2% Cap Plus Federal Grant Equals Bust

by: brendanod

Thu Aug 12, 2010 at 11:14:09 AM EDT

Lets say you have a 2010-2011 budget of 10 million. If a school board was to receive $250,000 in federal assistance, the NJ cap law would be busted. The school board would not be able to accept the money unless they had voter approval (which takes too much time and would be impractical in this instance)

Am I wrong here?  Is the legislature going to make another exemption for federal grant money? Another problem in receiving grant money is that if you were to receive a one or two year grant, the cap law allows no function to build reserves during the grant period so that when the grant ends, there is no practical way to sustain the hires that were aquired during the grant years without a significant tax increase in the end.  I know Senator Sweeney was working on an exemption for reserve money, but I think it went nowhere.