Board of Ed Approves Proposed Budget

Back in November, Chris Christie defeated incumbent Gov. Jon Corzine campaigning on a platform to slash out-of-control spending that Christie said caused New Jersey residents to bear the highest tax burden in the country. Last week, Gov. Christie kept that campaign promise at a budget address where he announced $3 billion in cuts, $820 million of which was appropriated for state aid to K-12 education.

While Christie won the gubernatorial race rather easily statewide, he lost to Corzine here in Hoboken by a nearly 2-to-1 margin and his proposed cuts, which amount to a $2.4 million reduction in state aid here in Hoboken for the 2010-11 school year (18% higher than the Hudson County average), are unlikely to make Christie any more popular in the Mile Square.

The $2.4 million includes as well as a $109,471 cut from a "special revenue fund" used for pre-school programs, according to Interim Business Administrator Robert Davis. 

Christie's announcement last week left Interim Superintendant of Schools Peter Carter, his staff and school officials scrambling to organize a new budget to present to the Board of Education and ultimately submit to the county office—all while preserving the board's goal of reducing the tax levy without impacting educational programs. That was no small task, to be sure, but according to Davis, they were able to pull it off.

The Board of Education agreed and voted unanimously (7-0) to approve the proposed budget and send it to a public hearing on March 30. Carter and Davis received plaudits from the Board for acting expeditiously and effectively. (Board members Carmelo Garcia and Frances Rhodes-Kearns were absent from the special session).

"It is the most precise presentation of a budget I have ever heard," said the Board's Vice President Carrie Gilliard just before the vote. "It convinced me we're in good hands."

Davis told the board they were able to mitigate the effects of the drastic reduction in state aid due to several factors, chiefly attrition. Twelve staff members have already filed for retirement, six are in the process of filing and Davis believes there will be more to come. As it stands now, the 2010-11 budget includes 14 fewer positions than the current budget.

Also, the proposed budget includes $900,000 from two one-time revenue streams: $535,000 in revenue from a textbook lease program; and $355,00 from the American Recovery and Reinvestment Act of 2009. And the budget includes a reduction in utility costs due to the temporary closing of Connors Primary School for renovations. Connors students will be relocated to Demarest High School, which is also expected to create money-saving scheduling efficiencies.

After the special session adjourned, Board President Rose Marie Markle said the proposed budget wouldn't impact students and taxpayers and wouldn't force staff cuts. She pointed to the abundance of retirements as being a fortuitous turn of events in the face of steep reductions in state aid.

"We don't want to have increased class sizes," Markle said. "We can't afford that. I'm grateful that they worked their magic and, let's face it, the people that are retiring helped."

Carter said the $2.4 million reduction in state aid was "absolutely devastating" but praised his staff for their efforts. "We did it!" he said.

Davis, who describes himself as "old as dirt," basically functioned as the board's oracle during the special session. The board members fired questions at him at him about what the $2.4 million cut in aid meant and he provided them with copious answers.

After the meeting, Davis said that the state had warned school districts that anywhere from zero to 15 percent state aid cuts were imminent, which, in the worst case scenario, would've amounted to a $1.4 million reduction in Hoboken. But, Davis said they were surprised when the number came in $1 million higher and on the heels of a $669,000 cut in the current school year's state aid last month.

"When the state aid numbers were released last week, I think most districts were shocked that the cuts were much higher, in our case it was five percent of the total budget," said Davis. "We were told to expect budget cuts between zero and 15 percent. Then we got the number and it was 40% higher. It was a bit of a surprise. You get twenty-four hours to deal with a million dollar problem, so that was difficult."

But Davis said the superintendent's office had been considering the possibility of higher-than-expected cuts and they were able to respond relatively quickly and maintain the board's goals of not raising the tax levy and not impacting students. He said the proposed budget reduces total spending by $4 million, or seven percent, and reduces in the tax levy by $3,000—a little less than one percent.

While the new cuts in state aid will be largely unfelt by Hoboken taxpayers, faculty and students during the 2010-11 school year, the years following are far less certain. There are potential revenue gaps in next year's budget and funds from one-time revenue streams, like the textbook lease program, won't be available for the 2011-2012 budget.

"Between now and then, we have to work to identify alternate revenue streams," said Davis. "There are options galore."

One creative revenue source, Davis said, would be adopting solar or geothermal energy systems for Hoboken schools, or other similarly eco-friendly methods of meeting the schools' power needs.

"On any of these green, alternate energy systems, you can reduce your expenditures by generating your own electricity—not having to pay the utility company," said Davis. He added that excess energy generated by Hoboken schools could then be sold back to utility companies, which under state law, are required to purchase it. Davis said this method would have the two-pronged effect of reducing energy costs and creating much-needed revenue.

In the near-term, the budget will be presented to the public at a meeting on Tuesday, March 30 and goes to a vote on April 20.

Davis, who doesn't live in Hoboken and is in his second year working for the city's school district, is cautiously optimistic about the public's reaction to the proposed budget next week.

"I would think that if you present a budget that spends $4 million less than the previous year—7% less—if, despite losing almost two-and-a-half million dollars in state aid, you present a budget which lowers the tax levy," Davis said, "one would reasonably anticipate that should be viewed favorably by the public."