David Sciarra: Governor Christie wipes out school districts' rainy day funds
BY DAVID SCIARRA
COMMENTARY
With a stroke of the pen, Governor Christopher Christie has wiped out $476 million in funds set aside by school districts to help address looming deficits in next year's (2010-11) district budgets.
Districts put away these "rainy day" funds in surplus and reserve accounts during 2008-09, anticipating less state aid and local revenue in 2010-11. By law, districts must use any surplus funds over 2 percent to build their budgets in the second year after the funds have been accumulated. The Governor, by executive order, has decided not to pay $476 million in state aid due to districts to support educational programs in the current (2009-10) school year. Instead, the Governor has directed districts to use their rainy day funds to pay for current year expenses, rather than keeping those funds in reserve to build next year's budget. Over 500 districts are affected by the state aid cut and loss of reserve funds.
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