School districts wary of deferred pension payments

By Greg Forester, Staff Writer
   Local school officials have declined to participate in a state program that allows school districts to recoup money cut from this year’s state aid funding through a deferral of payments into the state pension fund for district support personnel.
   The program, which is seen as bad fiscal policy by many local officials, was signed into law by Gov. Jon S. Corzine to provide an extra $75 million for balancing next year’s state budget, as required by law. The deferrals were legalized to provide a way to temporarily replace the cut state aid dollars, although school districts must eventually pay back the money.
   Princeton Regional Schools officials, facing a $250,000 cut to their April state aid payments, said they will not participate in a program that will impact future budgets affected by unforeseen fiscal pressures.
   ”We’re not going to defer because we don’t think we can push that burden to future years,” said Superintendent Judy Wilson.
   The impact of the state aid cuts and the district’s decision not to defer will eat into the district’s end-of-year fund balance, which is normally dedicated to lowering the tax levy in the coming school budget, Ms. Wilson said.
   Hemant Marathe, the president of the West Windsor-Plainsboro Board of Education, echoed Ms. Wilson’s comments.
   ”It makes absolutely no sense,” said Mr. Marathe, whose district faces $550,000 in state aid cuts.
   Mr. Marathe said the program was inconsistent with the state’s promises of last year, when state officials promised West Windsor-Plainsboro increased aid under a new state aid formula.
   ”They made such a big deal about increasing aid to the districts,” said Mr. Marathe, who sensed irony in a program where state aid cuts will immediately impact districts that have been fiscally prudent.
   ”They are essentially punishing us for being good money managers,” he said.
   Thomas Venanzi, the Montgomery Township Schools business administrator, said he would recommend to the school board that the district should not participate, which reflected sentiments on the board.
   ”It has been our effort as a district and a board to be as conservative as we can be and be prudent with our financial practices,” said Charles Jacey, the vice president of Montgomery board, who does not support the program.
   Frank Belluscio, director of communications for the New Jersey School Boards Association, said Gov. Corzine’s program is unique in that the cuts impact state aid payments for the current fiscal year, rather than aid figures included in 2010 school budgets.
   ”I have been with the School Boards Association for 30 years,” said Mr. Belluscio, whose organization is opposed to the program and all measures that underfund the state pension system. “The mid-year cut in state school aid is the first that I can remember.”
   Mr. Belluscio supported districts with enough cash to opt not to defer payments, saying they “were taking the best course of action.”
   He said many state districts, however, cannot refuse the deferral because they rely heavily on state aid payments, even to pay employees and operate month-to-month.
   The state government pays out approximately $8 billion in direct aid payments to school districts each year, according to Mr. Belluscio.