Montclair School Vote

How did the district get into this deficit?

According to the district, the deficit grew over several years because the district was spending beyond its means. The budget was not being adhered to, with unbudgeted staff hires, unpaid bills, and other unbudgeted expenses contributing to the problem.

What is a state monitor and what will they do?

A state monitor is appointed by the NJ Commissioner of Education. Their charter is to ensure a balanced budget and maintain state educational standards. They have the power to override the board on financial matters, approve spending, and direct corrective actions. The goal is financial stability, not to ruin the schools or cut to state minimums. As long as the school district has enough tax revenue and can get to a balanced budget, the monitor has no reason to make cuts. Also, the monitor has no reason to raise taxes as long as state minimum standards are met.

Who pays for the state monitor and how much do they cost?

The district pays for the state monitor directly. The rate is $125/hour for up to 32 hours per week, which is a maximum of $208,000 per year. The monitor remains in place until the state loan is repaid. While this figure might seem high, it is relatively small when viewed as interest on a $12.6 million loan (Q1 loan amount).

What is the "interest rate" on the state loan?

The loan itself is interest-free. However, the cost of the mandatory monitor can be seen as "interest." If the monitor costs ~$200K/year, the effective APR on a 10 year $12.6M loan (Q1 loan amount) is roughly 2.9%. This is lower than most mortgage rates.

Can the loan be paid off early and the monitor removed?

Yes, it can be paid off at any time. If, in 5 years, the district is financially stable and wants to remove the monitor, the town could hold another special election to raise the remaining balance (e.g., $6.3 million (Q1 loan balance)) and pay off the loan early. The Commissioner of Education would then remove the monitor. According to the Montclair School District's FAQ, "Monitors remain in place until the loan is repaid."

Will the district lose state aid to pay back the loan?

The loan is paid back by withholding state aid for 10 years. The district will lose $1.26M per year for the loan associated with Q1, $0.7M for the loan associated with Q2, plus 200K (state monitor yearly salary). The total cost of the loan associated with Q1 (witheld aid plus monitor salary) is less than 1% of the school district's total budget. The district could make small efficiency gains to absorb this. In addition, property taxes could be raised to offset the loss of state aid and monitor salary. A $130 tax raise on a $639,630 assessed home offsets the state aid loss and monitor salary for the Q1 loan. $130 is 88% off the full price of Q1, which is $1,117. All budgetary shortfalls associated with Q1 can be avoided by voting No on Q1 and implementing a very modest tax raise next year ($130 on an average priced home).

Will a state monitor impact property values?

There is no evidence of this. Property values in Nutley, a nearby town that was recently assigned a monitor, have increased over the past year based on both Redfin and Zillow data. According to a research paper from the Robert F. Wagner Graduate School of Public Service at NYU, fiscal stress labels assigned by New York's fiscal monitoring program have no effect on property values. Property values are primarily driven by school rankings. As long as the schools remain well-funded (dependent on Q2 passing) and educational support services stay intact, the impact should be minimal. The district's financial situation is already public knowledge.

What about the state monitor horror stories from other towns?

Every situation is unique. Almost all of the bad experiences reference towns with huge financial issues and low value tax bases. In those towns, the monitor was forced to do unpopular things in order to get a balanced budget and keep state standards. Those situations do not compare to Montclair.

Will the state monitor raise taxes?

The monitor does have the power to raise taxes, but in all likelihood would only do that if it’s necessary for the schools to maintain state standards. Montclair has plenty of tax revenue to maintain state standards, so it’s unlikely the monitor will raise taxes. The amount by which a monitor can raise taxes is limited by NJ state law.

Will the state monitor cut staff and programs?

The monitor's job is to ensure a balanced budget and maintain state standards. If those two items can be achieved based on the tax revenue, the monitor will have no reason to make any unnecessary cuts. If spending outpaces tax revenue, it is likely that the monitor will ensure cuts happen in order to get a balanced budget. If cuts are necessary, the monitor will likely work jointly with the superintendent to identify those cuts. The monitor does have the power to choose the cuts. As long as the board and superintendent manage operations effectively, the monitor should not need to make any cuts.

Are the financial benefits of the loan associated with Q1 worth the risk of a monitor?

"The central issue is that this financially beneficial loan requires accepting a state monitor."

What is the community sentiment?

Based on NJMLS data, about 70% of Montclair households do not use public schools. Census data shows that 34% of households earn $100,000 or less annually, making monthly expenses and overall affordability a significant concern for many residents.

Based on our discussions, many voters recognize the importance of Q2 in order to keep Montclair schools properly funded and avoiding major cuts in the summer of 2026. In regards to Q1, many voters welcome some level of oversight because they think it's needed given the district's history of financial mismanagement.