LAWRENCE: School budget calls for 6-cent tax hike

By Lea Kahn, Staff Writer
   The Lawrence Township Board of Education got its first look at the draft budget for the 2013-14 school year — which the district’s business administrator termed an “as is” budget, with no new initiatives — at its Feb. 13 meeting.
   The $66.7 million budget calls for a 6-cent increase in the school district property tax rate, from $2.35 per $100 of assessed value to $2.41. The owner of a house assessed at the township average of $160,262 would pay $3,862 in property taxes for the $61.3 million tax levy to support the budget, which is a $96 increase.
   The increase in the tax levy is 2.6 percent, which exceeds the 2-percent cap mandated by state law.
   But Business Administrator Thomas Eldridge said the school district can exceed the cap because it has tapped into its “cap bank.” The district did not use all of its allowable tax levy increases over the past few years and state law allowed it to “bank” the amount that was not raised, which is $3.7 million.
   The school district must approve the proposed 2013-14 budget and submit it to the Mercer County Superintendent of Schools for approval by March 7. A public hearing will be held March 21, and any revisions will be made then.
   And for the first time, the budget and tax levy will not be put in front of the voters for approval in April. The school board voted last year to move the school board election from April to the general election in November. The board’s action also eliminates the vote on the tax levy, if it does not exceed the state-mandated 2-percent cap.
   Although spending in the proposed 2013-14 budget only has increased by $33,914, the hike in the school district property tax rate “has a lot to do” with the ratable base, Mr. Eldridge said. The ratable base is the value of all taxable properties in Lawrence Township.
   The value of the ratable base has been in steady decline since 2010 because of successful property tax appeals, he said. It has dropped by $27.8 million in the last year, and by more than $103 million since the 2009-10 school budget year.
   Mr. Eldridge suggested that the school board should look at the actual growth in the tax rate over the past five years. The property tax levy has increased by $1.8 million, or 3 percent — from $59.5 million to support the 2009-10 budget to $61.3 million for the proposed 2013-14 budget. The tax levy has been “almost flat,” he said.
   ”Over the last five years, the property tax has increased by 3 percent — the total number of dollars we asked for over five years, not each year. The Consumer Price Index has gone up by 7 percent in five years. It is clear, we are beating inflation,” he said.
   Turning to the details of the spending plan, Mr. Eldridge noted that overall, the percentage of the budget devoted to specific programs has not changed in five years. The cost of transportation has remained steady at 4 percent of the budget, but security/maintenance/utilities has increased from 9 percent to 10 percent, for example.
   But a year-to-year comparison of the 2012-13 budget and the proposed 2013-14 spending plan shows increases in some areas, such as special education and tuition for out-of-district placements in specialized schools. Some special education students are sent to private schools if their needs cannot be met by the school district.
   Mr. Eldridge acknowledged there is a “bulge” in special education costs. The in-district special education program is going to cost about $300,000 more, or 6 percent. Tuition for special schools is increasing by 21 percent, or $397,571. The cost of regular instruction, by contrast, is going up 1 percent.
   ”What drives our (overall) costs? About 78 percent is for salaries and benefits,” he said. Tuition accounts for 3 percent and energy makes up 2 percent. Supplies — “everything from light bulbs to pencils” — uses up 4 percent of budget dollars.
   Mr. Eldridge pointed out that the cost of salaries and benefits for all employees has continued to climb — except for the years when they agreed to a wage freeze — since 2001. The cost of other budget items, ranging from tuition to transportation, energy and supplies, has not fluctuated significantly.
   The cost of salaries and benefits — $51.6 million for 2013-14 — has squeezed out spending on other budget areas, he said, so the district has resorted to other measures to make up for it. The district has saved money by installing solar panels, and by revising the transportation system to save hundreds of thousands of dollars, he said.
   While the proposed 2013-14 budget is virtually complete, there are still some “costly unknowns” lurking, Mr. Eldridge said. The district will not learn the amount of state aid that it will receive until after Gov. Chris Christie delivers his state budget address Feb. 26, although Mr. Eldridge said he does not anticipate a loss in state aid.
   The impact of the Affordable Care Act, informally known as Obamacare, is more significant, he said. The law, which takes full effect Jan. 1, 2014, requires all employers who employ at least 50 people who work 30 hours or more — whether they are considered full-time or part-time employees — to offer dependent health care.