Steve Sweeney's office has released more details of what districts would get an adjustment to the tax cap law under his proposal, "S-4289" to amend the tax cap law (aka "Chapter 44") for aid-losing districts.
Although ~180 districts are slated to lose Adjustment Aid, Steve Sweeney's proposal is only to amend the tax cap for 28 aid-losing districts who are also below Adequacy due to insufficient local tax levies.
The reason tax cap reform is necessary is for some low-taxing and low-spending Adjustment Aid districts is that a 2% tax increase is less than their state aid loss and they will be forced to make cuts from a position of sub-Adequacy spending.
Brick and Toms River provide an example of why some tax cap adjustment is necessary.
So indeed, for districts like Brick and Toms River, S2 represents budget cuts that they cannot legally tax their ways out of.
Steve Sweeney's bill is actually quite a limited loosening of the tax cap. It would only allow sub-Adequacy Adjustment Aid districts to increase their taxes by
Lost Adjustment Aid + 2% of Pre-budget year tax levy
So this bill only offers budgetary stability to aid-losing districts. It is not enough to bring these districts to their full Local Fair Shares and Adequacy Budgets.
From the OLS analysis:
This bill provides a tax levy cap adjustment for school districts that are spending below adequacy and are subject to a reduction in adjustment aid between the prebudget and budget years. The adjustment will be effective for the 2020-2021 through 2024-2025 school years. The amount of the allowable adjustment will equal the difference between the amount of adjustment aid received by the school district in the prebudget year and the amount of adjustment aid received by the school district in the budget year. However, the amount of the allowable adjustment may not exceed the amount that brings the school district’s spending to adequacy.
Although Jersey City is listed here as district that will get $27 million in tax cap adjustment due to Jersey City being $140 million below Adequacy, S2 already exempted Jersey City and all the other Abbotts, so its inclusion on the list is misleading.
Also, S2 completely eliminated the tax cap for sub-Adequacy Abbotts up to their full Local Fair Shares, which goes farther S-4289.
Many people might argue that all aid-losing district should get tax cap liberalization, including the above Adequacy districts, but Steve Sweeney's bill is written from a more conservative place and will require those high-spending districts to make cuts. While this might be criticized as a violation of home rule, it is in the state's interest to restrict the spending of high-wealth districts since their high-spending creates inequity and pressures middle-wealth and low-wealth districts to overburden their taxpayers to equal them in spending.
Also, since the state pays districts' FICA taxes and TPAF, state taxpayers themselves are on the hook for districts' high-spending, so it is in the state's interest to restrict school budgets.
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