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4-15-07 Schools keep hikes near 4% limit
Spending cap helps to rein in budgets Survey: Schools keep hikes near 4% limit Sunday, April 15, 2007 BY DUNSTAN McNICHOL AND JOHN MOONEY Star-Ledger Staff As it cobbled together its budget this year, the Flemington-Raritan School District respected the new 4 percent cap on spending that is a centerpiece of the Legislature's property tax reform. But it wasn't easy. There was no room in the district's planned $53 million budget to add full-day kindergarten. For the time being, at least, language tapes -- rather than teachers -- will continue to deliver foreign language lessons to grade-schoolers. "Would we like to provide more and have actual teachers for those classes? Sure we would," said John Yankowski, the board president. "But not without giving something else up." It's a story being repeated across New Jersey, as residents prepare to weigh in Tuesday on the first school budgets assembled under the Legislature's new rules for curbing local spending in a bid to control property taxes. A Star-Ledger survey of 193 school districts across North and Central New Jersey shows the new limit appears to be having an effect. Most districts came in above the 4 percent limit, invoking waivers or special spending proposals to seek tax increases that in some cases were as much as triple the new state limit. But two-thirds of the districts reviewed kept proposed tax hikes below 5 percent, and the average increase was about 4.5 percent -- far below recent increases that typically have been close to 7 percent statewide. If the trend found among the districts surveyed holds up statewide, it would mark the lowest average school tax hike since 1999. "That's a lot better than it was," said Assemblyman Lou Greenwald (D-Camden), chairman of the Assembly Budget Committee. "We're closer now." School taxes are a high-stakes issue in New Jersey, where they account for 55 percent of the highest homeowner taxes in the nation. Last year, state records show, school levies totaled $11.5 billion statewide. That means every percentage point increase will cost property owners $115 million in additional property taxes this year. For individual homeowners, the effect of a local tax increase is determined by a variety of factors, including the amount of commercial properties in a community -- large ratables can soften the blow -- and the pattern of property assessments locally. Across the state, voters in 549 school districts are scheduled to go to the polls to consider budgets. In addition, voters in 65 communities will be asked to approve "separate questions" involving millions of dollars in supplemental spending for items like bus service for students who live within 2 1/2 miles of school and for expanded kindergarten programs. WAIVERS PUT TO USE Legislation Gov. Jon Corzine signed earlier this month (A-1) requires districts to keep their proposed levies to the new 4 percent limit -- but with some big exceptions if they can document extraordinary increases in health care, special education and other tuition costs. Fourteen of the 193 districts the Star-Ledger surveyed hit the 4 percent exactly, and another 70 came in under. But a majority needed to use the waivers. Take Nutley, for example. Corzine visited the high school last week to trumpet his new property tax measures, including the cap, a new state comptroller to monitor government spending, and plans for an average $1,000 tax rebate for most homeowners in the fall. Yet Nutley has come in with a proposed 4.9 percent tax increase, due largely to health care costs that have risen 9 percent. The district is also asking for an additional $573,000 in a separate ballot question for new technology that would bring the tax hike to 6 percent. Those totals include two new staff positions at the high school, and new gifted and talented programs in the elementary schools. "But every year it's getting harder," said Superintendent Joseph Zarra. "Without the waivers, it would be very difficult to get under the cap and still meet the needs of the students." In the Somerset County community of Green Brook, homeowners are facing a 9.5 increase in their school tax bills. Officials say the increase is largely the lingering result of budget maneuvers imposed under state orders to spend down surplus in 2005 that temporarily lowered the district's tax collections last year. Enrollment also has been climbing there. "What's really killing us is tuition to the high school, because we're sending more children to it," said Joyce Picariello, business administrator of the 1,100-student, two-school district. Green Brook high schoolers attend Watchung Hills Regional High School, at a cost to the district of $12,600 per student. Looking beyond this year, she said it will become increasingly difficult within the 4 percent cap to maintain the level of school services families flock to Green Brook to find. "That's the squeeze play that we're suffering," she said. "It's the same squeeze that gets to personal finances that you have to grapple with as well." Green Brook is among 109 districts included in the Star-Ledger survey where proposed budgets exceed the growth limit. Last year, property taxes collected for schools grew by $681 million statewide, an increase of 6.6 percent. This year, with total school tax collections at $11.5 billion, the 4 percent increase allowed by the new law would translate into $460 million in additional property tax payments. NO QUICK FIX In Nutley last week, Corzine conceded it will take more than a single year for homeowners to fully realize the benefits of the new measures. "We're already lower (in terms of increases) than we were in previous years," Corzine said in an interview before he was seriously injured in a car accident Thursday. "Now we just need to see it on a cumulative basis." He said he also plans to have a new school funding formula in place next year that will provide relief to districts where homeowners are spending the largest portion of their incomes on school taxes. State and local officials say it was easier to control costs this year because of a 3 percent boost in state aid -- the first across-the-board school aid increase the state has offered in five years. Combined with two other new aid programs, state aid jumped by a total of $185 million -- the equivalent of a 1.5 percent hike in property tax rates. "I guess between that (4 percent) directive and the additional moneys that came, it fell together as we hoped," said Assemblyman John Burzichelli (D-Gloucester), a sponsor of the cap and credit bill. "If we're successful in keeping taxes in New Jersey from rising 6 percent, 7 percent, that has to be viewed as progress." Yet Republicans say the Democrats who hold majorities in both the Senate and Assembly fell far short of their promise to reform New Jersey's local tax structure, and that the level of tax hikes being proposed this week remains too expensive for homeowners. "Property taxes are still going up; 5 percent can't be sustained," said Assemblyman Kevin O'Toole (R-Essex). "We've been promised tax reform, and it's not here."
