CAPE MAY POINT _Some call it the best decision this tiny town of less than 300 residents ever made. The borough closed its only school in 1931 and never joined a neighboring school system.

While Cape May and Lower Township are in an epic battle over funding shares at the regional school, and other towns across New Jersey constantly battfor more state aid, the borough mostly just stays quiet about its school tax rate of three-quarters of a penny for each $100 of assessed property value. The rate, year in and year out, is consistently below one cent.

The tax is so low that even a house assessed at $793,000, the average assessment here, has an annual school tax bill of just $59.63. Compare that with Cape May, a town where the average school tax bill is $2,350 for a home assessed at $661,100.

Vito Gagliardi, an attorney who represents towns in battles over school funding, currently representing Cape May, said whoever made the decisions years ago saved the towns millions, annually.

“They should name something after him,” said Gagliardi.

Nobody is quite sure who made the decision. Irene Schreiner, a retired town clerk who began working in 1967 under the late Mayor Frank Rutherford, said they were given an opportunity to join the regional school and were even offered a seat on the Board of Education. She said many of the children in town, including her five, went to Catholic school. There was also concern about contributing to the expense of building a new school in Erma. They declined to join.

“Frank Rutherford always said it was the best thing we ever did. We could send the kids wherever we want and pay per student,” said Schreiner.

Subhead: Is It Fair?

This is not a poor town. The town only has about 600 homes, many second homes, but the proximity to the water produces a ratable base of more than $515 million. The median family income in 2010 was $76,250. More than 58 percent of the population has a college degree or higher.

It’s also an older town with a median age of 66.4 years so there are few young families and only a handful of children go to school on a given year. The town pays tuition for them at Cape May Elementary and Lower Cape May Regional. The budget this coming school year is $108,907, up from $65,240 because a few more children moved into town.

The regional school is funded based on property values in the three towns and some would argue Cape May Point is getting off easy.

Frank Campbell, an education attorney representing Lower Township in its fight with Cape May, said a statewide school tax could eliminate situations where “pockets of wealth” somehow have among the lowest school tax rates. Schools, however, are mostly funded locally and that can create such pockets.

“That’s one of the anachronisms of the law,” said Campbell.

Joan Brown, a member of the borough’s Board of Education, argues the system is fair since the town has so few students that it does not burden any neighboring school districts.

“I really think for the kind of community we have, paying a tuition per student is fair,” said Brown.

Gagliardi said the state subsidizes schools that need help, but at regional districts the state simply has the richest town pay the most. Cape May is fighting Lower Township because it pays one-third of the budget with just over five percent of the students. Cape May has more valuable properties.

“If Cape May Point joined, Cape May Point would subsidize Cape May. I can’t say it’s unfair, but it does underscore the unfairness to the city of Cape May,” said Gagliardi.

In 2007 the state began pushing non-operating school districts (those without schools) like Cape May Point to merge with their neighbors. A study done then showed the tax rate just for grades 7-12 could go up from .99 cents to 47.7 cents for each $100 of assessed valuation. The town doesn’t even have one student this year in grades 7-12 so it could have been paying huge sums for no students.

Gov. Jon Corzine did merge non-operating districts in 2009 that sent tuition students to a single school but the 13 that sent to multiple districts, including the borough, were supposed to be done at a later date. It never happened.

“The Christie Administration decided they wouldn’t get to them at all and just left them alone,” said Campbell.

Most mergers did not cause the financial pain the non-operating districts worried about because costs were not just based on property values but could also include enrollment numbers.

Gagliardi notes that regional schools were initially based on enrollment with towns paying based on the number of students they sent. That’s what the residents voted for when they set up the district but the state changed the law in 1975 to base it on property values.

Subhead: Neighbors React

Cape May Councilman Jack Wichterman has led the fight against Lower Township over funding but does not begrudge Cape May Point its good fortune. Wichterman said a bigger problem is state education funding.

In 1976 the state instituted an income tax to fund public education and lower property taxes and that pot of money is now close to $8 billion a year. Wichterman said most of this money is now being funneled to just 31 school districts. Wichterman remembers the vote because he was friends with Republican state Assemblyman Bob Littellcq, who cast the deciding vote. The 31, formerly called Abbott districts, now get about 67 percent of the funding for the state’s 603 school districts.

“We get very little down there. That’s a bigger problem. The 31 Abbott districts get most of the money and from what I’ve read it’s been a failure,” said Wichterman.