Cape May Hires Attorney to Pursue Change to Regional School Formula

CAPE MAY- In a unanimous vote Nov. 7, City Council approved hiring attorney Vito Gagliardi, a specialist in changing regional school funding formulas, to produce a feasibility study to see what methods Cape May can use to decrease the cost of sending students to the Lower Cape May Regional School District.
The study will cost $48,000.
“We should spend some money to try and save ourselves one heck of a lot of money,” said Deputy Mayor Jack Wichterman, who has spearheaded meetings with other municipalities with similar regional school funding formula problems.
At a Nov. 7 meeting, Gagliardi addressed council noting there were 66 limited purpose regional school districts in the state. He said the vast majority had a community with a relatively high tax base compared to other towns and a relatively small population and the municipality winds up subsidizing the education of children in another community.
When Cape May agreed to form the Lower Cape May Regional School District in 1956, it passed a referendum and agreed to fund it on a per pupil basis, said Gagliardi.
In the mid-70s, the state legislature changed the law to require a formula using an equalized property value equation, he said.
Gagliardi said he worked with Cape May six years ago because he had prevailed in a case in front of the state Supreme Court on behalf of North Haledon, which was seeking to withdraw from a regional school. He said there were two other communities in that regional school, one paying about $3,000 per pupil and the other about $5,000 while North Haledon was paying $23,000 per student annually.
He said Cape May was paying about $80,000 for each student sent to the regional school district, up from $41,000 six years ago. Gagliardi said the Supreme Court would not allow North Haledon to leave its regional school district because it would upset the racial balance.
The court required the state Commissioner of Education to establish an “equitable funding formula.” He said the landscape was different today.
North Haledon saw a “maddening display of state bureaucracy,” when the state could not figure out how to accomplish what the Supreme Court had ordered. About eight years ago, the Commissioner of Education established a funding formula for North Haledon which was 67 percent equalized property value and 33 percent per pupil.
“When it was done being phased in over a four year period, it saved North Haledon about $4 million a year,” said Gagliardi.
He said North Haledon wanted greater savings. One and a half years ago, an administrative law judge ruled the formula should be once again be modified for greater savings for North Haledon.
Gagliardi said that is currently pending before the Commissioner of Education.
“The proposed modification would be 67 percent per pupil, 33 percent equalized property value, if we implemented that it would save North Haledon taxpayers about 1.8 million per year,” he said.
As a result of the case, the state Attorney General provided direction to the Department of Education on what to do in circumstances that follow the North Haledon’s path of a disparity of funding communities in a regional school district and an inability, due to state legislation, to leave the regional school district, said Gagliardi.
He said while the Lower Cape May Regional School District funding formula was based on equalized property value, it also takes into account the ratio between the number of students at the regional level and the number of students at the elementary school level.
He said in an effort for Cape May to get to the point where it has a court proceeding and can ask the Commissioner of Education to establish a new formula, the city would have to exhaust all administrative remedies. Gagliardi said it while it would be a futile effort to change the funding formula by a voter referendum, it must be requested to exhaust that possibility.
It has been acknowledged that Lower Township’s much larger voter population would crush any efforts by Cape May to change the formula by referendum.
Gagliardi said Cape May trying to withdraw from the regional school district did not need the cooperation of the other towns in the district. If the city tried to dissolve the regional school district it would require a majority of the towns and districts to cooperate.
If Cape May withdrew from the regional school district and sent students on a “send-receive basis,” the fee would be the actual per pupil cost, said Gagliardi. Instead of paying $80,000 per year, Cape May would pay about $10,000 per year per student and would send the same students to the same building with the same teachers and classmates
He said there was no state law mechanism to give the city that option.
Gagliardi said if Cape May exhausts all its options and fails, the city may approach the Commissioner of Education for relief as a result of a Supreme Court decision.
“They need to prove there is disparity in funding and that there is some constitutional impediment which creates this problem,” he said.
“You are facing a long term problem that’s destined to get worse,” said Gagliardi.
“If we can’t help you, you can’t be helped,” he added.
Councilman William Murray said he agreed with Gagliardi that the chance of state legislature changing the funding formula was “slim to none.”