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School Boards Lose Millions in State Aid

By Nicholas Loffredo, Wyckoff Patch, 3/18/10

School districts were well aware heading into the current budget season that they were likely to sustain a cut in state aid, owing to New Jersey's economic problems and the governor's desire to make deep spending cuts. The reality—unveiled Wednesday—is far worse than a simple reduction, leaving Wyckoff and Ramapo-Indian Hills with only days to make difficult funding decisions.

Both the local and regional districts will receive no state formula aid under Chris Christie's proposal to lower state spending on education by approximately $819 million. While districts had been told to expect a 15 percent reduction in their overall aid figure, the state Department of Education's aid numbers represent up to 5 percent of the overall budgets.

The Wyckoff Board of Education will lose $1,452,374 while the Ramapo Indian Hills Board of Education will have to make up $2,102,944. The figures excludes specialized state aid used for debt service, Social Security payroll taxes, etc.—$2,257,524 for Wyckoff and $2,643,532 for Ramapo Indian Hills.

State Education Commissioner Bret Schundler defended the increased cuts in a conference call with reporters Wednesday afternoon. He avoided discussing individual districts and their cuts, stressing the overall aid figure.

"Districts had the understanding that it would be 15 percent and it is a number that is less than that," Schundler said.

However, that simply isn't true for the local and regional districts. A 15 percent cut in aid would have left both boards with some money to work with. Instead, since Wyckoff and RIH's aid doesn't even rise to 5 percent of the overall budget, they joined dozens of mostly suburban districts in losing their entire formula package.

Both Wyckoff and RIH have until only early next week to adjust their 2010-11 budgets to reflect the total loss of aid.

The Wyckoff school board tentatively adopted a $36,593,029 budget earlier this week with a projected expenditure increase that had already incorporated cuts in planned capital projects while keeping district offerings stable. The regional district's budget has been projected to come in at $49.5 million with a roughly $1 million expenditure increase that can be attributed almost entirely to fixed costs and contracted increases.

Wyckoff business Administrator Alan Reiffe has said the board identified a series of cuts that could be made based on different aid assumptions, but the board had not budgeted for the possibility of a 100 percent reduction.

The Wyckoff board can take advantage of a cap waiver that would give districts the option of essentially passing the loss on to the taxpayer by exceeding the state's 4 percent expenditure cap and incorporating the loss into the tax levy. Were the district to cut the existing budget by the full $1.45 million, the administration expects that personnel and/or programs could be in jeopardy.

RIH had been expecting to keep all existing programs without having to make cuts because of cost concerns. Business Administrator Frank Ceurvels could not be immediately reached for comment as he works to revise the budget. Check back with Patch later for updates.

Schundler defended the cuts by saying that the state Legislature can avert layoffs at the school district level by quickly implementing Christie's package of public employee reforms. The package includes changing the pension and health benefits packages for teachers, including requiring co-pays and larger payments for pensions. The co-pays would apply to school personnel who retire after the changes are made, but not to those who leave their jobs before the proposals are enacted.

Schundler said this will allow for more quick retirements from teachers who do not want to pay part of their health insurance in retirement. He said quick enactment, which is not considered likely, will help stem the expected layoffs in school districts statewide.

"That will dramatically reduce the number of personnel reductions that would be achieved through a layoff," he said. "These reforms will reduce costs to the districts and create a need for early retirements."

In addition, Christie has proposed a constitutional amendment requiring a 2.5 percent cap on expenditure increases. That amendment could not become law until the end of the year at the earliest. Districts currently face the 4 percent cap, and the local districts have criticized the idea of lowering the ceiling while they still deal with state mandates and fixed costs.

Schundler said he has instructed county superintendents to thoroughly review each school district budget and be prepared to make line-item vetos in order to make further reductions before the budgets go to the voters on April 20. State law allows county superintendents to make these vetos.

The Wyckoff school board will conduct a public hearing on the budget at 8 p.m. April 1 at Eisenhower Middle School. Ramapo Indian Hills will hold its public hearing at 7 p.m. March 31 in the Ramapo High School auditorium.

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