READER'S WRITE

NJ Must Make Some Tough Choices

As Governor Corzine and the new State Legislature begin their work, there are many challenges demanding their attention. New Jersey is once again faced with an alarming deficit for one simple reason: state government under both Republican and Democratic administrations has lived beyond its means, and the bills are becoming more difficult to pay or defer.

Certain expenditures are non-essentials, and should have been trimmed years ago as any family would have done when times were tough. The more difficult problem is that the overwhelming majority of expenditures, considered individually, are ones that most citizens strongly support. Taken together however, they have amounted to a bill that is more than we can pay.

A poor economy and other factors can lead to a budget crunch in certain “bad” years, and it’s often nobody’s fault. If there is any lesson we can take from those years, it’s that we need to maintain fiscal discipline when we have cash in our pockets – knowing the tough times will return.

New Jersey can no longer write off its budget woes to any external factors, however, because the “bad” years have become the norm. This is my third year in the Legislature, and I have yet to see a deficit of less than $4 billion.

We need to make deep structural changes and to insist that spending will not exceed our projected revenues. No more debt increases and deferrals, and no more one-time asset sales and deals that bargain away our receipts for years to come, in exchange for some quick cash today.

An essential starting point is the reform of our educational funding. Fully one quarter of our state budget goes directly to our schools, as does 55% to 60% of our property taxes. Despite this, we have not yet achieved a quality education for all of New Jersey’s children, homeowners are being taxed out of their communities, and major inequities exist in the way that aid is distributed.

There are three main issues which need to be addressed for lasting reform.

First, we must lessen our dependence on the property tax, though there are no silver bullets to accomplish this without great sacrifice. The income tax, the sales tax, or a combination of each, will have to offset decreases in our property taxes. This is arguably fairer, since these taxes are progressive in nature, but politicians have been hesitant to make these shifts.

Second, we must find creative ways to cut education costs without impacting educational quality or giving up local control. There is not a single school I have visited which is not making very good use of every dollar. But there are still some untried alternatives.

One proposal which makes sense is allowing teachers to waive health coverage if they can get it through their spouses, and offering them incentives to do so.

We could also consider pooling the reserves of school districts, which are currently maintained individually, so when emergencies arise they can draw from a shared account. This would make it unnecessary for all 611 New Jersey school districts to keep the reserves they maintain now. And all would have an obligation to replenish funds which they utilize.

In fact, we could consolidate administrative functions as other states have done, as long as we retain local control of schools and their curricula. There is no reason why payroll, accounting, purchasing, legal services and utilities could not be shared.

Third, there is an elephant in the room which can no longer be ignored. It is an issue often unfairly categorized as “rich v. poor”, “urban v. suburban” or “Democrat v. Republican.” We must push politics and provincial interests aside to address the situation of our Abbott school districts.

The Abbott system skews our entire education funding equation, and it is playing a significant role in the property tax crisis.

The 1989 court decision on Abbott was intended to make per pupil expenditures of the poorest districts equal to those of the wealthiest, in an effort to improve academics. This is an admirable goal, and we must ensure that children in these districts do not fall through the cracks.

But as it stands, just 31 out of 611 school districts in New Jersey receive nearly 60% of state aid, while educating only 1 in 5 New Jersey students.

The other 95% of schools are struggling to survive. We can not blame the recipients of this funding, but the simple fact is that there are single Abbott districts in Monmouth County that alone receive more state aid than Rumson-Fair Haven Regional, Shore Regional, Monmouth Regional, Freehold Regional and Red Bank Regional high school districts combined.

A potential solution is to fund Abbott districts to the median level of school districts statewide. The current system of making Abbott budgets commensurate with the wealthiest districts leaves middle class districts to shoulder an inequitable burden.

It is imperative that we also monitor educational progress and spending, and demand accountability from Abbott districts. Through 2003, $27 billion had been spent in Abbott districts, and while some academic gains have been made, money has not cured the problem.

Now is also the time to revise the criteria which are used to designate Abbott districts. Some schools on the current list no longer belong there, while others, like Red Bank and Freehold, have compelling cases for inclusion.

New Jersey is spending too much, arguably in the wrong places, and the oversight of taxpayers’ hard-earned money is lacking. Property taxes in Abbott districts have not increased in six years, and many can afford to increase them at this point. If only I could say the same for our non-Abbott districts throughout the state.

Making changes in Abbott is a political third rail: 51 state legislators represent Abbott districts, and the issue has the potential to pit town against town. But we must make tough and fair choices if we are to protect the well-being of all New Jersey’s students.

I will continue to work toward a long-range solution and encourage any input from my fellow residents. Please feel free to contact me at AsmPanter@njleg.org.

Michael J. Panter
Trenton, NJ

Michael J. Panter represents New Jersey’s 12th Legislative District as a member of the General Assembly.