BELMAR/LAKE COMO, NJ — Belmar and Lake Como’s boards of education have shifted funds in their budgets to cover a total of $100,000 loss in state aid for the upcoming school year.
While Belmar transferred $50,000 from its general fund surplus and nearly $23,000 from its health benefits account to make up for the $73,000 shortfall, Lake Como offset the entire $26,700 decline in state funding by dipping into its general fund surplus.
Belmar and Lake Como were among 32 school districts in Monmouth County — and 172 districts in the state — that were notified they would be receiving less state aid for 2018-2019 school year, under Gov. Phil Murphy’s recently approved state budget.
The decreases also are considered the first step in an overhaul of the public education funding system signed into law on July 24 by the governor, who called it “landmark legislation to fully and fairly fund public school districts.”
The new law, which will redistribute state aid over the next seven years, takes effect in fiscal year 2020. It modifies the current school funding law to eliminate adjustment aid, as well as state aid growth caps, and allows adjustments to tax growth limitations for certain school districts.
Over the course of seven years, aid to overfunded districts will be reduced and aid to underfunded districts will be increased so that all public school districts achieve their appropriate levels of assistance under the formula contained in the School Funding Reform Act (SFRA) by fiscal year 2025, according to the governor’s office.
Any district that loses aid and underspends will be required to increase their prior year’s school tax levy by 2 percent until fiscal year 2025. Abbott districts that underspend but have significantly higher tax rates than the statewide average will be held harmless from aid losses through fiscal year 2025. In addition, county vocational school districts will not see any decrease in state aid.
Underfunded districts will see aid increases based on funding made available from aid reductions, and additional funding provided through the annual appropriations act with the goal of full funding by fiscal year 2025.
The law also permits any Abbott district to exceed the 2 percent tax cap without voter approval to increase their local levy up to the expected local levy determined by the funding formula. This provision will last only until fiscal rear 2025. Non-Abbott districts are still subject to the 2 percent tax cap.
In addition, Murphy signed legislation that allows municipalities with populations over 200,000 to impose an employer payroll tax. These payroll tax revenues are then disbursed to the respective school districts.
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