$21 million in upgrades with no increase to the tax rate
State aid + savings + debt payoff = no increase to the tax rate
A school district can strategically use bond funding to pay for certain improvements. By separating those projects from the annual operating budget, GEHR can spread the cost over many years and tap into a special kind of state aid to cover about 42% of the total.
What are bonds? Bonds can be sold, like a company can sell stock, so a school district can get funds to make long-term improvements. Property tax revenue is used to buy back those bonds with interest. For schools, this is a form of borrowing.
Why not include these projects in the annual budget? When voters approve bonds for specific projects, the state will pay a share of the costs. Projects that are part of the annual budget do not qualify for this aid.
That state aid is collected from across New Jersey, but only shared with districts where voters approved the sale of bonds.
A bond referendum is an opportunity for GEHR to bring some of those dollars back to the communities.
For GEHR’s bond proposal, the state verified it will pay nearly $8.9 million (about 42% of the costs).
Project costs for all three high schools are estimated at $21,013,875. That includes not just the work to be done, but the professional and permit fees to support it. The estimate also includes a contingency in case costs are higher or some unforeseen circumstance arises.
State aid would contribute $8,871,487 to reduce the amount on local property tax bills. This special kind of state aid is only available with a voter-approved bond, and it amounts to 42% of the improvements planned for GEHR schools.
The district will put $1.25 million from its Capital Reserves toward project costs. That funding is held for specific capital improvements, sort of like a savings account.
That leaves the local share at $10,892,388, and GEHR can pay back that amount within the existing tax rate for school debt.
State Aid + Savings + Debt Payoff = No Tax Increase
GEHR is paying off the costs of a previous referendum, when voters took on a tax increase to invest in the future. The district can continue the existing tax rate and begin another slate of improvements. That approach keeps the tax rate steady, much like a family might finish paying off one car and shift the payments toward replacing an older car. There would be no increase to the current rate for GEHR debt tax.
The Board of Education plans this continued investment within a continued tax rate to maintain the quality of life and strong property values of all GEHR communities.