By Kristine Snodgrass, Staff Writer
MONTGOMERY — The Township Board of Education this week approved a $77.3 million budget that reflects a $2.1 million reduction in the tax levy ordered by the state Commissioner of Education.
Spending was reduced by $666,000 in order to meet the tax levy certified last week by the state, which upheld a report issued by the Somerset County Executive Superintendent of Schools.
The county superintendent had recommended that the district reduce the local tax levy by $2.1 million through spending cuts and the use of additional revenues, primarily surplus funds.
Board President David Pettit said that the board is considering a challenge to the commissioner’s decision in the state appellate court. The board met in executive session prior to the open meeting to discuss its legal options.
The deadline for filing an appeal is August 9, he said, and it must be based on either of two criteria. For one, it can be based on the allegation that the cuts prevent the board from certifying that the district is providing a thorough and efficient eduction, he said. The second option, which the district is exploring, is the allegation that the tax levy reduction will create fiscal instability, he said.
The board is in the process of deliberating on the “wisdom” of an appeal and the potential consequences for the district, Mr. Pettit said. Among the board’s considerations is that a victory in the appellate court would result in a tax increase for homeowners in the township.
”Even if we win, it might not feel like a win for the community,” he said.
Superintendent Earl Kim presented figures that he said demonstrate the looming fiscal instability for the district. He expects a $3.2 million revenue shortfall as the district begins planning its 2011-12 budget this fall. Meanwhile, costs are expected to increase by $1.6 million, creating a nearly $5 million gap.
Raising taxes by 2 percent of the general fund would generate only $1.2 million, he said.
The planned implementation of a “three-tier” busing system in the 2011-12 school year through the elimination of contracted bus routes will save $700,000, Mr. Kim said.
”While it would help, that doesn’t get us anywhere near the $3.2 million we need to cut,” he said.
Even with the elimination of co-curricular activities, where the district spends about $1 million of its budget, a deficit of $2 million would remain, he said.
Mr. Kim explained that his scenario assumes that the district receives a steady level of state aid funding. Unless the state increases the amount, the board will have to consider staff reductions, larger class sizes, privatization of custodial and busing services and other measures.
”There’s not a lot of places we can go,” he said. “There have to be program effects for these kinds of savings.”
While it is required to meet the dollar figure for the tax levy that was certified, the board does not have to follow the county’s specific recommendations on how to achieve the savings.
The district does plan to follow the county’s recommendation to spend down its fund balance, or surplus, by $900,000. However, the decision “definitely creates an unstable situation for us,” business administrator Tom Venanzi said. If an unbudgeted expense arises, the district will be forced to reallocate money from other areas, for example suspending purchasing or leaving vacancies open, he said.
The district will also increase revenue generated by the student activity fee by $26,000, bringing the total to $126,000. The fee for next year has not been determined, but Mr. Kim said he expects it to be in the range of $100 per student per year, an increase of $25.
The possibility of reinstating the Upper Middle School sports program on a fee basis is also in the works, he said. The program was eliminated from the 2010-11 budget.
The board also cut $172,000 in student transportation services and eliminated positions including two custodians, two grounds workers, summer painters, technician assistant, a second grade teacher, and supervisor of guidance, according to documents distributed at the meeting.
The district is also expected to save $130,000 in contracted tuition reimbursement for teachers, as agreed to by the Montgomery Township Education Association.
After the district’s proposed spending plan was defeated in April’s school elections, the local governing bodies were unable to reach an agreement on a tax levy. That bumped the matter to the county superintendent’s office, which recommended a cut $130,000 larger than proposed by a municipal subcommittee.
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