"Knowledge will forever govern ignorance

 and a people who mean to be their own governors

 must arm themselves with the power which knowledge gives."

Wednesday, August 09, 2006

Is School Consolidation The Answer To New Jersey’s Property Tax Crisis?

New Jersey Democrats contend local government consolidation and shared services are the keys to reducing local property taxes. State Senator Bob Smith (D-Middlesex), co-chairman of a special legislative committee looking for ways to reform New Jersey’s property taxes, offers this idea:

[H]e intends to push his idea of establishing 21 county school districts. In each, one staff of administrators would oversee the operation of existing school districts, purchasing, transportation and health and insurance costs while allowing the schools to retain their hometown identity.
New Jersey’s public schools are currently financed though local property taxes, the state’s income tax and to a lesser extent with federal income taxes. Let’s test the Democrats’ school consolidation theory to see if it is the most promising way to reduce New Jersey’s property taxes. As Smith said, “Sixty-five percent of local property tax dollars go into the schools.”

Newark has one school district and about the same number of schools as all of Somerset County, making the two excellent examples to test the school district consolidation theory.

Somerset County, covering 305 square miles, is comprised of 40 communities which have consolidated into 21 municipalities. There are a total of 19 school districts, including 2 county districts for vocational and special education. The following are key statistics for Somerset County schools:

Somerset County Public Schools
Number of Public Schools - 78
County Public School Enrollment - 53,804
Average Cost Per Student – $11.915
Average Administrative Cost Per Student - $1,076
Total Cost County Schools (Enrollment x Avg. Cost per Student) - $641,086,249
State School Aid (Property Tax Relief) - $98,683,997
School Costs Paid By Somerset County Property Taxpayers - $542,402,252

Somerset County property taxpayers pay as much as 95 percent of their local public school costs, with the county average at 85 percent.

Now let’s compare Somerset County statistics with those for the city of Newark. Newark encompasses 23.8 square miles and has one school district. You can’t get any more consolidated than that and of course the city covers a much smaller area than Somerset County.

Newark City Public Schools
Number of Public Schools - 76
City Public School Enrollment – 41,855
Average Cost Per Student – $16,506
Average Administrative Cost Per Student - $1,775
Total Cost City Schools (Enrollment x Avg. Cost per Student) - $690,858,630
State School Aid (Property Tax Relief) - $698,818,253
School Costs Paid By Newark Property Taxpayers - $0.00

Newark has about twelve thousand fewer students than Somerset County, but spends about $50 million more per year and receives $600 million more in school aid (property tax relief) than all of Somerset County. Newark’s average cost per student is 39 percent higher and the city’s administrative costs per student are 65 percent greater than Somerset County. By any measure Somerset County school spending is far more cost effective than Newark's. Under the school consolidation theory, Somerset County should have higher administrative and total per student costs, but that clearly is not the case.

Newark’s property taxpayers pay nothing toward their public schools and received about $8 million more in school aid last year than the city’s actual school costs. You may remember reading that Corzine’s budget was cutting state aid to some of New Jersey's neediest school districts this year. Newark was one of those districts and had its aid cut this year by $8 million.

Obviously, Newark has no incentive to hold down school costs and every incentive to spend as much of the state’s income tax revenue as the city can get away with. The way it stands now, Somerset County taxpayers foot the bill for their local schools though property taxes and then pick up the tab for all of Newark’s schools through their income taxes. To top it all off, Somerset County residents are supposed to quietly accept the notion that is fair for so-called needy schools to spend 39 percent more than their own.

If Newark property taxpayers continued to pay nothing for their schools, but spent the same per student as Somerset County, that would free up $200 million in property relief. That’s enough to cut every Somerset County resident’s school tax bill by 37 percent.

This same property tax solution can be applied throughout the state. We will post similar comparisons between entire counties and city school districts to show what could be accomplished if the goal was to reduce property taxes though spending efficiencies. There are reasons Democrats have not chosen the most obvious way to reduce property taxes and we will explain them in future posts.


At 3:50 PM, Anonymous Bob said...

Just to toss a couple other considerations into the fire, not that it counters the argument above . . .

Abbott districts, the theory contends, have higher costs than middle-class and wealthy communities have. For instance, there is more crime in an Abbott district, therefore, the district employs more security guards.

There is more poverty, fewer "stable" homes, fewer educated parents, etc. All these factors require Abbott districts to expend more money counter-acting these "societal" elements that Millburn and Princeton do not have to.

One of the pushes I see is to provide those "experiences" younger students should have had outside school that "normal" families provide. So, there are lots of trips to museums, libraries, etc. to provide "culture" that the students' families have not provided.

So, if the district begins with the mandate to spend as much educationally as the wealthiest then they add these kind of services to the mix, it is no wonder it costs more to educate children in Abbott districts.

What few ever ask is whether or not public schools are the place to teach many of these things. We have progressed far beyond reading, writing, and arithmatic. If the average taxpayer understood how academics are squeezed for time for character education and other things many would not consider core academics, he might would be quite surprised, I suspect.

At 5:41 PM, Blogger Eric said...

I whole heartedly agree with your post. The average cost per student in Newwark is more than double what I pay in tuition at a NJ college.

At 8:17 PM, Anonymous njcons said...

As my children moved through a "desirable" school district, I was shocked by the amount of teaching that my wife and I had to do. Many times my children would bring home homework to us that they had no idea how to do. For years I thought I the most in-attentive childeren in the world. Then after the 4th child, I realized that the teachers really never taught the material.

When I went to school homework was a re-enforcment of the day''s lessons. Today the educators expect the parents to teach the children.

At 11:34 AM, Anonymous Mr. Bingley said...

While i agree with the general thrust of your idea, I'm not opposed to letting urban districts spend somewhat more. as has been noted above, they do need to spend a bit more on security. That in turn means they have to pay the teachers a bit more, call it 'combat pay' if you will. Think about it: regardless of your desire to teach and help students, for the same basic money are you going to want to teach in Cranbury or Irvington?


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