Study: N.j. Should Ease District Mergers Financial Incentives Could Encourage School Districts To Consolidate. That Could Save Cash, A Report Says.

TRENTON — While the political will may still be lacking to force New Jersey's 584 school districts to consolidate and save taxpayers money, the state could easily make changes to its current policies that would smooth the path for districts that want to consolidate voluntarily, a new report says.

The report also urges the legislature to encourage school districts to consolidate by providing financial incentives that would enable districts to get over some hurdles to consolidating.

``New Jersey clearly has an excessive number of school districts,'' said Don Linky, president of the Public Affairs Research Institute, a nonprofit taxpayer group that researches government spending. ``But promoting consolidation is very difficult, given New Jersey's unique political heritage that emphasizes local control over education.''

The institute's report comes as the Whitman administration tries to put pressure on districts to cut administrative costs through a new penalty system that takes away funding to districts with high overhead.

But Joan Ponessa, who put the report together, said the Whitman approach might not be the best way to encourage consolidation, since some small districts that cannot cut their staffing any further could be penalized for their higher than average administrative costs.

Instead, Ponessa said, the state should provide the financial incentives for districts to merge. For instance, two neighboring school districts may want to merge, but one might have a large debt. The other would be less inclined to merge, since it would have to absorb the cost of the debt. The state could provide financial incentives to make the merger more palatable, Ponessa said.

John M. Henderson of the New Jersey School Boards Association said his group opposes mandatory consolidation but encourages financial incentives to entice districts to merge voluntarily. He said some districts do not even study consolidating because a study costs too much. He said that if the the state paid, more districts would at least consider a study.

The institute's report also says that there is little public understanding about the benefits of school districts consolidating, and that the state must take a central role in pushing the idea.

In producing her report, Ponessa reviewed past studies of school-district consolidation made by some New Jersey districts, by the state and in other states.