Taxes and Education in New Jersey

~ Laura

I have once again gotten into the fray of local politics.

By cutting off state funding to schools, Governor Christie has forced town councils around the state to make tough decisions. If one is looking for a positive side to this debacle, it has brought people to town council meetings and the voting booths in record numbers. It has forced political representatives to take sides, instead of making empty political gestures. That's all good.

However, it has also brought out all the underlying resentments and bitterness percolating under the surface. There's anger at state employees, including teachers, who appear to enjoy greater benefits and security than those in private sector. There's the seniors v. parent rumble, which ain't pretty. The seniors harken back to cost saving measures of the Great Depression, and the parents want to take back the town's Senior Van and movie night at the library. There are those who can afford a raise in taxes and those who can't; that division cuts across age lines.

This Tuesday, the Town Council held an open meeting to discuss the failed school budget. The town council wants the schools to cap teachers' pay and contribute towards their health insurance. The school districts says that they can't legally open up a contract, so any cuts would involve firing even more teachers and increasing class sizes to illegal levels.

I was uncharacteristically quiet. I wanted to hear the town officials and the other residents before opening my trap. The room was packed. I sat on the floor jammed up against the front desk. This morning, I sent a letter to the town council and had my say.

Published by Laura

23 thoughts on “Taxes and Education in New Jersey”

  2. However, it has also brought out all the underlying resentments and bitterness percolating under the surface.
    Just like the fifth bottle of wine at Thanksgiving.

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  3. “However, it has also brought out all the underlying resentments and bitterness percolating under the surface. ”
    I’m seeing a lot of this everywhere. It’s interesting (in a kind of ugly way), like the recognition that one of the biggest stressors in a marriage is money or when kids grapple over the money left by parents.
    Do we get to hear your say? Our issues aren’t as bad as those in NJ (I think), but a lot of the discussion sounds a lot like we’re discussing whether we should cut off people’s fingers or their toes. And, though I have an opinion on that, it’s a pretty tough one to fight for.

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  4. What is angering is that in prior negotiations, the towns haven’t wanted to give large raises, so instead offer more benefits and security. Now, having accepted the benefits and security instead of the money, they are being attacked for having more benefits and security.
    Well, this is the bargain that the unions and governments made. If you take away the security, wait and see how much you’re going to have to pay the teachers in straight salary the next time the economy starts expanding.

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  5. In personal finance, it’s very important to get fixed costs under control (car, mortgage, rent, other debt payments, etc.) and to have an emergency fund, so that you can cope with a major drop in income. I realize that government surpluses are politically problematic (when there’s a surplus, everybody wants to either cut taxes or spend it), but I think local governments need to start thinking about their financial structure and its vulnerability to variations in revenue. Under the current structure, if you hire extra people during good times, it means that you’ll have to fire them in bad times. This is particularly true in high-tax areas where the tax payer cow is milked really hard during flush times, and if you try to milk her even harder during tough times, she will die or jump the fence.
    In the context of small business and commissioned salespeople, Dave Ramsey talks about using a “hill and valley” account to smooth out income variation. He encourages businesspeople to have a prioritized list of basic necessities. You’d need to tweak that a bit for local government. It seems to me very imprudent (indeed dishonest) to sign contracts promising to pay people money when you can’t guarantee that you will have that money. I think I would suggest that in future that local government should adopt shorter contracts and a substantial emergency fund, but it beats me what NJ can do now, short of lifting the class size limits. The economy will not be much better anytime soon, and any measures that treat this as a temporary issue will only leave local governments in more trouble down the road.

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  6. I agree with Ragtime–the infuriating thing about the dialogue, generally, about public employees in this country is that they do tend to work for less than private sector workers because they enjoy better benefits–and now they are being penalized for that.

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  7. I’m not sure if I believe that public sector folks get paid less, outside of select professions (law, medicine, CS).
    I do think governments have traded future benefits for current pay for years, and that revising contracts going backwards is generally wrong, and probably not feasible.

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  8. I’m not sure if I believe that public sector folks get paid less, outside of select professions (law, medicine, CS).
    Yes, I don’t understand where that idea comes from. For example, public school teachers make more than private school teachers every place I’ve heard of, even if you exclude the parochial schools.
    and probably not feasible.
    They aren’t here, but I’ve been over that before.

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  9. I would like to see some numbers for *hourly* calculations of pay, private vs. public. I am painfully, painfully aware of my sister’s bankers’ hours (she teaches 4th grade this year).
    And it’s not like the rest of us weren’t promised stuff that never materialized. I haven’t gotten my “promised” bonus since 2006.

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  10. “Yes, I don’t understand where that idea comes from. For example, public school teachers make more than private school teachers every place I’ve heard of, even if you exclude the parochial schools.”
    Working for the county (even just as a flagger) was definitely a prized job when I was growing up in rural Washington. The guy in charge of the road crew on our end of the county had a grossly nepotistic payroll, with most of his employees being his near relations. I don’t think it was the benefits that were the main attraction, but the hourly wages themselves. It was a huge coup when my dad did a temporary stint with the county.

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  11. Being a prison guard is also a sought-after gig, even though prison is obviously not the happiest place on earth. It’s just that the salary is pretty high relative to the educational level needed.

