Governor Cuts $619K in RIH School Aid

Gov. Chris Christie's planned cuts in school aid could impact the property tax burden on FLOW-area residents whose payments finance the Ramapo Indian Hills School District.

The RIH district was notified last week that the state plans to withhold $619,024 in aid due as part of the governor's efforts to plug a gaping budget gap by cutting $1.5 billion from the state budget, including $475 million in school aid. Christie declared a "fiscal emergency" in making the announcement, and has since said that districts throughout the state should prepare for a 15 percent reduction in aid for the upcoming fiscal year when he releases the administration's proposed budget in mid-March.

"The state is in crisis mode. Unfortunately, it trickles down to us," school board Administrator Frank Ceurvels said at last week's Board of Education meeting.

Despite the governor's pronouncements, it remains to be seen whether he will be able to slash $475 million in school aid. The district has been notified that Christie will need legislative approval for the cuts, the news of which has not been popular among many legislators, especially Trenton Democrats.

Ceurvels later said that a $619,024 cut will affect the district's ability to offset taxes in the 2010-11 budget, which the administration and board have been drafting for weeks.

"The reduction itself poses a problem for the taxpayers of the district in that the amount identified as being 'taken' by the state was actually set up to be used to offset local property taxes in the form of appropriated fund balance into the 2010-11 budget. Now, that relief will no longer be available, as it's being used by the state to help offset their budgetary problems," he said via e-mail.

Data released by the governor's office shows the RIH district's projected fund balance for June 30 is $865,219. Before Christie's cut, RIH was due the $619,024 of a total $2,102,944 in aid allocated by state education officials last year.

The news comes as no surprise to the district, which was aware that it likely could not have even hoped for flat aid from the state. However, the timing of the announcement poses challenges; the administration likely won't get final aid figures until approximately March 18, with the 2010-11 budget due to the county superintendent by March 22. A public hearing on the proposed plan, which currently shows less than a 2 percent increase in expenditures over the total $48.6 million 2009-10 budget, will be held March 29 with a public vote on April 20.

Typically, districts are informed of their state aid award at the end of January, Ceurvels said. 

Fixed costs largely drive school budget expenditure increases, with contracted salaries and benefits to be paid, utilities costs to be accounted for and special education funding obligations. Meanwhile, districts face a 4 percent cap on the amount of money that can be raised via taxation, so any aid cuts impact the district's ability to make funding choices.

Ceurvels stressed that the board and administration has not yet made any final decisions on how state aid cuts will be made up for 2010-11, but said reductions in the capital budget have been discussed. However, such an expenditure decrease would not be welcomed.

"It would be detrimental to our long-range facilities plan for us to have a reduction in that area, as we currently are receiving 40 cents for every dollar spent by securing grants with the state and are completing a number of much-needed building improvements," he said.

"We can make various assumptions about where we stand but none of them will have merit until we have the details from the state," he added.

Currently, the board's finance committee is in the process of reviewing the 2010-11 budget as it currently stands, Ceurvels said.

"The various committees have worked to re-evaluate all areas of operations and to try and do more with less. I think the fact that the proposed budget reflects an expenditure of less than 2 percent is a testament to those efforts," Ceurvels said at the board meeting.

The administrator expects the district's Web site, www.rih.org, to soon feature a "status report" on the 2010-11 spending plan.