Wednesday, 07 March 2007

Jonathan Marshall: "New Jersey's legislative eggshells: Tiptoeing around property tax and school funding reform" During New Jersey's legislative debate on property tax reform, politicians have avoided certain subjects. I hope they aren't afraid to inform voters and taxpayers. We aren't delicate, we can handle the truth, and we shouldn't be shielded. Involving the public openly and broadly will make reform more achievable. These "top ten" underreported issues are being discussed on 1. New Jersey’s total taxes are average, not high. New Jersey has high property taxes, but relatively low sales and income taxes. New Jersey’s state and local taxes total about 8.6% of income per capita, according to US Census data. This includes state income tax, sales tax, and local property tax, and compares favorably to the 50-state average, 8.4%. New York has the highest rate, 11.0%. Even after taxes and cost of living, New Jersey is one of the wealthiest states, per capita. 2. Property should be taxed, fairly. Income and property both are forms of wealth. Taxes shape financial decisions. If property taxes are too high, people are less able to buy homes, gaining less stake in their community. But if they are too low, wealth gravitates toward property as a tax shelter, and the resulting higher tax on income is a burden on gainful toil and ambition. In terms of land use, low property tax rates promote inefficiency and sprawl. 3. A property tax deferral program would help New Jersey's seniors. Twenty-five states let qualifying home­owners defer property tax until they sell their home, at which time they pay the deferred taxes plus interest, from the proceeds. Seniors can enjoy their homes, by retaining use of their cash, rather than feeling forced to sell. Affordability is uncoupled from income, so the tax is no longer regressive. Deferral can be combined with other forms of tax relief. A property tax deferral program can be self-supporting, with zero cost to the state, municipalities, and taxpayers. The state acts as bundler, not borrower. Bonds secured on the properties, for the deferral amounts, compensate municipalities for deferred revenue. Home sellers repay in full their deferred principal plus interest including low administrative costs. 4. New Jersey penalizes frugality. Many school districts provide good value – excellent education at below-average cost. However, New Jersey caps each school district's annual budget growth at a fixed percentage, pegged to inflation. As a result, a 4% cap, for example, permits a $360/student increase in a frugal district, but $560 in a less-frugal district. Meanwhile, real costs outpace inflation; and typically 90%+ of school spending is mandated or nondiscretionary. These factors disproportionately hurt frugal districts, forcing them to curtail educational programs, while wasteful districts can cut noneducational fat. 5. Consolidating school districts wouldn’t save money. New Jersey’s larger school districts have more layers of bureaucracy, not fewer administrators. A Maryland expert testified that his state's consolidated districts have lower costs only because of larger school buildings. Since New Jersey cannot spend hundreds of billions of dollars to rebuild schools, it cannot reach the touted efficiencies of district consolidation. Instead, New Jersey can consolidate services, as in Pennsylvania, New York, and other states. 6. Wealthy communities have lower property tax rates. In general, towns with low property values must set higher rates to obtain the same revenue as towns with high property values. For example, the relatively poor city of Trenton has a tax rate of 1.83¢ per dollar of equalized property value, while the relatively wealthy city of Summit has 0.33¢. This structure is regressive. Instead, New Jersey can partly replace local property taxes with a statewide uniform property tax rate, as in Michigan, Vermont, Alabama, and New Hampshire. Because education for all is a constitutional mandate, it would be appropriate and perhaps fairer for New Jersey to fund schools via state taxes. School districts should keep control of collection, spending, and supplementary local tax (subject to local vote). 7. The New Jersey Supreme Court left only one escape ... ... from its 1985-2003 rulings mandating state spending in "Abbott" school districts. The only permitted escape is success: improved educational outcomes in the low-performing districts. Educators in New Jersey must continue to find, invent, try, measure, and spread programs and practices that work. Legislators and all of us in New Jersey must actively help them reverse the cycle of educational failure for the poorest and neediest children. Most non-Abbott school districts in New Jersey spend in the normal range, and many underspend. Pennies might be scrounged in a few corners, but substantial dollar reductions in school spending are unrealistic until New Jersey's constitutional and moral obligation to educate all students is being met. The real question is whether we want to drag the process on indefinitely, through continued inadequate funding of schools -- or to eventually overtake the Abbott burden by embracing it. 8. "Teacher salary" doesn't mean "teacher salary." The unspoken debate is about educational quality, not taxes, salaries, or benefits. Any given level of compensation attracts teachers of a corresponding level of quality. Someone who says “teachers are overpaid” actually means “reduce teacher quality.” The right question for New Jersey legislators and residents is whether quality of teaching is too high or too low. The debate should be about educational quality. 9. New Jersey can give school districts their share of “interim” property tax. This is the unanticipated tax revenue from property improvements completed during the year after annual property tax rates are set. It is now delivered to municipalities. Yet the school district, county, and municipal rates are used. Municipalities receive windfalls – totaling over $200 million per year – while school districts are hurt: voters must approve higher school budgets, thus decreasing the chances of approval. 10. A flaw in the New Jersey constitution underlies the state’s problems in taxation and spending. The legislature gives voice to forty local legislative districts, but not to the state as a whole. Each legislative district elects two Assembly members and one Senator, all of whom answer only to the voters of their district. As a result, New Jersey’s...
