School Taxes Unchanged in Proposed Budget

For the second year in a row, the Ocean City School District is proposing a budget with no increase to Ocean City taxpayers.

Business Administrator Tom Grossi presented a preliminary budget to the Ocean City Board of Education on Wednesday night that calls for a local tax levy of $21,640,721 for the 2013-14 fiscal year — the same figure as in the 2012-13 budget and the the 2011-12 budget. (See attached PDF for a summary of the 2013-14 revenue budget.)

The district must submit a full budget to the county by March 7. A public hearing on the final budget is scheduled for March 27. Any school budget that falls under the 2 percent cap on the tax levy is no longer subject to voter approval.

While Ocean City taxpayers, on average, will pay exactly the same amount in taxes next year under the proposed budget, not all property owners will see the same tax bills. Because the value of Ocean City's tax base (combined real estate values) has fallen, the tax rate will go up. 

Owners whose homes were reassessed in the past year will likely pay less in taxes, while owners whose homes were not will pay more. It's the same situation that led the municipal government in Ocean City to propose an 8 percent increase on the tax rate to cover a 1 percent increase in spending. (See also Sandy and Recession to Deliver Double-Whammy to Tax Base.")

Grossi said the district does not yet have a final proposed tax rate for the 2013-14 budget.

The budget introduced on Wednesday assumes no increase in state aid. While aid figures were not released in time for the meeting, Gov. Chris Christie has promised some increases.

The budget shows a $1.6 million decrease in tuition from sending districts (the result of fewer students and a lower per-student tuition calculation). But the district will make up $1.3 million of that loss with an increase in School Choice aid.

The new School Choice program allows out-of-district students to apply to attend Ocean City schools — with the state paying Ocean City $12,330 (in 2012-13) for each student. The program has allowed the district to compensate for a declining enrollment and sustain programs without increasing taxes.

"Without these funds, we would need to increase the tax levy by the entire 2 percent ($432,000) and we would still have a budget shortfall of $1,664,100," Grossi wrote in a PowerPoint presentation to the board.

Ocean City will accept 166 students (33 at the Primary School, 39 at the Intermediate School and 94 at Ocean City High School) for the 2013-14 school year, bringing the district $2,096,100 in revenue, a 150 percent increase over $838,440 for 2012-13.