Lawmakers are quickly moving ahead with a plan backed by the Senate President that will allow certain school districts to raise property taxes beyond the 2 percent cap.
The measure – Senate Bill 4289 – is intended to help districts make up for dollars that they lost as a result of the June 2018 “equalization” overhaul to the state’s school funding formula.
Forty school districts across the state would be affected by the legislation, said State Sen. Paul Sarlo, D-36th District, who chairs the Senate Budget and Appropriations Committee where the bill was approved on Thursday.
The legislation could mean another political showdown between Gov. Phil Murphy – who opposes increasing the cap – and Senate President Stephen Sweeney, D-3rd District, who backs the bill.
“Before middle-class property taxpayers have to again take it on the chin, we should be asking our wealthiest residents to pay their fair share,” Murphy said in a Nov. 25 statement.
S4289 only allows a school district to raise the property taxes to finance the school district at a state-defined “adequacy level.”
A Senate Democratic staffer said that if those districts are able to bring in that extra money, but there is still a difference between what they are making and the level of spending, they would have to cut expenses.
“You can raise it only up to adequacy,” the staffer said. “If there’s a deficit above the adequacy that’s determined by the state formula, then they’ll have to make cuts.”
Some of the larger districts include Toms River, Brick Township, Old Bridge and South Brunswick. But most of the remaining districts are much smaller.
“It was never the intent to hurt any schools, we just wanted to fix the unfairness,” Sweeney said last month.
The Senate President assured, according to Politico, that the property tax increases would not run counter to his so-called Path to Progress reform, which aims to employ fiscal reforms in order to cut local taxes and reduce the state’s public worker pension and health care obligations.