB.  As a result, school districts are likely to be subjected to many of the more stringent penalties of NCLB.  This will further reduce the financial resources available to support quality education and contribute to a downward spiral of education nationwide.    

 

Concentrating decision making at the district level rather than at the county, state or federal level will increase accountability not only by focusing more resources on those most affected by education policy, the students, but also by enabling those who are the most intimately involved in providing education, the school districts, to provide improved instruction.  It is the districts that not only are closest to the school systems and students but also have the necessary expertise to most effectively decide how best to provide a quality education. 

 

But the greatest reduction of our state’s property tax burden would be to eliminate the unnecessary and overly expensive layer of county government (i.e., Freeholders) as the majority of states have already done.  For example, Connecticut had a system similar to the one in New Jersey in which Connecticut not only had the Freeholder level of government but also had the counties involved in the running of local schools as New Jersey does through such legislation as A4S which created the Office of the Executive County Superintendent.  Because those associated with both levels of county government, Freeholder government as well as the County Department of Education, were not only too far removed from local taxpayers but also too expensive, Connecticut’s solution to cutting property taxes while improving the resources available for education was to eliminate county government. 

 

However, there is perhaps an even greater irony within debate over how best to improve student achievement while minimizing property taxes.  The dilemma facing our schools is that while districts must comply with the requirements of unfunded and under funded county, state and federal mandates, too many school districts are forced to spend much more to meet these requirements than they receive in combined financial aid from all county, state and federal governmental sources.  

 

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Posted in class size, county government, education, executive county superintendent, home rule, IDEA, independent schools, mandates, New Jersey, No Child Left Behind Act, property taxes, ratables, SAGE, SAT, school finance, school funding, school governance, school law, school reform, special education, STAR, state mandates, student teacher ratios, tax base | No Comments »

Creating Self-Governing Independent Public Schools

Sunday, January 11th, 2009

Our public schools must be given the choice of becoming self-governing so that they can be free to provide a top quality educational system.  A self-governing public school district is free of state control as well as federal intervention.  Therefore, it would be independent of the state system but remain a public school district serving the same local community rather than a charter school or a private school or a school run in full or in part by a private company.  While public school districts could elect to stay within the state system and continue to abide by all mandates, all districts should be given the opportunity to legally opt out.  The ability to opt for self-governance would be supported by legislation.  

 

Self-governance would provide public schools with the authority to improve education consistent with the priorities of their local school communities as well as the flexibility to innovate rather than be forced to march in lock-step to the state’s one size fits all mandates.  Public schools choosing to opt out would be independent public schools free of all state mandates except for perhaps reporting test results but they would also forgo all state aid.  Opting out of the state system would restore decision-making to the local school district level.  Because decisions guiding the operations of self-governing schools would no longer be made largely at the county or state level, parents, teachers, school administrators, boards of education, and local taxpayers would be better able to shape the quality of education which their students receive in their local schools. 

 

A public school district would become self-governing when a simple majority of the registered district voters who voted in a district-wide vote approved of the change.  While these votes would comply with the laws governing ballot procedures, campaigns and elections, they would be held in April so as to provide sufficient lead time to convert to self-governance by July 1, the beginning of the new fiscal year.  Once the district community voted to authorize the school district to become self-governing, it would be governed solely by its board of education.  Board of education members would be chosen from among the registered voters in the school district.  Municipal, county, state and federal governments would no longer play any role in the governance or management of self-governing school districts.  Therefore, boards of school estimate would no longer have any role vis-à-vis appointed boards of education. 

 

Local property tax levies rather than tuition would continue to be the primary source of funding for self-governing public school districts.  Still, these districts would be eligible to receive appropriate state or federal grants.  The annual operating budget and debt authorizations for a self-governing public school district would be decided by its board of education rather than be subject to district-wide public votes.  Indeed, this would be consistent with the fact that the annual operating budgets of municipal, county, state and federal governments are not subject to approval through a vote of their respective electorates.   

