Six school districts in Atlantic County approved budgets for next year that exceed the 2 percent cap on property taxes but don’t violate state law.
Three districts in Cape May, four in Cumberland counties and one in southern Ocean County will also exceed the cap. All 14 complied with a new state law that allows tax-levy increases of more than 2 percent to cover excess expenses for employee health and pension benefits or enrollment adjustments.
A review of 2012-13 school budgets by The Press of Atlantic City shows that although almost all local school boards no longer take their budgets to a public vote, the cap appeared to help keep costs under control for next year.
Seven of the 72 public school districts in The Press of Atlantic City’s coverage area will reduce the property-tax levy next year.
Eighteen school boards approved budgets with no property-tax increase for next year. But under 2010 state law, they can reserve the 2 percent cap allotment for use within the next three years.
Districts that raised taxes less than 2 percent are also allowed to “bank” the remainder for use within the next three years. Six school districts in Atlantic County, two in Cumberland County and two in southern Ocean County approved budgets that had tax-levy increases between zero percent and the 2 percent cap.
A 2010 law requires districts to get approval from the state Department of Education to use their banked cap allotment. Districts must show they have no other revenue to apply to the expenses, and the local board of education must also discuss and approve the spending. If school boards still want to exceed the approved tax levy, they must take the excess amount to a public vote in November. No local school budget will require a November vote.
Frank Belluscio, spokesman for the New Jersey School Boards Association, said the board supported the cap because it allowed for exemptions of items over which the district had no local control, such as increases in health-benefit premiums and enrollment shifts.
“We’re not opposed to caps, but they have to be reasonable,” he said. He said the change in the law that placed the cap on the local tax levy rather than on the entire budget is a challenge because districts that lost state aid could no longer just make up the balance by raising local property taxes. Districts with small tax levies have a greater challenge because their 2 percent cap is a smaller amount of money.
“The cap does restrict us,” said John Saporito, superintendent in the three small Cumberland County K-8 districts of Commercial, Maurice River and Lawrence townships. “But there is always pressure not to raise taxes.”
Locally, most districts were allowed tax increases for employee health benefits or enrollment issues that affected costs.
The largest approved local increase in school taxes in an operating district is Absecon, where the tax levy will increase 5.3 percent for 2012-13 because so many more students are attending public rather than private high schools. Tuition costs in Absecon have more than tripled in the past three years to almost $1.7 million for 2012-13. Tuition for students attending either Pleasantville High School, Charter Tech High School for the Performing Arts or the Atlantic County Institute of Technology will increase the cost to taxpayers by almost $520,000.
Absecon Superintendent James Giaquinto said the district got an adjustment last year for the extra students but needed only $281,000 of the allotted $396,000 for the 2011-12 school year. The balance was applied to the 2012-13 budget. The district also got a health-benefits adjustment.
Buena Regional was approved for a 4.2 percent tax increase to make up for funds lost because the Gloucester County town of Newfield is leaving the regional district, Superintendent Walter Whitaker said. The district banked some of its property-tax allotment from this year to cover lost revenue anticipated in 2012-13. The loss of Newfield students has cost the district about $1.5 million in annual tuition revenue.
The levy increases approved for Egg Harbor Township (4.1 percent) and Somers Point (3.8 percent) were due to increases in employee-benefits costs, school officials in those districts said.
In Egg Harbor Township, the State Health Benefits Plan cost increase was 10 percent, Business Administrator Kateryna Bechtel said, so the district could request an adjustment of 8 percent, or $1.3 million.
Dennis Township had no property-tax increase in 2011-12. The district banked the amount and will use some of it to compensate for an almost $368,000 reduction in state aid for 2012-13, school Business Administrator Terri Nowotny said. The district also got a small health-insurance waiver, for a total 3.6 percent property-tax increase.
Nowotny said that under the proposed state-aid modifications, the district will likely lose money every year for the next few years, so the district is banking its cap as much as it can.
A few districts will reduce their property-tax levy next year. West Cape May was able to reduce local property taxes because of increased state aid it received for taking students from other districts as part of the state school choice program.
North Wildwood was able to reduce its property-tax levy because tuition to Wildwood and the Cape May County Technical high schools was reduced because of lower enrollment. Business Administrator John Hansen said there has been a drop in the number of students coming in from West Wildwood, which has no school.
That reduced enrollment will also mean an almost 9 percent reduction in the property-tax levy in West Wildwood, where the entire budget is tuition. Enrollment shifts and the effect on tuition will increase the property-tax levy in Longport, which also has no school, by 6.4 percent.
Hansen said that allowing districts to bank their cap is a good idea because the flux of enrollment can cause dramatic changes in the tax rate in the small districts.
One drawback of a zero percent increase or a reduction in taxes is that it maintains rather than increases the base amount of money the district can raise the following year to meet the 2 percent cap. Hansen said he considered that effect but tried to make decisions based on what was best for children and taxpayers.
“It is difficult to explain how the cap works,” Hansen said. “But I think boards act responsibly, even when there is no public vote.”
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