This paper outlines the findings about the Paterson school district current budget based on the interview that had to be conducted with a business officer. It discusses details of the 2013-2014 budget for the Paterson school district, comments on the last years trends in taxes levying and revenues allocation, and makes humble predictions and recommendations for the future.

Reviewing the most current budget, Paterson business officer said that Paterson’s budget, similar to other schools the New Jersey, is largely dominated by the expenses known as compensation and benefit expenses. These take up around 75% of the budget. Importantly, full time and part time teachers, as well as secretaries, get set by typical contract negotiation with the union, or to be more precise, the teacher’s union. Today 58% of the school district budget is spent on instruction, next 40% on services of supportive nature, and 2% on the rest secondary or elementary spendings. In current expenditures, $18, 408 is spent on every student in Paterson each year.  For every full-time employed teacher there are 11 students.

Paterson School District, similar to other school districts in the state of New Jersey, gets funded with a mix of local property taxes plus aid from the state based on income as well as sales taxes. At the level of the state, the source is income plus sales taxes in addition to lottery revenues; at the local level, the Paterson school district acquires funding by property taxes. The latter are established by local officials, the school board, and, naturally, citizens.  Importantly, the local revenue (it is above all funded by property taxes) reaches the sum of nearly $45,987,000 per year; finally, the state revenue, predominantly funded by income as well as sales taxes, reaches the sum of $490,594,000.

Currently, the preliminary budget of $523 million was voted for on March 2, 2013.  That budget contained district revenues yet it did not contain the expenses. Currently, there is a delay in draftingtghe final budget because there is a $50 million gap. This is a gap between the sum requested by the Board and the sum which is now available for spending. Overall, it is $523 million in federal, state, and city money. A table can be provided below that illustrates well how the budget was distributed:

550, 000 is spent on teachers’ summer training. At the same time, to major cuts in funding, 106 jobs in Paterson district could be cut. That may be similar to 2010, when the school district laid off 300 teachers. At the same time, it was noted that the ruling of the State Supreme Court made Governor Christie cooperate with Paterson and even dole out extra $500 million to Paterson and other school districts that are urban. On the basis of that decision, Paterson will hopefully get funding in the sum of $27.8 million. The funds will be utilized for restoration of earlier cuts made within elementary school library, as well as music and art programs.

It seems that the final draft of the proposed budget for 2013-2014 could manage avoid major program cuts, staff layoffs, and even a tax increase. The deficit that the district will face in the future 5 years may range from $15 to 20 million. Overall, for 2013-2014 the Paterson school district budget will be 490.8 $million. This is going to be $19.9 million more than the sum that was total for that year. Importantly, around 80 % or more of the Paterson school district’s sum of revenues will arrive from different kinds of state aid. This is about $401.8 million.

At the same time, the amount of those municipal property taxes that are used in the school budget will stay at the level of $38.9 million. It is important to note that the Paterson school district did not have increase in taxes for around last 4 years. The data provided in the Fiscal Report for 2011 showed that in the years 2010 and 2011 property taxes, namely $39 million, accounted for about 7 per cent of Paterson Schools overall revenues. It means that revenues obtained from State and Federal aid accounted for as many as 92 per cent.

Legally, under increases in the limiting property tax regulated by the state law, the tax levy for Paterson school district will possibly reach a meagre sum of $700, 000. This is just a drop in a bucket in the context of the whole bucket. Yet, business officials   are eager to look into the possibility of increase in the immediate future. Local taxes increase will help the city stay vested in education. Local residents should avoid being flat-funding. Overall, the successful increase in the budget by $19.9 million comes for the following key areas.

1)      $2 million increase in expenses on various kinds of maintenance that have been deferred;

2)      $6.2 million increase accounts for funds allocated to charter schools;

3)      $8 million accounts for an increase in employee benefits;

4)      $ 4.7 million increase will be in the sphere of school-level salaries.

To conclude, this paper has presented the information about the current budget of the Paterson school district. It has provided the overview of the details of the 2013-2014 budget and commented on the trends that took place within the last 4-5 years/will take place in the near future.