New Jersey Bond Referendums

By: Alicia Scelso

Background Information• One-third of school buildings in the

U.S. are in need of extensive repair or replacement of at least one major building feature.

• A 1999 survey conducted by the USDOE found that the average age of a public school building was 40 years and on the average major renovations had occurred over 11 years ago.

Background Information• The average functional age of school

buildings in the U.S. is 16 years with 40% having a functional age over 15 years.

• Another study found that older buildings were often designed with sounder infrastructures and had life spans of almost 100 years.

• School buildings built after 1970 were designed to have a lifespan of no more than 30 years.

Background Information• The National Center for Educational Statistics

indicated that 3 out of every 4 existing public school building is in need of repair.

• No universal funding.• NCLB offers subgrants, however it only allows

school districts the opportunity to begin conversations needed to pursue new and upgraded school buildings. The federal funding may not be used for construction, renovation, or repair of school facilities.

Background Information• Research shows a direct correlation

between student achievement and the condition of the school building.

• For example, students who are too hot or too cold, who are exposed to allergens, or who attend classrooms with inadequate fresh air or try to read under poor lighting, obviously will not perform as well as they would in better buildings.

What is a bond?• A long-term loan • A way to borrow-money to fund capital

improvements, such as constructing, improving or maintaining facilities and purchasing buses, technology or school sites.

• Bond money may not be used for operating expenses such as: salaries and benefits, transportation costs, utilities, textbooks, or other supplies.

What is a bond?• Debts incurred by a school district

and sold by the district to competing lenders to raise funds to pay for the costs of construction, renovations, and equipment.

Bond Issue versus Tax Levy• A bond issue is used when a school

district wants to build schools, make capital improvements, or purchase large amounts of equipment .

• A tax levy provides funds for operating the schools, paying staff, and educating students.

New Jersey Bond Issue• Provides an opportunity for the

voters to decide if the school district will be authorized to raise funds through sale of bonds to finance construction or renovations.

• July 18, 2000 N.J. put into law a $8.6 billion school facilities and construction bond package.

New Jersey Bond Issue• NJ Legislature must have $105 million on hand

at minimum to guarantee bonding for school districts at all times.

• Two funds for education-related bonds– NJ Public Schools Loan Assistance Fund

• main fund– NJ Public Schools Compliance Loan Fund

• Renovate older buildings in order to be compliant with state and federal laws on school buildings.

• This includes asbestos removal, replacing HVAC equipment, or any other purpose to be compliant with state and federal health regulations.

New Jersey Bond Issue• A ballot question is required.• Against the law for a school district to

hold a special election.• May hold elections on dates specified by

law only.– Final Tuesday in September, the second

Tuesday in December, the fourth Tuesday in January, the second Tuesday in March, and the Annual School Board Election on the third Tuesday in April.

New Jersey Bond Issue• Bond Proposal – GEHRHSDThe BOE of the GEHRHSD in the County of Atlantic, New Jersey is

authorized (a) to undertake the installation of solar energy panels at the Absegami High School; (b) to appropriate $3,320,000 for such installation; (c) to issue bonds of the School District in the principal amount of $3,320,000 funded in part by a grant from New Jersey’s Clean Energy Program in the amount of $966,373.60.

The final eligible costs approved by the Commissioner of Education are $3,320,000. The State debt service program will equal 57.9877% of the annual debt service due on the project’s final eligible costs.

• Interpretive StatementIf the Proposal is approved, the BOE will be authorized to undertake

the solar energy project that will reduce the energy costs at Absegami High School.

Funding Options – General Guidance (NJ)

• Department approval of the LRFP and the capital project is necessary before districts can award bids and initiate capital project construction.

• All local funding for implementations of capital projects must receive voter or Board of School Estimate approval. Approval is achieved through inclusion in the district’s budget certified for taxes or through a bond referendum or special election question, or specific capital reserve deposit.

Funding Options – General Guidance (NJ)

• Spending on capital project approved by referendum is limited to the amount approved by the voters in the referendum question.

• All bond referenda must include and list separately by source, all local revenue to be used on the capital project. Spending on a referendum approved capital project cannot be increased above the voter approved amount through a transfer of local revenue to the capital projects fund if it was not identified in the original question.

Funding Options – General Guidance (NJ)

• Board approval of change orders must certify funds are available to complete the capital project. No change order can be approved if it will increase the total cost above the referendum approved amount.

