BY SHERRY CONOHAN
Staff Writer
EATONTOWN — In three years, school districts will be faced with a dire situation requiring them to slash programs and staff under the restrictions on spending and surplus being imposed by the state, Kenneth Sommerhalter, interim business administrator for the Eatontown Board of Education, warns.
Sommerhalter noted that Gov. James E. McGreevey has said the caps that have been imposed are only temporary, with the implication that the state will have a better method of funding schools in place by that time.
But if it isn’t, he said, big trouble looms ahead.
“That’s when you start cutting your programs and cutting your staff,” he said.
Sommerhalter was referring to a 2.5-percent cap on revenues and a 3-percent cap on surplus that school districts will soon be chafing under. He said Eatontown, which grappled with how to lop $239,000 from its budget this year, is now in a comfortable position for the 2004-05 school year.
He said the $16 million current expense budget, in round numbers, is funded with only $4 million in state aid, $500,000 in federal aid and $11,500 from the property tax levy and miscellaneous other revenues.
Sommerhalter, who will leave his interim position Oct. 29, said the district’s budget typically goes up 5 percent a year, fueled by salary increases of 4.5 to 5 percent annually for teachers won by their union, and increases in health benefits that run from 9 to 28 percent.
Salaries and health benefits account for 73 percent of the current expense budget, he said.
“We’re a labor intensive business,” he pointed out.
Using a round number of $10 million as a budget, and $300,000 for the surplus in the first year as an example, Sommerhalter said the 2.5-percent cap would allow for revenues of $10,250,000 in the second year. To keep on an even keel on programs and staff with the usual 5-percent increase, he said expenditures would have to be $10,500,000, meaning $250,000 has to be drawn down from the $300,000 surplus to flesh out the revenues.
In the third year, he said, the allowable revenues, with a 2.5-percent increase over $10,250,000, would be $10,506,250. But if the expenditures, which were $10,500,00, go up by the usual 5 percent, they would total $11,025,000, he said. He noted that $518,750 over the $10,506,250 is allowed. When the remaining $50,000 is drawn down from surplus, that leaves a deficit of $468,750.000 with no further surplus to call upon, he continued, and that is what would have to be cut from programs and staff.
And it gets progressively worse from there, he said.
“In 2005-2006, we’re going to do a lot of work to hold it together,” he said.
“But in 2006-2007— Holy Mackerel!” he exclaimed. “They’d better have something in place by that time … because that’s when it’s really going to hit the fan, so to speak.”
The public, Sommerhalter continued, doesn’t realize what’s coming.
“They don’t have a clue,” he said.
Sommerhalter said it would begin with school districts not fixing the roofs and repairing the windows to save money. And that, in turn, will lead to big referendums down the road to catch up with routine maintenance that was let go, he said, like what happened in Middletown, which he observed had a $100 million referendum after years of the school budget being defeated by voters.
“They just didn’t do anything for years,” he said. “Now we’re all in the same boat. You’re going to see district having to bond to do it [routine maintenance] because the money is not available in the surplus fund.”
Sommerhalter said the average 5 percent school budget increases in New Jersey are slightly higher than the national average of 4.75 percent, but that’s because teacher salaries are higher in New Jersey than elsewhere.
He noted that the state has never fully funded education in New Jersey to the level fixed in the law. New Jersey ranks 45th among the 50 states in the amount of state support schools get, he said, citing the national report card.
Sommerhalter said the national average for the percent of a school budget that is funded by the state is 49.6 percent, while in New Jersey it’s 37 percent.
“It’s terrible,” he said. “That’s why taxes are going up so much.”
Sommerhalter said that in the last 10 years, there has been a 27-percent increase in student enrollment in New Jersey and a 28-percent increase in classroom teachers. He said there has been a zero-percent increase in administrators during that time.
“In fact,” he added, “I think there’s been a decrease.”
Sommerhalter said everyone in education is concerned about the governor confiscating $80 million of school surplus funds after imposing the cap without giving districts time to spend the money they had on hand.
“We are one of the few exceptions because we qualified for Impact Aid and because that’s federal money the governor couldn’t take it,” he explained.
Sommerhalter worried what would happen to classroom accomplishments that have been posted in New Jersey when the Draconian cuts in programs and staff hit. He said New Jersey ranks third among the 50 states in fourth-grade reading scores and fifth among the 50 states in fourth-grade math scores
New Jersey ranks third in SAT scores in states where at least 60 percent of the students take the test, he continued. And, he said, 85 percent of New Jersey students take the SAT test, which is No. 1 in the nation.
Sommerhalter also said New Jersey has the highest graduation rate among the 50 states -— 86.3 percent, compared to the national average of 68 percent.
“So I’m totally amazed we’ve done so much,” he said. “I don’t know if we can maintain those figures with the governor squeezing us so hard.”
“My hat is off to the elected board [of education] members and administrators in all the districts,” he added. “I commend the Board of Education and administrators for what they have done.”

