New Jersey school district goes broke, says it can’t pay teachers without state loan

A New Jersey school district is claiming it won’t be able to pay teachers this month unless the state approves an emergency loan by Feb. 22.

Michael Inzelbuch, an attorney and spokesperson for Lakewood School Board, shared the ultimatum publicly in a school board meeting in late January.

“The only thing that could help us is winning the lottery like someone did in Jackson yesterday,” Inzelbuch told the board. “We are not making light of this.” 

New Jersey’s legislature has waffled in recent months on the implementation of state aid cuts, exploring various avenues to support struggling districts. Lakewood School District, however, has long been the subject of controversy regarding both its unique demographic makeup and notorious track record of financial woes.  

Lakewood Public Schools provide a direct education to only about 5,000 of the district’s roughly 50,000 students; the remaining school-aged students in the district attend private religious schools due to their adherence to Orthodox Judaism. 

Representatives for the district have claimed the cost of busing students to private schools has resulted in underfunding.  

Though the state Department of Education argues the district has brought about its own financial distress through poor budgetary management, Lakewood schools have engaged the Department in a decade-long lawsuit seeking to increase the flow of state funding into the district. 

“The record demonstrates that Lakewood’s own choices and management issues have resulted in the unavailability of funds that could and should have been used to provide [a proper education] to its students,” Cary Booker, assistant education commissioner for the state, wrote in a report associated with the legal battle. 

“The pervasive errors and questionable practices in Lakewood’s record-keeping result in the inefficient use of funds,” Booker added. 

Notably, Lakewood responded to the report by hiring an education consultant to evaluate its findings. According to consultant Elizabeth Keenan, Ph.D., the state’s report contained more than one example of a “subjective finding with no legal merit.”  

“It is unfortunate that a report would conclude that teachers, support staff and administration have a culture of low expectations for students across the district,” Keenan wrote in response to a critical line from the Department’s report. “This comment speaks more about the author of the report than it does about the district. The comments are unfounded, subjective, and could be considered biased.”