State Aid Figures Welcome News to South Brunswick Township and School Officials; Tough Decisions Loom

The South Brunswick School District will see a boost in state aid of $1.26 million this year, while municipal aid stayed flat at about $5.1 million after the figures were released by the state over the past two days.  While encouraged by the lack of deeper cuts, local officials said the overall impact would be minimal due to the steep cuts endured last year.

"Any increase is something that we're quite happy about," said Superintendent Gary McCartney.  "But we'll have a better idea of the impact as we move forward."

The district will receive about $18.9 million in state aid this year, a positive development after last year's cut of about $6.3 million.  However, district officials are unsure what the overall impact of the aid increase will be.  

In October, the district learned it would be receiving $836,858 through the Federal Education Jobs Act, but officials are wary that amount may be included in the state aid total.

School Budget Committee Chairman Martin Abschutz said when the district received the notification from the state education commissioner, the letter basically said to think long and hard before spending the Jobs money.  Reading between the lines, Abschutz said, strongly suggested state aid would include that total from the Jobs Act.

"We don't know whether that money from the Jobs Act will be included or whether it will stand alone," McCartney said.  "My guess is that it will be included already."

The district is currently preparing the proposed school budget, which will be presented to the public over the coming weeks.  At Wednesday evening's budget committee meeting, the board voted to pursue a "middle of the road" budget, that would maintain last year's tax levy at about $95 million.  

The tentative plan would involve eliminating about 60 full time equivalent positions and would carry a 12.2 cent tax rate increase.  Last year, staffing was cut by 111.9 full-time equivalent employees from across the district.

"We're dealing with a constant decrease in ratables," said Board of Education President Matthew Speesler.  "We're at the mercy of ratables.  The burden of the tax levy is not being offset by other businesses."

The drop in ratables is causing added difficulties for both the district and township.  South Brunswick's total assessed value dropped by about 4.3 percent, to approximately $3.7 billion this year.  

"It's still too soon to say what kind of impact the aid increase is going to have on the budget," Abschutz said Wednesday evening, shortly after school aid figures were released by the state.  

McCartney said the district still must also determine the impact of fees related to debt service.

During the public portion of Wednesday's budget meeting, township resident Larry Rosenberg said some residents of South Brunswick can't continue to keep paying higher taxes.

"I don't know where I'm going to get the money because you're asking for more money and the town is going to ask for more money," he said to the board.  "I don't know where we're going to get all this money from.  We're going to have to take second and third jobs to pay for it.  And we can't do that."

Board members said it would be up to voters to determine what they can afford to pay, as they weigh the value of the dollar amount to pay for education in town versus the benefit of the programs provided by South Brunswick's schools.

"We don't like paying higher taxes," said Board of Education Vice President Stephen Parker.  "But it's going to be a community decision whether they can afford to pay for these programs or whether we have to dismantle the programs we have built up over the last several years."

On the municipal side, the flat aid was welcome news, but township officials said the $1.1 million cut in aid the previous year is still being felt.

"I'm glad our aid stayed flat but this does nothing to help us stay under the 2 percent cap," said Mayor Frank Gambatese.  "We still have to fix this year what the Governor cut last year.  That $1.1 million still has to be made up, so while I'm glad there are no additional cuts, I'm still not happy about what was done last year."

Gambatese said that the label of "state aid" is misleading, because what is referred to as aid is actually money generated locally by the energy receipts tax.

"We don't get state aid," he said.  "The state is the holder of the energy receipts tax that every resident in the state of New Jersey pays on their public services bill.  Everybody pays 3 percent extra, then that money goes to the state and is divided up amongst towns based upon their population. We normally get about $6 million and last year that was cut.  

"It's simple, that money doesn't belong to the state.  It belongs to the town, because that's what every resident pays for.  That aid doesn't come out of the state treasury, it comes out of what residents pay for their electric bill."

During his budget address on Tuesday, Gov. Christie said the flat aid to municipalities means there should be no reason to raise taxes locally.

"And also in the context of property taxes, this year’s budget continues to provide municipalities with steady aid," Gov. Christie said in his address.  "That's right, mayors – at the exact same level as last year. So there is no excuse for this relief to be eaten up with higher local taxes, between receiving no further cut in municipal aid, and implementing a 2 percent cap on property taxes."

Gambatese said the statement was misleading because increases in pension and health benefit costs alone, which rose by about $1 million for the municipality, would cause a tax increase.

"When you stop and think about that statement it makes no sense at all," Gambatese said.  "Aid remains flat, but that doesn't mean our expenditures as a town remained flat.  He says that and meanwhile the state doesn't make its contribution to pensions.  We have an increase from the state not making its contribution, so for him to say something like that is disingenuous."

At Tuesday evening's Township Council meeting, Township Manager Matthew Watkins presented a proposed $46.3 million municipal budget that carries an 8-cent tax rate increase, which raises the total tax rate to 80-cents per $100 of assessed valuation.  The cut in spending and rise in the tax rate is also due to the decrease in ratables and increase in pension and health costs.

The proposal is expected to undergo changes as the council meets with various township department heads over the coming weeks.

"My concern is trying to come up with a budget that is not going to truly hurt residents in town," Gambatese said.  "Right now we're looking at an 8-cent increase, which means the average resident is looking at an increase of $150 to $160 on their tax bill. And that doesn't include what's going to happen with school taxes and the tough situation they're facing.  We don't know what that's going to be.  So these are not good things.  Property taxes are not going down and it's not the fault of the towns, we're all doing everything we can."

The proposed municipal budget includes 10 layoffs of township employees and an undetermined amount of furlough days.  The actual number of total layoffs and furlough days will be determined over the coming weeks as the council evaluates the budget. , which would take effect at the end of the business day on April 18.

"We're cut so low as is so it's clear (Gov. Christie) wants us to cut services," Gambatese said.  "We've laid off as many people as we can possibly layoff without effecting the actual quality of life of our residents.  We have a good town and it costs money to run it in an appropriate manner.  The last three years our budget has been cut from the previous year, so it's not like we're raising the expenditures."