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Another Centralized School Bureaucracy Wastes Millions

Lisa Snell
March 6, 2005, 1:27pm

This shocking story about wasting school construction dollars in New Jersey demonstrates how centralizing school resources in the name of "oversight" can often cost big money. The state agency overseeing New Jersey's massive school construction project paid $5 million to relocate a company from a Newark industrial park nine months after scrapping plans to build on the firm's site. . . . Jack Spencer, chief executive officer of the schools corporation, which is under fire for cost overruns and policies, said it signed an agreement to pay New York Box's moving expenses so the new East Side High School project could meet a deadline to start construction this past January. But after the state agreed to pay New York Box, the industrial park's owner, Gerald Rubin, surprised officials by demanding $60 million for the entire site -- more than twice what the state planned to pay. That prompted state officials to seek another site. Spencer said the corporation will have future properties fully in hand before paying relocation costs. And here is the key shocking paragraph: Last month, Acting Gov. Richard Codey directed the state's new Inspector General to review the corporation's activities after a Star-Ledger analysis found schools built by the corporation have cost, on average, 45 percent more than schools erected by local school boards during the same period without the agency's oversight. The state agency must really be wasting a lot of money, because when local school boards build schools it already costs significantly more than the private sector.

Lisa Snell is Director of Education


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