administrator
forecasts tax increase
Business
administrator
forecasts tax increase
BY JANE MEGGITT
Staff Writer
Upper Freehold school officials are concerned about the new state requirements for local school budgets.
The new laws are part of Gov. James E. McGreevey’s Fair and Immediate Relief (FAIR) plan, which includes a 2.6-percent income tax for the state’s wealthiest residents, government spending controls, and a call for a constitutional convention in 2005.
More specifically for school districts, there is an administrative spending cap of 2.5 percent, an overall spending cap of 2.5 percent, and a reduction of surplus from the 6 percent allowed last year to 3 percent, according to the plan.
School Business Administrator Viola Yousifon explained the consequences of the recently passed legislation to Board of Education members at their July 14 workshop meeting.
Superintendent of Schools Dr. Robert Connelly said that the new 3-percent surplus maximum is "dangerous." He added that it is supposed to be lowered to 2.5 percent the following budgetary year.
"Three to 5 percent is living nicely. Under 3 percent is on the edge," Connelly said, citing unforeseen expenses for districts, such as having to send students to special schools.
Districts with 6-percent caps will be required to give 3 percent back in local taxes, according to the plan.
The provisions are retroactive to decisions made after the April school budget election, according to Yousifon.
"Any appropriation after the election in April is null and void," she said, referring to the district’s capital reserve or maintenance fund.
Yousifon said the district would be over the new cap by $51,107, which would now have to come out of the district’s surplus. It would go toward a reduction of the same amount from the tax levy for residents.
"We had to recertify the tax levy assessment to Upper Freehold and Allentown," Yousifon said.
"We must adopt the revised budget," she continued. The numbers are the same, but $51,107 less is coming from the tax levy, and $51,107 more is coming from our surplus."
According to Yousifon, there will be a $43,000 reduction in Upper Freehold tax levies, and an $8,300 reduction in Allentown tax levies.
"It’s a little less than 1 cent," Yousifon said.
Connelly called the immediate tax reduction "a political ploy."
Although the plan calls for money to be returned to taxpayers, it is coming from surplus rather than from actual spending cuts. District officials fear that this surplus reduction will leave them short the next budgetary year, and will likely result in future tax increases.
Connelly said the legislation means that "the money [for 2005-06] is not there [and that] there will be a huge increase in taxes."
"There is no wiggle room at all," she added.