Cy Thannikary
Guest Column
New Jersey’s heavy reliance on property tax to fund public education and municipal services is one of the principal reasons why the state’s property tax is high. On average, 55 percent, but in some towns 75 percent, of property taxes goes to support public schools, which is the nation’s costliest. Trends show that school spending in New Jersey will continue to increase, putting added pressure on property tax to pay for schools.
Part of the reason for this high cost of education in New Jersey is its fragmented school system. New Jersey has 617 school districts, which is more than all but six other states. These districts spend more on bureaucracy than any other state in the nation. Of these school districts nearly two thirds are classified as “small” districts, 64 have fewer than 400 students, 24 do not operate schools, but still support a board of education, and 172 are “double districts” that have a K-8 district and a separate high school district.
This fragmented school system leads to corruption, inefficiency and political power play at the local levels. If we have to achieve any reduction in property tax, we need to address this inefficient system. Many experts, including educators, are of opinion that at least some of these school districts, especially the double districts, can be consolidated without sacrificing educational quality of our children.
According to a Rutgers University study, school consolidation can save more than $360 million (in 1996 dollars) in administrative costs in five years, which should result in a reduction in local property tax.
In the past, however, all attempts to consolidate school districts have failed miserably in New Jersey because the state Legislature and the public school districts have resisted giving up local control. Here is a summary of such failed attempts.
In 1968 a state committee recommended mandatory consolidation of “sending-receiving” districts. But many, including the Legislature, opposed this mandatory regionalization. In fact, the Legislature proposed a constitutional amendment to bar any creation of regional districts without a public vote.
In the 1990s the state’s Commission on Business Efficiency of the Public School was formed to develop a model for regionalization and encouraged the state to fund incentives for districts to regionalize. Most or all of this commission’s recommendations were ignored.
In 1996 the state created the current school aid formula and created the New Jersey Regionalization Panel. The panel called for eliminating all non-operating districts and suggested a countywide coordination of services such as transportation, purchasing and administration. No one paid any attention to these recommendations.
In 1998 Gov. Whitman’s administration tried to diffuse some of the anticipated furor over the above panel’s recommendations by linking regionalization with property tax relief and proposed a statewide referendum on regionalization.
But that issue was never placed on the ballot.
In 1999, the Legislature responded by creating the Assembly Task Force on School District Regionalization and that task force concluded, “Forced regionalization should never occur. Consolidation does not automatically reap major savings or improve quality of education, and expenses relating to teachers’ salaries and transportation costs may actually increase.”
Further, the current laws governing the funding of regional districts continue to penalize one district over another, making mergers virtually impossible. This means, if consolidation is to occur, the current funding formula has to be revised to make the system an even playing field.
After more than three decades of studies and recommendations, little has changed. Our elected officials, with their eyes locked in on the next election and not on the well-being of the taxpayers and state’s future, refuse to compromise. Now, we, the taxpayers, are stuck with the system and paying for it through the highest property tax in the nation.
At this go around, the Legislature has created a bipartisan Joint Legislative Committee on Government Consolidation and Shared Services to look into the areas of consolidation and shared services to reduce the cost of public education, thus reduce property tax.
As taxpayers you can call your elected officials at the state and local levels and advocate for consolidation of at least the “double districts” for administrative efficiency.
Lend your support to eliminate the 24 non-operating school districts by merging them with functioning districts. Demand local school boards reduce nonessential administrative costs.
Require that no less than 80 percent of the school budget be used for direct instruction and retain the recently enacted budget caps in A-99/S-1701.
Regionalize the purchasing of products and services and conduct zero-based analysis of all state mandates and eliminate those which can no longer be justified.
Require competitive bidding on all professional service contracts and impose tough continuing audits of local district spending practices, contracting relationships and competitive bidding.
Ask for simplified comparative fiscal information such as budget vs. actual expenses, internal controls on spending, list of source of revenues and carefully review the need for non-teaching positions based on district enrollment and setting standards for assessments of such positions.
Examine privatizing transportation, site and building maintenance, food service operations, nursing services, human resources, information technology and payroll and strictly enforce competitive bidding.
Cy Thannikary is the chairman of Citizens for Property Tax Reform, Allen-town.