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R' Aron (Arthur) Lang, who has tirelessly devoted countless hours over nearly a decade advocating for fairer school funding for Lakewood, is once again turning to the New Jersey Appellate Division as the State Education Commissioner continues to rebuff all his hard efforts.

Mr. Lang's long time 2 simple arguments are; 1) Lakewood's students are not receiving a constitutionally sound education (known as a Thorough and Efficient education, or T&E), and; 2) the fault of this lies squarely in the fact that New Jersey's School Funding Formula (SFRA) is unconstitutional as applied to Lakewood's unique demographic situation (which has many nonpublic students who need transportation but whom are not counted towards funding).

Succeeding on both of these arguments is key to be able to force State officials to finally provide fairer funding to Lakewood.

After many years of fighting in the Office of Administrative Law, a judge agreed with Mr. Lang as to his first point, but not with his second point. Instead, the Administrative Law Judge (ALJ) directed the Education Commissioner to review Lakewood’s School District and recommend how they can cut spending.

Following this ruling, the then-Commissioner issued a Final Agency Decision completely reversing the ALJ's ruling, claiming that Lakewood did provide T&E and therefore it was not even necessary to review Mr. Lang main argument as to the constitutionality of the funding formula.

In a massive win for Lakewood's taxpayers and students, on March 6, 2023, the Appellate Division reversed this decision, finding that the Commissioner erroneously disregarded the record before the ALJ that Lakewood does not provide T&E.

Having reached this determination, the 3-judge panel remanded the matter back to the Commissioner to do a "thorough review of the most substantive argument - that the funding structure of the SFRA was unconstitutional as applied to Lakewood's unique demographic situation."

Following this remand order, as previously reported here on FAA News, the then-acting Commissioner did all in her power to do everything - except what the court ordered her to do.

Seeing that the Appellate Division had not issued a deadline for the Commissioner to complete her "thorough review," Mr. Lang filed a Motion seeking for the court to set a deadline. The court agreed and set a April 1, 2024 deadline.

In the interim, the Commissioner brought in numerous experts to do all sorts of reviews of Lakewood.

The result: On April 1, 2024, the new acting commissioner issued a Final Agency Decision completely denying Mr. Lang's arguments. Instead, arguing that our money issues lie mainly with the facts that we are "undertaxed," and that the Board of Education is "mismanaged."

Assistant Commissioner Cary Booker wrote:

The SFRA cannot be solely blamed for the substantial loss of revenue attributable to Lakewood’s tax-related choices.

Lakewood’s own choices and management issues have resulted in the unavailability of funds that could and should have been used to provide T&E to its students.

Nothing in the record supports a finding that Lakewood suffers from municipal overburden to a degree that it cannot raise revenue to support its public schools and reduce the impact of transportation and special education costs. Rather, Lakewood has chosen not to require its tax base to further support its schools, and suffers from local mismanagement regarding its transportation and special education costs. 

Lakewood had a $5 million surplus in 2010. Lakewood chose not to raise its tax levy to the cap from 2011-2014, despite the fact that the community’s non-public school population was rapidly increasing. From 2014 to 2018, Lakewood was not taxing up to its LFS and lost not only the increased revenue from those years, but the compounding value as well. Over fiscal years 2015 through 2018, Lakewood raised $31.5 million less than it would have had it taxed at its LFS level. Furthermore, Lakewood chose not to avail itself of opportunities to present voters with a referendum to increase the school tax levy in any year except 2016. As a consequence of all of these decisions, Lakewood’s school-tax rate was below the state average and below other districts. Lakewood only tried on one occasion in 2016 to raise additional money to help with transportation costs, which was unsuccessful. The Acting Commissioner concurs that Lakewood failed to take advantage of opportunities under the funding scheme to ameliorate its financial difficulties.

