BOE Votes to Give $1.25M State Aid Windfall 'Back to the Taxpayers'

Following an intense debate at a special workshop meeting Wednesday night, the Parsippany Board of Education voted 8-1 to use $1,256,153 in additional state aid for schools as property tax relief. This means property owners will see a reduction in their fourth quarter tax bills.

Last week, Gov. Chris Christie surprised many with his announcement of additional to schools across New Jersey. He gave school districts until July 19 to designate the funding to go back to taxpayers, then allowed extensions whose lengths would be determined by municipalities. 

Board President Frank Calabria said he talked with the mayor's office and the county tax board and won an extension of "a day or two."

Board member Sharif Shamsudin moved to use the money to reduce the tax levy for the 2011-12 school year; member Michael Strumolo seconded.

Stating that the additional aid should go to taxpayers, member Deborah Orme nonetheless argued for holding onto the money.

"By maintaining this money in addition to the surplus by putting it against next year's budget, it will help them offer a bigger tax savings for [2012-13]," Orme said. "I feel that's a more responsible way of going forward."

"Yes, i want the money to go back to the taxpayers, but in the past, your aid was your aid. The instability …," said member Fran Orthwein. "Who is to say that the government may not turn around next year and cut $800 million from education? So if we keep this, we will still be able to, when we strike the 2012-13 budget, take this off the tax levy."

"We also have 5 million dollars …," added Strumolo, alluding to recent talk of a 2011-12 budget surplus.

"The surplus is projected," Superintendent LeRoy Seitz reminded him. "And now the projected surplus is about $3 million." 

Last week, the board voted to allocate $1.5 million of any projected surplus going into a capital reserve fund with $500,000 earmarked for a maintenance reserve fund. 

"If we don't have that $3 million and our state aid is cut and by law we are restricted to a two percent levy, we won't have enough to cover our programs," Seitz cautioned. "There is merit to keeping the $1.25 million in reserve. By law it will turn into tax relief in 2012-13."

The superintendent continued: "Two years ago, I was right with you. That all changed when we were expecting $7 million [in state aid] and got only one.

"By giving back the money, you are creating a liability that may come back to haunt you during the 2012-13 budget process," he said. "It's a tough call, and it's up to the board."

The discussion turned to the amount of relief property owners would get. Last week, Seitz estimated between $10 and $12 for the average homeowner with a house valued at $306,000. Township Business Administrator Jasmine Lim reported savings of $53.20, though the figure would be half that since the school district uses a fiscal year system. At the Wednesday meeting, Seitz had a new estimation: $26.20.

Lake Hiawatha resident Pat Petaccia was permitted to make a statement urging the board to allow property relief now.

"I don't have faith or trust that I will get this money back two or three years from now," she said. "You should be reimbursing the taxpayers at this time. If we lose aid, we expect you to do your job and make the tough decisions."

"Is there a possibility that the governor can take the money back or take the projected surplus if it appears?" asked President Calabria.
Superintendent Seitz answered yes.

"If we don't give this money back now, we have an opportunity for the state to take the money, and then the people of Parsippany are out the money," said member Gary Martin. "I am not going to gamble with the people's money. If I can give them back 50 cents to help feed their children, that's what Gary R. is doing."

Board member Anthony Mancuso agreed.

"Gary's statement is right to the point," he said. We've seen the state take the excess money. It is gambling a little bit."

Calabria called for a roll call vote. At its end, the board decided 8-1 to use the additional state funding for property tax relief.

The lone "no" vote came from board member Deborah Orme.

The remainder of the meeting consisted of public comments.

Former board member Robert Crawford asked when Superintendent Seitz will make his intentions known regarding the 4 1/2 year contract offered to him. Seitz refused to answer and Calabria said he couldn't because the matter was in litigation.

"The school year starts in less than seven weeks, and the district needs to start the process of looking for an interim [superintendent]," Crawford insisted.

"The contract is in negotiations, so I can't answer," Calabria replied, adding that any comment would have to wait until the next meeting, when the board attorney would be present.

"I find it unfortunate," said Crawford. "This could potentially put the school district into a precarious position."

He asked a second question: whether Seitz would be required to repay the district the money he earned in excess of Gov. Chris Christie's superintendent salary cap between Dec. 1, 2010 and June 30, 2011. Calabria repeated that the matter was in litigation.