Courts: high school taxes no reason to sue Ocean Twp.

By Neil Schulman
On July 13, the state Appellate Court upheld a Superior Court judge’s ruling that Loch Arbour has no ground to appeal the large school tax increase it’s faced the last two years from the Ocean Township School District.
The village has been looking at alternatives to reduce its taxes, including attempting to merge with another community.
Loch Arbour sends its children to Ocean. Before 2009, Loch Arbour had paid $300,000 a year to the township schools. This was done under an agreement known as the Kiely Bill.
But in 2008, Trenton passed the School Funding Reform Act (SFRA), which eliminated all exceptions to the funding formula, and required Loch Arbour to pay taxes based on the same method used by the rest of the state.
Since the formula relies on equalized property value and Loch Arbour’s homes are assessed for significantly more than Ocean Township, its school taxes more than quadrupled, and taxpayers there are paying a much larger share than previously. The first year the new funding formula was in place, school taxes went up 447 percent.
For the 2009-10 school year, Loch Arbour wound up paying over $970,000 in school taxes. The total Ocean Township district budget was more than $53 million.
This year, the average Ocean Township homeowner’s property taxes increased $146 as a result of the school budget, while the average Loch Arbour tax bill went up $1,785.
As a result of the SFRA, Loch Arbour brought a suit against the Ocean Township Board of Education and the Monmouth County Board of Taxation, arguing that the new school formula should not have been implemented.
Loch Arbour’s attorneys argued, among other things, that the Kiely Bill’s specific provisions should have been given priority over the the general SFRA, and it should be treated as a contract between Ocean and Loch Arbour.
They also argued that the heavy taxes violated the Fifth Amendment of the Constitution, because the government was unfairly taking property, and the Ocean Board of Education was violating the 14th Amendment, because they did not have a Loch Arbour representative on the school board.

Judge Thomas Cavanaugh rejected their arguments, and when Loch Arbour appealed, the courts agreed with him. They said there is no language in the Kiely Bill that indicates it is a contract, and the SFRA can supercede it.
The appeals court also said that the Fifth Amendment applies much more narrowly, to real property and not to taxes. They said the 14th Amendment was not violated, because Loch Arbour still had a chance to participate in school budget votes.

Loch Arbour has been examining alternatives, including merging with Allenhurst. Last year, voters in the village created a Charter Study Commission, which made the recommendation in February.

If Loch Arbour merges with Allenhurst, its connection to the Ocean Township school would be dissolved. Allenhurst students attend the Asbury Park school system.

Voters from Allenhurst and Loch Arbour would need to approve the merger in the November elections.