 

Becoming self-governing would enable a school district to operate more efficiently and cost-effectively through the exercise of many new choices.  A self-governing school district would be free to choose whether to have unions.  If it chooses to be union-free, it would be no longer subject to such legislative restrictions as the New Jersey Employer-Employee Relations Act which is commonly referred to as the “PERC law” (Strassman, Vogt and Wary, 1991.)  If the district elected not to have unions, then all union contracts such as those with its teachers would be dissolved and renegotiated once the district became self-governing. 

 

Free of outside governmental intrusion such as the No Child Left Behind (NCLB) Act, the district also would be free to determine its teacher licensing requirements including training, education and experience.  Because the district would no longer be subject to the New Jersey Core Curriculum Content Standards (CCCS,) it would be free to develop and determine its own curriculum.  The district also would be free to determine whether or not to offer special education because the Individuals with Disabilities in Education Act (IDEA) and state special education requirements would no longer apply.  If the district chooses to provide special education, then it would have sole discretion over what level and kinds of special education it offered.  

 

A self-governing public school district would be held harmless from frivolous lawsuits through its enabling legislation.  This would help to greatly minimize escalating legal expenses.  Law suits filed against the district would be heard first by one of several newly created arbitration panels.  Arbitration panel members would be appointed by a newly created state-wide association of self-governing public school districts. 

 

By changing to self-governance, a school district would be able to cut unnecessary expenses through the elimination of special education-based lawsuits with the ever increasing costs arising from such litigation.  As parents have become more knowledgeable about what constitutes special education programs and services, they have increased their demands to have their children receive not only more intensive services as well as increasing their children’s classification but also more placements in private schools which have resulted in more parents suing school districts for these additional benefits.  New Jersey’s legal system, however, operates according to a fee shifting principle in which a school district losing in an administrative court not only must pay all of the judgment costs but also all of the plaintiff’s legal costs including those for their attorneys and expert witnesses regardless of the length of the trial. 

 

Litigation for special education proceedings often takes longer than civil law suits which increase legal fees and court costs.  In addition, there is the cost resulting from the amount of time required of teachers, child study teams and administrators to appear in court rather than in school.  While school districts do settle a number of cases rather than run the risk of potentially more expensive outcomes, these settlements fuel the cost of providing special education.  Holding New Jersey school districts harmless from such law suits would be another way in which to enable school districts to allocate more of their scarce resources to student instruction.

 

The ever increasing cost of unfunded and under funded mandates is not only forcing school districts to cut regular education programs and, therefore, leveling down student achievement but also increasing property taxes.  But New Jersey’s public school districts can no longer afford to pay for these unfunded and under funded mandates because most school districts are forced to spend disproportionately more to meet the requirements of these mandates than these districts receive in total state and federal financial aid.  If local school districts opted for self-governance, therefore, they would eliminate the excessive financial and administrative burdens imposed by the county, state and federal governments. 

 

Opting for self-governance would increase the financial resources available for the classroom because it would be much more cost effective for local school districts to provide educational programs and services without the administrative burden of state requirements.  The funds that are currently used for regulatory compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.  Changing our state’s educational system in this way would not only improve the quality of education but also increase property taxpayers’ return on investment.  But Trenton continues to blame school districts for property tax increases rather than take responsibility for their role in keeping property taxes high.  Instead of fully funding their mandates to reduce the property tax burden which drives up the cost of public education, Trenton focuses largely on constricting school district funding, budgets, operations and the independence of local school districts.   

 

The state’s flawed approach is demonstrated in the new funding formula as contained in the New Jersey School Funding Reform Act (SFRA) of 2008 as well as its predecessor the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA,) which caused higher property taxes and cuts in regular education.  Dr. Reock, Rutgers University Professor Emeritus, studied the financial impact on school districts of the state’s failure not only to not fully enact CEIFA but also to freeze most CEIFA funding beginning with the 2002-03 school year and reached a profound conclusion (Reock, 2007.) 

 

Based on his study (Sciarra, 2008), Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state.”  Instead of fully funding the CEIFA school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs as well as state and federal unfunded mandates.  The shortfall was hardest on those districts that were most dependent upon state aid.  During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of $1,627 in non-Abbott DFG A and B districts, $758 in DFG C through H districts, $386 DFG I and J districts, and $188 in Abbott districts. 