GoodSchoolsPA: "Pennsylvania State Board of Education shares details for education cost-study process" (Article from -- pointed out by Lesley Hirsch) "Pennsylvania State Board of Education shares details for education cost-study process" Education stakeholders had an opportunity last week to learn more about Pennsylvania's costing-out study, when the State Board of Education convened a meeting to introduce the consultants, Augenblick, Palaich, and Associates, Inc., (APA) who will be conducting the study and present an overview of the process. The goal of costing out studies is to determine the base cost (sometimes referred to as a foundation level) of educating a student who has no special needs, attending a district with no special circumstances, to meet state requirements. Additionally, costing-out studies determine the variations on this foundation level required by particular factors impacting school districts (i.e. size, location) and their students (i.e. special education, poverty and limited English proficiency) More than 35 other states have undergone a costing-out process, frequently using the information to guide the creation of a new school funding formula that achieves greater equity and effectiveness. The State Board of Education was directed last year by the General Assembly to steer a statewide costing-out study for Pennsylvania. To learn more about costing-out studies, visit our website at Methodologies APA will use four methods to analyze the resources needed for all students to attain proficiency on the state's standards: Using the successful school district approach, APA will infer the base cost of education by analyzing the budgets of districts that are identified as "successful" based upon a particular criteria, such as meeting the goals of the Pennsylvania Accountability System. As part of this analysis APA will examine schools that are identified as high performing and low spending, as well as schools that have made significant progress in closing achievement gaps. The professional judgment method, by contrast, will focus on identifying the resources - not dollars - that schools need to be successful. This will be accomplished by convening panels of education professionals to discuss what resources hypothetical Pennsylvania schools and districts need to help their students attain proficiency on state standards. Using the evidence-based approach, APA will create hypothetical schools using current education research and conduct a web-based inquiry asking Pennsylvania educators and citizens to react to these models. Finally, the highly statistical cost-function approach (also known as the "black box" approach) analyzes performance, spending and efficiency. While the costing-out study will consider transportation costs, excluded from the study will be costs related to food service or capital needs. Public input sought Ten professional judgment panels are being planned for March, April, and May; each panel requires eight members, including teachers, principals, school business officials, superintendents, and others. These panels will meet for 1-2 days in different locations across the state. The State Board of Education is now seeking nominations for these professional judgment panels. If you are a professional educator interested in participating - or know someone you would like to nominate -- please submit the individual's name, position, school entity and school, years of experience, number of districts in which the individual has worked, professional recognitions, phone number and e-mail address to Good Schools Pennsylvania at Good Schools Pennsylvania will submit this information to Dr. Robert Feir, the project manager for the costing-out study. The deadline for these nominations is February 16, 2007. The State Board of Education and the consultants are also planning to convene meetings with non-school personnel stakeholders - parents, business leaders, and school board members - around the state. Good Schools Pennsylvania would like to identify and recommend a number of potential participants for these meetings as well. Inform us of your interest by sending an email to Take action! Now is the time to get involved in the campaign to improve the way Pennsylvania funds and support public education. With your help we can make sure that Pennsylvania continues to make progress toward a sound school funding formula. Contact Good Schools Pennsylvania at or (866) 720-4086 to learn how you can help. Email your legislator: Use our on-line advocacy tool to send a message to your state legislators that you are committed to supporting policies that guarantee all children have equal opportunity to pursue a high quality public education. Make a donation: Use our secure, on-line donation form to make a financial contribution to Good Schools Pennsylvania and help us amplify the voices of citizens who want great public schools for all children. Stay informed and stay connected! Make sure Good Schools Pennsylvania has your current contact information - including your email address. Use the online registration form to subscribe to our periodic updates and action alerts. Visit us online at .


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