SENATE BUDGET AND APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

ASSEMBLY, No. 1943

 

STATE OF NEW JERSEY

 

DATED:  MAY 14, 2009

 

      The Senate Budget and Appropriations Committee reports favorably Assembly Bill No. 1943.

      The bill establishes a three-year pilot program to provide high school seniors in selected districts with a personal financial literacy course.  The Commissioner of Education will select six districts for participation, two in each of the northern, central, and southern regions of the State.  The goal of the pilot program will be to ensure that high school graduates in the pilot districts receive instruction on budgeting, savings and investment, credit card debt, and other issues associated with personal financial responsibility.  At the conclusion of the pilot program, the commissioner will report to the Governor and the Legislature on the feasibility of implementing the program on a Statewide basis.

      As reported, this bill is identical to Senate Bill No. 2211, as also reported by the committee.

 

FISCAL IMPACT:

      The Office of Legislative Services (OLS) notes that the cost of  implementing the bill is dependent on the manner in which the pilot school districts choose to provide the financial literacy course.  Additionally, the total cost would be impacted by the number of students taking the course, which would only be known after the pilot districts are selected.  To address the ambiguity created by these two factors, this fiscal estimate presents a possible range of costs on a per pupil basis.

      At one end of the spectrum, participating school districts might be able to reallocate current staff to teach the course.  Under that scenario, there would be no additional cost associated with the program.  At the other end of the spectrum, a participating district may need to hire an additional teacher for the course.  The OLS estimates that this approach would cost $377 per pupil in the first year.

      This figure was derived as follows:

·        The teacher’s salary in the first year is estimated to be $57,721. This represents the median teacher salary in K through 12 school districts during the 2007-2008 school year indexed by the FY 2009 CPI of 3.999 percent;

·        The teacher’s benefits, including those paid by the State on behalf of the school district, are estimated to total $21,419. This includes $12,305 for medical benefits and 15.79 percent of salary for the employer’s share of Social Security taxes, workers’ compensation, and the contribution to the Teachers’ Pension and Annuity Fund.

·        The total annual compensation, $79,140, is divided by 210 students, the estimated number of students who could be instructed by the teacher in a year.  This estimate is based on the assumption that the teacher is in the classroom for five periods each day with 21 students (the average class size for 12th grade classes according to the most recent School Report Card) per period.  It is further assumed that the course lasts one semester.

      While it is not possible to predict the precise manner in which the pilot districts would choose to provide the course, there are at least two reasons that a reallocation of current staff would appear to be the more likely approach.  First, the Core Curriculum Content Standards for Career Education and Consumer, Family, and Life Skills currently require that students be instructed in various areas related to personal finance.  As such, the pilot districts should have personnel capable of teaching such a course.  Second, districts may be reluctant to hire new staff for a three-year pilot program.