Lawrence School Tax Rate Could Increase by 3 Cents

Update: According to updated information released by Lawrence Township Manager Richard Krawczun during the , the township experienced a loss $38.3 million in ratables during 2011. 

The school tax rate for Lawrence Township property owners would increase by 3 cents under a proposed budget that has been drafted by for the 2012-2013 school year.

The preliminary $66,406,126 spending plan discussed at the Lawrence Township Board of Education meeting Monday night (Jan. 9) is $1,534,175 more than the current school year’s general operating budget of $64,871,951.

From a calendar-year standpoint – and not a school-year one – Lawrence Township property owners would have to pay a total of $59,778,632 in school taxes during 2012. That’s just a little less than $49,000 more than the $59,729,748 in school taxes property owners in Lawrence Township paid in 2011.

The problem, according to school district Business Administrator Thomas Eldridge, is that on top of the the township lost another $30 million or more in ratables in the last year.

To make up for that additional loss of ratables, Eldridge said, the tax rate would need to be raised 3 cents to a total of $2.36 per $100 of assessed property value, meaning that the average homeowner in Lawrence Township would need to pay about $48 more in school taxes during 2012.

Last year – after the tax rate increased 3 cents to $2.33 per $100 of assessed property value – the owner of a house assessed at the 2011 township average of $161,292 paid about $3,758 in school taxes.

“If property taxes had remained stable in Lawrence Township for the 2012 year there would be no tax increase from the school district whatsoever,” Eldridge told board members Monday night. “And so what we’re dealing with is we’re fighting the stream. We’re swimming upstream. We’re doing the best we can at this point.”

Eldridge and School Board President Laura Waters stressed several times during the meeting that the 2012-2013 budget as discussed Monday night was still preliminary and could very well change before the district, as required under law, submits it to the Mercer County executive superintendent of schools for review.

The budget must be approved by the executive county superintendent before it can be put before township voters in the annual school election, which is tentatively scheduled to be held April 17, Eldridge explained.

“I wanted to give you an overview of where we are right now. It’s quite early on in the process,” Eldridge said as he began his presentation. “However, that being said, we have put together numbers so that we can, as [board member] Mr. [Bill] Michaelson would have it, manage expectations and keep everyone informed.”

Eldridge explained that the current budget draft is based on several assumptions, among which are that aid to the district from the state this year will remain at the level received last year; that the decline to township ratables in the past year remains at $30 million; that all programs currently offered by the district remain in place; and that there are no layoffs.

He said salaries/wages and out-of-district tuition are the main “cost drivers” for the proposed 2012-2013 budget’s $1.5 million increase over the current school year budget  

To offset that $1.5 million increase, in addition to the 3 cent tax rate increase, the district will use but did not use.

“We held onto it because we got it so late in the budget process – it was July before the state told us we were going to get it,” Eldridge said, explaining how the additional state aid was put into the district’s surplus fund for use this year.

“Just so everybody’s clear, this is a projected budget,” Waters said. “There are a couple assumptions that Tom had to build in, which is first of all that our state aid will remain what it is…. It also makes certain assumptions about our negotiations process with LTEA [Lawrence Township Education Association], so we have to keep all that in mind. This is still an ongoing project.”

Contract negotiations between the district and the teachers’ union reached impasse last year. The first meeting between the union and district before a state mediator is scheduled for Jan. 26.

As part of his presentation, Eldridge provided a brief historical overview of steps the district has taken in the last decade or so to help manage its costs, saying, “With tuition…we once had 150 students out-of-district; we now have 50 students out-of-district. When we found open classrooms, we didn’t allow them to sit idle. We filled those classrooms with programs that we were able to manage. Transportation…over the last 10 years we’ve changed school times twice, each time reaping the benefit of savings because of the way we tiered our schedules. It didn’t make sense to a lot of people at the time but it’s part and parcel of why we have a flat line in transportation.

“Energy…energy was going up at a radical pace all through the early 2000s,” he related. “We stemmed that with any number of initiatives, from new roofs with insulation on our buildings to the windows referendums and then finally the ] and now we’re on a boiler replacement plan. So we continue to keep energy flat. Supplies…we simply found other methods of holding down costs – going out for bulk purchasing of copies and paper and toner and so on and so forth…”

Eldridge explained that much work still needs to be done on the proposed budget in the coming weeks, and he noted that the district likely will not learn until late February what amount of aid it will receive from the state.

But as things stand at this point, the district is eyeing a 3 cent increase to the school tax rate this year. “Why the increase? The increase happens because the total amount of taxable property in Lawrence Township has gone down by $30 million,” Eldridge reiterated. “The tax rate with a 3 cent increase translates into $48 a year for the average assessed home. We are still working to reduce that at this point.”

Slides from the budget presentation given by Eldridge during the meeting Monday can be found on the school district’s website or in the media box above.

Audio from the full school board meeting on Jan. 9 can be listened to via the school district's website by clicking here.