Princeton BOE Approves Budget With Tax Increase Under 1%

PRINCETON, NJ — The Princeton Public Schools Board of Education unanimously approved the budget for the 2021-22 school year, which will result in a 0.56 percent tax increase.

This increase reflects the lowest percentage tax increase in nine years, said Board President Beth Behrend.

The total budget, including debt service and grants, is 108.2 million —an increase of about $2 million from the previous year.

The operating budget is $96.3 million — $700,000 more than the 2020-21 operating budget of $95.6 million.

The budget was adopted during Tuesday night's board meeting.

"We are seeing the lowest tax increase in nine years," said Matthew Bouldin, PPS Business Administrator.

"This budget has a 1 percent tax increase for the general fund and a 0.564 percent overall increase if you include both the general fund and debt service."

The 2021-22 operating budget calls for $80.8 million to be raised in property taxes from Princeton’s residential and commercial property owners.

The proposed tax levy is an increase of $796,000 over the current budget. An increase of 2 cents in the 2021 (calendar year) school district property tax rate means it will increase from $1.183 to $1.201 per $100 of assessed value, the school district said.

Board member Brain McDonald thanked the operations committee and said they were “focused on making sure every taxpayer dollar is spent as efficiently as possible.”

Interim Superintendent Barry Galasso said that the district's financial position is “strong” and thanked Bouldin and the Board for their “excellent work in identifying savings and opportunities to reduce the growth rate in several expense categories."

"I am pleased that we have been able to control expenses and identify alternate sources of revenue. This has enabled us to minimize tax increases," he said.

The pandemic has resulted in non-recurring savings and non-recurring costs. The costs don’t have a major impact on the budget, which is primarily based on recurring costs, Bouldin said.

Around 77 percent of all expenses are salaries and benefits.

According to PPS, several factors have helped to decrease upward budget trends. Apart from stronger purchasing controls, energy costs are slightly lower due to the new HVAC units installed in the middle school and at Community Park, Littlebrook, and Riverside schools.

Some of the biggest financial challenges faced by the district were decreasing enrollment from Cranbury students and rising health care costs.

Tuition from Cranbury declined due to a steady reduction in Cranbury students enrolling in PPS. In 2017-2018, 280 students were enrolled in PPS. This number has decreased to 247 for the 2021-2022 school year.

There is a year-over-year decline in revenue of $283,358 with no associated savings, said the school district.

The Cranbury School District, which does not have its own high school, will pay PPS $4.836 million in tuition to send its high school students to Princeton High School.

PPS has also appropriated $7.1 million for the Princeton Charter School, an increase of $362,319 over the 2020-21 tuition payment.

This is mostly due to a 6.13 percent increase in tuition, based partly on a decline in PPS enrollment which the school district attributes to COVID-19.

Over the past two fiscal years, the school district said it saved between $2 million and $2.5 million in costs associated with the pandemic, and about an equal amount of extra costs.

Savings were made during remote learning and included transportation and lower energy costs.

The extra costs were mainly attributed to improving the school HVAC systems, buying PPE, tents, and technology costs associated with online learning.

PPS expects costs to be reimbursed through three federal funding initiatives — CARES, ESSERII, and American Recovery Plan.

For the 2021-22 school year, PPS will receive $4.5 million in state aid, which is an increase of $296,017 over the current budget year.

An additional $3.3 million from the fund balance will be used as revenue in the budget, as required by New Jersey.

"This budget maintains our high levels of educational services while also focusing on financial efficiencies," Bouldin said.

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