Spending cap helps to rein in budgets Survey: Schools keep hikes near 4% limit Sunday, April 15, 2007 BY DUNSTAN McNICHOL AND JOHN MOONEY Star-Ledger Staff As it cobbled together its budget this year, the Flemington-Raritan School District respected the new 4 percent cap on spending that is a centerpiece of the Legislature's property tax reform. But it wasn't easy. There was no room in the district's planned $53 million budget to add full-day kindergarten. For the time being, at least, language tapes -- rather than teachers -- will continue to deliver foreign language lessons to grade-schoolers. "Would we like to provide more and have actual teachers for those classes? Sure we would," said John Yankowski, the board president. "But not without giving something else up." It's a story being repeated across New Jersey, as residents prepare to weigh in Tuesday on the first school budgets assembled under the Legislature's new rules for curbing local spending in a bid to control property taxes. A Star-Ledger survey of 193 school districts across North and Central New Jersey shows the new limit appears to be having an effect. Most districts came in above the 4 percent limit, invoking waivers or special spending proposals to seek tax increases that in some cases were as much as triple the new state limit. But two-thirds of the districts reviewed kept proposed tax hikes below 5 percent, and the average increase was about 4.5 percent -- far below recent increases that typically have been close to 7 percent statewide. If the trend found among the districts surveyed holds up statewide, it would mark the lowest average school tax hike since 1999. "That's a lot better than it was," said Assemblyman Lou Greenwald (D-Camden), chairman of the Assembly Budget Committee. "We're closer now." School taxes are a high-stakes issue in New Jersey, where they account for 55 percent of the highest homeowner taxes in the nation. Last year, state records show, school levies totaled $11.5 billion statewide. That means every percentage point increase will cost property owners $115 million in additional property taxes this year. For individual homeowners, the effect of a local tax increase is determined by a variety of factors, including the amount of commercial properties in a community -- large ratables can soften the blow -- and the pattern of property assessments locally. Across the state, voters in 549 school districts are scheduled to go to the polls to consider budgets. In addition, voters in 65 communities will be asked to approve "separate questions" involving millions of dollars in supplemental spending for items like bus service for students who live within 2 1/2 miles of school and for expanded kindergarten programs. WAIVERS PUT TO USE Legislation Gov. Jon Corzine signed earlier this month (A-1) requires districts to keep their proposed levies to the new 4 percent limit -- but with some big exceptions if they can document extraordinary increases in health care, special education and other tuition costs. Fourteen of the 193 districts the Star-Ledger surveyed hit the 4 percent exactly, and another 70 came in under. But a majority needed to use the waivers. Take Nutley, for example. Corzine visited the high school last week to trumpet his new property tax measures, including the cap, a new state comptroller to monitor government spending, and plans for an average $1,000 tax rebate for most homeowners in the fall. Yet Nutley has come in with a proposed 4.9 percent tax increase, due largely to health care costs that have risen 9 percent. The district is also asking for an additional $573,000 in a separate ballot question for new technology that would bring the tax hike to 6 percent. Those totals include two new staff positions at the high school, and new gifted and talented programs in the elementary schools. "But every year it's getting harder," said Superintendent Joseph Zarra. "Without the waivers, it would be very difficult to get under the cap and still meet the needs of the students." In the Somerset County community of Green Brook, homeowners are facing a 9.5 increase in their school tax bills. Officials say the increase is largely the lingering result of budget maneuvers imposed under state orders to spend down surplus in 2005 that temporarily lowered the district's tax collections last year. Enrollment also has been climbing there. "What's really killing us is tuition to the high school, because we're sending more children to it," said Joyce Picariello, business administrator of the 1,100-student, two-school district. Green Brook high schoolers attend Watchung Hills Regional High School, at a cost to the district of $12,600 per student. Looking beyond this year, she said it will become increasingly difficult within the 4 percent cap to maintain the level of school services families flock to Green Brook to find. "That's the squeeze play that we're suffering," she said. "It's the same squeeze that gets to personal finances that you have to grapple with as well." Green Brook is among 109 districts included in the Star-Ledger survey where proposed budgets exceed the growth limit. Last year, property taxes collected for schools grew by $681 million statewide, an increase of 6.6 percent. This year, with total school tax collections at $11.5 billion, the 4 percent increase allowed by the new law would translate into $460 million in additional property tax payments. NO QUICK FIX In Nutley last week, Corzine conceded it will take more than a single year for homeowners to fully realize the benefits of the new measures. "We're already lower (in terms of increases) than we were in previous years," Corzine said in an interview before he was seriously injured in a car accident Thursday. "Now we just need to see it on a cumulative basis." He said he also plans to have a new school funding formula in place next year that will provide relief to districts where homeowners are spending the largest portion of their incomes on school taxes. State and local officials say it was easier to control costs this year because of a 3 percent boost in state aid -- the first across-the-board school aid increase the state has offered in five years. Combined with two other new aid programs, state aid jumped by a total of $185 million -- the equivalent of a 1.5 percent hike in property tax rates. "I guess between that (4 percent) directive and the additional moneys that came, it fell together as we hoped," said Assemblyman John Burzichelli (D-Gloucester), a sponsor of the cap and credit bill. "If we're successful in keeping taxes in New Jersey from rising 6 percent, 7 percent, that has to be viewed as progress." Yet Republicans say the Democrats who hold majorities in both the Senate and Assembly fell far short of their promise to reform New Jersey's local tax structure, and that the level of tax hikes being proposed this week remains too expensive for homeowners. "Property taxes are still going up; 5 percent can't be sustained," said Assemblyman Kevin O'Toole (R-Essex). "We've been promised tax reform, and it's not here."