 

The impact of the CEIFA funding shortfall was minimized on the Abbott districts largely due to their “parity-plus” court mandated protection.  State law forbids the budget of an Abbott district from falling below its level of the prior school year (Hu, 2006.)  Furthermore, under state law, if an Abbott district increases local property taxes without a state directive to do so, it will lose a similar amount of state aid. 

 

The CEIFA funding shortfall also caused serious imbalances between local school districts.  During the 2005-06 school year Abbott districts received approximately 58% of all state financial aid while educating only 23% of New Jersey’s K to 12 student enrollment.  This meant non-Abbott districts were educating 77% of New Jersey’s students with only 42% of state aid.  This imbalance has continued to widen under SFRA with Abbott aid increasing to approximately 60% of all state aid or $4.64 billion.  State aid reductions and the ever increasing unfunded state mandates force non-Abbott districts to balance their budgets by raising property taxes, increasing class sizes as well as cutting regular education programs and services.   

 

As part of his statement of New Jersey Supreme Court certification in support of the Plaintiffs’ opposition to the School Funding Reform Act (SFRA) of 2008, Dr. Reock concluded (Sciarra, 2008) that “the State’s failure to fund CEIFA for the past six years directly resulted in an enormous shortfall of funding in districts across New Jersey.”  He went further to state, “By 2007-08, the sixth year of the CEIFA “freeze,” the total under-funding of state aid had reached $1.326 billion annually, despite the introduction of several new, smaller aid programs.”  The result was a state-driven increase in local property taxes within non-Abbott districts to make up for the shortfall. 

 

Creating state-wide self-governing public school districts free of state control is the solution that will lead to a top quality, cost-effective educational system while Trenton continues to force local school districts to pay for its under-funded and unfunded mandates that unnecessarily increase the cost of providing education and drive up property taxes.  By forcing school districts to divert necessary resources to paying for the escalating costs of the State of New Jersey’s mandates rather than investing these scarce resources in the classroom where they are needed most, the State of New Jersey harms the quality of education.  Local school districts, therefore, would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on their educational investment if they became self-governing by opting out of the state system. 

 

 _______________________________

References

Hu, W., (2008) In New Jersey, System to help Poorest Schools Faces Criticism, New York Times, October 30, 2006. 

Reock, E. C. Jr., (2007) Paper, Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06,” Institute on Education Law and Policy, Rutgers University, Newark, http:// ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf  

Sciarra, D. G., (2008) Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the Plaintiffs’ opposition to the School Funding Reform Act of 2008, Education Law Center, Newark New Jersey, http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf

Strassman, E. R., Vogt, K. R., and Wary, C. S., (1991). The Public Employment Relations Law, Trenton, New Jersey: New Jersey School Boards Association.    

 

 

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Posted in assessment of property, county government, education, executive county superintendent, home rule, IDEA, independent schools, mandates, New Jersey, No Child Left Behind Act, property taxes, S1701, school finance, school funding, school governance, school law, school reform, special education, state mandates, tax base | 1 Comment »

New Jersey’s Under-funded Education Mandates Hurt Public Education

Wednesday, December 31st, 2008

Under-funded state special education mandates are perhaps the primary reason why the cost of public school education continues to increase at a rate higher than the rate of inflation, causing property taxes to rise disproportionately to incomes in New Jersey.  According to the Garden State Coalition of Schools (GSCS, 2008), in New Jersey “mandates drive 70% of district expenses” and of these mandates, those for special education represent the fastest growing financial challenge confronting school districts.  Furthermore, these under-funded state mandates have heightened the pressure on school districts to fund operating budgets by reducing programs and services for regular education in order to fund mandate-protected programs and services, primarily special education.

