New Jersey Schools: The Canary in the Coal Mine

Every now and then I come across some statistics that are staggering, and are completely indicative of the financial problems the country now faces. New Jersey is a financial basket case, and more likely than not may be the first state to default as it struggles with its financial nightmare. Every American should study New Jersey and learn how not to run a state, and extrapolate how not to run a country.

In 2010, New Jersey faces an $11 billion shortfall in revenue. That is staggering. Newly elected Governor Chris Christie (R) announced massive budget cuts to balance the books. Included were a billion dollars in cuts to public school and universities. Education related expenses account for 40% of the New Jersey budget. You are going to have to cut where the spending is…and that is in education.

This, of course, would result in massive layoffs to teachers, who dodged the bullet last year when the Feds picked up 2009's shortfall. That was the stimulus money, and it is no longer there. Hence the argument against the stimulus bill to pay for salaries of public employees rather than promoting projects that actually produced private sector jobs proved to be accurate.

To help resolve some of the issues, Gov. Christie has asked the teachers union to do two things: 1) Give up their raise for one year;

2) pay 1.5% of their health care costs;

3) cooperate in adjusting retirement and pension rules.

Those of us in the private sector who have suffered wage cuts plus paying an increasing amount of health care insurance would jump at that kind of a deal. But the teacher unions have been only minimally cooperative. Hence the increasingly disconnected public and private sector divide.

And here's what is unbelievable. New Jersey has increased spending on public education over the last ten years by 67%, while the enrollment in public schools has only increased by 3%. Many school systems are now spending $22,000.00/year/pupil. That being said, New Jersey schools are considered to the best in the nation, with graduation rate of 83% vs. 70% for the nation as a whole. Even among urban minorities, the graduation rate is 10% higher than the rest of the nation.

Still, how much would the students suffer if the teachers are asked to forgo a raise and pay a portion of their health care just like the rest of us. Individually, it is only a small amount of money, but will keep the school system solvent.

My wife is a teacher, and I sympathize with their plight. The burden put on teachers by the courts and government bureaucrats at all levels is staggering, and I sure wouldn’t want that kind of a job. I would hope that included in the cuts are the top heavy administrative staff from county education officials to sports coaches. It is a sin how school money is spent. The waste isn’t hidden. It’s obvious and right out up front. Yet nobody does anything about it.

Wake up America. Balancing public sector salaries with private sector salaries is a major issue facing every level of government today. And schools systems, and every other level of government need to streamline and spend money smarter. One thing is certain. New Jersey is among the top taxed states in the nation, and is losing jobs and corporate headquarters at an alarming rate. Increasing taxes is not an option. America should take a lesson. New Jersey is the canary in the coal mine…and Tweetie Bird is on his last breath of air.