Monday, February 22, 2010

School Districts Receive Negative Consequence for Fiscal Prudence

Every year, the Harding Township School District examines all expenditures and continues to employ fiscal responsibility. On January 16, 2009, Lucille Davy, Commissioner of Education released a memorandum asking all school districts to cut back further on all non-essential and discretionary funds “given the uncertainty of the magnitude and impact of a prolonged national recession on our state’s fiscal situation.” What happened to districts that adhered to her recommendation? They were penalized.

Expecting commendation, we received a negative consequence for our fiscal prudence. After receiving Commissioner Davy’s letter, I immediately informed all staff that the district would be employing these recommendations. Many of the district’s plans were postponed due to the memorandum. Unfortunately, we are losing state aid for implementing these suggestions. The message this decision sends is for school districts to spend frivolously prior to the conclusion of every school year, even if that means unwise spending. This completely defies the proper guidelines of entrepreneurship. “Nothing is being spent unless we clearly have to,” remarks Brian Javeline in Forbes Magazine’s How the Best Small Businesses Spend Money. A decrease in state aid will be equivalent to the amount in excess surplus. I am disappointed by the message that this sends moving forward in education. Although we may help the financial environment in the immediate future, the message has already been sent to spend all your funds to prevent penalization.

At the conclusion of last school year, the Board of Education was proud about the money saved in excess surplus. The Board of Education announced the savings on the school website and superintendent’s blog with many commendations from community members. “Please know that the Harding taxpayers are pleased with your fiscal prudence and hope you continue to embody such measures for the next school budget” was among the several anonymous comments. The former mayor commended the Board of Education and myself for our efforts on fiscal prudence and announced the savings at a township committee meeting. This is the response the district anticipated from the NJDOE as a result of following Commissioner Lucille Davy’s memorandum. But instead, we received a reduction in state aid. While extremely disheartening, the taxpayers in Harding can be assured that the district will continue to deliver the best education with utmost fiscal responsibility going forward.
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