Superintendent: School Budget Process 'Changed Drastically'

Last night, the River Dell Educator's Association (RDEA),  with the help of RD Superintendent Patrick Fletcher hosted their first Community Education Program ". The program focused on what the new 2% cap law will mean for all school districts in the state.

"This is not the River Dell school budget," Fletcher began. "It's not the Oradell school budget, or the River Edge school budget. This is just what you need to know about the budget process in general that was changed drastically six months ago."

Six months ago, Gov. Christie and the Legislature approved Senate Bill 29 to change the tax levy increase on property taxes from a 4% cap to a 2% cap in an attempt to reign in increased taxes. 

But there are exemptions to the cap, if a district's expenses for health benefits or pensions increase beyond 2%, a natural disaster occurs, debt service payments for a bond referendum or enrollment growth beyond what is expected. The cap will take effect for the 2011-12 school year budget.

"There is a thing called cap banking," Fletcher said. "When you are in the process of determining your expenditures and you don't go up to 2%, that difference can be held for a future budget year, up to 3 years. It gives a district  an opportunity to have a little extra in their back pocket for a rainy day."

The second thing, according to Fletcher, that will be important for school districts under the new cap is how much state aid they have received in the past. The cap, is placed on the revenue a district receives, specifically the tax levy. Additional revenue a district receives is state aid, federal aid, and out-of-district tuition for students that attend school.

"If a district is like River Dell and did not receive any state aid, than you can figure out the budget pretty quickly," Fletcher said. "If a district receives 50% in state aid to fund the budget, they can only increase the levy so much. The same goes for the former Abbott districts. In a strange, weird way, when you lose all of your state aid, you are in a better position to grow your budget than if you kept getting any."

School districts across the state will begin developing their 2011-12 school budgets within the next month. State aid figures are released sometime in mid-March.

The RDEA is currently planning future Community Education Programs for the spring. Anyone with questions regarding last night's presentation, can contact Fletcher by calling 201-599-7206 or email patrick.fletcher@riverdell.org.