School Board Facing Difficult Budget Decisions

The Board of Education's difficulty in preparing a budget that does not include a tax increase was discussed at an open meeting of the Board of Education's Finance Committee on Feb. 8.

Finance Committee Chair Jonathan Chatinover addressed the topic in a PowerPoint presentation prior to a regularly scheduled board meeting.

Chatinover prefaced his remarks on possible funding scenarios by noting the current bad economy and discussing Chatham's record of educational excellence. He said that with Gov. Chris Christie taking office and facing a big budget deficit, there have been reports of possible funding cuts. The district now receives 7 percent of its $52.3 million budget from Trenton, Chatinover said, while the rest comes from local property taxes.

"There are rumors that the 4 percent tax increase cap will be reduced," Chatinover said. Under state law, school district budgets are only allowed to rise by up to four percent each year, and the district typically increases taxes by that much. "To increase property taxes by less than that will hurt the school district," he said.

Currently, school districts are allowed to ignore the cap if they ask voters in a referendum to approve higher taxes for specific projects, what is known as a "second question" on the ballot (the "first question" on the ballot is the vote on approving the basic school budget, in those districts that require voter approval). But Chatinover noted that Gov. Chris Christie has indicated he may consider eliminating "second questions" on a school budget vote. "Second questions" are required to pass with 60 percent of the vote.

"It's a difficult decision to ask the public for more money, but it may come to that," Chatinover said, should "second questions" continue to be permitted.

Superintendent Jim O'Neill said that the state contributes $10 billion in school aid but is looking to cut 10 percent. That $1 billion savings would help fill the state's anticipated budget shortfall, he said. Gov. Christie is asking school boards with surpluses to use those funds to make up for the loss of state monies, but Board Secretary Ralph Goodwin said he sees that as siphoning off local property tax revenues to help balance the state's budget. He said he found that "objectionable."

Finance committee members also discussed some savings the district can expect. "We have a savings when a teacher who has been with us for a long time retires," O'Neill said, since the new teachers that replace retirees earn lower salaries. "We only have four or five official resignations at this point."

Chatinover said that over the last seven years, the biggest increases in the school budget have been 14 percent for energy costs and 10 percent in Special Education expenses. At the same time, salaries have increased by 4 percent and benefits have increased by 7 percent. The school district's salaries for this year total $31.7 million, special education costs are $4.4 million and energy costs are $1.7 million.

The district also has to plan for possible shifts in student enrollment. "Our four smallest classes are in the high school," Chatinover said. "Four years from now, the high school will have a lot more students." There are currently 1,061 students in Chatham High School and 1,325 students in grades five to eight.

"Empty-nesters are selling their homes to families with children," O'Neill said. "[Growth is] hard to forecast."

The Finance Committee will hold another open session on Feb. 22.