Towns, schools brace for aid cut

Await governor’s budget address.

By: Leon Tovey
   With less than a week to go before acting Gov. Richard J. Codey makes his March 1 budget address, predictions of a $4 billion state budget deficit have some local municipal and school administrators worried about possible cuts in state aid.
   By law, the state Legislature must adopt a balanced budget by July 1. State aid figures are released March 1 and Jamesburg, Monroe and Cranbury, which drew 19 percent, 11 percent and 6 percent, respectively, of funding for their municipal budgets from state aid, could be hit hard by any cuts.
   Area schools also are facing cuts. Jamesburg received almost 36 percent of its funding for the 2004-05 budget from the state, while Monroe received less than 7 percent and Cranbury 5 percent in 2004-05.
   On Tuesday, William Dressel, executive director of the New Jersey League of Municipalities, said that while it is too early to say which — if any — aid programs will be hit by cuts, 2005 "has all the makings of a nightmarish budget year."
   "We won’t know definitively until March 1 whether we’ll see cuts," Mr. Dressel said. "But all indications are that we will see level funding at best.
   "And level funding basically translates into a cut," he said, pointing out that operating costs for all governments almost always increase.
   And when coupled with stagnant or decreasing rates of state aid, Mr. Dressel said, those increases leave municipalities with the choice of cutting services, raising taxes or both.
   In Jamesburg, the Borough Council is planning to introduce a budget for 2005 that would increase taxes between 11 and 20 percent in order to meet cost increases mandated by the state and the federal government.
   The 11 percent increase is based on the presumption that the borough will receive the same amount of state aid that it received in 2004 — which is by no means a sure thing, Borough Business Administrator Denise Jawidzik said Wednesday.
   In 2004, the borough received $842,780 from the state, almost 19 percent of its total $4.5 million budget. Included in that number is $175,000 in extraordinary aid and $50,000 in Homeland Security police aid — the two aid sources Ms. Jawidzik said she worries most about losing.
   The borough also depends heavily on state Department of Transportation grants, which it has received fairly consistently over the past several years, Ms. Jawidzik said.
   In 2004, those grants brought $265,000 into the borough for construction and repairs of sidewalks and curbs. But after recently published news reports claimed that DOT officials are considering cutting $120 million in local aid grants, borough Mayor Tony LaMantia said he worries that revenue source might dry up as well.
   Cranbury Township Administrator Fred Carr said he’s not concerned about possible aid cuts at this point, because the governor hasn’t even given his budget statement yet.
   "In my experience, you don’t get excited until its time to get excited," he said.
   However, Cranbury has less reason to fear a cut in state aid than some municipalities. The township relied on just under 6 percent of its total $11.8 million budget for 2004 from state aid.
   Monroe officials are also less concerned about the impact of state aid cuts. The township received $3.04 million in state aid in 2004 — a far larger amount than either Jamesburg or Cranbury — but that represents a little less than 11 percent of the total 2004 budget of $28.2 million.
   Wendy Matson, the township’s chief financial officer, said the majority of that money came from the Energy Receipts Tax ($1.97 million) and the Consolidated Municipal Property Tax Relief Aid ($857,923) — sources that are typically less likely to be hit hard by cuts.
   Township Administrator Wayne Hamilton said Monroe is also somewhat insulated from fluctuations in state aid by growing business and residential development in the township.
   "Any cut has an impact on us — of course it does," Mr. Hamilton said. "The difference with us is that we do have a constantly increasing tax ratable base.
   "It’s a really tough issue for smaller municipalities," he added.
   It’s also a tough issue for school districts in those municipalities.
   While the Monroe and Cranbury school districts each receive less than 10 percent of funding for their total budget from the state, Jamesburg — which has only two schools in its district and pays to send its high school students to Monroe Township High School — draws more than a third of its budget from state aid.
   Jamesburg School Business Administrator Tom Reynolds said borough schools received $3.75 million for its $10.5 million 2005-2005 budget from the state.
   But Mr. Reynolds declined to comment on what effect the looming budget crisis might have on borough schools, saying simply, "I don’t speculate."
   Wayne Holliday, school business administrator for the Monroe Board of Education, also declined to comment on possible effects of the shortfall. Mr. Holliday said Monroe received $4.1 million for its 2004-05 budget of 62.3 million from state sources.
   "There’s always concern about what we will get in state aid and from the Department of Education," Mr. Holliday said. "But at this point, we’re all just waiting for the budget address."
   One district that’s not waiting for the budget address is Cranbury. Brian DeLucia, school business administrator, said the district usually only receives about 5 percent of its total budget from the state.
   In 2004-05 the district, which operates only one school and pays to send its high school students to Princeton High School, received around $650,000 in state aid, Mr. DeLucia said.
   "It’s not that we’re not worried about possible cuts," Mr. DeLucia said. "But the state has always made our taxpayers bear the burden for schooling.
   "Anything we get in aid, we look at as a gift," he added.