School Funding Issue Heats Up New Jersey Governor's Race

NEW Jersey public schools opened this fall to a problem that won't go away: how to provide equal educational opportunities for all of its students.

This state is not alone. Across the United States, the financing of public schools through property taxes is under siege. Educational advocates charging that the funding mechanism is unfair to poorer school districts have won victories so far in 12 states, including New Jersey.

In each of those states the school financing system has been ruled unconstitutional by the state's highest court, according to the Education Commission of the States. The Commission, a nonprofit policy and research group in Denver, says legal challenges are pending in another 25 states.

In an Aug. 31 ruling, a New Jersey Superior Court judge concluded that the state was spending too little on its troubled urban school districts. Judge Paul Levy declared that, despite spending hundreds of millions of dollars in state school aide over the last two years, the state had not done enough to close the gap between rich and poor districts. He estimated that the state would have to spend $450 million over the next year to close the gap.

Judge Levy's decision has become an issue in the race this year between New Jersey Democratic Gov. James Florio and Republican challenger Christine Todd Whitman.

Governor Florio had convinced the Democrat-controlled legislature in 1990 to pass a record $2.8 billion tax increase that included $1.1 billion dedicated to education. He made the move in anticipation of a state Supreme Court decision that came several months later, throwing out the state's school-funding formula.

FLORIO'S goal was to increase spending by urban school districts to the same level as the wealthiest suburban districts within five years. State lawmakers, facing voter resentment over the new taxes, a year later siphoned off $360 million of the school aid for local tax relief and rolled back part of the tax increase.

But it was too late for the Democrats. The Republicans in 1991 captured veto-proof majorities in the Senate and General Assembly for the first time in decades, and Florio's popularity sank.

Florio, now in the political fight of his life, insists that he did the right thing by revamping school financing before the 1990 Supreme Court decision. ``Probably no other state in the nation has been dealing with this in as progressive a way as we are,'' Florio says. ``We are trying to close their gaps.''

But Ms. Whitman says the Superior Court decision that funding inequality still remains is an indictment of Florio's actions. ``It is inescapable that the Florio administration did nothing to solve the problem; rather, it made the problem worse,'' she says.

A bipartisan study committee appointed by Florio and the legislature is expected to come up with its own suggestions by Nov. 15 (after the election) on ways to end the funding disparities.

Commission Chairman Albert Burstein said higher taxes may be the only way to provide equitable funding for all schools.

``The money does not come magically out of somebody's golden bag,'' he said. ``It's got to come from the usual sources.''

Mr. Burstein did not mention the state income tax, but state aid for schools comes almost exclusively from that levy.

Meanwhile, Kenneth Hall, superintendent of the Matawan-Aberdeen school district in Central New Jersey, worries that a new funding formula will not take into account the state's middle-class school districts. Mr. Hall says in the last five years, while the state has increased aid to urban districts, it had reduced aid to districts like his.

``We've gone down from 40 to 20 percent state aid,'' he says.

His district had to cut advanced placement and foreign language classes, eliminate most of the vocational education program, and increase class sizes. Because of lobbying, rich districts have not had their state aid cut, Hall notes.

Hall, who heads a coalition of 100 middle-income school districts, says legal action is pending in the state courts to end the continuing decline of state funds.