MEMO To:
Members of the Board of Education
From: Robert H. Davis
1<..1
nv
Copy: Dr. Mark Toback, Mr. Walter Rusak, Mr. Peter Carter, Mr. Michael Donow Date: March 8, 2011 Re:
Required Local Share and Minimum Tax Levy
Ms. Theresa Minutillo, Chairperson of the Finance Committee, has requested that I provide information to the full board relative to the minimum tax levy required as a local share to meet the educational adequacy standard. In essence, state law defines the amounts of money that are required on a per pupil basis for weighted pupil enrollments to determine what is the amount of money each district should spend to provide a thorough and efficient system of education for each pupil. Each districts property value and income levels determine what the district local share (property tax levy) should be. If the local share required to attain the "adequacy budget" is not met (i.e. the district is below adequacy), then the district must budget a local levy equal to the previous budget year. This is its minimum tax levy. Her three questions were: 1) Have I verified the numbers? 2) Have I contacted the county office for their confirmation? 3) Could I provide the board with a copy of the statute? In response to those questions, please be advised as follows: Question #1 I have checked the statistical information provided by the state in its state aid notifications and worksheets as well as the data provided in the computerized budgetary software downloaded to us and find no errors in the numbers provided. Question #2 I have contacted the office of the Hudson County Executive Superintendent of Schools and they have confirmed that the minimum tax levy provision in question is correct. They indicated that since the requirement is from the statutes and not the code, no one except the legislature can alter the provision. The statute is clear in that the requirement states "shall" and not "may". It is mandatory and not permissive,
Question #3 The state aid law is 18A:7F-5 through 18A:7F63 (59 sections, 39 pages of detailed definitions and formulas). 18A:7F-5(b) states "Each district shall have a required local share. For districts that receive educational adequacy aid pursuant to subsection b. of section 16 of P.L. 2007, c. 260 (C.18A:7F-59), the required local share shall be calculated in accordance with the provisions of that subsection. For all other districts, the required local share shall equal the lesser of the local share calculated at the district's adequacy budget pursuant to section 9 ofP.L. 2007, c. 260 (C. 18A:7F-52), or the district's local share for the prebudget year. In order to meet this requirement, each district shall raise a general fund tax levy which equals its local share. No municipal governing body or bodies or board of school estimate, as appropriate, shall certify a general fund tax levy which does not meet the required local share provisions of this section." The information is therefore correct and mandatory as incorporated into the preliminary budget document. At the current time, there are 205 school districts in New Jersey who have a mandated minimum tax levy equal to the prior years levy, 24 more than last year. If you have any further questions or require any additional information, please do not hesitate to let me know.
************** Edits Were Run and No Errors Were Detected
**************
New Jersey State Department of Education Division of Finance and Regulatory Compliance 2011 - 2012
03/08/2011 12:45:14 0000
Page: H 1
SFRA Cales HUDSON Report
of District
District
Status Above
Adequacy
Spending:
General
Fund Levy
2011-12
Equalization
or Below Expected
Local Levy
36,479,095(A)
o (B)
Adequacy
Adequacy
Excess Amount
CITY
Aid
Total Budgeted District
- HOBOKEN
=
Spending
(A)
+
(B)
Budget (C) - (D)
If E is: Positive-Proposed Budget Exceeds Expected Local Levy Zero or negative-Prop. Bud. is at or Below Expected Local Levy
36,479,095(C) 37,083,017(D) -603,922(E)
* * *'* * * * * * * * * * * Edits Were Run and No Errors Were Detected ************** New Jersey State Department of Education Page: H 2 03/08/2011 Division of Finance and Regulatory Compliance 12:45:14 2011 - 2012 0000 SFRA Cales HUDSON Minimum
- HOBOKEN
CITY
Tax Levy Calculation
District Adequacy Budget Required Local Share 10-11 General Fund Levy Less: Non-permanent Non-permanent Adjusted
37,083,017 114,855,165 36,479,095
Separate Proposals Waivers 10-11
10-11 General of
10-11
0 (C2) 0 (C3)
Fund Levy (A) or
(B) or
(C4)
(A) (B) (C1)
Minimum
Tax Levy Lesser
*Amount
Shown on Line 150 or 160, col. 4 Must Equal or Exceed
*
36,479,095
(C4)
36,479,095
(D)
* * *.* * * * * * * * * * * Edits Were Run and No Errors Were Detected ************** New Jersey State Department of Education Page: H 3 '03/08/2011 Division of Finance and Regulatory Compliance 12:45:14 2011 - 2012 0000 SFRA Cales HUDSON
- HOBOKEN
CITY
Tax Levy Cap Calculation Prebudget year adjusted tax levy, including for enrollment, inflated by 2%
weighted
increases 37,208,677
(A)
o
(B)
Adjustment for increase in certain normal and accrued liability pension contributions (pension deferral)
o
(C)
Adjustment
o
(D)
o
(E)
37,208,677
(F)
Adjustment
for increase
in Health
Care costs
for responsibility
assumed
by district
Adjustment for responsibility district or entity
shifted
to another
Tax Levy Cap
=
sum
(A) through
(E)
Note: The 2011-12 tax levy recorded on line 150 of the budgeted revenues cannot exceed the amount on line F above, unless the result of a merged separate proposal. Additional levy increases must be proposed separately to the voters or board of school estimate and be supported by interpretive statements.
