LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 10

STATE OF NEW JERSEY

212th LEGISLATURE

 

DATED: DECEMBER 27, 2006

 

 

SUMMARY

 

Synopsis:

Implements CORE proposals, including "Uniform Shared Services and Consolidation Act"; user-friendly budgets; November fire district elections; revision of county superintendent of schools title and duties.

Type of Impact:

Potential local government cost reduction; potential State expenditure increase.

Agencies Affected:

Department of Education;  counties, municipalities, and agencies and instrumentalities thereof; local school districts.

 

Office of Legislative Services Estimate

Fiscal Impact

Year 1 

Year 2 

Year 3 

 

State Cost

Indeterminate Potential Expenditure Increase - See Comments Below

 

Local Savings

Indeterminate Potential Local Cost Decrease - See Comments Below

 

 

 

 

·        The Office of Legislative Services (OLS) estimates that this bill may result in an indeterminate decrease in local costs, by eliminating many fire district elections that currently are held separately from general elections; by increasing State oversight of local school district budgets, operational and administrative practices, and by reducing existing statutory obstacles to local undertaking of consolidations and joint and shared services.

·        The OLS estimates that this bill may result in an indeterminate increase in State costs, by reconfiguring the current office of the county superintendent of schools and expanding the duties and responsibilities of that office. 

·        The OLS notes that indeterminate increases in State expenditures may result from provisions that require annual State funding of property tax credits to residential property owners and residential tenants in situations where municipal consolidations are voluntarily implemented.

BILL DESCRIPTION

 

      Senate No. 10 of  2006 groups together certain individual components of the CORE proposal that was considered by the Joint Legislative Committee on Consolidation and Shared Services.

 

      Article 1 contains the “Uniform Shared Services and Consolidation Act,” which includes provisions designed to encourage savings among local units of government through the use of shared services, joint meetings, and municipal consolidation; codifies the “Sharing Available Resources Efficiently” (SHARE) program of financial incentives for local units to investigate shared services opportunities and also empowers residents to promote shared service and consolidation opportunities; and provides methods for resolving Civil Service barriers to shared services and consolidation in situations where some participating local units have adopted Civil Service and some have not.

      Article 2 of the bill requires preparation by municipalities and counties of “user-friendly” budgets.  Article 3 moves fire district elections to the date of the November general election.

      Article 4 reconfigures the office of the county superintendent of schools, by re-naming the position the executive county superintendent of schools, making the position a gubernatorial appointment with an initial three-year term, with re-appointment contingent upon a satisfactory performance assessment, and revising the duties of the office.  In addition to assuming the current duties of the county superintendent, the executive county superintendent of schools is assigned expanded duties, including: promoting administrative and operational efficiencies and cost savings within school districts; recommending the consolidation of certain districts’ administrative services; eliminating of districts not operating schools, if appropriate; developing a plan to consolidate school districts in the county and require the affected districts to hold a referendum on the plan; promoting the coordination and regionalization of public and nonpublic pupil transportation services, cooperative purchasing of textbooks and other instructional materials; and monitoring the need for and delivery of services to special education students.  The article also provides that the executive county superintendent is required to review all school district budgets and may disapprove a portion of the school district’s proposed budget upon determining that the district has not implemented all potential efficiencies in the administrative operations of the district or that the budget includes excessive non-instructional expenses. Under the article, local school district may apply to the executive county superintendent of schools to have services including, but not limited to, transportation, personnel, purchasing, payroll, and accounting assumed by the office of the superintendent.

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that this bill may result in decreased local costs in indeterminate amounts.  Fire district costs are likely to be reduced by holding elections of fire district commissioners, as provided in Articles 3, during general elections, and by further eliminating special elections to approve fire district property tax levies.  A precise estimate of these cost reductions is not feasible since the OLS lacks current and comprehensive election cost information for fire districts.

      The OLS further estimates that the potential impact of the provisions of Article 4 of the bill is to increase State expenditures by indeterminate amounts while decreasing local school district costs by indeterminate amounts.  The provisions comprising Article 4, by revising the office of county superintendent of schools, re-naming the office the executive county superintendent of schools, and by significantly expanding the duties of the office, imply a level of staffing and operational costs above those currently provided through State appropriations.  The OLS lacks sufficient information about current costs and operational practices of the several county superintendent offices with which to develop an estimate of a level of spending adequate to ensure performance of all current and expanded duties.  The effective exercise of these expanded duties by the office of the executive county superintendent will potentially lead to reduced local school district costs, for example through consolidation of administrative services (subsection e. of section 68), elimination of school districts that do not operate schools (subsection g. of section 68), oversight of school district budgets (subsection l. of section 68) and assumption of certain services on behalf of local school districts (section 73).    

      The OLS additionally estimates that the potential impact of the provisions of Article 1 is to decrease by an indeterminate amount local government costs, as well as to increase State expenditures by an indeterminate amount.  Subarticles B and C, by clarifying and establishing procedures and conditions for entering into shared service agreements and joint meetings, respectively, are intended to remove obstacles to those undertakings, and would therefore facilitate future multi-government arrangements that in the past have resulted in cost savings.  Subarticle D provides more flexible options to municipalities seeking to study or effect consolidation, and in doing so could lead to municipal consolidation more frequently than under current law.  Also, subsection b. of section 28, contained within Subarticle D, provides property tax credits for owners of residential property and residential tenants to negate increases in school and municipal property taxes that result from municipal consolidation, a new and potentially decisive incentive to consolidation.  In requiring full annual state reimbursement of the cost of this credit, which endures until the residential property is sold or the tenant moves, this provision could also result in increased annual State expenditures by an indeterminate amount. 

 

Section:

Legislative Budget and Finance

Analyst:

Frank W. Haines

Assistant Legislative Budget and Finance Officer

Approved:

David J. Rosen

Legislative Budget and Finance Officer

 

This fiscal estimate has been prepared pursuant to P.L. 1980, c.67.