 

School districts are required by state and federal laws to provide the special education programs and services included in a student’s Individual Education Plan (IEP); therefore, special education budgets cannot be cut and the under-funded portion of special education’s costs must be made up from other budgetary sources.  To offset the increased costs of under-funded special education mandates, school districts are increasingly forced to significantly reduce programs for regular education students because property tax increases have been limited largely through other state legislation.  Under-funded state special education mandates not only have sharply increased the competition between regular and special education programs for funding within a school’s budget but also have created sharp divisions within a school’s community because they pit the parents of special and regular education students against each other in the fight for funding.

 

In 2005, New Jersey state aid covered less than one-third of state mandated special education programs and services while the federal Individuals with Disabilities in Education Act (IDEA) is funded at approximately five percent of its cost to school districts nationwide.  Since January 2008, special education financial aid has been further and significantly reduced for most districts statewide based on the new state funding formula that reduces a school district’s special education aid calculation to the extent that its classification rate is above the state average.  In addition, wealthy districts have been losing entitlement aid for at-risk children, particularly special education as these and other categorical financial aid funds are now subjected to the formula’s wealth-equalizing local share calculation. 

 

All of this comes at a time when the costs for special education are skyrocketing.  Increased costs for mandated preschool programs including intensive services for autistic students and lower special education student to teacher ratios are a major part of the problem.  But more importantly there are also increasing numbers of costly out-of-district placements as well as parental lawsuits against public school districts for the purpose of obtaining private school placements for their children at the public’s expense.  

 

New Jersey has the highest proportion of special education students in out-of-district placements as well as the fourth highest classification rate for special education eligibility in the country.  Many of New Jersey’s school districts find that out-of-district placements can consume as much as 50% of the special education budget despite covering approximately ten percent of special education enrollment.  The students placed in out-of-district schools tend to be the most expensive because they are usually the ones most in need of special education programs and services.  Depending on the student’s disability, the annual cost of sending a student to an out-of-district private school can range from roughly $70,000 to over $250,000 especially for the most educationally and physically challenged students.  

 

The legal costs arising from parental special education-based law suits are another major expense for schools.  As parents have become more knowledgeable about what constitutes special education programs and services, they have increased their demands to have their children receive not only more intensive services as well as increasing their children’s classification but also more placements in private schools which have resulted in more parents suing school districts for these additional benefits.  New Jersey’s legal system, however, operates according to a fee shifting principle in which a school district losing in an administrative court not only must pay all of the judgment costs but also all of the plaintiff’s legal costs including those for their attorneys and expert witnesses regardless of the length of the trial.  Moreover, litigation for special education proceedings often takes longer than civil law suits – increasing both legal fees and court costs.  In addition, there is the cost resulting from the amount of time required of teachers, child study teams and administrators to appear in court rather than in school.  While school districts do settle a number of cases rather than run the risk of potentially more expensive outcomes, these settlements fuel the cost of providing special education.  Holding New Jersey school districts harmless from such law suits would be another way in which to enable school districts to allocate more of their scarce resources to student instruction.

 

The State of New Jersey requires special education programs for children with educational disabilities ages three to five, particularly autistic children.  While the only difference for preschool aged children is the state requirement to have a speech pathologist on the child study team, the same IEP, evaluation, eligibility, due process and “least restrictive environment” requirements apply for all special education students regardless of age.  These mandated pre-school programs put an additional expense burden on local school districts as long as the mandates continue to come without the requisite funding from the state. 

 

The special education students to teacher ratios are set by the State of New Jersey and they are, necessarily, lower than the student to teacher ratios for regular students.  These staffing ratios are based primarily on the student’s IEP, classification, and intensity of services required.  The student to teacher ratio for a class for children with the lowest level of disabilities having one teacher has a maximum of eight while the maximum is twelve for a class with one teacher and one aid.  Although ratios usually range from four to seven depending on the severity of the student’s disability, class sizes exceeding six students require two aids in addition to the teacher.  However, classes for children with autism and other profound cognitive disabilities are limited to a ratio of three to one.  While providing a good education for students with special needs, without the requisite state funding for these mandated levels, the higher costs of such low student to teacher ratios are often offset by higher student to teacher ratios for regular education.  Because smaller class sizes have been shown to improve learning for all students, the under-funded state mandates for special education can have a deleterious effect on regular student education.

