OCEAN CITY — The Ocean City Board of Education unanimously introduced a $45.6 million school budget with a slight tax increase at its Wednesday, March 15 meeting.
As proposed, the school district’s 2017-18 budget would include increasing the school tax rate by one-tenth of a cent to 21.8 cents per $100 of assessed value. The county superintendent is set to review the budget before the school board takes a final vote in an April 26 public hearing at the high school.
Under the district’s proposed tax rate increase, the owner of a $500,000 home would pay $1,090 in school taxes – plus city and county taxes – for the 2017-18 fiscal year, a $5 increase from last year, according to district business administrator Tim Kelley.
Kelley said the district, which decreased the tax rate by one-tenth of a cent last year, had to increase the rate due to a decline in tuition revenue. In 2017-18, the district’s tuition revenues are expected to fall some $1.7 million to $11.7 million. Tuition brought in $13.3 million in 2016-17, according to budget figures.
The district plans to use $2.15 million in fund balance reserves to offset the shortfall, Kelley said. School districts are required to balance their budgets, Kelley said.
According to Kelley, the district expects to receive less students than initially expected next year from Upper Township and Sea Isle City, which both have send-receive agreements with Ocean City.
Some students moved out of the area, which factored in the decline, Kelley said. In 2017-18, many of the school’s tuition rates are expected to rise slightly.
“We’re not experiencing a huge drop in the upcoming freshman class, but this year we received fewer freshman students than we anticipated,” Kelley said. “On top of that, we actually received fewer tenth graders than we did as freshmen. We’re not seeing that revenue from our sending districts.”
Kelley said the district’s fund balance helped the district to offset those losses in 2017-18, but he said the district will need to further supplement the tuition decline in the coming years.
The budget, made up of a $42.2 million general fund, $673,894 in special revenues and a $2.8 million debt fund, is up $1.2 million from last year.
A $22.4 million tax levy, up about $300,000 from last year, would account for slightly more than half of the district’s revenue. The tax levy on the district’s debt service would increase slightly to $2.75 million, about a $45,000 bump.
Under the proposed budget, costs include $15.3 million in regular district programs; $7.2 million in employee benefits, up about $600,000 from last year; $4.5 million in operations, maintenance, grounds and security, up slightly from last year; $3.9 million in student support services, down slightly from last year; $3.2 million in administration, curriculum and staff development, down slightly from last year; and $3.1 million in instruction for special programs, down nearly $500,000 from last year.
Along with the tax levy, tuition and the fund balance, other revenues include about $3.8 million in state aid and $1.1 million in capital reserves.
State aid didn’t budge from last year, staying entirely flat in what Kelley called a “copy-and-paste job.”
“When I say it’s unchanged – it’s actually very unusual – each individual category did not change by one dollar,” Kelley said.
Generally, Kelley said, the school receives the same amount of school aid each year, but funding for different areas of state aid such as transportation and special education typically fluctuate.
“This year, a little bit to my surprise, I opened the budget and breathed a sigh of relief that state aid in total was the same as it was last year, but then tilted my head when I saw that it was exactly the same,” Kelley said. “This is the first time that I’ve seen that.”
Gov. Chris Christie maintained the status quo with state aid to New Jersey’s school districts with his Fiscal Year 2018 budget address on Feb. 28. But that followed a recent push from the governor to dramatically overhaul state aid in a plan that would provide $6,599 per student for each school district, a proposal that would significantly reduce aid to urban districts while lowering property taxes in many suburban towns, according to a June 2016 NJ.com report.
Met with resistance from the state’s Democratic-controlled Legislature, Christie abandoned the plan in his budget proposal, but he promised to act on his own if the Legislature doesn’t agree to a new school funding formula within 100 days, according to published reports.
Jacqueline McAlister, vice president of the school board, asked Kelley in Wednesday’s meeting if Christie’s ultimatum is just political theater, and if any changes to state funding would affect Ocean City’s 2017-18 school budget. Kelley said he hopes any changes would not impact the district until the 2018-19 school year.
“I don’t think we will see any material changes in our budget as a result of that, but there are many districts that could,” Kelley said.