COVID-19 School Funds Cut Could Cause Kinnelon Budget Crunch

KINNELON, NJ - School districts are going to have to find ways to come up with another $336 million now that New Jersey officials have sliced a huge amount of school funding amid the coronavirus outbreak. And the Kinnelon School District is among them.

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Gov. Phil Murphy's administration released its revised state aid numbers this week for every school district in the 2020-21 school year. Funding for 375 school districts was reduced from Murphy's original proposal in February, and they may need tax increases, staff cuts or furloughs to make up the differences.

That means many districts will have to redo their budgets even after approving them now that the state says it's experiencing "unprecedented" budget challenges.

If nothing changes, Kinnelon could be facing a $131,095 shortfall.

Reacting to the crisis and the ensuring economic downturn, Murphy recently rescinded Executive Order No. 73 (2019), which directed the Department of the Treasury to achieve a $1.276 billion surplus by the end of this current fiscal year.

"No one has been more committed to restoring our state's fiscal foundation than I have," said Murphy. "We have spent the past two years working nonstop to build surpluses and put money aside for a rainy day fund.

"However, in the absence of significant federal assistance, we are on the brink of having to make very tough fiscal decisions, and a $1.28 billion surplus for this fiscal year is no longer realistic."

Lawmakers have sought other methods — such as raising property taxes and consolidating school districts — to bring in more revenue to New Jersey and help fund school districts that experienced sharp cuts in state funding.

"New Jersey is not alone in dealing with unprecedented budget challenges right now as this crisis continues to unfold," said Treasurer Elizabeth Maher Muoio. "Building our reserves to responsible new heights was one of our paramount fiscal goals.

"However, COVID-19 handed us an entirely new reality. Absent additional federal funding and a substantive borrowing facility, our foremost priority now is ensuring sufficient cash flow to meet this health crisis head on while also meeting our basic obligations."

Patch previously covered the full loss of money to districts across the Garden State.

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