Budgeting in the current context requires hard choices, but it’s not complicated.
School districts and municipalities across New Jersey are faced with the same challenge. They have limited sources of revenue and costs are increasing at a rapid rate.
This isn’t a complex puzzle, and the optimal strategy is simple. Maximize revenues while minimizing costs. This means some combination of a) raising the tax levy a reasonable amount, b) taking advantage of grants and other revenue sources, and c) controlling spending.
Anyone trying to convince you that one piece of this puzzle is all you need is either delusional or lying to your face.
In the school district, we’ve attacked the budget head on. For the last few years, state aid has been drying up. We pulled the one lever at our control – raising the tax levy to the cap – and then we set about diligently reviewing and controlling spending. This required targeted cuts, and it wasn’t always popular. But we made sure to balance the competing needs of everyone in our school community, and we kept the district healthy financially.
We’ve also been able to take advantage of grants to make additional investments throughout the district – including universal preschool, renovated classroom space at St. Cloud, and a new building at Mt. Pleasant.
To see what happens when you don’t take the budget seriously, all you have to do is look around Essex County. There are lots of tactics you can use to push off unpopular decisions for a time – raid the fund balance, underestimate costs, defer maintenance.
But eventually, the bill comes due. In East Orange, this led to mid-year layoffs. In Montclair, it led to the collapse of the high school stairwell and to the need for a bailout. You can only delay the inevitable for so long.
Meanwhile, in West Orange, the Mayor has failed to even attempt to present a balanced budget. The past few years, the budget presented to the Council was built around an unreasonable increase to the tax levy. And for a long time, the budget has been subsidized by borrowing.
The result? A town that’s in an extraordinary amount of debt.
It was left to the Council to do the hard work to trim the budget down to size. But in the process, they got lost in the weeds. Last year, they failed to pass a budget until November. They argued over pennies, and in their haste to cut everything they missed an opportunity to begin to address long term problems like capital improvements and debt reduction.
West Orange needs a Mayor who takes the budget seriously. We need someone who will deliver a balanced budget on time, balance the needs of the entire town, and plan for the future.
It’s not complicated. But that doesn’t make it easy. It takes experience and leadership to strike the right balance.