Governor Delivers Seventh Budget Address, NJPSA Awaits Details

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Governor Chris Christie delivered his seventh budget address to the New Jersey Legislature February 16 proposing a $34.8 billion spending plan which includes a small increase (1 percent) in education funding over the past fiscal year.   In total, the proposal is a 2.2 percent increase over the prior year.

Under the budget proposal, revenues are expected to increase 3.1 percent compared to the current fiscal year, with income tax rising 4.8 percent, sales tax up 3 percent and corporate business taxes staying flat. The treasurer’s office expects the state to end the fiscal year with a $787 million fund balance.

The governor’s budget also claims to reduce use of non-recurring revenues to .07 percent, dow from 13.2 percent in the 2010 fiscal year.

Ed Funding

The budget proposal calls for $13.3 billion in education funding, with direct aid up by 94.4 million to 9.1 billion.  The numbers are predicated on running the School Funding Formula with modified rates that are to be outlined in a soon to be released Education Adequacy Report (EAR).  Exact school figures, as well as the EAR, are expected to be released February 18.   Education stakeholders expect the report may result in the first adjustments in years to the school-aid formula.

What we do know at this point is that the budget proposal includes modest increases in equalization, extraordinary special education, transportation and security Aid are also expected.

Unfortunately the budget proposal does not include an increase in preschool aid (currently around $655 million), although the Legislative Leadership have voiced their intense commitment to this priority.   However, the proposal does include a $10 per pupil investment in Professional Learning Communities for use in how to use data to inform instruction.

school aid

Charter Schools

In addition, the Governor once again called for relaxation of rules as it relates to charter schools – something he first raised during his State of State address last month.

In recognition, however, of the impact that a large proliferation of charter schools can have on a district, the Christie also provided a new ‘host community’ pocket of aid that is meant to support districts with high concentrations of charter schools.  The proposed budget line item totals $25 million, although a majority of this pocket of funding ($20 million) is dedicated to Newark.

Pension Payment

Beyond school aid, athe Governor is proposing a $1.86 billion payment into the state’s pension system, less than the originally agreed to amount under reforms he signed in 2011 but the highest made in recent history. The treasury said the state still plans to make a $1.3 billion payment for this fiscal year as well.

But, Christie railed against the proposed Constitutional Amendment related to pensions, arguing that the payment could be ‘economy-killing’ during the almost hour long speech.  Christie argued, as he did during the State of the State address, that the pension amendment would ‘put government workers…ahead of students…hospitals… the disabled… and seniors”

The Governor went on to call current public pension and health benefits ‘platinum level’ arguing that folks receive an ‘exorbitant pension for life.’  Using this as a sounding board, he called for support of his Pension and Health Benefit Study Commission plan put out February 18.  According to Christie, that plan would save $2 billion on government worker health benefits which could then be used to ‘save the pension system.’  The health benefit changes, of which details are somewhat scarce, would include, the use of generic drugs when available, increases in co-pay and ‘establishing new delivery methods for primary care services.’

Stay Tuned

More details are expected out February 18 so stay tuned!