15 Jun Christie’s School-Aid Freeze was Legal, Court Says (NJ)

June 15, 2010

By: Adrienne Lu
Source: The Philadelphia Inquirer

Gov. Christie acted within his authority when he froze $475 million in state aid to schools to close a $2.2 billion budget deficit, a state appellate court ruled Monday.& lt;br />

The Perth Amboy Board of Education lost more than $15 million as a result of Christie’s order to withhold state funding for the remainder of the current fiscal year, which ends June 30. Christie directed the state to withhold an amount equal to the "excess surplus" for each school district.

Excess surplus is defined as surplus exceeding 2 percent of a district’s operating budget; by law, districts are supposed to use their excess surplus to provide tax relief.

Christie said that because he cut aid the way he did, no programs would have to be cut in the current fiscal year.

Perth Amboy officials argued that Christie violated the constitutional principle of separation of powers because under the state statutes, excess surplus is to be appropriated to the school district’s subsequent fiscal year’s budget.

The three-judge panel ruled that under state law, the state education commissioner "is granted broad powers to direct expenditures to meet [thorough and efficient] requirements as well as to address emergency circumstances."

"The Legislature clearly contemplated that situations may arise whereby a district will need to use its excess surplus for matters other than the next year’s operating budget," the opinion continues. "In such cases . . . the commissioner has the power to approve the transfer of those funds to operating costs for the current school year to ensure that a school district provides a [thorough and efficient] education."

The judges said Perth Amboy had "not shown that it will be unable to meet its obligation to provide a [thorough and efficient] education this year if the state withh olds aid, or that it will not have adequate funding next school year to provide a [thorough and efficient] education."

Perth Amboy school officials have not sought approval to transfer money from excess surplus to operating costs, the judges wrote.

Christie spokesman Michael Drewniak said the decision to withhold $475 million from schools was among the most difficult decisions the governor had to make shortly after assuming office to close a $2 billion budget gap.

"We know using surplus balances was a difficult step for school districts, but it was an urgent and necessary step amid a fiscal emergency," Drewniak said. "In that sense, the governor is pleased that the appellate court recognized his significant responsibilities and executive authority during a fiscal and economic crisis."

Christie will host his sixth public meeting Tuesday to discuss his proposal for a constitutional amendment to cap property-tax increases at 2.5 percent per year in Perth Amboy.

The lawsuit could have thrown a wrench into the state’s budget discussions. Just weeks into his term, Christie used an executive order to freeze $1.5 billion in spending and use the surpluses. In addition to the $475 million public school cut, Christie slashed funding for colleges by $62 million, hospitals by $25 million in state and federal matching funds, and NJ Transit by $32.7 million.

Neither the lawyer for the Perth Amboy School District, Richard E. Shapiro, nor Superintendent John M. Rodecker returned calls for comment.

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