Friday, March 30, 2012

Easy Money

Last year, South Orange residents were quite surprised to receive their tax bills, which showed an increase of 4% in the School portion of the bill. With the average homeowner already paying over $15,000 per year in property taxes and the school taxes making up the large majority of our bill, that resulted in a material increase during a year when people were still seeing flat or declining incomes.

Last November, I along with other members of the Board of School Estimate made it crystal, crystal clear that the Board of Education should not raise taxes any higher than 2% going forward. While I am well aware that the 2% “CAP” imposed by the State ALLOWS for increase greater than 2% (due to exemptions, cap banking etc), that does not mean that it SHOULD be done, except under extremely dire circumstances. This year, that was clearly not the case.

This year, the Board of School Estimate was asked to approve a tax levy increase of 2.16% overall, which equates to a tax rate increase of 2.73% in South Orange (due to the equalization between Maplewood/South Orange and the hybrid rate that is calculated due to differing fiscal years for the Municipal and School budgets). While 2.16% is not radically larger than 2% in the grand scheme of things, when we are starting with such an enormous base to begin with, every dollar adds up and in the end, 2% means 2%. It’s that simple.

Ultimately, when it became apparent that the Board of School Estimate would not support the proposed increase greater than 2%, the Administration brought forth an alternative, which reduced $165,000 from the capital budget and the overall increase was brought to exactly 2%. I commend the Administration for working with the Board of School Estimate to meet our request, as well as for implementing a much improved process for reviewing the budget this year. (In years past, the Board of School Estimate was presented the budget during a workshop 2 weeks in advance of the vote, whereas this year, budget discussions occurred over multiple meetings during the year beginning last summer)

For next year, I have asked them to improve things even further. The Administration speaks of a variety of important “gaps” – the achievement gap, the District Factor Group gap and the gender gap. However, they never discuss or even consider what I like to call the Tax Gap; that is, the additional expense it costs to live in South Orange and Maplewood versus surrounding communities. South Orange and Maplewood are already among the highest taxed communities in the state of NJ with a material tax gap between us and many of our neighbors. Last week, I took a look at the local press of some surrounding communities to see what THEIR school budget increases were this year and found the following:
  • Livingston 1%
  • Millburn .65%
  • Montclair 0%
  • West Orange <1%
  • Springfield 1.84%
  • Summit 0%
  • Caldwell - .64% DECREASE
  • Berkeley Heights – 1.7% DECREASE

With these other communities rising well under 2% (or some even decreasing) and South Orange/Maplewood proposing increases of 2% or higher, the tax gap will only widen, making our communities less attractive for new residents and less desirable for existing residents to remain. This is just untenable.

As the parent of a 4th grader in the District, I want nothing more than a high quality education for my daughter and for ALL kids. However, this MUST be done in a more fiscally prudent manner for the sake of all residents. I urge the Administration and Board of Education to think creatively and to actively explore what surrounding communities are doing which enables them to provide high quality education, with much lower tax increases than we are being asked to approve.