Preserving Educational Excellence
The 2007 - 2008 proposed school budget was approved by the South Brunswick Board of Education at a special Budget Hearing conducted during the regular March 26 meeting. On April 17, the annual school election will provide our community members with an opportunity to vote on this financial plan.
So that our residents can cast the most knowledgeable vote, I will attempt to provide an overview of our budget. Keep in mind that this budget was designed through an intensive process that sought to balance the interests of education and interests of taxpayers in containing costs.
The proposed budget is in the amount of $131,544,937. Voters previously approved the Debt Service (expansion and renovations of our facilities) portion of this budget that now totals $11,024,927. On April 17, we are requesting that you vote on the local share of the General Fund Budget in the amount of $94,583,348. It is this amount, when coupled with the State contribution of $20,160,884 (16.9% of Operating Budget) as referenced in Chart #1, our local fund balance from 2006 - 2007 and some miscellaneous revenue that makes up the total proposed Operating Budget of $118,851,732.00. The cost increase necessary to support this budget is 11.8 cents per $100 of assessment.
Obviously, no one wants to pay higher taxes. Unfortunately, public schools in New Jersey have only State-prescribed methods to fund their operations. Because of this, property tax represents the funding strategy that must bear the weight of the public schools.
So that you might better-understand this financial plan, let me share some insights and identify the issues that served to shape the proposed 2007 - 2008 budget. First of all, education is a labor-intense endeavor. As student enrollment rows, the staff necessary to meet student needs expands, as well. While we experienced a welcomed slow-down in our enrollment growth this year, our projections anticipate an increase of an additional 221 students for the 2007 - 2008 school year.
A review of our student enrollment chart (Chart #2) reveals a significant and sustained pattern of growth over the previous ten years. With an anticipated enrollment of 9,011 students in September, we will have witnessed a ten-year increase of 2,729 students. The result of this continual enrollment has created an ongoing need for more staff and expanded facilities.
As you already know from past correspondence, the District has renovated and expanded Brunswick Acres, Greenbrook, Constable, Cambridge and Monmouth Junction elementary schools in conjunction with the 2003 Referendum Bond Issue. Presently, from that referendum, we are constructing an addition on Crossroads North Middle School. The final work will be completed as air conditioning projects in the gym areas of both middle schools. Obviously, this construction activity was carried out as a response to our growing student enrollment and has been a major impact on our budget in the areas of personnel and facilities.
The process that was utilized to shape this proposed budget was different than past efforts. Made abundantly clear to all by our State government officials was the fact that property tax reform would create new budget constraints for schools. In this instance, the legislature has passed a bill on to the Governor that places a four percent cap on each school district’s tax levy. The tax levy cap provides for a few exceptions that ultimately yielded a 4.8% growth ceiling for our budget planning.
Knowing the financial limitations of the tax cap, as well as the financial burden on our community, we began to examine our existing circumstance. We calculated the cost of advancing our existing staff into the 2007 - 2008 budget year. This process involves calculating the salary and fringe benefit costs based upon negotiated agreements with teachers, maintenance staff, custodians, paraprofessionals, bus drivers, secretaries, supervisors, and administrators. This represents approximately eighty percent of the total cost of our operating budget.
Our next step was to calculate the cost associated with our fixed cost areas. These costs are associated with such things as heat, light, water, air conditioning, gasoline, fuel oil, diesel fuel, buses, postage, increased pension costs for support staff, insurance and legal fees. While this is not offered as a mutually exclusive list, it does represent about twelve/thirteen percent of our operating budget.
The final area of cost calculation represents all that remains that we traditionally call the “instructional costs.” All curriculum materials, supplies, textbooks, instructional support items and equipment and professional development for staff are funded from this portion of the budget.
When we added the costs associated with maintaining our existing staff, funding our fixed costs and supporting our instructional costs, the total exceeded the amount allowed under the tax levy cap.
