Drops in State Aid, Property Values Increase Local Tax Burden

A combination of drastically reduced state aid and an alarming drop in the value of Cinnaminson's ratables has been a major contributor to the increase in school taxes township residents have felt in recent years. 

The board of education unanimously approved a budget Wednesday night for the 2013-14 school year that will raise the tax rate 3.8¢, to 1.576, or roughly $107 on a home assessed at the township average ($283,562).

In presenting it at a public hearing Tuesday, Superintendent Salvatore Illuzzi explained the budget was as lean as it could be without cutting back on important services and programs, like athletics and transportation.

"When folks say there's fat in the budget—there's nine board members and a county executive superintendent looking at it," said Illuzzi. "If (fat) was there, you know they'd be doing something to assist you."

The problem, according to Illuzzi, is that in the past 10 years state aid has been dramatically reduced—from making up 32.3 percent of the district budget in 2001-02, to 26 percent in 2008-09, to just 20.2 percent in the 2013-14 school year.

"It is the shift from the state to the local taxpayer that has accounted for the taxes you have felt in recent years," he said. "It is one of the primary reasons for the tax inequity in the state of New Jersey."

Compounding the problem is the severely decreased value of Cinnaminson's ratables, Illuzzi said. In the last year, the total property value of the township dropped by $22.6 million. Over the last three years, it sank by $50 million, according to business administrator Thomas Egan. 

Of the $107 tax increase being imposed by the district, $51 is a direct result of the drop in ratables, llluzzi said. 

The township, which has also felt the pain of decreased property values, recently approved a reassessment to stabilize the market and stem the bleeding of revenue from lost tax appeals.

Here's a summary of the approved school budget:

Technically, the board raised the tax levy for the general fund to the 2 percent cap allowed by law. However, because of a 15 percent decrease in the debt service levy, the overall tax increase came to almost $200,000 less than the cap. Overall, the tax levy will increase by $386,124 from last year.