On appeal from Final Decision of the State Board of Education.
Petrella, Baime and Ashbey. The opinion of the court was delivered by Petrella, P.J.A.D.
The Deptford Township Board of Education (local Board) successfully appealed to the Commissioner of Education (Commissioner) from a decision by the Mayor and Council of the Township of Deptford (governing body) which reduced the proposed 1986-1987 school budget after it had been rejected by the voters of the township on April 15, 1986.
The Commissioner rejected an initial decision by an Administrative Law Judge (ALJ), determining that the governing body had failed to provide a statement of reasons when it made its reductions, dismissed the answer to the petition and reinstated the entire amount which the governing body had removed from the budget. The Commissioner relied on his interpretation of Bd. of Ed., E. Brunswick Tp. v. Tp. Council, E. Brunswick, 48 N.J. 94, 105-106 (1966). On appeal to the State Board the Commissioner's determination was affirmed.
The facts are not complicated. On April 15, 1986 the Township voters rejected the local Board's proposed 1986-1987 budget. The rejected budget was then submitted to the governing body*fn1 pursuant to N.J.S.A. 18A:22-37. On May 6, 1986 the Township manager sent a letter to the Assistant Superintendent and Board Secretary of the local Board indicating $611,528 in proposed line item reductions of the rejected proposed budget.
The letter also requested an open public meeting between the parties to resolve those disputed reductions on or before Thursday, May 8, 1986. No such meeting occurred and on May 8 the governing body made certain reductions in the rejected proposed budget and certified those reductions to the County Board of Taxation under N.J.S.A. 18A:22-37. The local Board notified the governing body on May 16, 1986 of its intent to appeal to the Commissioner. The petition of appeal was filed by the local Board with the Commissioner on May 20, 1986. On May 21, 1986 the local Board and governing body met with the County Superintendent of Schools, and as a result, on May 22, 1986 the governing body revised the proposed reductions to $183,300, and certified this reduced budget to the County Board of Taxation.*fn2 This revised budget did not include a list of reasons for the proposed reductions.
On June 13, 1986 the local Board filed an amended petition with the Commissioner challenging the $183,300 in reductions. The governing body filed an answer which gave reasons for the reduction and the matter was listed as a contested case to be heard by an ALJ.
A hearing was held on November 14 and 21, 1986 before the ALJ. The Assistant Superintendent of the local Board and the Township manager gave lengthy testimony regarding the propriety of the proposed reductions. The local Board's motion at the close of the hearing for a summary decision reinstating all the proposed reductions due to the governing body's failure to provide a statement of reasons at the time the budget was certified to the County Board of Taxation was denied. The ALJ in his initial decision of March 9, 1987 reinstated approximately $79,950 of the proposed reductions in the current expense budget, but recommended, for reasons stated in his opinion,
that the balance of the reductions ($102,350) be sustained. The ALJ also found that the governing body's answer to the local Board's petition for appeal adequately provided a line-by-line statement of reasons for each reduction in a timely manner.
Neither the Commissioner nor the State Board reached the merits of the issues before the ALJ, electing instead to dismiss the case on procedural grounds by relying on their interpretation of East Brunswick. On April 21, 1987 the Commissioner found that the governing body's statement of reasons filed in its answer was untimely and lacked adequate specificity. He therefore directed that $183,300 be restored and added to the $8,020,389 previously certified to the County Board of Taxation for the 1986-1987 school year.*fn3 The State Board agreed.
On this appeal the governing body argues that the record below established that its reduction of the budget was reasoned and proper; the reasoning of East Brunswick was codified in N.J.A.C. 6:24-7.5 and did not require the governing body to include in its certifying resolution specific reasons for line item reductions; the reductions were not substantial and did not even fall within the ambit of the East Brunswick decision; the State Board and Commissioner erred in setting aside the initial decision of the ALJ, and that reinstatement of all the proposed reductions would be a miscarriage of justice.
N.J.S.A. 18A:22-37 states:
If the voters reject any of the items submitted at the annual school election, the board of education shall deliver the proposed school budget to the governing body of the municipality, or of each of the municipalities included in the district within 2 days thereafter. The governing body of the municipality, or of each of the municipalities, included in the district shall, after consultation with the board, and by April 28, determine the amount which, in the judgment of said body or bodies, is necessary to be ...