SENATE, No. 1353

STATE OF NEW JERSEY

INTRODUCED JUNE 20, 1996

By Senator PALAIA

An Act concerning debt service aid for special needs school districts and amending P.L.1990, c.52.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 18 of P.L.1990, c.52 (C.18A:7D-22) is amended to read as follows:

    18. Each district's State aid for debt service shall be calculated as follows:

    A = DB x (MB - FS)/MB

where

    A is the district's State aid for debt service;

    DB is the district's net debt service budget; except that for special needs districts DB is the district's debt service budget;

    MB is the district's maximum foundation budget, as determined pursuant to section 6 of this amendatory and supplementary act ; and

    FS is the district's local fair share, as determined pursuant to section 7 of this amendatory and supplementary act.

(cf: P.L.1990, c.52, s.18)

    2. This act shall take effect immediately and shall first apply to State aid adjustments for debt service for the 1995-96 school year.

STATEMENT

    This bill revises the calculation of debt service aid for special needs school districts. The bill provides that for special needs school districts State debt service aid shall be calculated based on their debt service budget as opposed to their net debt service budget.

    This bill provides relief for special needs districts which have limited ability to reduce their general fund tax levy because of the Supreme Court decision in Abbott v. Burke. In order to keep the local tax levy from rising precipitously, some special needs school districts have appropriated money to their debt service budgets and as a result have faced reductions in their State debt service aid. The appropriation of additional funds to debt service has been necessary in these communities due to the difficulties they face with municipal overburden. By allowing debt service aid to be calculated on the district's debt service budget as opposed to its net debt service budget, these special needs school districts will not be penalized by future State aid reductions.

Calculates State debt service aid for certain special needs school districts based on their debt service budgets.