Lakewood school board OKs ‘unsustainable’ budget with $70M NJ loanMay 6, 2021
LAKEWOOD – The Board of Education on Wednesday approved a $217 million budget that includes a request for more than $70 million in state loans.
If the borrowing is approved, the financially strapped district’s total state debt would reach nearly $200 million, a load district officials say cannot continue.
“I don’t think you have to be an economist to realize that is unsustainable,” District Business Administrator Robert Finger said. “We’re not the federal government; we can’t keep cranking out money on a printing press.”
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On the bright side, residents will see a slight tax cut — an average of less than $4 per home — for the year.
The final budget plan, approved in a 5-1 vote with board member Shlomie Stern opposing, is actually higher than the initial proposed budget introduced March 17. It totaled $214 million and asked for a $68 million loan.
But Finger said the loan amount increased due to a preschool enrollment drop that resulted in less state preschool aid.
The latest spending plan includes a $109 million tax levy that will mean an average school tax decrease of $3.95 for a home assessed at $300,000.
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The budget includes the same $750,000 for legal services as last year, the majority of which goes to board attorney and spokesman Michael Inzelbuch.
Other major budget items include $500,000 set aside for new textbooks and other resources, as well as another $500,000 for two capital projects: a Clifton Avenue School auditorium renovation and a new parking lot at Spruce Street School.
Health costs are down about $3.3 million, Finger said, due to some staff switching to the state system. But, he added, the district is having to transport about 1,500 more non-public school students in the coming year.
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There are no layoffs expected, Finger said, adding that all positions are funded and some vacant positions will be filled.
Still, he stressed that the ongoing state loans cannot continue, noting that with this latest request, the district’s state loan debt is up to $195 million.
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Because of that debt, the district has to set aside more than $14 million in the new budget just for state loan repayment, after paying more than $5 million of the debt in the current budget.
“Let’s just face it, this has to be addressed. When, we don’t know,” said Finger. “This is our debt clock and it keeps going up.”
The budget must still be approved by the Ocean County Superintendent of Schools.
The proposed budget is being submitted as the district awaits a decision by the state education commissioner related to its controversial state funding formula.
An administrative law judge recently ruled on a 2014 lawsuit that had claimed the district did not provide a “thorough and efficient education.”
Judge Susan Scarola recommended in her ruling that the state education commissioner conduct a needs assessment of the district’s ability to meet its obligations and make “appropriate recommendations,” but she stopped short of directly blaming the state aid funding formula.
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And the ruling, which stems from a lawsuit led by Lakewood High School teacher and attorney Arthur Lang, technically does not obligate acting Education Commissioner Angelica Allen-McMillan or state legislators to do anything.
Allen-McMillan has until June 1 to issue a response, but that response could be to do nothing, change the state funding formula or institute other policies to impact the district’s standing.
The sticking point for Lang and other funding advocates has been how Lakewood’s funding is assessed given its unusual situation as a public school district that serves tens of thousands of nonpublic students who live in the community.
While Lakewood has nearly 6,000 public school students, it also has more than 30,000 nonpublic students who rely on the public school district for many services, most importantly busing.
State law requires that school districts pay to bus private school students if their school is two miles or more from their homes. In Lakewood, the cost is immense for those attending more than 100 private schools.
Lakewood’s state aid actually increased slightly this year, from $23.39 million to $23.81 million, for a $420,000 jump. But district officials still contend it is vastly under-funded.
That funding formula, which broadly sets each district’s needs based on overall public school enrollment and assessed wealth in each district, has failed to provide Lakewood with its true need, experts contend.
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Lakewood’s 2020-2021 district budget surpassed $204 million, with more than $24 million set aside for nonpublic school transportation. That’s more than $1 out of every $10 spent busing student to private schools.
Inzelbuch, the board attorney, made several points about the funding disparity in his written response to the ALJ ruling but added more fuel to the fire during the April 21 school board meeting where he went on a 20-minute attack of the judge’s determination that the district had failed to provide a “thorough and efficient” education for students, calling the ruling “ridiculous” and a “perversion of justice.”
He then went on to demand more state funding.
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Speaking from a desk in the Lakewood High School gymnasium during the April 21 Zoom meeting, Inzelbuch read off a litany of improved test scores and graduation rates, while urging the state increase its state aid.
“if we don’t get the money it will get dark,” he said, while lowering the lights in the gymnasium during his address. “Continuous loans are not sustainable.”
There was no immediate word from the state on the district’s loan request. In the past, State Senate President Stephen Sweeney, D-Gloucester, has called Inzelbuch’s compensation “outrageous” and “particularly egregious,” and held it up as evidence of slack oversight of the district’s finances.
Joe Strupp is an award-winning journalist with 30 years’ experience who covers education and Monmouth County for APP.com and the Asbury Park Press. He is also the author of two books, including Killing Journalism on the state of the news media, and an adjunct media professor at Rutgers University and Fairleigh Dickinson University. Reach him at firstname.lastname@example.org and at 732-413-3840. Follow him on Twitter at @joestrupp