Bill Text: NJ A4294 | 2024-2025 | Regular Session | Introduced
Bill Title: Permits school districts to receive loans from State to support operating budget under certain circumstances.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced) 2024-05-06 - Introduced, Referred to Assembly Education Committee [A4294 Detail]
Download: New_Jersey-2024-A4294-Introduced.html
Sponsored by:
Assemblyman ALEX SAUICKIE
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Permits school districts to receive loans from State to support operating budget under certain circumstances.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning school financing and supplementing Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. There is established in the Department of Education a nonlapsing, revolving dedicated account designated the "School District Budget Relief Loan Account" which shall be credited with the monies appropriated, transferred, or otherwise made available for the purposes of providing a loan to a school district pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). Any interest that shall accrue on the monies in the account shall be credited to the account.
2. a. The School District Budget Relief Loan Account established pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be used for the purpose of providing loans to school districts that have significant budgetary shortfalls that would otherwise require the elimination of multiple nonmandatory programs including, but not limited to: advanced placement courses and other specialized instructional programs; kindergarten; sports teams; student clubs and other programs, such as honor societies; musical programs, including bands; and student body government programs.
b. Notwithstanding any law, rule, or regulation to the contrary, a school district that has submitted an application for a loan pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be allowed to delay submission of a proposed budget as required pursuant to section 5 of P.L.1996, c.138 (C.18A:7F-5), the holding of public hearings on the proposed budget, the date for the notification of nontenured staff as required pursuant to section 1 of P.L.1971, c.436 (C.18A:27-10), and any additional budgeting deadlines that the Commissioner of Education deems appropriate until a decision has been made to approve or deny the loan application and the school district has been notified of the decision.
c. When making a decision regarding a district's loan application, the commissioner shall consider whether the loan is necessary to ensure the provision of a thorough and efficient education. For any district for which a State monitor has been appointed by the department, the commissioner shall approve the loan application if the State monitor has indicated that viable budget reductions and general fund tax levy increases are not sufficient to meet the budgetary shortfall. If the commissioner denies a district's loan application, the commissioner shall provide written documentation to the superintendent of the district which shall explain the reasons why the commissioner has determined that the quality of education in the district is better served by denial of the application than by approval.
3. a. Beginning in the 2024-2025 school year, a school district shall be able to apply for a loan pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) after the district has received its State school aid notice following the State budget message by the Governor, as required by section 5 of P.L.1996, c.138 (C.18A:7F-5). The Commissioner of Education shall, within 30 days of the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), develop a process by which districts are able to apply for the loans. The commissioner may take such anticipatory action as shall be necessary to ensure the availability of loans for the 2024-2025 school year.
b. The loan application shall meet all of the requirements set forth in rules and regulations promulgated by the commissioner and shall include the following information:
(1) the nature and amount of the budgetary shortfall, including an explanation as to why the district is unable to make sufficient changes to its budget through personnel and program reductions or general fund tax levy increases;
(2) an analysis of the impact of the budgetary shortfall on the district's ability to provide a thorough and efficient education. The analysis may include a description of the impact of the budgetary shortfall on student learning and participation in extracurricular activities and shall include a demonstration that the district spent below adequacy, as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70), in the year prior to the budget year for which the district is applying for the loan;
(3) information about the district's general fund tax levy, including a demonstration that, in each of the five years preceding the budget year for which the district is applying for the loan, the district increased its general fund tax levy by at least two percent; and
(4) information concerning the district's capital reserve fund balance and capital outlay budget.
c. Prior to submitting the application for a loan to the department, a district shall first submit its application and a preliminary budget to the executive county superintendent and, if a State monitor has been appointed to the district, the district's State monitor. The executive county superintendent and, if applicable, the State monitor shall review the information provided and indicate to the commissioner whether they recommend that the commissioner approve the loan to the district.
4. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Commissioner of Education is authorized to adopt immediately upon filing with the Office of Administrative Law rules and regulations necessary to implement this act. The rules and regulations adopted pursuant to this section shall be effective for a period not to exceed 18 months following the date of filing and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
5. This act shall take effect immediately.
STATEMENT
This bill permits school districts to receive loans from the State to support the district's operating budget if the district is anticipating a significant budgetary shortfall.
The bill establishes the School District Budget Relief Loan Account for the purpose of providing loans to school districts that have significant budgetary shortfalls that would otherwise require the elimination of multiple nonmandatory programs including: advanced placement courses and other specialized instructional programs; kindergarten; sports teams; student clubs and other programs, such as honor societies; musical programs, including bands; and student body government programs. A school district that has submitted an application for a loan would be allowed to delay submission of a proposed budget, the holding of public hearings on the proposed budget, the date for the notification of nontenured staff, and any additional budgeting deadlines that the Commissioner of Education deems appropriate until a decision has been made to approve or deny the loan application and the school district has been notified of the decision.
Beginning in the 2024-2025 school year, a school district is to be able to apply for a loan after the district has received its State school aid notice following the State budget message by the Governor. Within 30 days of enactment, the commissioner is to develop a process by which districts are able to apply for the loans. The loan application is to include the following information: (1) the nature and amount of the budgetary shortfall, including an explanation as to why the district is unable to make sufficient changes to its budget through personnel and program reductions or general fund tax levy increases; (2) an analysis of the impact of the budgetary shortfall on the district's ability to provide a thorough and efficient education, which may include a description of the impact of the budgetary shortfall on student learning and participation in extracurricular activities, and which is required to include a demonstration that the district spent below adequacy in the year prior to the budget year for which the district is applying for the loan; (3) information about the district's general fund tax levy, including a demonstration that, in each of the five years preceding the budget year for which the district is applying for the loan, the district increased its general fund tax levy by at least two percent; and (4) information concerning the district's capital reserve fund balance and capital outlay budget.
Prior to submitting the application for a loan to the department, a district is required to first submit its application and a preliminary budget to the executive county superintended and, if a State monitor has been appointed to the district, the district's State monitor. The executive county superintendent and, if applicable, the State monitor are to review the information provided and indicate to the commissioner whether they recommend that the commissioner approve the loan to the district.
When making a decision regarding a district's loan application, the commissioner is to consider whether the loan is necessary to ensure the provision of a thorough and efficient education. For any district for which a State monitor has been appointed, the commissioner is required to approve the loan application if the State monitor has indicated that viable budget reductions and general fund tax levy increases are not sufficient to meet the budgetary shortfall. If the commissioner denies a district's loan application, the commissioner shall provide written documentation to the superintendent of the district which shall explain the reasons why the commissioner has determined that the quality of education in the district is better served by denial of the application than by approval.
