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Regional School Taxes Back on the Table in Cape May

Lower Cape May Regional High School

By Vince Conti

CAPE MAY – As the state makes a new push at school consolidation and opening regional school districts, those who remain opposed or skeptical of such an effort often point to Cape May as their proof of the “trap” that lies in regional plans that depend on property values, instead of enrollment, for the designation of who pays what in a regional system.
Cape May has been part of the regional system that serves itself, West Cape May and Lower Township. Cape May Point sends students to Lower Cape May Regional School District, but only on a much less expensive send-and-receive basis. When the state Legislature eliminated enrollment as part of the calculation of the regional school tax distribution among the municipalities, everything fell back on property values.
The change left Cape May with what the city’s taxpayers have long complained is a disproportionate and unfair share of the costs. This year, according to Dennis Crowley, chair of Cape May’s Municipal Taxation and Revenue Advisory Committee, the city was charged $7.9 million for sending roughly 60 students to the regional district. That amounts to $131,000 per student.
Crowley pointed out that a glitch in federal reimbursement policies adds to the burden on Cape May taxpayers. It has long been policy for the federal government to pay what is known as impact aid to help meet the costs borne by municipalities that host military facilities, like the Coast Guard base in Cape May. Each year, the city’s elementary school receives impact aid because of the children it serves from the base.
The glitch, according to Crowley, is that just when the cost of educating those children of Coast Guard families rises most significantly when they leave the city for the regional school district, the impact aid stops. 
The city, which does not directly provide the education, no longer qualifies for the impact aid. The regional school district, in which the Coast Guard children are then enrolled, is large enough that the percentage of enrollment accounted for by those children from the Cape May federal facility is then so low, the regional system also does not qualify for the aid.
The burden then falls on the city’s taxpayers, who must foot the bill for  Coast Guard children at the regional districts. As Crowley noted to Cape May City Council July 6, the $7.9 million charge from the regional system is not likely to go down in coming years. The regional system, like almost all of the county’s school districts, is in the middle of a multi-year process in which the state is ending a particular type of state education aid known as adjustment aid. So far, the county schools have absorbed $15 million in cuts over three years, and the seven-year total could be a decline of between $21 million and $25 million.
Cuts in state aid to the regional system may cause an increased dependence on property taxes, which continues to leave Cape May taxpayers vulnerable.
The advisory committee had a unique proposal for the city that Crowley said could help to “blunt” the loss of the federal impact aid. Crowley urged the city to “reach out” to its Washington delegation, with the goal of establishing some form of payment in lieu of taxes (PILOT) arrangement that would have the federal government contribute for the cost of educational service provided to Coast Guard children.
Whether the arrangement followed the structure of a PILOT or took some other form, the unique nature of Cape May’s problem, with a regional school system that disqualifies the city’s taxpayers from the benefit of impact aid, needs to be addressed with a unique arrangement with the federal government, Crowley said.
He was quick to add that this is not an anti-Coast Guard recommendation. “We love the Coast Guard,” he said. The city is in what he called a “trap that may be unique to any other community in the country hosting a military facility.” It requires a different approach.
Even if the city is successful in finding a solution to the Coast Guard issue, the larger issue Crowley raises will probably not disappear. The state’s push for consolidation of school districts requires a new way of allocating costs, an allocation mechanism that recognizes property values, but that also blunts the impact of towns with few children to educate. 
A $131,000 per student bill is almost assuredly going to encourage continued political infighting. Right now, according to Crowley, Cape May is the “negative role model” for school regionalization. That is something many in the city may feel has to change.
To contact Vince Conti, email vconti@cmcherald.com.

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