• Contracts for capital projects require a contingency of 5% at time of bid award.

Strategies for Passing a Bond Referendum

• In addition to the negative feelings about higher taxes, other issues that intensify bond elections include the community’s feelings following prior attempts at passing school bond referendums, trust in the BOE and school leadership, and the impact of the school district’s bond election campaign to win the support of the community.

Strategies for Passing a Bond Referendum

• To pass, you must put together a plan before the issue gets to the ballot, and implement a solid campaign strategy through Election Day to increase the odds of getting the public OK to fund your construction or renovation needs.

Strategies for Passing a Bond Referendum• The Superintendent should ensure a unanimous

vote of support by the BOE.• Administrators and board members should keep

a low profile.• The board and administrators should establish

a diverse community task force or facilities committee.

• The attention of the campaigner should be on “yes” voters. Proponents should concentrate on getting “yes” voters to the polls and convincing the undecided to vote “yes” rather then trying to change the minds of “no” voters.

Strategies for Passing a Bond Referendum • The local media and school staff members should

be involved in the early planning stages of the campaign.

• School boards should utilize experts such as bond consultants, architects, and other trained individuals to educate support groups in the community.

• The citizens’ committee should concentrate a great deal of effort on disseminating information through flyers, brochures, question-and-answer sheets, and other printed material.

• Districts should collaborate with other governmental agencies.

Strategies for Passing a Bond Referendum

• The school board should limit the tax levy increase by keeping the school design simple and by utilizing existing capital outlay funds.

• Disseminate information and public relations activities should focus on the benefits to children and community.

• School boards and administrators should seek advice from administrators and school boards that have won bond elections.

Boschee and Holt’s School Bond Success: A Strategy for Building America’s Schools.

Strategies for Passing a Bond Referendum

• Theobald and Meier – 5 determinants of a school bond election– Does the school district have pressing

needs?–What will the bond issue cost?– Can the district afford the bond issue?– Has the district performed well with the

money it has?–What is in the self-interest of the individual

voter?

Conclusion• The success of a bond referendum is

dependent upon several items such as the needs of the district, the costs, resources, and the self-interest of the voters.

• School districts must highlight the benefits for students and community.

• Communicate with all constituents and carefully craft a ballot question.

References• Colgan, C. (2003). Building Boom. American School Boards Journal.

Retrieved March 30, 2010 from www.asbj.com.• Crader, A., Holloway, K., & Stauffacher, A. (2002). Perceptions of Successful Strategies and

Passage of School Bond Issues. Paper Presented at the American Education FinanceAssociation Annual Meeting. (ERIC Document Reproduction Service number ED 472937). Retrieved March 23, 2010 from ERIC database.

• Fairbank, R. (2006). How to Win A Bond Referendum. American School Boards Journal.Retrieved March 23, 2010 from www.asbj.com.

• Funding Options/Approval for Local/State Support for Capital Projects under EFCFA GeneralGuidance. Retrieved March 23, 2010 from

www.state.nj.us/njded/finance/fp/af/otions.shtml. • Greater Egg Harbor Regional High School District Solar Referendum Fact Sheet. (2008).

Retrieved on March 20, 2010 from www.gehrhsd.net.• Holloway, J. (2000). Healthy Buildings, Successful Students. Educational Leader, 57(6),

pages 88-89. Retrieved March 30, 2010 from http://www.ascd.org.• Holt, C., Wendt, M., & Smith, R. (2006). School Bond Success: An Exploratory Case Study.

The Rural Educator, 27(2). Retrieved March 20, 2010 from www.encyclopedia.com/doc/1P3-1040334671.html. • Kelly, M. & Zieper, M. (2001). Strategies for Passing a Bond Referendum. Government

Finance Review. Retrieved March 23, 2010 from www.gfoa.org/services/dfl/debt/GFR-Passing_a_Bond_Referendum.pdf.

• Norristown Area School District 2009-2010 Budget Frequently Asked Questions and Answers

References• School bond and tax elections in New Jersey. Retrieved March 23, 2010 from

http://ballotpedia.org/wiki/index.php/School_bond_and_tax_elections_...• Theobald, N. & Meier, K. (2002). The Politics of School Finance: Passing School Bonds.

Paper Presented at the National Meeting of the Midwest Political Science AssociationAnnual Meeting. Retrieved March 23, 2010 from http://teep.tamu.edu/pubs/bonds.pdf.