NJ Moves To Take Over Lakewood School District

LAKEWOOD, NJ — The New Jersey Department of Education has moved to take over the Lakewood School District following "years of documented failures," the agency said.

The announcement comes after years of back-and-forth between the district and the state regarding financial issues and tens of millions in loans to Lakewood to support its school budgets.

The state filed an order to show cause on Wednesday, the first step toward full intervention in the district, which has had a state monitor since 2014.

"This filing represents a significant and necessary action to address persistent deficiencies that have denied Lakewood students the thorough and efficient education guaranteed by the New Jersey Constitution," state officials said.

An email seeking comment from Lakewood Superintendent Laura Winters, business administrator Kevin Campbell and school board president Moshe Bender was not answered as of 4 p.m.

The district, which had just over 4,200 students in the 2024-25 school year, and has accumulated $138 million in loans from the state to fund its budgets.

"For more than a decade, the New Jersey Department of Education has been working with the Lakewood Township School District to address ongoing fiscal and operational concerns that impact students, staff, parents, and the entire Lakewood community," said Kevin Dehmer, the state education commissioner. "For all of those impacted, most especially the students of Lakewood, we are obligated to intervene in this situation and provide the district with the necessary oversight to course correct."

The takeover filing follows an appellate court ruling in September that said Lakewood public school students “suffer from an ongoing constitutional deprivation,” the NJDOE said.

The court "identified the causes of that deprivation as a 'consistent pattern of neglect and misfeasance by various elected and appointed Lakewood school leaders with respect to critical governance, finance, curriculum, transportation and special education recommendations made by [the NJDOE] over the years.' "

The district now must argue before the courts why the state should not take over the district.

In the 638-page show cause filing, the state details a number of financial issues that it says the Lakewood Board of Education has failed to address, including transportation costs and special education costs, in spite of what it says were warnings as far back as 2009.

"Specifically, the Department recommended that Lakewood BOE reconsider its courtesy busing policy, which resulted in the District spending $4,000,000 in the 2008-2009 school year to bus private school students who did not live remote from the schools they attended," the state filing said.

"And because a significant portion of Lakewood’s budget was spent on out-of-district special education placements, which included transportation for those students, the Department recommended that Lakewood develop ways to educate more special education students in-district in order to curtail growing expenses," the state said.

Lakewood also "chose not to raiseits local tax levy to the statutorily permitted cap ... and, as a result, failed to tax up to its local fair share," which is the amount the state says is a district’s ability to contribute to its overall adequacy budget through through local property taxes, "and thus did not raise additional funds that could have been used to provide T&E."

The district had a budget surplus of $5 million in 2010, the state said, but between holding the tax levy flat and the spending on transportation and special education found itself with a deficit that has ballooned over time.

Many of the findings cited in the state filing come from a 2021 ruling by a state Administrative Law Judge on a lawsuit — referred to as the Alcantara lawsuit — filed in 2014 by parents of Lakewood students alleging the students were not receiving their constitutionally mandated thorough and efficient education because of the impacts of the School Funding Reform Act of 2008.

The judge ruled the issues were "the result of the Lakewood BOE’s severe fiscal mismanagement and Lakewood’s lack of effort to pass referenda for additional funding," the state filing said.

"The ALJ found that the District’s financial difficulties were attributable, in large part, to the extraordinary cost the District chooses to bear to pay for transportation for private school students and for tuition for special education students it places in out-of-district private schools," the filing said. In 2017-18, the Lakewood schools spent $78 million out of a total budget of $144 million on transportation and special education costs, it said.

The filing also cites a state review of the district that was undertaken following the 2021 administrative law judge's ruling in the Alcantara case that detailed what the state Department of Education said were critical failings and deficits across the board, from how the school board meetings were run to access to Spanish translations of basic information.

There was "a district-wide culture of low expectations for students," which the state says translated into student performance on state testing and graduation rates that were significantly below state averages. The teaching staff is overloaded and overwhelmed and are left feeling defeated and deflated, the filing said.

The district pushed back against the comprehensive review in a report posted on the district's website, but the district has been in conflict with the state for several months. The current state monitor, Louise Davis, rejected the school board's attempt to reappoint Michael Inzelbuch as its attorney for the 2025-26 school year.

Inzelbuch had a contract for $800,000 for the 2024-25 school year and had earned nearly $7 million since 2017, the Asbury Park Press reported. Inzelbuch also is well-known for representing the families of special education students throughout the state and winning significant settlements.

The full order to show cause can be read online.

The state also filed its plan for intervention, including wide-ranging changes to the administration and the conversion of the Lakewood school board to an advisory body, with no authority to make decisions.

It would appoint a new superintendent along with "highly skilled professionals (HSPs) in the areas of Governance and Legal Compliance, Special Education, Transportation and Operations,

Fiscal Management, and Nonpublic Student Services," to revamp the district's practices and policies.

The intervention plan is available online.