The record also demonstrates severe deficiencies in Lakewood’s fiscal management, including its failure to keep track of expenditures, records, and data and questionable spending practices. For example, testimony demonstrated that there were no purchase orders in place for students sent to out-of-district placements. The district did not keep an accurate position control roster reconciled with the names of staff. An auditor from the Office of Legislative Services testified that an audit of Lakewood found financial transactions that were not consistent with government auditing standards, a lack of control environment leading to a lack of stability, lax reconciliation procedures, a lack of supporting documentation, Board approvals of contracts without review, and other questionable expenses. The audit also noted that, in terms of special education costs, there was a lack of proper approval, tuition documentation, and attendance records for students placed in unapproved nonpublic schools. The New Jersey State Aid Audit Unit determined that poor record-keeping resulted in Lakewood incorrectly reporting hundreds of students on its Application for State School Aid (ASSA).

Attention to administrative and financial detail remains an issue in Lakewood. There were significant data discrepancy and reporting issues... many nonpublic students do not have a student identification number in the District Report of Transported Resident Students (DRTRS), presenting a risk that students might be counted and funded in multiple counties.A spot-check of transportation documents revealed several that listed the Township of Branchburg rather than the Lakewood Public School District as the contracting unit, which “could indicate a systemic lack of legal, procurement, and financial review and oversight of bid documents.”

The pervasive errors and questionable practices in Lakewood’s record-keeping result in the inefficient use of funds. If the Board is not properly vetting its vendors and only approving payments after services have been rendered, there is a risk that the district is overcharged... 

In light of Lakewood’s tax-related choices that decreased revenue, the significant deficiencies in Lakewood’s spending practices, and Lakewood’s failure to control its transportation and special education costs, the Assistant Commissioner concludes that... the SFRA is not the significant cause of Lakewood’s failure to provide T&E and therefore, the SFRA is not unconstitutional as applied to Lakewood.

Today, just 17 days after the issuance of this final agency decision, Mr. Lang has filed a new appeal to the Appellate Division.

The petition states:

Student-petitioners are submitting this appeal to the Acting Commissioner’s Final Decision well before the appeal process has run because of our strong continuing belief that time is of the essence for those students.

As just one indication of the urgency of resolving this case expeditiously, the Lakewood school district has requested another advanced state aid loan for the upcoming school year -- this one for $104 million -- to enable it to balance its budget. On top of the large outstanding loan balance, which the ALJ described more than three years ago as creating an unsustainable fiscal situation for the district, this could be the straw that breaks the district’s back. The real victims, yet again, would be the student-petitioners, Lakewood’s public school students.

This court's remand order to the Acting Commissioner directed her to address the second argument - that SFRA was the cause. Neither the Final Decision, nor the Comprehensive Review on which it is based, meaningfully address that question, however.

The Final Decision barely mentions SFRA, let alone evaluates its application to Lakewood and constitutionality as applied.

The Acting Commissioner's only attempt to support that conclusion is by referring to general presumptions of validity accorded to legislative enactments without addressing whether those general presumptions should apply here where there has been a final, unchallenged adjudication that Lakewood students have been denied their fundamental constitutional right to T&E. Had the Final Decision delved into the details of how SFRA actually operates with respect to Lakewood, it would have become clear that there is a fundamental mismatch between Lakewood's unique fiscal needs, caused by its unique demographic characteristics, and SFRA's statewide funding formula.

Because the Final Decision gave SFRA an unwarranted constitutional pass, it never addressed the third major question raised, the remedial issues regarding the State's school funding system, and especially SFRA.

As to the constitutionality of SFRA, even if the statutory formula is fully funded in the upcoming school year, it will fall far short of providing the district with enough funding to assure its students T&E. The simple reason, acknowledged by the State and everyone else, is that Lakewood has unique demographic characteristics and that SFRA's application to Lakewood has never been meaningfully evaluated and calibrated to those district characteristics. 

The petition suggests that the court should launch an appropriate state-level remedial process as expeditiously as possible so that the longstanding and inexcusable denial of the Lakewood public school students' fundamental constitutional right to T&E can be remedied.

While R' Aron continues to work tirelessly for fairer funding for all of Lakewood, Township and School District officials - including the incumbent Board of Education members who previously claimed to openly support R' Aron - remain silent regarding the Commissioner's continued efforts to subterfuge fairer funding for Lakewood. 

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1 comment:

Aaron Lang said...

We could not have gotten as far as we did, and IY"H we will win, without the dedication and brief-writing eloquence of Professor Tractenberg and advice of Mel Wyns. Lakewood and its posterity are zoche to have them on our side.