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  12. Apparently, two people want to see the letter that I wrote…
    Dear Acting Mayor and Town Council,
    I attended the town council meeting on Tuesday, May 11th and listened with great interest to the residents’ views regarding the school budget. Even though I’m comfortable with public speaking, I chose to listen to both sides of the debate and take the time to formulate a measured response.
    Like many of the residents of this town, I chose to move to H…….. because of the schools. Six years ago, when my husband and I decided to move back to Bergen County, we made a chart to find the best town for our family. I ranked the towns based on home affordability, commute into Manhattan, and school quality. H…….. was tops on the list, and we quickly bought our little home.
    With the drop in test scores and the turmoil over the school budget, I worry that H……..’s reputation for school quality has been irreparably tarnished.
    I understand that the downturn in the economy has hit everyone very seriously. Many of my close friends in this town are struggling. However, we have to figure out a way of maintaining quality schools, while keeping a lid on taxes.
    Since it impossible to renegotiate existing teacher contracts, it is now clear that we cannot freeze teachers’ salaries or increase their contributions to health care. Although these are measures that can be certainly entertained in the future, we cannot make other changes in the school budget without destroying our schools.
    I was dismayed by some of the cost saving suggestions that were discussed at the town council meeting, ie taking away the monthly senior lunch and limiting services to children with autism. Before we take away these vital services, I believe that we should consider a proposal that both Governors Corzine and Christie have discussed. I believe that we should look at consolidating services with our sister town, R……..
    Unlike the rest of the nation, we have extremely small towns in New Jersey, which has resulted in expensive, redundant services. I believe that we should enter into a discussion with the town of R…….. to find ways to consolidate services and, thus, reduce redundant administration costs.
    The turmoil over the school budget has seriously damaged our town’s reputation. One speaker at this week’s meeting suggested that our town council should have spoken more vocally about supporting the schools. I also believe that the supporters of the schools should have been more active and urged our neighbors and friends to vote. We should take our children to the voting booth with us; it prepares them for a life of political participation.
    I very much appreciated the civility at Tuesday’s meeting. It was inspiring to see both residents and members of the Town Council respectively listening to opposing viewpoints on this hot button topic, weighing the arguments, and taking the time to re-examine positions. This was truly an example of democracy at its best.
    Sincerely,
    Laura McKenna
    address

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  13. They have been trying to consolidate various services around here for a while, with minor success. Of course, our consolidation efforts are on a whole bigger scale. The difficulty is that cost savings from consolidation are mostly in the form of reduced need for staff and even people who got hired because they are somebody’s cousin can figure out the implications of that in a few seconds.

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  14. It’s a good letter and a plausible path. Do you have any idea if there’s a real hope for such things? In addition to the worry MH notes, I’d assume that much of the savings, if there were one, would be in cutting administrative over-head, but it’s hard to get people who are willing to eliminate their own jobs. Perhaps it’s worth supporting local politicians who will try to do such things (or state politicians? Often states have significant control over how local bodies are set up, if the state wants to use it.)

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  15. I realize that government surpluses are politically problematic (when there’s a surplus, everybody wants to either cut taxes or spend it), but I think local governments need to start thinking about their financial structure and its vulnerability to variations in revenue.
    Amy, you comment indicates you do not understand what happened in New Jersey this year. This is not a question of planning.
    The problem in New Jersey is not the economy, but that our Governor is evil, and is trying to destroy the public schools.
    First, you have to understand that payments to local school districts from Trenton for the 2009-2010 were being made in 3 equal installments. This is the CURRENT school year, and budgets for the current school year were made based on the assumption that the promised payments would be made. Upon becoming governor, Christie eliminated the third installment for every district (like mine) that had a surplus, and made them use that surplus instead of state money.
    This move essentially penalized districts that made good financial decisions, and GUARANTEED that every district entered the 2010-2011 school year without any financial wiggle room.
    Christie then slashed the state’s contribution to local districts three weeks before the budgets had to be finalized. Each town lost approximately 5% of their total budget as a result. This wasn’t a problem of financial structure, but of the state pulling the rug out at the last minute. Every school district was then forced to either immediately seek a 5% tax increase, cut spending by 5%, or some combination.
    I love my town, because we passed our budget 2-1 (it is usually a close pass), as everyone realized they needed to support the local Board after getting royally screwed by Trenton and an evil Governor. Most districts, unfortunately, did not follow our lead.

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  16. “This wasn’t a problem of financial structure, but of the state pulling the rug out at the last minute.”
    NJ tax revenue is down, yes?

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  17. Not between the time (at the trough of the recession) when Governor Corzine told districts how much money they’d have for the 2009-2010 school year so they could budget appropriately, and when Governor Christie pulled the money back after they had already budgeted.

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  18. “Not between the time (at the trough of the recession) when Governor Corzine told districts how much money they’d have for the 2009-2010 school year so they could budget appropriately, and when Governor Christie pulled the money back after they had already budgeted.”
    I don’t think anybody knows where the trough of the recession is going to be. It sounds like it is quite controversial whether it is a V, U, or W-shaped recession. Roubini says here that we have about a 20% chance of a double-dip W-shaped recession:
    http://www.forbes.com/2010/03/10/united-states-recovery-recession-opinions-columnists-nouriel-roubini.html

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  19. The point, despite the attempts to change the subject, is that the state told us Boroughs how much money we would get, we budgeted accordingly, and then they didn’t give it to us. And the didn’t give it to us because we had a surplus fund (they did give the third installment to municipalities that didn’t).
    This is not about the economy or the recession, it is about not making good on one’s commitments, for the sole purpose of destroying the financial wherewithal of the Boroughs.
    And then, once the municipalities are over a barrel, offering to restore some money to districts where teachers accept a pay freeze — but not to districts that find greater savings in other areas instead of a pay freeze.
    In every case, choices were made to harm public schools and the teachers, even when other options were available that would have been more fiscally prudent.

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  20. …is that the state told us Boroughs how much money we would get, we budgeted accordingly, and then they didn’t give it to us.
    I realize the adjustment is painful, but there are many services which my area has been promised by state and local government and that have not been received and probably will never be. I don’t see how this is much different than our perpetual game of “we’ll fix that this year…oops, no money because we had to fix a pension hole” dance that means nobody will get the infrastructure fixed unless there is a fatal crash.

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