New Jersey lawmakers have approved legislation intended to help school districts with large populations of students from military families.
The bill, which is sponsored by Assemblymen Ronald Dancer, R-12th of Plumsted, and Troy Singleton, D-7th of Palmyra, would permit districts that receive federal impact aid to establish special reserve accounts to carry over unused funds from one school year to the next.
The accounts would be separate from a district’s budget surplus or fund balance, which is capped by state law.
The bill was approved by the Assembly in September and by the Senate on Monday, sending it to Gov. Chris Christie’s desk for consideration. The governor has 45 days to sign, veto or recommend changes.
Federal impact aid was established in 1950 to support school districts that serve students who live on large federal facilities and whose families pay none of the property taxes that traditionally cover educational expenses.
In Burlington County, Pemberton Township, North Hanover, New Hanover and Northern Burlington County Regional receive impact aid because of their large populations of students who reside on Joint Base McGuire-Dix-Lakehurst.
The aid is often crucial to those school districts’ finances to ensure they don’t get shortchanged because of the federal presence. But the aid has dwindled in recent years due to federal budget constraints.
During the 2014-15 school year, Burlington County’s four impact-aid districts anticipated receiving a combined $8.2 million in federal aid, a sum roughly 35 percent less than the $12.6 million those districts got in 2012-13, according to district budget documents.
Some of the reductions were the result of broad automatic spending cuts mandated under the 2011 Budget Control Act. The spending cuts, known as sequestration, were rolled back as part of an agreement reached by Congress in 2013. However, the deal covers spending only through Sept. 30 this year.
Supporters of the legislation claim the special reserve accounts would help school districts deal with the volatility of the federal aid, which is awarded during the middle of the school year.
“School districts on military bases, in particular, are at the mercy of decisions far beyond local control,” Singleton said in a statement. “The uncertainty this creates can be tempered by the careful type of long-term budget planning authorized under this bill, which will certainly help districts like that at (the joint base).”
Dancer, who introduced the measure in May 2013, said it was the right thing to do from a moral and economic standpoint.
“It protects millions of dollars of educational funding for the children whose families are fighting to keep us safe. New Jersey will set a national example by committing to use these funds for what they are intended — educating the children of our brave men and women in the armed forces,” Dancer said.
He said 16 of New Jersey’s 21 counties have school districts that receive impact aid. He also said the federal government likely would preserve funding in states with protections in place than those without.
“We need to act quickly and make sure our schools serving these military families don’t lose these federal dollars,” Dancer said.
In addition to allowing districts to create reserve accounts, the legislation specifies that the state Department of Education may not award less aid to a school district based on the impact aid the district receives or holds in reserve.
The language addresses an issue that arose in 2010, when Christie slashed $475 million in state aid to districts to help close a more than $2 billion budget deficit.
The reductions were based on the money the districts had in their reserves and surpluses.
Northern Burlington County Regional was docked $2.1 million, or roughly 20 percent of the total state aid it was promised. The district appealed the cut, arguing that $1.67 million of its surplus was federal impact aid, and that federal law prohibits states from providing less aid to districts because of the federal aid they receive.
A state appeals court ruled in Northern’s favor, and the Department of Education agreed to reimburse the district $1.67 million in aid it had withheld.
Northern Burlington Superintendent James Sarruda said the legislation would provide more accounting clarity and flexibility by ensuring that impact aid is not commingled with other funding.
If signed by the governor, it also would prevent a repeat of the aid dispute that Northern was forced to fight.
“One of the guidelines of impact aid is that it shouldn’t influence the amount of aid districts receive,” Sarruda said. “If the state needs money in any area, they can’t dock aid based on the impact aid we receive. And it will be clear to everyone where the money is.”