New Jersey School Districts Reluctant to Use Federal Grant Money (NJ)

January 31, 2011

Trenton and other cash-strapped school districts are sitting on millions of dollars of federal money, but they have been reluctant to spend it ahead of possible announcements of more state aid cuts by Gov. Chris Christie.

Trenton, for example, learned in September that it had been awarded $7.5 million under federal legislation targeted at saving education jobs. Having laid off 218 employees during the summer, the district doubtlessly could use the funds.

Four months later, however, interim Superintendent Raymond Broach has not spent a cent of the money. Nor have most of the New Jersey districts that were awarded a combined $262 million, state Department of Education data show.

Statewide, districts had only applied for $1.9 million in reimbursement from the award money as of December, the DOE said.

Trenton’s state fiscal monitor, Mark Cowell, said that after the money was awarded, he advised district officials to hold off on spending the funds because Christie might soon announce new reductions in school funding, as he did last year.

The district might need the money to soften the blow in the new fiscal year that starts July 1, officials said.

“We are waiting to see what happens with next year’s state aid payments,” said district Business Administrator Jayne Howard, who is crafting the fiscal 2011-12 budget.

Cowell, the monitor assigned to help Trenton improve its financial management, said the district may have to lay off more employees this year depending on how its fiscal picture shapes up.

The federal education jobs money was awarded to schools across the country. Mercer County received $12 million, with awa rds ranging from $88,036 for the county vocational schools and $96,663 for Robbinsville, to $2.5 million for Hamilton and $7.5 million for Trenton.

While Trenton’s award was by far the largest, as a poor district funded almost entirely by the state, it also stands to lose the most. By contrast, the county’s suburban districts could end up benefiting from changes in the 2011-12 state budget that Christie is expected to release next month.

Speaking earlier this week in Chesilhurst, Camden County, the governor criticized the court-ordered funding formula that pays for school operations in a small number of districts, including Trenton, calling it a “failed experiment.”

“The state’s funding formula has been rigged so nearly 60 percent of all the state aid goes to 31 school districts,” he told residents attending a town hall meeting. “It’s crazy.”

Christie said his administration would seek to change the formula again, less than three years after former Gov. Jon S. Corzine succeeded in changing it in ways that led to a long-term funding freeze for Trenton and other poor districts.

With contractual salary and benefit costs, utility costs and other expenses rising annually, the funding freeze has effectively cut Trenton’s funding every year, district officials said, leading to annual mass layoffs of teachers and other staff.

Christie also further cut aid to most school districts last year as he balanced the state budget. The state Supreme Court heard arguments this month from advocates for poor districts who say the cuts violated the state’s constitutional obligations.