Why don?t school boards budget for routine repairs every year?
By Seth Grossman, Political Columnist
(Reprinted from December 15, 2010 Current-Gazette Newspapers of Atlantic and Cape May Counties, http://shorenewstoday.com/index.php/…very-year.html)
?A bond referendum is an opportunity for local voters to decide whether the school district will be authorized to raise funds through the sale of bonds, in order to address specific facility construction, additions, capital improvements, repairs and renovations.?? Somers Point Board of Education Information Guide, December 2010
The Somers Point Board of Education did everything it could to get a ?yes? vote last Tuesday. It paid $4,000 to hold an extra election in December ? when most voters were busy getting ready for vacations and the holidays. (Somers Point voters usually vote ?no? in regular April elections).
Instead of mailing out sample ballots showing the exact ballot question, the school board mailed out an attractive brochure urging a vote ?for the security of our children.?
Both that brochure and the ?information guide? distributed by school officials barely mentioned words like ?debt,? ?borrow? or ?$2.3 million.? The board never directly said it was borrowing money that would be paid back with interest through higher taxes. Instead, it referred to the ?sale of bonds? as something more like a bake sale than a 15-year mortgage on every piece of real estate in Somers Point.
For any senior citizen who did figure out that a yes vote meant higher taxes, the guide explained how to apply for the ?Senior Freeze? program, so somebody else would pay them.
The Board of Education for Buena Vista Township and Buena Borough asked its voters to approve $4 million of new debt in much the same way.
Borrowing money may be good these days. If the federal government keeps borrowing 40 cents of every dollar it spends, the dollar might crash and Somers Point may be able to pay back its $2.3 million loan with some bake sales in a few years. But if the Chinese and others decide to stop loaning us money and the federal government defaults, we may end up with deflation, in which prices go down ? like during the Great Depression. Then Somers Point (and Buena Regional) property owners will have a real problem.
Neither Somers Point nor Buena Regional is borrowing to build anything new. They are both replacing things like roofs, doors, windows, etc., and even curtains for the auditorium. Why don?t these school boards follow the same rules as every condominium association? Why don?t they budget and pay for routine repairs and replacement every year, according to a regular maintenance schedule? This is what is expected of ordinary citizens who volunteer to serve on condominium association boards.
Republican Governor Chris Christie is partly to blame. Earlier this year, he cut school aid for responsible school districts that set aside money like this, and gave extra money to irresponsible districts that overspent and were broke.
When school districts borrow money, they pay 3 to 5 percent off the top to pay-to-play lawyers and Wall Street bond experts.
Buena Regional and Somers Point school officials say they are getting a good deal, since state government is paying 60 percent of the cost of the repairs and replacement for Buena Regional and 40 percent for Somers Point.
But why is the state paying roughly half of routine repair and replacement costs for just these two school districts, when it yanked money away from so many others? Isn?t the state broke? New Jersey?s income tax is supposed to be dedicated to property tax relief. But Governor Christie gave two-thirds of that income tax money to schools in 30 selected Abbott cities. If most of the other third goes to towns that borrow money for routine maintenance, it means almost no state income tax money for anyone else.
It appears that the New Jersey Schools Development Authority is borrowing roughly $100 million for a handful of selected school districts around the state. But where did it get money? Voters just amended the New Jersey Constitution in 2008 so that state authorities like the NJSDA could no longer borrow without voter approval. This was after Democratic Governor Jon Corzine complained that he had to hock the toll roads because the state was $175 billion in debt ? mostly because of independent authorities that borrowed without voter approval.
Also, school districts rarely borrowed money or got state money for routine repairs and replacements until 2002. That was when Democrats and Republicans in Trenton passed a state law forcing all public schools to have ?project labor agreements.? This gave union companies a near monopoly and jacked up costs by 40 to 60 percent.
Somers Point attorney Seth Grossman appears on 1400AM talk radio 3-4 p.m. Mondays and Tuesdays and on 92.1FM 9-10 a.m. Saturdays. For information see www.libertyandprosperity.org, email firstname.lastname@example.org or call (609) 927-7333. Breakfast discussions are held 9:30-10:30 a.m. every Saturday at the Shore Diner on Fire and Tilton roads in Egg Harbor Township.