By Frank Mustac, Contributor
With recent passage of the more than $35 million school facilities bond referendum, the Hopewell Valley Regional School District Board of Education is looking to reduce property taxes for schools over the next three years.
According to officials, the district is currently paying off old debts for past facilities projects, which will be retired by August 2021.
Now that district will be incurring new debt due to the referendum, there will be an overlap period from 2018 to 2021 when taxpayers in Hopewell Township, Pennington Borough and Hopewell Borough will be paying off both the old and new debts simultaneously.
Earlier this year, Superintendent of Schools Thomas Smith explained that a Hopewell Borough taxpayer, for example, would be billed in 2017 to help pay down the old school debt at the rate of $100 per $100,000 of assessed property value. Once the overlap takes place, however, that same taxpayer could pay upwards of $114 per $100,000.
The rate would drop substantially to $39 in 2022 because the old debt would expire by then.
At its Oct. 17 meeting, the school board approved a plan to reduce property tax payments for schools during 2018-2021.
“What we’re trying to do is to get what is called non-conforming debt, which will get us over that hump of the two debts overlapping,” Board of Education President Lisa Wolff said. “So during the time from 2018 to 2021, we would pay interest only on the (new) debt. From 2021 on we would make both interest and principal payments.”
As a result, the total repayment period of the new non-conforming debt would be for 15 years instead of 25.
Because of the shortened repayment period, the school district would pay about $8 million less than if the repayment schedule was 10 years longer, Ms. Wolff said.
“We need to go before the state’s Local Finance Board to get it approved,” Ms. Wolff said. “It is not definite that it will get approved. We’re not actually sure, but we’re going to try and get that approval.”
The school district filed an application with the Local Finance Board on Wednesday, Oct. 19. Representatives from the district will appear before the Local Finance Board in early November.
Voters in Hopewell Township and Pennington and Hopewell boroughs approved the $35-plus million school facilities bond referendum on Sept. 27 by an almost 2-to-1 margin.
The money from bond sales will be used to fund repair work, construction, alterations and other capital improvements at several schools in the district.
Superintendent Smith said some projects will likely start as early as spring 2017.
