BOE plans preliminary budget
The Rutherford Board of Education introduced its new 2008-2009 school year budget at last week's March 3 work session. The budget features a 1.67-percent increase in school tax bills. The tax bill for a homeowner with a house assessed at the borough's average of $449,333 will see an increase of $82.62, bringing the average bill up from $4,939 to $5,022.
Last year the average taxpayer's school taxes increased by 4.4 percent. At the beginning of the school year, Rutherford superintendent Leslie O'Keefe and fellow board members began talking about the possibility of getting this year's budget as close to a zero percent increase as possible.
"This is the lowest increase we've presented to the public in seven years," said O'Keefe. Each year school taxes make up the largest portion of the town tax bill.
The total tax levy for the schools increased by 1.6 percent from $33,505,635 in 2007-2008 to $34,043,063 in 2008-2009.
New rounds of teacher, administrator and supervisor union contracts all featured a new preferred provider health benefits plan that saved the district about $400,000 and allowed the school's health premiums for 2008-2009 to decrease, according to school business administrator Bob Brown.
However, pension contributions for support staff significantly increased. O'Keefe said the state used to pay the pension share for non-faculty employees but began phasing out its contributions four years ago, leaving the schools with a $293,000 expense where previously there had been none.
"The increase in [state] aid is almost to the penny the amount we now pay in pensions," said O'Keefe. "They give it to us in one pocket and take it out the other."
The school received $3.295 million in state aid for 2008-2009, about $391,226 more than last year. The school also saw a $120,000 increase in faculty pension payments, a $20,000 increase in social security payments and a $16,000 increase in worker's compensation insurance.
Brown said about 75 percent of the budget goes towards contractually obligated employee salaries and benefits.
In addition, the school saw large increases in transportation and special education costs, a trend O'Keefe said has been seen through out the area. Special education costs rose by $53,000 to $2,380,215 and transportation costs increased by $38,000.
$196,226 in interest from the school's 2002 referendum loan was added to the budget as an additional revenue. However, that interest has been steadily decreasing as the money in the account is spent on the large capital projects it was originally bonded for, according to O'Keefe. Last year the interest was $354,745 and several years ago it was over $500,000. O'Keefe said the school isn't obligated to return interest from the referendum loan but has done so in order to help lower the budget.
When the capital project referendum was passed, the state agreed to pay for $8 million towards the project in installments gradually paid out each time the schools reach certain milestones. O'Keefe said the state still owes the schools an additional $800,000 for a milestone the project met last year. O'Keefe said the school is hoping to receive the money by the end of June.