 

When the State of New Jersey requires its public schools to pay for an ever increasing proportion of special education costs through its under-funded mandates, the state is not only forcing property taxes to grow faster than the rate of inflation but also pressuring districts to find the missing funds by reducing the regular education budget.  Such forced cuts to the regular education budget cause school districts to reduce the number of regular education teachers which results in much larger class sizes for regular education students.  Because larger class sizes have been shown to lead to lower test scores which make it more difficult for students and schools to achieve adequate yearly progress (AYP) as required by the No Child Left Behind (NCLB) Act.  As a result, school districts are much more likely to be subjected to many of the NCLB’s more stringent financial penalties.  This will further reduce the financial resources available to support quality education. 

 

Unless the people of New Jersey wish to have not only higher property taxes but also a downward spiral in the quality of their public education, then the State of New Jersey should pay the costs of its mandated school programs and services particularly special education.  If all of New Jersey’s special education mandates were fully funded the quality of the education of all of New Jersey’s public school students, both regular and special, would be the greatest beneficiary. 

 

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References:

Garden State Coalition of Schools (2008). Garden State Coalition of Schools Legislative FYI 5-16-08 http://www.gscschools.org  May 16, 2008. 

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More Schools Face NCLB Penalties due to NCLB’s Variable Standards

Wednesday, December 31st, 2008

The article below explaining how more schools nationwide are facing No Child Left Behind Act (NCLB) sanctions, underscores the problem of allowing different states to have different standards for NCLB.  Because NCLB allows states to add their own incremental standards, the test results can be extremely misleading and easily misinterpreted.  For example, New Jersey applies some of the most stringent incremental state standards to NCLB requirements which help to further challenge our students to achieve higher benchmarks.  However, New Jersey continues to be among the leaders in terms of schools failing NCLB and facing NCLB penalties as a result.  In fact, (Mooney, 2008) 106 New Jersey public schools mostly in urban areas are facing some of the most severe NLCB penalties for having missed federal benchmarks for at least six consecutive years. 

 

However, when the basis of comparison is the Scholastic Assessment Test (SAT) 1 which has the same standards nationwide, the result is radically different especially in terms of student achievement.  For example, as Summit Public Schools’ Assistant Superintendent, Ms. Julie Glazer, discussed during her December 18, 2008, Board of Education presentation of the Summit Public Schools Assessment Report 2007-2008, Summit students’ mean SAT 1 verbal, math and writing test scores overwhelmingly out perform not only the national mean test scores but also the state mean verbal, math and writing test scores.  Moreover, this achievement was demonstrated for every year during the 2001 to 2008 timeframe. 

 

It is important to note that NLCB is not only one of the most under funded mandates ever and, therefore, one of our nation’s largest tax increases but also it lacks funds to reward school districts for improving student achievement while providing financial and operational penalties for failing its standards.  Perhaps if our nation focused more of the energy currently diverted to NCLB on improving rather penalizing needy schools and districts, our educational system especially in urban areas would become the transformational process it should be. 

 

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References

Glazer, J., (2008) Summit Public Schools Assessment Report 2007-2008, December 18, 2008.

Mooney, J., (2008) 106 Schools Get Mandate to Restructure, Star Ledger, December 20, 2008. 

Published Online: December 19, 2008

More Schools Facing Sanctions Under NCLB

Data on adequate yearly progress show that 1 in 5 public schools are in some stage of penalties under the federal law.

By David J. Hoff

 

Almost 30,000 schools in the United States failed to make adequate yearly progress under the No Child Left Behind Act in the 2007-08 school year. For states with comparable data for the 2006-07 school year, the number of such schools increased by 28 percent.

Half those schools missed their achievement goals for two or more years, putting almost one in five of the nation’s public schools in some stage of a federally mandated process designed to improve student achievement. The number facing sanctions represents a 13 percent increase for states with comparable data over the 2006-07 school year.

Of those falling short of their academic-achievement goals, 3,559 schools—4 percent of all schools rated based on their progress—are facing the law’s more serious interventions in the current school year. That’s double the number that were in that category one year ago.

