TAX NEWS - JUNE 2010

New Jersey Tax: Reduced tax levy slices amount of tax increase

by CLARE MARIE CELANO, 02 June 2010 -- The Freehold Borough K-8 School District Board of Education has accepted a $68,648 reduction in its general fund tax levy for the 2010-11 school year.

The reduction in the general fund tax levy was certified by the Borough Council after voters rejected the board's request for an $8.09 million general fund tax levy in the April 20 school election.

The revised general fund tax levy will be $8.02 million for the 2010-11 school year. The school district's total budget for the upcoming school year will be $20.7 million.

Under the budget proposal put forth by the board, the K-8 school tax rate would have increased from 78.8 to 81 cents per $100 of assessed valuation.

The owner of a home assessed at the borough average of $250,000 would have seen his K-8 school taxes increase from $1,970 in 2009-10 to $2,025 in 2010-11. The owner of a home assessed at $450,000 would have seen his K-8 school taxes increase from $3,546 in 2009-10 to $3,645 in 2010-2011.

With an additional $68,648 removed from the general fund tax levy, the K-8 school tax rate will now increase from 78.8 to 80.3 cents per $100 of assessed valuation.

That means the owner of a home as- sessed at the borough average of $250,000 will pay about $2,007 in K-8 school taxes in 2010-11 (up from $1,970). The owner of a home assessed at $450,000 will pay about $3,613 in K-8 school taxes in 2010-11 (up from $3,546).

School board members said the $68,648 reduction in the general fund tax levy can be accomplished in a way that will not adversely affect the ability of staff members to educate students.

The reduction in the tax levy is accounted for by members of the Freehold Borough Education Association (FBEA) agreeing not to take an increase in salary during the upcoming school year, according to school district Business Administrator Patrick DeGeorge.

The Borough Council reviewed the district's budget following the rejection of the tax levy by voters in April. On May 17 the council certified the $68,648 reduction in the tax levy.

Mayor Michael Wilson noted that the district's 2010-11 proposed budget was $4.4 million below what the state calls its adequacy level.

School board members have said in the past that regulatory limits on how much money they can raise in taxes each year prevents them from proposing a budget that would place the district at the state's adequacy level.

Wilson noted that the FBEA members, including teachers, will not receive a salary increase in the upcoming school year.

Wilson said the council recommended a reduction of $68,648 from the amount to be raised by taxation and said that money would have been used to fund the teachers' 2010-11 salary increase.

"The (reduction in the tax levy) can be realized without adversely affecting the school district's ability to provide a thorough and efficient education," the mayor said.

He thanked the board members for working so closely and cooperatively with the members of the governing body "to come to an amicable solution to a problem neither one of us wanted to face, but these are the times we have to live with."

Council President Jaye Sims, who is the council's liaison to the school district, helped to negotiate the reduction in the tax levy. He said this is a "difficult time to manage a school budget and the school district has done an excellent job with what they have."