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State Budget Overview

State Budget Overview. Presented by: Michael Vrancik NJSBA Director of Governmental Relations. Objectives. Understand the State Budget: revenues, expenditures, language & flexibility. Understand the context of advocating for school funding in the fiscal 2006-07 budget.

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State Budget Overview

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  1. State Budget Overview Presented by: Michael Vrancik NJSBA Director of Governmental Relations New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  2. Objectives • Understand the State Budget: revenues, expenditures, language & flexibility. • Understand the context of advocating for school funding in the fiscal 2006-07 budget. New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  3. Major Revenue (in billions) • Income Tax ………………..$10,275 • Sales Tax……………………..6,850 • Corporation Tax……………...2,402 • Lottery Revenue………….…….842 • Cigarette Tax……..……….…....626 • Remaining Sources……...…$7,525 • Total…………..………….…$28,520 New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  4. Major Revenue New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  5. Additional Revenue Information • NJ Constitution requires a balanced budget • Projected revenues are estimates based on economic models and past experience • Dedicated revenue – some taxes are dedicated to specific programs New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  6. Expenditures New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  7. Education Spending Comparison (In Billions) • 2005-06 State Appropriations $27,920 • State Funding for Education $9,435 • Education Percentage 33.8% • 2005-06 NJ Federal Support $9,796 • Federal Funds for Education $836 • Education Percentage 8.5% New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  8. Context of Education Funding • Education spending outpaces all other State program costs. • Given the State’s financial situation, it is unlikely that funding will increase this year. • No single component of the State budget has a bigger impact on property taxes. • Within current funding levels there is room for reallocation e.g. non-public school aid exceeds $100 million. New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  9. Statewide Programs (In Billions) Educational, Cultural, Intellectual Develop. Government Direction, Management Control Physical & Mental Health Public Safety Economic Planning, Develop. & Security Capital Transportation Community Develop., Environmental Mgmt Special Gov. Services Debt Service New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  10. State Operations New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  11. Difficult Spending Choices • FY 2006-07 budget cycle contends with projected revenue shortfall of nearly $4 billion. • State operations represents less than 20% of the overall State spending plan. • The complexity of the spending requirements make across-the-board reductions difficult. New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  12. NJSBA Advocacy Efforts • Seek legislative commitment for no reductions to school aid. • Focus on areas in the State Budget where reallocation can provide more effective use of state funding. • Inform Legislators ways they can help local boards hold the line on spending: • Provide flexibility to negotiate SHP provisions • Remove impediments to shared services with local governments New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  13. How You Can Help Ask Your Legislators 4 Questions: • Will you commit to no reductions in school aid funding in the FY 2006-07 State Budget? • Will you focus on reallocating misdirected education funds toward public education? • Will you support changes to the SHP to allow local boards to negotiate benefits including the elimination of dual coverage? • Will you consider NJSBA recommendations to implement cost savings through voluntary shared services agreements? New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  14. Talking Points • Maintaining at least the current level of State aid for education is extremely important because it is the single largest factor limiting further growth in local property tax rates. • Focusing on program allocations within the state’s education expenditures would ensure that funding is going to the areas of greatest priority for public tax dollars. New Jersey School Boards Association – Serving Local Boards of Education Since 1914

  15. Talking Points • Being able to negotiate benefits within the SHBP is key to cost-containment at the district-level. • Legislation will ease the process of sharing services between school boards and other levels of government. Cost savings helps both the local districts and the State. New Jersey School Boards Association – Serving Local Boards of Education Since 1914

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