NJ Education Report

Later today at its public meeting the Lakewood Board of Education will approve a budget of $204 million that assumes the state will kick in a loan of $60 million. In addition, the Board will request that Education Commissioner Lamont Repollet defer the repayment of prior year DOE loans. The Board will also approve attorney Michael Inzelbuch’s annual compensation of $750,000.

A few notes:

• If the State approves the $60 million loan, Lakewood’s unpaid annual loans will total $139 million. Every year it needs more to remain solvent. During this pandemic year as state revenues take a nose dive, school districts will likely get hit hard. While Lakewood has grown accustomed to fiscal favors (more on that below), school funding allocations next year will be a zero-sum game. Will the DOE take money away from other districts to placate Lakewood? Just how much political capital does Lakewood have left to burn?

• During these past years when Lakewood has found itself in the red, the Board has expressed reluctance to ask for loans in order to feign accountability. “You’re assuming we’re going to get what we want,” board member Meir Grunhut said at the March public meeting. “How long is this borrowing going to last?” At this point in the annual Kabuki dance, the state-apppointed Fiscal Monitor, currently David Shafter, leaps to the rescue and vehemently insists that Board members vote “yes.”

That’s not what happened this year. Instead, Shafter grew a spine. From the Asbury Park Press:

[A]fter the board initially voted down the spending plan, a lengthy discussion occurred with [Business Administrator Robert] Finger, Board Attorney Michael Inzelbuch and state monitor David Shafter urging the board members to approve the budget or face legal consequences from the state…Shafter, who had the option to override the board and submit the budget, chose not to. 

• Everyone knows that these “DOE loans against state aid” will never be repaid. Lakewood has asked for additional aid for the past three years because the state funding formula doesn’t account for 37,000 ultra-Orthodox yeshiva students who attend private religious schools. While parents are responsible for tuition to private schools, school districts are responsible for transportation or “aid in lieu of transportation.” The district is also responsible for services for students with disabilities, even if they go to private school. There is supposed to be oversight to ensure special education students are actually getting their services but that’s not part of Lakewood’s culture.

• In fact, much of Lakewood’s budget goes for private school education and transportation: This past year Lakewood spent $31.2 million on buses, mostly for non-public students. (Ultra-Orthodox school leaders insist on gender-specific and yeshiva-specific buses yet won’t coordinate start and stop times, which increases costs.)

• Tuition this year, mostly to yeshivas for students with disabilities, came to $41.7 million. Next year’s tuition is projected to cost $50.5 million, a 21% increase. The most popular non-public special education school among Lakewood parents is the School for Children with HIdden Intelligence, or SCHI. While it advertises itself as secular, Lakewood sends 200 ultra-Orthodox children there. (I heard a rumor last year that there was one Latino student but the rest are ultra-Orthodox.) The state has released its approved tuition to private schools for children with disabilities for 2020-2021. SCHI’s annual tuition will be $127,446.90 per child, or $606.89 per day.  Only one other school in the state costs more, the Somerset Hills Learning Institute. Lakewood also provides a one-on-one aide for about half the children at $166 per day, on top of the tuition and transportation.

• SCHI’s founder, Rabbi Osher Eisemann, was convicted last year of “money-laundering and misconduct.” (See here for more detail.) SCHI, as well as the Lakewood public schools, have a cozy relationship with Gov. Murphy, who last year tucked into his budget an extra $30 million for Lakewood in the form of “provisional aid,” which included special education and transportation aid. (The Legislature took it out.)

• The district is largely operated by attorney Michael Inzelbuch. (Here he is last night announcing that schools will remain closed for the remainder of the year due to COVID-10 and recognizing Teacher Appreciation Week. Does any other district delegate these duties to its lawyer?)  Inzelbuch gets paid  $715,000 per year, more than any other public K-12 employee, attorney or otherwise, in the country.  The contract actually says Inzelbuch gets $50,000 a month but he also gets to bill the district for other “litigation services” at a rate of $475/hour.  (It used to be $350 but the Board gave him a raise.)  Various people have raised questions about the legality of his contract. (See here.) Also, in his spare time Inzelbuch runs a private law practice.

• Last year when Senate President Steve Sweeney heard that Lakewood was not only asking the State for extra aid –not a loan —plus paying its lawyer exorbitant fees, he said,

That’s outrageous. $600,000 for an attorney is outrageous. You know something, that’s rubbing it in our face. … And I have nothing against him, obviously he must be a spectacular attorney to get that kind of income out of a government. I’ve never heard of anybody having that.But a $600,000 deal — with anyone — likely won’t be allowed if Lakewood expects to get more aid from the state.

Senator Sweeney also wrote a letter to Education Lamont Repollet about Inzelbuch; scroll to the bottom to read it.

• David Sciarra of Education Law Center has his own qualms. He told the Asbury Park Press that Inzelbuch was “making vastly more than the governor or any other state employee, and for that to happen in a district where every dollar is needed to educate kids and to provide services and teachers and support staff in classrooms is just unconscionable.” And here’s Sciarra on Inzelbuch’s contract: “In 30 years I’ve never seen an attorney contract like this. This once again confirms this contract violates Department of Education rules.” Sciarra was so bothered that he made a formal complaint to the State Attorney General.

What was the Lakewood Board’s response? They hired a lawyer for $400/hour to represent Inzelbuch. 

• Another oddity: On page 8 of Lakewood’s budget on the DOE website it says that “legal costs per pupil” (i.e., not yeshiva students unless they have disabilities)  is $18, down dramatically from $131 three years ago. But $18 for 6,000 enrolled students comes to $108,000, just 14% of Inzelbuch’s salary. What’s up with that? If you’ve got an answer, please put it in the comments.