Monday, October 24, 2016

Vincent Prieto Proposal for SFRA II

For years, the loudest silence on state aid has been from Assembly Speaker Vincent Prieto.

Aside from vocational education, Prieto leaves education legislation to other people.  His references to state aid fairness have been nonexistent.

Although most of the legislature, frankly, ignores state aid, Prieto's indifference to state aid is hard to accept because his own District 32 in Hudson and Bergen counties is savagely underaided.

Red indicates Abbott.

So Vincent Prieto's entry into the state aid battle is welcome after years of neglect, but that doesn't mean that Prieto's ideas actually are good ones.

As Prieto wrote with Assemblywoman Marlene Caride in the Star-Ledger on October 24th:
We also recognize New Jersey has not properly funded its schools. It's a longstanding problem that should have been resolved years ago, but remains festering due to economic struggles and political ideology. 
The status quo is unacceptable, but the ideas proposed by Gov. Chris Christie and another approved by the Senate are unacceptable options. 
That brings us to the Joint Legislative Committee on Public School Funding Reform, our proposal to fairly fund schools in our state free of politics and ideology.
Free from politics and ideology?  Excuse me?  How is that possible? There isn't a single person in the edusphere who isn't ideological and the subject of state aid is no exception to that tendency.  Some people worry more about taxes than others; some people worry more about inequity; some people want teachers to be much higher paid.  Everyone with an opinion on state aid is ideological to some degree.  

Anyway, here is the proposal for "SFRA II"
This commission would be modeled after the [PJP - Professional Judgment Panel] 2006 committee that devised the current school funding formula, the first school funding plan deemed constitutional by the New Jersey Supreme Court in nearly 30 years.
The main problem has been the state's failure to fund it. The provisions have been ignored and overridden.

We believe this is still the model, but it's been 10 years, so we can now take a look back at what was right and wrong with that formula....
The committee will review the School Funding Reform Act of 2008 and formulate proposals that address problems and issues that have arisen since the enactment of the law, including issues associated with changes in the demographics and fiscal conditions of districts that have impacted the ability of local communities to support the education of their students.
The 2006 committee availed itself of the expertise of numerous stakeholders. We would expect this committee to do no less. The legislation would create a public school funding reform working group comprised of 12 members from expert education organizations across the state. This working group would serve in an advisory capacity and as a resource for committee deliberations.
No part of the school funding formula or the processes associated with the formula would be off limits. We expect the committee to look at all problems and issues that have arisen in the past 10 years, as well as demographic changes and changes in the fiscal conditions of school districts.
We want a realistic proposal that can be fairly funded annually.
One particular area that we hope will get special attention is preschool opportunities — a proven indicator of future educational success. We also hope the committee will focus attention on funding for special education.

Ok. I'm not enamored of the SFRA PJP committee>legislative amendment process.  According to Chris Cerf, the legislature arbitrarily increased the Professional Judgment Panels' recommendation for weights for at-risk students and created "Adjustment Aid" out of nowhere.

Although Prieto doesn't rule out cutting or eliminating Adjustment Aid, any formula that Prieto's "Joint Legislative Committee on Public School Funding Reform" comes up with will primarily rely on new money for K-12 education and if the next governor decides to prioritize things other than K-12 education or there is a recession, Prieto's "SFRA II" will fail just like the original SFRA did.

Prieto's suggestion that the state put more money into Pre-K education may or may not have merit, but budgeting is a zero-sum game and putting more money into Pre-K would subtract from money for K-12, higher ed, pensions, senior tax rebates etc etc etc.  If Pre-K is provided by public schools themselves, in the long run, Pre-K even increases the state's pension liabilities since Pre-K teachers are pension-eligible public employees.

Pre-K itself is incredibly expensive, around $13,500 per student.  To provide Pre-K to the 50,000 students who are statutorily eligible for it under SFRA would cost nearly $700 million.

Although Vincent Prieto has said he would "love a millionaire's tax," increasing rates on high incomes is enough. In 2014, raising the 8.97% top rate to 10.75% on income over $1 million would only have brought in $565 million.  A 2015 version that would also have raised business taxes by 15% would only have brought in $1.1 billion.

$565 million isn't enough.  $1.1 billion would be a good deal more helpful, but it would make our corporate taxes the country's second highest (after Iowa's 12% top rate).  Since New Jersey's other taxes are the highest in the country or among the highest, making our corporate taxes #2 is insane.

The state's debt and pension payments alone increase by nearly $1 billion a year, in some years increasing faster than the state's revenue growth, so the hope we might "grow our way" out of the budget mess is far-fetched.

Prieto is also wrong about why Congress hasn't reopened the base closing process.  Congress hasn't reopened that because it doesn't like the idea of an empowered committee, it hasn't reopened that because it doesn't want to close any more based. Period.

Anyway, I'm glad that Prieto is finally talking about state aid and not ruling out redistribution, but I wish it were something that put redistribution front and center and addressing other problems, such as the state aid growth limits and PILOTing.


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