CENTRAL JERSEY – New Jersey residents have two things that bite every July — mosquitoes and property tax bills.
But this year residents only have to deal with the bugs because property tax bills have been delayed.
Because the state legislation made last-minute changes in state aid to local school districts for the 2017-18 fiscal year that began July 1, school boards throughout New Jersey have to change their proposed school budgets to reflect those changes.
School budgets, with a May 12 deadline, were adopted based on state aid numbers presented by Gov. Chris Christie in February.
However, those numbers were changed in late June as the governor and legislature negotiated a budget for the new fiscal year.
School districts have until 4 p.m. Friday to submit their revised budgets to municipalities and county tax boards so a property tax rate can be set. The deadline can be revised if the municipality and school district agree to a change.
The school districts have discretion on how to use the extra money. The districts can apply the money to reduce the total amount needed to be raised by taxes or can set the funds aside for reserves or other uses.
For example, the Somerset Hills School District decided to use its additional state aid, $95,855, not to reduce the taxes. Though that amounted to an 10 percent aid increase, the total amount of state aid to Somerset Hills, one of the most affluent districts in the state, is now $994,791 out of a total $42 million in expenditures
Once the budgets are received, it’s “not a big job” to calculate a property tax rate, said Robert Vance, tax administrator for Somerset County.
But property tax bills can’t be sent to property owners until the rate is set, Vance said.
Tax bills for the new fiscal year are usually sent on July 1, with the first quarterly payment due in early August.
But now, Vance said, the bills have not yet been sent so the money will not be due until later in August.
While that may be a break for property taxpayers, it could also cause a cash flow squeeze for smaller municipalities who rely on the expected revenue.
Bound Brook Mayor Bob Fazen was worried about cash flow until the borough’s school board decided Monday to allocate $500,000 of the additional $1.5 million in state aid to reduce taxes with the rest being put into reserves.
That decision, Fazen said, would mean a 2 percent reduction from the tax rate calculated before the additional aid.
“We’re very happy,” Fazen said, adding that his initial worries about the borough suffering a cash flow problem will be eased if tax bills are set out soon.
But Manville Mayor Richard Onderko remains worried because the borough’s school board has yet to decide how to use its additional $741,268 in state aid. Manville will get a total of $6.054 million in state aid toward its budget of $22 million in total appropriations.
Manville, like Bound Brook, has been cited as one of the school districts that has been chronically underfunded by the state.
The use of the increased state aid is still under review, said Superintendent of Schools Anne Facendo.
The Manville Board of Education will meet Tuesday at 7:30 p.m. in the media center of Alexander Batcho Intermediate School to discuss what to do with the money. The meeting is open to the public.
Onderko said the school board should use the extra money to reduce the projected 5 percent property tax increase.
Onderko said he is worried about will happen next year when the 2018-19 state aid is calculated. .
“We have to keep the pressure on to change the state aid formula,” Fazen said.
Staff Writer Mike Deak: 908-243-6607; firstname.lastname@example.org
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