States have been releasing data on the number of schools that failed to make adequate yearly progress, or AYP, since last spring. But the Editorial Projects in Education Research Center, part of the nonprofit corporation that publishes Education Week, is the first research organization to verify AYP results for the 2007-08 school year, and Education Week is the first entity to publish the results.

The research includes AYP data from 47 states and the District of Columbia. Indiana, Nebraska, and New York have not released their final AYP determinations for the 2007-08 school year.

Failure Inevitable?

The rising number of schools failing to make AYP under the law is inevitable, its critics say, because of what they see as the law’s unrealistic requirement that student achievement rise on a pace so that all students are proficient in reading and math by the end of the 2013-14 school year.

Adequate Yearly Progress and Improvement Status Under NCLB

SOURCE: EPE Research Center, 2008.

President George W. Bush and Secretary of Education Margaret Spellings have been steadfast defenders of the proficiency goal, but President-elect Barack Obama and Congress may revise or extend the goal as they work on renewing the NCLB law, as they’re scheduled to do in the upcoming congressional session.

“The system is going to systemically make sure that every school fails,” said William J. Mathis, the superintendent of the Rutland Northeast Supervisory Union, an administrative unit for 11 local school boards in Vermont.

“The increases that are demanded by No Child Left Behind are way larger than anything we’ve ever seen in the past or that you see in other countries,” said Robert L. Linn, a professor emeritus of education at University of Colorado at Boulder, who has argued that all U.S. schools will fail to make their achievement goals between now and the target date.

But supporters of the NCLB law say that the numbers suggest that the law has spurred many schools to take steps to improve.

The relatively modest increase in schools subjected to the NCLB law’s sanctions by missing their achievement goals for two or more years suggests that educators are taking action to address the problems in such schools, said Gary M. Huggins, the director of the Commission on No Child Left Behind of the Aspen Institute, a Washington-based think tank. The panel of educators and advocates released a high-profile report in 2007 proposing ideas to refine the federal law.

“When the problems are a matter of focus, schools seem to be agile in dealing with them,” Mr. Huggins said. “I wonder if anything would have changed in these schools absent” the pressures from the law, he said.

The law’s accountability measures probably have spurred some school officials to address problems that otherwise may have been neglected and could have become worse over time, another of the law’s supporters said.

“The sooner they’re identified, the sooner they can take remedial action,” Dianne M. Piché, the executive director of the Citizens’ Commission on Civil Rights, said of low-performing schools.

Federal Goals

President Bush and other champions of the No Child Left Behind law were planning to celebrate the seventh anniversary of its signing by Mr. Bush on Jan. 8, 2002. The law, which the president made one of the top domestic priorities of his administration, is an overhaul of the Elementary and Secondary Education Act first passed by Congress in 1965.

Under the NCLB law, the most important factors in determining whether a school makes AYP are scores on reading and mathematics tests, given annually in grades 3-8 and once in high school.

To make AYP, a school must meet achievement targets for its student population as a whole and for each several demographic “subgroups,” such as racial and ethnic minorities, students with disabilities, and those who are eligible for services as English-language learners.

Schools’ AYP goals are set by their states based on meeting the law’s overall goal that all students be proficient in reading and math by the end of the 2013-14 school year.

States’ Choices

While the national data suggest a steady increase in the number of schools failing to make their achievement goals, state-by-state results show that states’ policy decisions can skew the results.

In South Carolina, for example, 80 percent of public schools failed to make AYP in the 2007-08 school year, the highest proportion of any state. Part of the increase can be attributed to the addition of new schools being rated for AYP.

“It was an exceptionally big jump this year,” said Jim Rex, the state superintendent.

The high rate is partially the result of the state’s decision to set standards that are more challenging than those of most other states. Researchers have identified South Carolina and Massachusetts as having the most challenging standards, typically by comparing the results of their state tests with their students’ results on the National Assessment of Educational Progress, the federally sponsored tests of a sampling of students.

“If you’ve got high standards, you’re going to hit a ceiling effect [when increasing student achievement is difficult] sooner,” said Mr. Mathis of Vermont, whose has published several articles critical of the NCLB law.

