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Budget Timing

It is said that timing is everything in life, and those preparing school budgets this year would certainly agree.

As if it isn’t difficult enough to walk the line between stakeholders and prepare a budget that is at least moderately satisfactory to all, New Jersey school district business administrators and their staffs are faced with a series of incompatible deadlines that will only add to their angst.

Our new governor has been given an extension on his annual budget recommendations, a favor traditionally granted to new governors. As a result the address will likely be given March 21 instead of in February. State aid figures for school districts are tied to that address, meaning that there will be far less time to incorporate those numbers in school budgets. The Department of Education normally forwards the award amounts to school districts within two days after the address. Instead, the department can now only issue approximate directives to waiting districts.

To make matters worse, the 2006-07 spending growth limitation, or budget cap, is not yet known to districts. The current cap of the greater of 2.5% or the rate of inflation is the last known rule. Usually the Department of Education notified school districts of the budget cap by late fall but districts are still waiting now.

The other shoe dropping is the election and school budget vote, as described by our own BA Steffi Jo Decasas:

Last year’s election date was April 19th. This year the date is April 18th. Last year the budget hearing had to take place between March 22nd and March 31st and the budget had to be advertised in the newspaper 4 days prior to the hearing

In short, Steffi Jo and others in her position will be scrambling to make all the numbers fit during a quick succession of deadlines that do not allow for adequate pre-planning. In a missive to members, the NJ Association of School Business Officials (NJASBO) describes the issue in this series of events:

"Give or take, here's what would have to happen:

  1. The state would have to send us our first budget download as soon as possible. This is important because we need the CPI number and the ability to calculate SGLA,s, cap limits, etc.
  2. The state should guide districts to budget state aid for 06/07 at current levels subject to change pursuant to the Governor's address on March 21. This is unusual but not unprecedented.
  3. Accordingly, we prepare and adopt our budgets on or about the last week of February.
  4. We then submit budgets to our County Offices on or about the first week of March.
  5. We set public hearing dates for the last week of March.
  6. After County budget approvals we advertise our budgets indicating that state revenues are only estimates and will likely change at the public hearing.
  7. We receive our actual state aid no more than two days following the Governor's address on March 21.
  8. We adjust our revenue and tax rates accordingly and readopt our final 06/07 budget at the public hearing.
  9. Our ballot Question could then be submitted to the election board on April 1 consistent with current law.

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