Toms River Regional Schools Applying For New NJ Tax Levy Incentive Aid

TOMS RIVER, NJ — The Toms River Regional Board of Education is submitting a request to the state Department of Education for approval to participate in the new Tax Levy Incentive Aid program introduced for the 2025-26 school year.

A notice published by the Collingswood School District to its residents says the program would allow qualifying districts to get additional funding through a one-time exception to the 2 percent cap on tax levy increases. Districts that increase their property tax levy above the 2 percent cap would receive additional aid from the state amounting to 5 percent of the amount of the adjustment for the 2025-26 budget year.

A TapInto report on the East Brunswick School District's plan to apply to the program includes a similar description of the program.

The state Department of Education declined to supply details about the Tax Levy Incentive Aid program without submission of an Open Public Records Act request.

School districts that are under adequacy — meaning they do not spend the minimum the state says it should be to provide a thorough and efficient education for students, as required by the state Constitution — and have a property tax levy below their local fair share, which is what the state says its taxpayers should be paying for its schools, are eligible to apply for permission to exceed the state's 2 percent cap on tax levy increases to meet the needs.

The Toms River Regional board approved a lengthy resolution that reiterated the district's stance on its funding challenges resulting from S2 and the School Funding Reform Act of 2008 that have left the district with a $22.3 million gap in the budget for next year.

Toms River Regional has been squeezed to a breaking point, with the district selling property the last two school years to cover its expenses, which are the lowest per student among all of the districts with 3,500 or more students in New Jersey.

The tentative 2025-26 budget submitted at the end of March included a $22.3 million gap that it labeled "Other" in the revenues portion, with an open-ended definition of what that "other" revenue would be.

The resolution asks the state to consider increasing the district's aid by $22,346,599, or to provide the district with a loan of that amount, but the program does not offer either of those options. Its only option would allow Toms River Regional to raise its levy by the $22.3 million in order to meet the bare minimum necessary for a thorough-and-efficient education, which would be a significant impact to taxpayers in the district, though the exact potential impacts were not spelled out Wednesday.

You can listen to board attorney William Burns read the resolution into the record at the 1:50 mark of the YouTube video below of Wednesday's committee meetings.

The board did not comment on the resolution following the passage of the resolution.

The Toms River Regional school board has its regular business meeting set for April 16 at Toms River High School North, with the public session beginning at 6:30 p.m.. A public hearing on the 2025-26 budget is set for 5:30 p.m. April 30 at Toms River High School North.

The text of the resolution approved Wednesday night is as follows:

"Whereas in the proposed Fiscal Year 2026 state budget certain districts have the opportunity to apply to the Commissioner of Education to increase expenditures including an allocation of tax levy incentive aid in order to satisfy the thoroughness and efficiency standards established pursuant to
NJSA 18:A7F-46 and

Whereas based on the information provided by the Department of Education Toms River Regional School District is under adequacy and under local fair share and is eligible to increase expenditures by up to $117,244,817 and qualify for tax levy incentive aid in the amount of up to $1 million and

Whereas upon completion and submission of the tentative 2025-26 budget Toms River Regional School District is $106,761,794 below adequacy and $122,049,294 under local fair share and

Whereas the 2025-2026 general fund expenditure budget as proposed is $269,501,907, excluding capital reserve projects, which is an increase of 5.6 percent from the prior year budget, 10-year average increase is 2.2% when comparing original budgets to original budgets and

Whereas a large portion of the increases are attributable to projected cost increases in special education, notably out-of-district tuition, health insurance, transportation, notably non-public, utilities, insurances etc and

Whereas student and special education services alone are budgeted to increase 11.7 percent or
$5,970,974 which includes increases in areas such as salaries, out-of-district tuition, nursing costs, related service costs etc and

Whereas the number of ESL learners since 2017-2018 has increased 476 percent to 985 students and

Whereas the number of free and reduced lunch students since 2017-2018 has increased 46.1 percent to 6,589 students and

Whereas the number of special education students since 2017-2018 has increased 39% to 3,210 students and

Whereas during the last eight years the Toms River Regional School District has utilized all allowable increases under the School Funding Reform Act and

Whereas Toms River Regional School District requires additional funding to satisfy the increased cost and project expenditures related to ESL learners at risk and free and reduced lunch students, special education students, transportation costs, and utilities and

Whereas despite the latest taxpayers guide to education spending 2024 demonstrating that Toms
River Regional Schools already has the lowest comparative cost per pupil in the state for districts with 3,500 plus students the district is not seeking an increase in expenditures above the amount already proposed in the 2025-2026 tentative budget rather the district is seeking a funding solution for the $22,346,599 necessary to cover those proposed expenditures which are necessary for a thorough and efficient education and to qualify for tax levy incentive aid in the amount of $1 million and

Whereas the New Jersey Department of Education is proposing capping state aid losses at 3 percent and state aid gains at 6 percent for the 2025-2026 budget cycle thereby acknowledging the need for guard rails when there are significant changes in state aid allocations from year to year and such guardrails have been necessary in other districts like Toms River Regional School District for many years

Therefore if Toms River Regional School District's aid losses were capped at 3 percent annually and applied retroactively beginning with the 2020-2021 school year this would result in a state aid adjustment and increase of $24,43,850 for the 2025 2026 budget cycle the district is not seeking retroactive funding prior to the 2025-2026 budget cycle which would provide a sustainable funding solution to address the district's projected revenue shortfall for the 2025-26 school year and

Whereas by approving the resolution the board of education is seeking either a state aid adjustment and increase of $24,43,850 with the retroactive application of a 3 percent annual state aid loss guardrail back to the 2021 back to the 2020-2021 school year or a state loan aid advancement of $22,346,599 or the authority to increase the tax levy by $22,346,599 as one of those solutions is necessary for the chief school administrator to balance the 2025-2026 proposed budget and provide a thorough and efficient education and

Whereas by approving this resolution the board of education is not authorizing a $22,346,599 tax increase but is simply approving the submission of the application for authorization to do the same and to request tax incentive aid and

Therefore the Toms River Regional School District Board of Education is approving the submission of such application to the Commissioner of Education."