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Princeton Board of Education approved the $96.3 million operating budget for 2021-2022 school year, which reflects the lowest percentage tax increase in nine years. The operating budget is $700,000 more than the 2020-21 operating budget of $95.6 million. The budget was approved on April 27.

"This is the lowest tax increase in nine years," said Matthew Bouldin, PPS Business Administrator. "This budget has a 1 percent tax increase for the general fund and a 0.564 percent overall increase if you include both the general fund and debt service."

The total budget, including debt service and grants, is $108.2 million, an increase of about $2 million over the previous year.

"The district's financial position is strong and Mr. Bouldin and the Board of Education have done excellent work in identifying savings and opportunities to reduce the growth rate in several expense categories," said Dr. Barry Galasso, Interim Superintendent. "I am pleased that we have been able to control expenses and identify alternate sources of revenue. This has enabled us to minimize tax increases."

In addition, PPS has proposed the most robust summer program the district has ever offered. "Our summer offerings will address learning opportunities, social and emotional health, and provide bonding activities," said Dr. Galasso.

Covid has resulted in both non-recurring savings and non-recurring costs. The costs do not have a major impact on the budget, which is primarily based on recurring costs, according to Mr. Bouldin. Compensation--salaries and benefits—represents approximately 77 percent of all expenses. The number of employees has remained stable.

Several factors have helped to decrease upward budget trends. Stronger purchasing controls have been implemented resulting in slower expense growth in supplies and services. In addition, energy costs are slightly lower due in part to new, high-efficiency HVAC units installed in the middle school and at Community Park, Littlebrook, and Riverside schools. Johnson Park is scheduled to get the high-efficiency units this summer.

Decreasing enrollment from Cranbury students and health care costs were challenges faced by the district this year. Tuition from Cranbury has declined due to a steady reduction in Cranbury students from a peak of 280 in 2017-2018 to an estimated 247 in 2021-2022. There is a year-over-year decline in revenue of $283,358 with no associated savings. The Cranbury School District, which does not have its own high school, will pay PPS $4.836 million in tuition in order to send its high school students to PHS.

The school board has appropriated $7.1 million for the Princeton Charter School, an increase of $362,319 over the 2020-21 tuition payment. The increase is mostly due to a 6.13 percent increase in tuition, based partly on a decline in PPS enrollment which is attributed to Covid. Enrollments are one element of the tuition calculation.

Over the past two fiscal years there have been between $2 million and $2.5 million in cost savings associated with the pandemic and about an equal amount of extra costs. Savings were largely realized during the periods of remote-only instruction and include transportation costs (busing) and lower energy costs. The extra costs were mainly attributed to improving school HVAC systems, PPE, and supporting teaching during the pandemic with new technology, teacher supports, and tents.

The district anticipates that costs related to the pandemic will be reimbursed by three federal funding initiatives: CARES, ESSERII, and ARP.

"We have been able to modestly increase our fund balance, and this had enabled us to maintain our district's triple AAA rating from Moody's," said Mr. Bouldin. "It will, if approved by the Board, enable us to fund urgent priorities associated with our facilities, including adding new high-efficiency HVAC units in some teaching spaces, replacing the pool HVAC system at the middle school, and some roofing replacements at Princeton High School."

In 2021-22, PPS will receive $4.5 million in state aid, which is an increase of $296,017 over the current budget year. An additional $3.3 million from the fund balance will be used as revenue in the budget, as required by the State of New Jersey.

"This budget maintains our high levels of educational services while also focusing on financial efficiencies," said Mr. Bouldin.

The 2021-22 operating budget calls for $80.8 million to be raised in property taxes from Princeton’s residential and commercial property owners. The proposed tax levy is an increase of $796,000 over the current budget. An increase of 2 cents in the 2021 (calendar year) school district property tax rate means it will increase from $1.183 to $1.201 per $100 of assessed value.

In the most recent year, for which PPS has audited results, the local tax levy accounted for 86.4 percent of the revenue for the school district. State aid makes up 6.8 percent of the budget and tuition from the Cranbury School District equaled 5.6 percent of revenue. Miscellaneous revenue, including tuition paid by staff members who live out of town and who send their children to the Princeton schools, was 1.2 percent.

 

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