State Aid Restoration and Tax Cap Flexibility Bill on the Move – Urge Your Legislators to Vote “Yes”
Legislation that would provide relief to school districts which have experienced painful state aid reductions is on the fast track and has been posted for a floor vote in the General Assembly on Monday, April 15. The legislation, A-4161/S-3081, would restore a portion of the aid cuts districts would experience under the fiscal year 2025 state budget proposal. The bill would also provide property tax cap relief to these districts, as well as those that experienced a cumulative reduction in state aid in recent years.
The New Jersey School Boards Association encourages all of our members to contact their local legislators and urge them to pass this legislation and send it to the governor’s desk. This measure is critical to ensuring all districts are able to continue providing a high-quality education to their students and avoid cuts to critical staff and services.
Members should call or email their representatives in Trenton to express their strong support for the bill. Contact information for your legislators can be found on the New Jersey Legislature’s website here.
What’s in the Bill?
Aid Grants The legislation establishes the “Stabilized School Budget Aid Grant Program.” Funded with a state appropriation of over $71 million, this program would allow any district experiencing aid loss in fiscal year 2025 to apply to the state for an aid grant equal to two-thirds of the amount of the district’s proposed school aid reduction. These districts would also be able to recoup the remaining one-third of their state aid losses by exceeding the maximum amount permitted under the statutory tax levy cap law without the need to obtain voter approval. (However, such an increase would be limited to no more than 9.9% of the prior year levy.)
Tax Cap Flexibility The bill also provides tax cap relief around the so-called “2% cap” that limits the ability of districts to raise funds at the local level to support their schools. This relief would be available to districts that experienced an overall reduction in state aid between the 2020-2021 school year and now. It does so in the following two ways:
- Districts Receiving Aid Grants If the district received an aid grant under the Stabilized School Budget Aid Grant Program, the permitted increase would be capped at the amount of the school district’s net reduction from 2020-2021 through 2023-2024 (the current and three prior fiscal years).
- Districts Not Receiving Aid Grants Districts not receiving an aid grant would similarly be eligible for tax cap flexibility. However, these districts would be able to increase their levy beyond the maximum permissible amount up to the overall reduction between fiscal year 2021 and fiscal year 2025 (the prior four fiscal years and the fiscal year beginning July 1).
The full text of the legislation and summary can be found here.
The NJSBA cannot emphasize enough how important it is to make your voice heard on this legislation, which could provide a substantial level of relief to school districts facing cuts under the proposed budget. Contact your state legislators as soon as possible and urge them to pass this bill.
Thank you in advance for your support!
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