Efficiencies Here, But Real Savings There

As we first noted yesterday here at NJ Business Matters, the legislature's research arm is forecasting state tax receipts to come in below the Governor's original estimate. The difference is a $289 million question that must be answered through either further spending cuts or tax increases. If you're a loyal reader, then you know that CIANJ has outlined a host of possible cuts in areas that government simply cannot continue to afford - such as within the Division of Community Affairs.

This year's budget also features state aid cuts to New Jersey's smallest towns with a way to get the money back if those towns with populations under 10,000 merge or share services. Given the fact 19 of our 120 state legislators are dual office holders, that discussion sometimes becomes terse.

Shared services in small towns would offer some measure of savings, and CIANJ supports efforts to streamline the process and remove legal impediments to mergers that have evolved through state history. However, Assembly Budget Committee Chairman Lou Greenwald strikes exactly the right note when he repeats a message he delivered to our members last May,

He said he's not in favor of cutting the property tax rebate program and instead suggested forcing school districts – which are seeing an increase in state aid in the budget– to become more efficient.

Bingo. New Jersey has 616 school districts - some of which do not even have a school. We spend more per-pupil than any other state, but rank below the national average SAT score, and when you calculate the number of students who pass the HSPA and not the much-discussed alternative test, we rank 24th in graduation rate.

So much of the reason for that is the number of dollars spent that never reach the classroom. Forcing efficiencies there would be a much better use of the budgetary bully pulpit.