New Jersey Department of Education 11-12 School District Budget Statement --* FATAL ERROR REPORT *--
12:46:22
HOBOKEN Error Message 11-12 Line 150
<
Minimum
Tax Levy
03/08/2011
CITY Amount
1
36479094
Amount
2
36479095
Page 1 of 4
Robert _Davis, _--------------_ ..
_-----_._----------
..
From:
Cynthia Triminio [CTriminio@EdlawCenter.org]
Sent:
Tuesday, March 08, 2011 10:05 AM
To:
Cynthia Triminio
Subject:
Governor's FY12 Budget Again Goes "Off Formula," Ignoring Students' Funding Needs
Education Law Center 60 Park Place, Suite 300 Newark, NewJersey01102 (973) 624-1815 Fax: (973) 62!4-7339 Email: elc@edlawcenter.org
fOR IMMEDIATE
RELEASE
GOVERNOR'S FY12 BUDGET AGAIN GOES "OFF FORMULA," IGNIORING STUDENTS' FUNDING NEEDS 205 DISTRICTS "BELOW ADEQUACY" WILL FALL FURTHER BEHIND Newark, NJ -- March 7, 2011
For the second straight year, Governor Chris Christie's proposal for K-12 state aid ignores the legal requirements of the State's school funding formula, depriving over one-third of NJ districts of the funding necessary to deliver the Core Curriculum Content Standards to students, particularly those at risk of academic failure. The Governor's FY12 aid proposal comes as Special Master Judge Peter Doyne is examining the State's massive aid cut in the current school year --路2010-11. Judge Doyne, under a directive from the NJ Supreme Court, is assessing the impact of the aid cut on the delivery of the CCCS in districts with varying concentrations of student poverty across the state. Judge Doyne will file his report with the Supreme Court by March 31st. In the hearing before Judge Doyne, the State conceded aid was cut in the current year by $1.08 billion from the 2009-10 level, or 13.6% of state aid. And, for the first time, the State revealed the real aid shortfall to districts: a $1.6 billion cut from the level required if the SFRA formula had been fully funded, or almost 20% of state aid.
Adequacy Gap Will Widen in FY12 As this chart shows, the gap between state aid provided in the current year (2010-11) and the amount required under the SFRA formula is $1.6 billion. Under the Governor's FY12 proposal, the "adequacy gap" will widen next year to an estimated $1.88 billion.
3/8/2011
Page 2 of 4
Comparison of Estimated 2011-12 SFRARequired K-12 Sh(lO~ Fundin to th,eGoven~r's' (\oCQ,m' ms •.··,·ded. ,( , ' H .. g.•.. . r." . Bud ug at •••...... '<;;; .. .en '111· .,5····11··. IF···· d' ...-~'coo •UJltng 2...'0·•• $1.0
""~"~".,,,,,-'"''~-'''''''''''",=,,"~~''''' ,...
$8 -;-'--~ ..'-:~~~-"--.".
~
$6
i
$4
o
-
..'----.-'C.-.... -".
$2
~o ~ 2010~11Actual
Governor's Budget
2010-11 SFRA Reqllire,d
Estimated 2011~
12 :SFRARequ.ired
Recommended
2'011-12.
Districts Below Adequacy Will Fall Further Behind in FY12 The evidence before Judge Doyne also showed that the number of districts spending "below adequacy" under the SFRA, or the funding level to deliver the CCCScalculated by the State, rose from 161 in 2009-10 to 205 this year. Even worse, districts below adequacy, which serve almost three-fourth of NJ's at risk students, fell further behind the State's defined adequacy level. This chart shows the number of districts below adequacy in 2010-11 by the district's concentration of at-risk students:
3fSf2011
Page 3 of4
Districts Sp.endiing Be·lowAdequacy, 2010 ..11 80 -,-
----.----.--
... ---.---.----.--.----.-.
-- ..---.'-.
--~-'--"---
II)
1J $;:
60
•••• II)
Q
1;
40
·k~·'"""~··,,,·:,
!I..
QJ. .Q
E !3
2:
0 .\~-
'"1 L.
r--r-
(}! ...."..~ ..•".,-
0-20%
20-40%
Over 40t}'O
Percent At-Risk
A more detailed analysis
m of the below adequacy districts shows:
• The budget shortfall in the 205 districts below adequacy under the SFRA is currently over $1 billion. • As a percent of the districts' current budget, the Guttenberg district has the highest adequacy gap -- 78%. In 91 districts the adequacy gap exceeds 10% of total budget. • The Governor is proposing to distribute a $217 million aid increase in FY12 without any regard for whether districts are spending below adequacy. The increase is also below the current Consumer Price Index of 1.23%. • The Governor's proposed increase will do nothing to close the districts' adequacy gap. Instead, by ignoring the SFRA formula, the gap in below adequacy districts will widen even further next year. "The aid cuts in 2010-11 represented a devastating blow to the provision of equitable and adequate funding to enable all districts to provide students with the CCCS, which is the measure of a thorough and efficient education under the NJ Constitution," said David G. SCiarra, ELC Executive Director. "The Governor's school aid proposal for next year does not even make a dent in the intolerable funding gap in over 200 districts now below adequacy, or the amount the State itself says our students need to achieve the CCCS." Education Law Center Press Contact: Danielle Farrie, Ph.D.
3/812011
Page 4 of4
Research Director email: dtarrie@edlawcenter.org voice: 973624-1815 x13
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