Covering a revenue shortfall


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Hopewell Valley Regional Board of Education adopts 2023-24 budget with tax increases

The Hopewell Valley Regional Board of Education – faced with a revenue shortfall and rising costs due to inflation – adopted a $100.5 million budget to fund district operations for the 2023-24 school year.

Board President Anita Williams Galiano, Board Vice President Andrea Driver, and Board members Jacqueline Genovesi, Alexander Reznik, Adam Sawicki, Michael Wilson, Ou Liu, and Pamela Lilleston voted “yes” to approve the budget at a meeting on April 24.

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“The overall increase to the budget is 4.1%,” said Robert Colavita, district business administrator. “This means a seven-cent increase to Hopewell Borough, a three-cent increase to Hopewell Township and a 15-cent increase to Pennington Borough.”

The 2023-24 projected tax levy of $86.7 million is the amount property owners are paying in school property taxes to support the district from the three municipalities in Hopewell Valley – Hopewell Township, Hopewell Borough, Pennington.

In Hopewell Borough, the school tax rate increases to $1.82 per $100 of assessed valuation. The owner of a home assessed at $475,000 will pay $8,645 in school taxes.

In Pennington, the school tax rate increases to $1.76 per $100 of assessed valuations. The owner of an average home assessed at $487,000 will pay $8,571 in school taxes.

In Hopewell Township, the school tax rate increases to $1.75 per $100 of assessed valuation. The owner of a home assessed at $550,000 will pay $9,625 in school taxes.

School taxes are one item on a property owner’s total tax bill, which also includes municipal taxes and county taxes.

The amount an individual pays in property taxes is determined by the assessed value of his home and/or property, and the tax rate that is set by each taxing entity.

Some of the cost drivers that the district faced with the budget were the rising health insurance costs; transportation (cost of bus route renewals, bus driver shortages, and fuel increases); costs for energy and fuel; and unanticipated facility and maintenance costs.

In addition to special education costs (out of district tuition increases); property, causality, workers compensation insurance increases, which are all at record highs this year; curriculum and instruction initiatives; and staffing (inflation increases due to contracts), according to Colavita.

When the school district administration and school board began budget planning the district had a revenue shortfall of about $4.2 million.

Colavita said they tried to close the gap regarding the shortfall with an additional $600,000 in state aid, $286,677 from the use of savings (bank cap) from previous years and using a health benefit waiver of $1.5 million.

The school district was still left with a $1.8 million shortfall. To cover the shortfall a lot of the solutions would be through attrition or a gradual reduction in certain areas.

Colavita added that the solutions included a reduction in secretarial positions ($30,000), a reduction of full-time K-12 instructional staff due to enrollment issues ($558,000), breakage – a less expense staff member replacing a more expensive staff member on retirements – ($600,000), elimination and consolidation of software platforms ($100,000), special education out-of-district tuition adjustments ($100,000), and a delay of technology upgrades ($400,000).

For appropriations, the budget includes $42 million on regular instruction, $18.5 million on staff benefits, $16.6 million towards special education, $7.4 million for operations and maintenance, $5.86 million for transportation, $4.2 million on debt service, $3.05 million on central office/district services, $2.9 million on capital outlay, and $1.7 million on athletics co-curriculars.

According to the budget presentation and budget documents, in addition to the tax levy, the revenues side of the budget includes $6.9 million in state aid, which is an increase from 2022-23; $4.7 million in total fund balance (savings), $995,524 in total miscellaneous revenues (revenues generated through services such as tuitions and renting out of facilities), $941,721 from federal aid, and $304,245 in capital reserve.

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