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Associated Press
in the Newark Star-Ledger
Published: August 23, 2006

Lawmakers seek property tax remedies

By Tom Hester, Jr.

As New Jersey moves to cut property taxes, it should look to how Maryland funds schools, two experts told a special legislative committee considering how to redo New Jersey public school funding.

Molly A. Hunter of Columbia University and Michael Griffith, an education finance expert for the National Conference of State Legislatures, both cited Maryland as an example of a state that seemingly has found a way to balance educational needs and financial resources.

Maryland has 24 county school districts and funds schools through state financial aid, property taxes and county income taxes. All districts are given an equal baseline amount per student, with additional money available for poorer districts.

"Maryland's system is not perfect, but it looks very good," Griffith said at yesterday's joint legislative committee hearing.

New Jersey has 616 school districts and provides heavy state funding to 31 poor, urban districts. New Jersey school districts can raise money only through property taxes. As a result, the Garden State has the nation's highest -- about $6,000 per homeowner.

The school funding committee is among four formed by the Legislature to recommend ways to cut property taxes, which have increased about 7 percent per year in recent years. Their proposals are due by Nov. 15.

Columbia's Hunter also cited Vermont, which created a statewide school property tax, and Kentucky, where education aid is cal culated on a per-pupil basis.

About 55 percent of the property tax money collected annually in New Jersey goes toward schools, and about $10 billion of the $30 billion spent every year by the state goes to school operations.

A state Supreme Court ruling -- stemming from concerns that children in poor city schools did not receive the same quality of education as those in wealthy suburban schools -- requires the state to provide heavy funding for 31 districts designated as needing special help.

Those districts have about 22 percent of the state's student population, but they get about 55 percent of all state school aid. Meanwhile, the state hasn't increased financial aid to most other schools for five years.

Hunter said school funding disputes in the United States date back as far as 1819 in Massachusetts. She said lawsuits challenging school funding methods have been filed in 45 of 50 states. "It's a widespread phenomenon," Hunter said.

But Hunter said New Jersey's case is unusual in that it led to funding help for 31 districts. She said most states that lose court cases revise funding for all their schools.

Griffith said New Jersey is the only state that ties funding for poor school districts to spending by its wealthiest districts.

Sen. John Adler, the committee co-chairman, said after the hearing that slowing school spending, especially in the most expensive districts, might prove key.

"I won't support drastic cuts in spending for the poorest districts, but limits should be considered for our wealthiest districts," said Adler (D-Camden).

The other committees will study government consolidation and shared services, public worker benefits and constitutional issues. The public worker panel is scheduled to meet today.