NEWARK, NJ - When Newark residents vote tomorrow on the public question to increase local taxes for the school budget, the amount coming out of pocket will be slightly larger than the district has been advertising these past few weeks.

The public will vote on a property tax levy to raise taxes by $2.7 million, 2% overall increase over the 2018-2019 school year last year, adhering to the federally allowed minimum, to help the district fulfill the $135.6 million it needs to balance the budget. 

The board presented and approved the 2019-2020 budget in March, explaining the tax levy dollars included in the budget would mean that the average homeowner in Newark would also see a 2% increase in their share of the taxes. That translates to $38 more than last year for a home assessed at $175,000. 

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However, the average homeowner would actually have a 2.9% increase in what they pay, or $56.90 more in taxes toward Newark Public School.

TAPinto Newark did the calculation and shared it with district officials who admitted to a calculation error. An individual who no longer works in the district used an estimate to achieve the numbers in the budget based on the 2019-2020 tax rate according to budget director Elvis Matos.

“Based on the rates we used and the numbers we used, the way they came up with the 2018-19, it looks like it was an estimate (based on this year’s tax rate),” said Matos. “It was not the correct rate that is in the user-friendly version of the 18-19 budget.”

Here's the math:

Using the proposed 2019 rate of $1.1159 and multiplying that by the average property assessed value of $175,000 and dividing by 100 results in the school portion of the city tax bill of $1,952.80.

Using the 2018 rate of $1.0834 and running it through the calculation above, results in the school portion of the city tax bill of $1,895.90. 

The difference is $56.90, or 2.9% increase for a house assessed at the city average.

District administrators will make the change in the budget presentation document where the data is reflected said Shirley Zachary, school business consultant. 

The 2% school budget levy increase is the same percentage increase he the school district has raised for over a decade to keep the district’s finances above water, according to School Business Administrator Valerie Wilson. Prior to 2007, the school portion of the property taxes had not been raised for 20 years. 

“Our goal is not to have a negative impact on the citizens of Newark, yet to have a transformative impact on our students,” Valerie Wilson, school business administrator, said in a statement. 

District investments will fund initiatives for the upcoming school year which include additional support teachers, bilingual programming, special education programming, technology, and facilities including the restoration of Newark Vocational and Harold Wilson schools. 

Stagnant state aid, tax shifts and rising inflation costs among other things, make operating levies a tiny, yet critical portion of the district’s budget. Revenue from local property tax levies accounts for 13.2% of General Fund Revenue. 

Governor Phil Murphy signed a bill in July -- which takes effect in fiscal year 2020 -- to modify the state’s current funding formula under the School Funding Reform Act and make the ongoing funding equitable. By fiscal year 2025, aid to overfunded districts should be reduced and aid to underfunded districts increased for all schools to reach adequate levels of state assistance. 

Some relief came this year when Governor Phil Murphy proposed an additional $24.8 million in state aid for Newark Public Schools for the 2019-20 school year. However, the district remains severely underfunded according to Wilson. 

“In 2019-2020, Newark remains $174 million below adequacy annually from the state. Newark is by far the most underfunded of any of the schools districts according to School Funding Reform Act,” said Wilson. ‘’We have a long way to go and not much time to get there.”

The public question needs 51 percent of votes to be approved. If less, the referendum is defeated, the school board must amend the budget. If the levy does not pass, it could be felt at all levels across the system. This could mean layoffs and fewer funds for school facility renovations, Wilson said.

“Ultimately, if the [tax levy] were to be defeated and disapproved by the municipal council and the commissioner, the district would have to return to its budget review and cut $2.6 million from the budget, however it needs to get balanced,” said Wilson.

“More than 85 percent of the budget is spent on salaries. That means people. When you have to cut your budget, that means you’re going to have to cut people before you probably end up cutting programs because there’s nowhere else to go.”