Twenty-three states’ decisions to set low achievement targets in the early years under the law also contributed to sharp increases in the number of schools failing to reach AYP in the 2007-08 school year. Those states assumed that they would be able to ramp up student achievement by the 2007-08, but the AYP results don’t reflect that.

California, one of those states, had a dramatic increase in the percentage of schools failing to make AYP, from 34 percent in the 2006-07 school year to 48 percent in 2007-08.

Other states have designed a path to universal proficiency with periodic increases in their achievement targets. Every three years, the target for student proficiency makes a big jump, creating a graph that looks like a staircase. (“Steep Climb to NCLB Goal for 23 States,” June 4, 2008.)

Mr. Mathis said that’s probably the main reason the proportion of Vermont schools failing to make AYP slightly more than tripled, from 12 percent in 2006-07 to 37 percent in the 2007-08.

In and Out

The process of identifying schools for improvement and the terminology around it are complex.

When a schools fails to meet its AYP goal for two straight years, it is labeled “in need of improvement.”

If it fails to make AYP for a third consecutive year, the school is required to offer students the chance to transfer to a different public school, the first in an annual series of steps designed to improve student performance.

In subsequent years, schools must spend money from the NCLB law’s Title I program of aid for disadvantaged students to pay for tutoring and then take steps to improve themselves.

If schools still haven’t made AYP after five years “in need of improvement,” their districts must make major changes, such as replacing the schools’ staffs or turning the schools into charter schools.

“If they’re in Year Five of improvement,” said Ms. Piché of the Citizens’ Commission on Civil Rights, “something is seriously wrong, and it’s almost never the students.”

To have 4 percent of schools at that stage seven years after the law’s enactment is a relatively small number, Ms. Piché said.

But state and district officials need to make a concerted effort to help struggling schools before they reach the fifth year of the school improvement process, she said.

“The longer schools are in need of improvement, the less likely they are to get out,” she said.

Turning Schools Around

Trying to fix the schools at that stage is currently the focal point of states’ work, several state officials said.

In South Carolina, where 80 schools are in the fifth year of the improvement process, state officials working closely with district leaders and higher education officials focused on improving such schools.

In working with school board members and district superintendents, the state is concentrating on recruiting effective principals and teachers to work in those schools, said Mr. Rex, the South Carolina schools chief.

“We’re doing what they’ve never been able or willing to do in intervening in schools,” he said of local district leaders.

Because the state is putting so much effort into improving those schools, it’s unable to do all it could to help the schools that are having trouble making AYP in one or two categories of students.

“We’re, in effect, ignoring a large group of schools,” Mr. Rex said.

In Maryland, where the largest portion of the state’s 93 schools in the fifth year of improvement are in Baltimore, the state is working closely with the district leadership to take aggressive action to close schools that are failing and reopen them with new staff members, said Nancy S. Grasmick, the state superintendent.

The state board of education must approve the improvement plans of schools that reach that stage.

“There’s an energy of not accepting chronically low-performing schools as business as usual,” Ms. Grasmick said. “We’re trying to ferret out the critical mass of effort needed to turn around those schools. No one has the answer. It’s like finding the cure for cancer.”

Vol. 28, Issue 16

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Allow Our Schools to Opt for Independence

Sunday, December 28th, 2008

To enable our public school districts to have the authority to improve education consistent with the needs of their local schools as well as have the necessary flexibility to innovate rather than march in lock-step to the state’s one size fits all mandates, local school districts should be empowered to opt out of the state system.  Public schools choosing to opt out would become independent public schools free of all state mandates except for perhaps reporting test results but they would also forgo all state aid.  Opting out of the state system would restore decision-making to the local school district level.  Because decisions guiding the operations of these schools would no longer be made largely at the county or state level, parents, teachers, school administrators and local taxpayers would be better able to shape the quality of education which their students receive in their local schools. 

