NJ may life 2% tax cap to help schools facing cuts

Proposal aims to offset state aid reductions, preserve programs

By: Mary Ann Krouth
NorthJersey.com
USA Today Network - New Jersey

..... As state aid cuts loom form changes made six years ago to the way New Jersey funds its schools, cries for help form beleaguered school districts have reached a fever pitch.
..... Now, state Senator Andrew Zwicker (D-Somerset) has a proposal to help those districts meet rising costs without cutting programs: end the 2% property tax Levey cap for districts experiencing funding cuts.
..... A 2018 law called S2 amended the state's school funding formula to correct historical imbalances in how much aid the state was releasing. But as a result, many districts lost state aid. Some lost it every year since, especially districts that saw drops in enrollment.
..... Last year's [2023] cut hit Monmouth, Ocean and Cape May counties the hardest. Some Sussex County public schools also got hit,
..... Half of the state's public school students attend districts that don't cover their local share of expenses, school funding expert and advocate Danielle farris of the Education Law Center told senators Thursday. [02/15/2024] the S2 amendment was "expectantly designed: to cut aid to some districts, by doing away with a provisions that gave aid in excess of the formula's calculation and then redistributing it to other districts, said Farris.
..... Even with the 2% cap, sate law does allow adjustment in the tax levy to account for increase in health care, pension costs and enrollment increases.
..... But without the flexibility to raise their local tax levy above the 2% cap each year for other expenses, districts that lost state aid have no choice but to make cuts.
..... Zwicker's bill could change that.
..... Kittatinny Regional lost more than $4 million since 2018, said Hutcheson. Last year [2023] the district reduced its staff by five. Over the last nine years, it reduced its staff by 36, form 167 to 131.
..... Its class sizes increased by 15% to 20% and it ended a consumer arts program that focused on sewing and fashion. It eliminated 5:30 PM. after-school busing despite transportation routes being spread over 135 square miles in rural Sussex County, Hutcheson said.
..... "I think the bill is the wrong way to do it, because it puts the burden upon our taxpayers, which already provide us with approximately 90% of our budget," Hutcheson said, "but I support any legislation that's going to allow me and our team and board to stop the dismantling of our distinct due to S2.
..... "The impact on taxpayers would vary by community," Farrie of the Education Law Center told NorthJersey.com . "some school districts have seen rapid development, either commercial or residential, and could increase taxes by the necessary amount with limited impact on homeowners.
..... "In other districts, the 2% cap may have kept property taxes artificially low and they may need to phase in increases to meet their schools, Farris said. "But regardless, school districts would be following the law, since the school funding formula dictates how much each community is able to and should be contributing to its schools."
..... The new bill move out of the Senate Education Committee on Thursday [02/16/2024] after testimony form 14 representatives from the south Brunswick school district, including students, parents, the president of the teachers' union and the school board.
..... Other districts providing testimony included Toms River, Regional and Hillsborough. The state's key education stakeholders supported the bill with amendments.

'Hundreds of conversation on this topic'

..... Addressing the impact of funding cuts to schools has dogged lawmakers representing central and south Jersey districts for years. "we have had hundreds of conversations on the topic. ... We are aware of the transportation and special education and inflationary costs," said state Senator Vin Gopal, D-Monmouth, who chairs the Senate Education Committee.
..... "It's a great bill. We're going to push leadership hard to move it," he told NorthJersey.com .
..... "We have come to an apocalyptic point in our budget," South Brunswick school business administrator David Pawlowski testified. "We changed our approach from revenue generation to looking at budget cuts," he said.
..... The district had already eliminated some bus routes, leaving 220 students without busing. "Next year's [2024] cuts will change how our district operates on a daily basis," Pawlowski said. "When it rains in South Brunswick, we have 14 buildings that leak. those projects are all on hold."
..... "I'm looking at 120 people losing jobs," he said. "inflation salaries and health are costs have left South Brunswick's budget numbers in the red every year for the past seven or eight years. The 2% cap plus cuts form S2 add a hole every year."

Inc erase tax levy without residents' permission

..... "The property tax cap is preventing many districts across the state from being able to deliver the resources necessary for a thorough and efficient education," Farrie told senators.
..... The state;s funding formula, cerated through the School Funding Reform Act, requires districts to contribute a "local fair share" to fund their adequacy budgets. The remainder of the adequacy budget is provided through state aid.
..... "Adequacy budget: refers to the cost of educating all enrolled students to meet state standards, indulging special education costs and cost for students from low-income backgrounds and non-English speakers.
..... The bill would allow schools to increase their tax levy without seeking permission from residents, which is usually done with a question on the ballot.
..... But there are limits. The bill would only allow a tax cap adjustment that equals the difference between the amount of state aid received by the school district in the previous school year and the amount received in the 2023-2024 school year or the 2024-2025 school year.
..... The bill also contains a provisions to increase the tax cap for schools that face a funding cut and would be spending below adequacy after the 2024-2025 academic year.
..... If the bill becomes law, it would be in effect for this school year and the following year, Zwicher told NorthJersey.com .
..... However, the language in the bill is unclear, and does not specify an end date. The broader plan is to review the school funding formula and permanently address aid cuts, Zwicher explained.
..... The tax levy adjustment is intended as a stopgap measure, he said.

Stabilization aid not enough

..... The Murphy administration has been on track to fully fund the state's share of the School funding Reform Act for the first time in the fiscal eyesore 2025 budget, 15 years after the law was enacted, Farrie said. "But nearly one third of districts across the state are still underfunding their local share," told senators.
..... "Last year, [2023] recognizing the dire straits many districts were in as they faced daunting state aid cuts, the legislature provided stabilization aid to prevent massive layoffs and program cuts," she told NorthJersey.com . "these districts, now facing the same, or worse, situation in the upcoming budget, need proactive policy changes, like the tax cap adjustment, that will give them the tools to adequately fund their schools."
..... The Murphy administration set aside $20 million in one-time assistance in its 2023-2024 budget, called "stabilization aid," for schools affected by these funding cuts.
..... In addition to moving this bill, Farrie and school district employees asked lawmakers to push the state to review the school funding formula. The Department of Education is supposed to conduct an in-depth review of the formula every three years, but the formula "has not been adequately reviewed in its 15 yeas of implementation," Farrie told senators.
..... Gopal told NorthJersey.com that reviewing S2 and school funding was a priority for him. "We will be doing a hearing very soon on S2," he said.
..... With Kevin Dehmer, the new acting commissioner widely acknowledged as a school finance expert taking the helms of the state Board of Education this month, [02/2024] changes to the formula might be closer than ever.

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