State Receives (and Approves) Fewer Requests to Exceed Tax Cap

State Receives (and Approves) Fewer Requests to Exceed Tax Cap

Fewer New Jersey school districts sought to exceed the state’s 4-percent property tax levy cap this year, and the state has approved a smaller share of those requests. The New Jersey Department of Education recently approved $12.28 million in cap waivers, a little more than a third of the $35.4 million requested by 33 local districts. This year’s activity represented a significant drop from last year, when the state approved 57 percent of the $58.6 million in waivers requested by 65 districts. The property-tax cap law enacted in April 2007 placed a 4-percent local levy cap on school, municipal and fire district budgets. The law included a “cap waiver” system that allows school officials, under certain circumstances, to petition executive county school superintendents to exceed the cap. Of this year’s 33 applicants, 23 were partially approved Four were rejected in their entirety Two were approved in their entirety, and Four were withdrawn Cap waivers either can result in a permanent base budget increase, or may be in effect for only a year. Three of this year’s waivers were permanent; all three were granted to districts that faced the increased operating costs of opening a new school. Waiver requests may be based on factors such as special education costs, particularly out-of-district placements; non-recurring revenue, such as the loss of surplus that was available the previous year; and increases in the costs of hazardous route busing, insurance, and sending-receiving tuition. Part of the reason for the decline in cap waiver proposals may be attributed to school officials not seeking to increase the school budget during a poor economy. State officials would not grant waivers if they could find other areas of the budget that could be cut, or if they could identify additional revenue such as surplus or tuition. In addition, local school officials had to demonstrate they met efficiencies outlined in the state Department of Education’s Accountability Regulations, such as limiting the number of non-required aides, ensuring a certain number of custodians per square feet of facilities, and adhering to transportation efficiency standards. (Figures were updated May 1, 2009)

Copyright © 2009 New Jersey School Boards Association. All rights reserved.