 

Because the State of New Jersey forces most of its school districts to spend disproportionately more to meet the requirements of the state’s unfunded and under funded mandates than these districts receive in total state financial aid, if local districts opted out they would eliminate the excessive financial and administrative burdens imposed by the state.  This also would increase the financial resources available for the classroom because it would be much more cost effective for local school districts to provide educational programs and services without the administrative burden of state requirements.  The funds that are currently used for regulatory compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.  Changing our state’s educational system in this way would not only improve the quality of education but also increase property taxpayers’ return on investment. 

 

Rather than taking responsibility for its role in helping to create and foster the fundamental financial problems facing our educational system, Trenton seems to blame school districts for driving up property taxes.  Instead of fully funding their mandates driving up the cost of public education, their proposals to reduce the property tax burden focus largely on constricting school district funding, budgets, operations and the independence of local school districts. 

 

The state’s flawed approach is demonstrated in the new funding formula as contained in the New Jersey School Funding Reform Act (SFRA) of 2008 and its predecessor the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA,) which caused higher property taxes and cuts in regular education.  Dr. Reock, Rutgers University Professor Emeritus, studied the financial impact on school districts of the state’s failure not only to not fully enact CEIFA but also to freeze most CEIFA funding beginning with the 2002-03 school year and reached a profound conclusion (Reock, 2007.)  Based on his study (Sciarra, 2008), Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state.”  Instead of fully funding the CEIFA school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs as well as state and federal unfunded mandates.  The shortfall was hardest on those districts that were most dependent upon state aid.  During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of $1,627 in non-Abbott DFG A and B districts, $758 in DFG C through H districts, $386 DFG I and J districts, and $188 in Abbott districts. 

 

The impact of the CEIFA funding shortfall was minimized on the Abbott districts largely due to their “parity-plus” court mandated protection.  State law forbids the budget of an Abbott district from falling below its level of the prior school year (Hu, 2006.)  Furthermore, under state law, if an Abbott district increases local property taxes without a state directive to do so, it will lose a similar amount of state aid. 

 

The CEIFA funding shortfall also caused serious imbalances between local school districts.  During the 2005-06 school year Abbott districts received approximately 58% of all state financial aid while educating only 23% of New Jersey’s K to 12 student enrollment.  This meant non-Abbott districts were educating 77% of New Jersey’s students with only 42% of state aid.  This imbalance has continued to widen under SFRA with Abbott aid increasing to approximately 60% of all state aid or $4.64 billion.  State aid reductions and the ever increasing unfunded state mandates force non-Abbott districts to balance their budgets by raising property taxes, increasing class sizes as well as cutting regular education programs and services.    

 

As part of his state of New Jersey Supreme Court certification in support of the Plaintiffs’ opposition to the School Funding Reform Act (SFRA) of 2008, Dr. Reock concluded (Sciarra, 2008) that “the State’s failure to fund CEIFA for the past six years directly resulted in an enormous shortfall of funding in districts across New Jersey.”  He went further to state, “By 2007-08, the sixth year of the CEIFA “freeze,” the total under-funding of state aid had reached $1.326 billion annually, despite the introduction of several new, smaller aid programs.”  The result was a state-driven increase in local property taxes within non-Abbott districts to make up for the shortfall. 

 

The fact that Trenton continues to force local school districts to pay for its under-funded and unfunded mandates that unnecessarily increase the cost of providing education and drive up property taxes is rather incomprehensible.  It is even more difficult to understand considering how our schools are suffering disproportionately from one of greatest financial crises ever to confront our nation.  Also, the State of New Jersey’s mandates harm the quality of education because they divert necessary resources to paying for the mandates’ costs rather than investing these scarce resources in the classroom where they are needed most.  Local school districts, therefore, would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on their educational investment if they opted out of the state system with its unfunded mandates. 

 

 

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References

Hu, W., (2008) In New Jersey, System to help Poorest Schools Faces Criticism, New York Times, October 30, 2006. 

Reock, E. C. Jr., (2007) Paper, Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06,” Institute on Education Law and Policy, Rutgers University, Newark, http:// ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf  

Sciarra, D. G., (2008) Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the Plaintiffs’ opposition to the School Funding Reform Act of 2008, Education Law Center, Newark New Jersey, http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf

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