As we analyzed the key factors that have caused the budget to expand, enrollment growth of 221 additional students played a major role. Related directly to this enrollment growth are the costs associated with the expansion of Crossroads North (10,900 sq. ft.). Continuing our existing staffing patterns for our projected 9,011 students represents the centerpiece of this budget. As mentioned earlier, we are a labor-intense organization and the School District’s exceptional results are directly related to the quality of our staff.
Rising energy costs will add approximately $225,000 additional dollars to this proposed budget. Likewise, we anticipate our increased transportation costs to be $760,000. The State of New Jersey bills South Brunswick for a portion of the pension costs of support staff members (custodial, maintenance, secretarial, etc.). With an increase of $243,000 in this category, the District will be paying approximately $900,000 for this line item.
Given these rising costs and the limits of tax levy cap, approximately one million dollars of cost reductions were made to the budget. This is particularly significant in that no new initiatives or cost categories were included in this budget. New requests were neither solicited nor accepted. The areas of budget reduction included personnel, transportation, professional development, memberships, supplies, related programs and travel. The personnel reductions will occur through attrition, reorganization and non-renewal. It is important to note that classroom instruction was not affected directly by these cost reductions and class sizes will continue at present levels.
A review of the Budget Appropriations: Major Categories chart (Chart #3), reveals the areas of growth and reduction in this proposed budget. Increases in Regular and Special Education, tuition for students in need of special programs and clubs and athletics reflect the commitment of the District to fund student needs. Transportation growth is a direct student service and the rising cost is associated with bus replacement (12-year State requirement), fuel costs and salaries/benefits. Cost reductions in General Administration and Business/Technology Administration as well as the almost flat funding of the School Administration category demonstrate the District’s commitment to contain administrative costs.
Among the other issues that impact our budget, three stand out as worthy of mention. The first of these is Township ratables. As you know, every taxable property (business, industrial, residential) in the Township is assessed (valued) in relationship to its market value (sale price). The total amount of all of the property-assessed values has come to be known as the “ratables.” Annually, the ratables are totaled to determine the tax base (Chart #4). It is this tax base that is utilized to calculate the budget revenue from local sources. A two percent ratable growth has been assigned for this proposed budget. Keep in mind that growth in the ratable base creates revenue that helps to offset tax increases.
The second issue is State funding. South Brunswick received, after five years of relatively flat funding, a five percent increase from the State. The existing State-created funding formula has been ignored and the promise of a new funding formula remains unfulfilled. All of this means that local sources of revenue must fund an even greater share of the budget.
The third issue of note impacting our budget is the continuing negative outcome of a New Jersey Legislative action (Act 73/S-1701). This legislation has created the need for “deficit funding” of our budget on an annual basis. In a nutshell, each year the District must conclude its financial operations with $3,860,000 left in the budget. In other words, our District budget can never be fully spent. The $3.86 million dollars is needed to fund the next budget. The General Fund budget is funded by recurring taxes except for this amount.
As we endeavor to make our budget proposals lean, we must always remember that the budget must yield this $3.86 million dollars of non-recurring revenue. Obviously, this ongoing exercise becomes more difficult each year. If we were to experience a situation where this balance was not available, we would need to reduce program and personnel costs to balance the budget.
Again, nobody wants to pay additional taxes. Here in South Brunswick, we have endeavored to build a first-class education system that meets the State mandate for a “thorough and efficient” approach. A glance at Chart #5 (NJ Cost Comparison Guide for 2006) reveals the status of South Brunswick’s per pupil spending when compared to the New Jersey averages. Perhaps more notable is the fact that our students are performing at historic levels. By every indicator, including State testing, SAT scores, National Merit qualifiers and Bloustein Scholars, South Brunswick students have never done better. We have much to be proud of in our students’ performance. While this performance doesn’t offset the need for a tax increase, I hope that every reader will view this budget as an investment in our students, our future and our community. I hope this information will assist your understanding of the proposed 2007 - 2008 school budget. As always, your support is greatly appreciated.
Sincerely,
Gary P. McCartney
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