The League of Women Voters
of New Jersey

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A.2041 Testimony, 6/1/00, Education Facilities

from Judy Cambria

The following is the latest of our testimony (6/1/00) on the Education Facilities Construction and Financing Act. Both the Senate and Assembly bill were continually changing over the past six months. S.200 and A.204 were passed and negotiations between Speaker Collins, Senate President Di Francesco, and Governor Whitman are now occurring.

The League of Women Voters of New Jersey urges you to amend A. 2041 to provide 100 percent of facilities costs in the poor urban districts. Without 100 percent payment for facilities, the special needs districts will be forced to divert very limited tax resources to construction and renovation from educational efforts, undermining whole school reform efforts. It is essential that you assure that priority is given to addressing the condition of schools in the special needs districts—the oldest, most unsafe and unhealthful, and most overcrowded schools in New Jersey.

Among the changes in eligibility for facilities aid that have occurred during debate, the League favors some but cannot support other. In particular:

• The League supports the more generous provision that makes districts receiving more than 40% state aid eligible for construction aid of 115 percent of their CCCS aid. Earlier we noted with concern the erosion in basic state school aid, which has eliminated or reduced debt service aid to middle income districts.
• The League cannot in good conscience support a minimum of 40 percent state aid for every district, regardless of wealth, unless and until the legislature provides for increased state revenue to help fund the increased cost of the facilities program.

A decade ago, LWVNJ joined others in supporting facilities legislation that would make school districts eligible for a minimum of 25 percent of construction costs. It and similar bills never passed. Recently, we supported a $1.050 billion revolving fund with 2 percent interest, but opposed 0 percent interest as too expensive. We also supported a 10 percent minimum payment to all districts. However, in every letter to legislators and testimony before legislative committees, the League has spoken out about the failure of the administration and the legislature to responsibly address the need for additional state revenue to fund school facilities. The 40 percent amendment to this bill will dramatically escalate the state’s share of costs.

LWVNJ opposes the 40 percent minimum facilities aid because provisions for payment of state costs not only are totally inadequate but also purport to use higher revenues when in fact they divert existing revenues from the General Fund. To date, the state has identified $50 million in cigarette tax revenue, $62 million in Big Game Lottery revenue, and $100 million in tobacco settlement revenue for school facilities.

• Cigarette Tax: Despite a doubling of the cigarette tax, projected income in 2001 is $8 million less than the revenue received in 1997 before the tax increase. The $50 million dedicated to facilities is simply reducing the amount of revenue available for other state programs.
• Big Game Lottery: The Office of Legislative Services projects that all lottery proceeds will increase to $685 million this year, instead of the $713 million earlier estimate. The lower amount is due to a 40% drop in Pick-6 sales, far larger than originally estimated. If the state continues its plan to provide $62 million in Big Game Lottery revenue for school construction, other state programs paid for by the lottery will lose $28 million in funds.

In short, the administration and legislature are "robbing Peter to pay Paul" with these diversions. Even more serious is the fact that the amount of all three proposed revenue sources falls far short of projected future costs, which will rise to three-quarters of a million dollars or more annually with the addition of the 40 percent minimum aid provision.

As LWVNJ has said earlier, "Passing legislation without providing the revenue source(s) leaves the unpleasant and politically unpopular necessity of raising taxes, or reducing other programs, to later administrations, governors, legislators and taxpayers. This failure to provide additional revenue sources for the massive costs for school construction is fiscally irresponsible and not acceptable."

The Board of Directors of LWVNJ voted on May 20 to endorse the "Principles and Strategies for the Construction and Financing of Educational Facilities in Abbott Districts" statement. They also voted to develop a working relationship with the Coalition for Our Children’s Schools, theorganization that has grown out of earlier meetings to develop the principles and strategies statement. The League supports the five amendments to A. 2041 proposed by the Coalition.

In particular we ask that you add provisions to allow Abbott districts to prepare and submit a construction management plan that uses a qualified public or private entity to plan, design, and construct each project, including but not limited to the New Jersey Building Authority and the New Jersey Economic Development Authority. Previously the League has testified to the lack of capacity of either agency to carry out the massive task, the need for an infusion of state funds to increase that capacity, and allowing as many districts as possible to avoid using such an agency which almost certainly will result in construction delays. In the meantime, we have talked with others who have researched how other states have handled statewide school construction projects, and read the Issue Brief developed by the Coalition for Our Children’s Schools, "How to Manage School Construction ... or How Not To." The League believes a compelling case is made that "legislators and the administration should consider anew how best to achieve effective state oversight without an overly centralized, state-run construction program."

The most important goal of legislation governing school construction and financing should be as rapid construction or renovation as possible to provide classroom space for the 250,000 additional student increase since 1991 and for the almost 50,000 students in overcrowded classrooms in the special needs districts, as well as to provide the specialized facilities needed to assure that every student has access to an academic experience which enables him/her to achieve the core curriculum content standards. Appropriate funding measures need to be addressed now, even if phased in over a period of time, to assure there is no delay in construction in future years because of a failure to provide sufficient fiscal resources as annual debt service payments escalate.

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