Elimination of School Aid Could Mean Layoffs, Reductions

The elimination of state aid and the reduction of debt service aid the state announced earlier this week will most likely mean layoffs and program eliminations, according to Madison Public Schools Superintendent Dr. Richard Noonan.

Madison, which typically gets $1.6 million or about five percent of the district's budget from state aid, had its aid completely eliminated for the upcoming fiscal year.

"To us, it's just completely astounding," Noonan said. "This is 10 times worse than the worst case we prepared for. The administration, department of education, governor and and the commissioner could have elected to take a 15-percent reduction across the board in state aid. Instead, they chose another path we didn't have to go down.

"What that means to Madison and suburban districts and other Morris County districts is that we will continue to give large amounts of tax revenue to Trenton but get less back in return."

Madison also had its debt aid reduced by 15 percent. Since 2005 when voters approved a $46 million construction project, the state has provided $600,000 per year to help pay off bonds. The state had pledged that support for the duration of the 30-year life of the bonds. However, part of the announced reductions would be about $100,000 less in debt service aid this year.

"So this is a double whammy for Madison, a double whammy for Madison  residents," Noonan said. "We did not expect that. It was never presented to us as possibility here."

Noonan said the bond council is looking into seeing if legal action could be taken to compel the state to make good on its initial obligation.

Noonan also said that recent comments by State Education Commissioner Bret Schundler do not add up. Schundler said, "Districts had the understanding that it would be 15 percent, and it is a number that is less than that," during a conference call with reporters on Wednesday afternoon.

"That is ridiculous and disingenuous on the part of the commissioner," Noonon said. "The commissioner is now saying, if legislation approves forcing every employee to contribute 1.5 percent of their salary to pay for their healthcare, then districts will recoup a fair amount of money and can use that to eliminate the reductions we have to make. That's disingenuous."

Noonan said he and the Board of Education believe the healthcare contribution is a legitimate issue to pursue. He also said that he thinks the legislation will be approved. However, Noonan says if everyone who works for the district puts in 1.5 percent, then $300,000 would be generated

"Districts will get money back if the 1.5 percent takes effect," Noonan said. "But that's a pittance compared to $1.6 million. It's 15 percent of the loss in state aid we absorbed. That does not allow us to absorb all cuts."

Noonan also said he wants to make sure people understand he knows the state is in a difficult position and that a reduction of some sort was necessary. The problem as he sees it is the difference in what the district felt was communicated about the aid cuts that were coming, and what was actually handed down.

"Our primary beef is why Madison and suburb districts are getting even less from the state," Noonan said. "There was always an imbalance, and now under a Republican administration it is greater rather than lesser.

"More to point the point, we are looking at many layoffs and program eliminations that this requires. That runs counter to our commitment and goals as a school district."

The board's budget committee will meet Friday night to discuss possible scenarios. Noonan says there will most likely be three options put together.

The first would be to stay under the 4-percent tax cap levy, with a lot of layoffs and program eliminations. The second would be identify things that would be cut, but to then to present a second budget question for voters to decide if they are willing to pay higher taxes to keep some of the proposed reductions in the schools. The third option, which Noonan said he believes would be very unlikely, is the board technically could increase the tax levey past the 4 percent guideline because of the state aid reduction. The increase would mean a higher tax burden on everyone in the borough.

The preliminary budget will be presented at Monday's Board of Education meeting. That information will be shared with the entire school community, including a newsletter Noonan will send to the entire borough. The budget hearing will be on Friday night at 7 in the library at Madison High School. That is a one week span, and only slightly more than a week since the state announcement was made on Wednesday.

"It is upsetting that there is not much time to make decisions, but also to share info with the communities," Noonan said. "We'll be working through the weekend to scramble to do it. We will present a lot of people lots of info in a quick amount of time. Some of that info will not be pretty. The set of circumstances is very difficult for a school district and for people to know what going is going on and why, and contributes to a lot of confusion."