1. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 State Budget Overview Presented by: Michael Vrancik NJSBA Director of Governmental Relations

2. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Objectives Understand the State Budget: revenues, expenditures, language & flexibility. Understand the context of advocating for school funding in the fiscal 2006-07 budget.

3. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Major Revenue (in billions) Income Tax ………………..$10,275 Sales Tax……………………..6,850 Corporation Tax……………...2,402 Lottery Revenue………….…….842 Cigarette Tax……..……….…....626 Remaining Sources……...…$7,525 Total…………..………….…$28,520

4. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Major Revenue

5. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Additional Revenue Information NJ Constitution requires a balanced budget Projected revenues are estimates based on economic models and past experience Dedicated revenue – some taxes are dedicated to specific programs

6. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Expenditures

7. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Education Spending Comparison (In Billions) 2005-06 State Appropriations $27,920 State Funding for Education $9,435 Education Percentage 33.8% 2005-06 NJ Federal Support $9,796 Federal Funds for Education $836 Education Percentage 8.5%

8. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Context of Education Funding Education spending outpaces all other State program costs. Given the State’s financial situation, it is unlikely that funding will increase this year. No single component of the State budget has a bigger impact on property taxes. Within current funding levels there is room for reallocation e.g. non-public school aid exceeds $100 million.

9. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Statewide Programs (In Billions) Educational, Cultural, Intellectual Develop. Government Direction, Management Control Physical & Mental Health Public Safety Economic Planning, Develop. & Security Capital Transportation Community Develop., Environmental Mgmt Special Gov. Services Debt Service

10. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 State Operations

11. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Difficult Spending Choices FY 2006-07 budget cycle contends with projected revenue shortfall of nearly $4 billion. State operations represents less than 20% of the overall State spending plan. The complexity of the spending requirements make across-the-board reductions difficult.

12. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 NJSBA Advocacy Efforts Seek legislative commitment for no reductions to school aid. Focus on areas in the State Budget where reallocation can provide more effective use of state funding. Inform Legislators ways they can help local boards hold the line on spending: Provide flexibility to negotiate SHP provisions Remove impediments to shared services with local governments

13. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 How You Can Help Ask Your Legislators 4 Questions: Will you commit to no reductions in school aid funding in the FY 2006-07 State Budget? Will you focus on reallocating misdirected education funds toward public education? Will you support changes to the SHP to allow local boards to negotiate benefits including the elimination of dual coverage? Will you consider NJSBA recommendations to implement cost savings through voluntary shared services agreements?

14. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Talking Points Maintaining at least the current level of State aid for education is extremely important because it is the single largest factor limiting further growth in local property tax rates. Focusing on program allocations within the state’s education expenditures would ensure that funding is going to the areas of greatest priority for public tax dollars.

15. New Jersey School Boards Association – Serving Local Boards of Education Since 1914 Talking Points Being able to negotiate benefits within the SHBP is key to cost-containment at the district-level. Legislation will ease the process of sharing services between school boards and other levels of government. Cost savings helps both the local districts and the State.