SENATE, No. 1385

 

STATE OF NEW JERSEY

 

INTRODUCED JUNE 27, 1996

 

 

By Senators EWING and PALAIA

 

 

An Act concerning the calculation of maximum permissible net budgets of public 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 85 of P.L.1990, c.52 (C.18A:7D-28) is amended to read as follows:

    85. a. "Maximum permissible net budget" means the amount calculated as follows:

    PNB = PCI x PR x PBY where

    PNB is the maximum permissible increase in the net budget for the budget year;

 

    PCI is the average annual percentage increase in per capita income as defined in section 3 of P.L.1990, c.52 (C.18A:7D-3);

    PR is 1.7442 - (.6460 x BR), however PR shall not be greater than 1.1628 or less than .9690;

    BR is the ratio of the district's local levy budget of the prebudget year to the district's maximum foundation budget for the budget year as determined pursuant to section 6 of P.L.1990, c.52 (C.18A:7D-6); and

    PBY is the net budget for the prebudget year. In the event that a district's net budget was less than its maximum permissible net budget in each of the three prior budget years, PBY may be increased by an amount not to exceed the difference between its maximum permissible net budget and its net budget for each of the prior three budget years, provided that the difference has not previously been included in the calculation of PBY.

    b. In determining a district's maximum permissible net budget for the 1991-92 school year, the district's net budget for the 1990-91 school year shall be increased by the amount of any current expense or capital outlay surplus which was appropriated in the district's 1990-91 annual school budget.

   c. Annually through the 1995-96 school year for each special needs district, the commissioner shall calculate an equity spending cap which shall provide for a percentage increase in the district's budget that, if sustained for each year through the 1995-96 school year, would result in the per pupil budget of the special needs district equaling the average per pupil budget of the districts included in the Department of Education's district factor groups I and J. The equity spending cap shall also allow for those budget items included in the net budget, but excluded from the local levy budget, to grow annually at the PCI or CPI, as appropriate. To ensure equity, the commissioner shall also adjust the calculation of the equity cap, when necessary, to account for the payment of teacher pension and social security aid.

    As used in this subsection:

    CPI is the consumer price index as defined in section 3 of P.L.1990, c.52 (C.18A:7D-3);

    PCI is the average annual percentage increase in per capita income as defined in section 3 of P.L.1990, c.52 (C.18A:7D-3); and

    Per pupil budget is the budget divided by the resident enrollment.

    d. If, for any year, a special needs district's equity spending cap determined by the commissioner pursuant to subsection c. of this section exceeds the maximum permissible increase in the net budget as determined pursuant to subsection a. of this section, the district may increase its net budget in accordance with the equity spending cap.

    e. A board of education of a school district which: (1) for the two years prior to the prebudget year, has had an annual average increase in the district's resident enrollment which is greater than two percent; or (2) between the prebudget year and the year prior to the prebudget year, has had an increase in the district's local cost for special education pupils which is greater than five percent; or (3) during the 1990-91 school year but prior to April 1, 1991, has entered into a lease purchase agreement, may apply to the Commissioner of Education for a waiver of the expenditure limitation established pursuant to this section. A board of education of a school district that sends pupils and pays tuition to a special needs district may apply to the Commissioner of Education for a waiver of the expenditure limitation established pursuant to this section. Any waiver granted by the commissioner pursuant to this subsection shall not be included in the question on excess expenditures which is to be submitted to the voters of the district pursuant to subsection f. of this section.

    f. Any school district may submit a proposal to raise the amount of tax levy necessary to exceed the maximum permissible net budget permitted by this section to the legal voters of the district for type II school districts without a Board of School Estimate and to the Board of School Estimate for those school districts with a Board of School Estimate as required during the school budget approval process pursuant to chapters 22 and 54 of Title 18A of the New Jersey Statutes and section 13 of P.L.1971, c.271 (C.18A:46-41). The proposal to raise additional tax levy to exceed the maximum permissible net budget shall be in addition to the amounts required to be approved for each school district in accordance with chapters 22 and 54 of Title 18A of the New Jersey Statutes and section 13 of P.L.1971, c.271 (C.18A:46-41). In the event that a school district's proposal to raise the tax levy to exceed the maximum permissible net budget is not approved in accordance with the budget approval process set forth in chapter 22 of Title 18A of the New Jersey Statutes for type II districts and for type I districts, chapter 54 of Title 18A of the New Jersey Statutes for county vocational school districts and section 13 of P.L.1971, c.271 (C.18A:46-41) for county special services school districts, that disapproval shall be deemed final and shall not be subject to further review or appeal.

(cf: P.L. 1991,c.62,s.19)

 

    2. This act shall take effect immediately and shall first apply to the 1997-98 school year .

 

 

STATEMENT

 

    This bill amends the calculation of the maximum permissible increase in a school district's budget for those school districts that did not budget up to the maximum permissible net budget level in any of the three prior budget years. As provided in the bill, such a school district would be allowed to increase its net budget for the prebudget year by an amount not to exceed the difference between the maximum permissible net budget and the net budget in each of the three prior budget years, provided that the difference in any particular prebudget year had not been used in the calculation of the district's maximum permissible net budget.

 

 

                              

 

Permits a board of education to increase its maximum permissible net budget for the budget year under certain circumstances.