Last summer, Vineland learned it had to cut $2 million from its budget after a decrease in state aid and a loss of additional emergency aid.
Now, the district is considering how a $15 minimum wage increase might further eat away at its financial resources.
“While we strive to protect the jobs of our hardworking women and men, and we realize that every employee deserves a livable wage, the realities of the economic situation shall require creativity and sacrifice,” said Mary Gruccio, superintendent for Vineland School District.
While the impact of recently approved legislation to raise the state minimum wage to $15 an hour has obvious impacts on private business, what affect the bill will have on school districts is still being considered by education professionals.
The bill, which incrementally increases the state minimum wage from $8.85 over the next five years, passed both houses of state government Thursday. Gov. Phil Murphy indicated on Twitter that night he will sign the bill Monday.
Last week, the New Jersey School Boards Association joined the state League of Municipalities and the Association of Counties to oppose the portion of the bill that tied state minimum wage to municipal, county and school employees.
In a letter to Sen. President Steve Sweeney and Assembly Speaker Craig Coughlin, the directors of the advocacy organizations said they are working to compile data on the financial impact of the new wage.
The letter said the organizations have “no position” on increasing the state wage, but asked that state, counties, municipalities, and school districts, which all comply with the federal minimum wage requirements, continue to be exempt.
“This decades-old distinction is important because it recognizes the impact on property taxpayers. If anything, this distinction is even more critical today,” the letter read, citing the state’s 2 percent levy cap.
“Because of the reality of the levy cap, subjecting entities previously exempt from the state minimum wage will have an immediate impact on local budgets,” the letter reads.
The NJSBA in its digest to members regarding the bill said it believes the increase could increase the cost of contracted goods and services.
There are not many school employees who make less than $15 an hour, but those who do are usually teacher aides, school food-service providers and other non-certificated positions. In addition, there are various contractors for various services from supplies to personnel that may be affected by the wage increase.
Locally, the impact is still unclear. Wildwood school business administrator Martha Jamison said that the district is not concerned about a large financial impact on the budget. Jamison said one area where it could have an impact is food service, which Wildwood contracts through Chartwells.
Sodexo, another area food service provider that contracts with school districts, did not directly respond to a request for comment on the impact of the bill.
“Wages represent a large portion of our operating costs, so we will be monitoring the situation and complying with all applicable wage laws,” said Enrico Dinges, director of public relations, Sodexo North America.
Warren Fipp, director of transportation at Egg Harbor Township School District, said that the bus drivers there are paid more than $15 an hour so they would not be affected. Districts that contract their bus services may be affected, he said.
In Vineland, Gruccio said the budget process will adapt to the increases just as it does for other wage increases that are the outcomes of collective bargaining negotiations. She said the district continues to reduce its workforce through attrition and the new bill will require the district to explore partnerships with vendors.
If signed Monday, New Jersey would join California, Massachusetts, New York and the District of Columbia in phasing in the $15 rate.
Sweeney promised to revisit the bill if there are “unintended consequences” in the future.
Associated Press contributed to this report.