40+ year battle over school taxes still continues

By Neil Schulman

Last week, Sea Bright held a town hall meeting to discuss the high amount it pays in school taxes. Due to the length of topics covered, the meeting will be covered in two parts. The first examines the history of how taxes got so high, and the attempts to change it before 2012.Sea Bright — How did Sea Bright wind up paying upwards of $100,000 per student per year to Shore Regional High School? The answer dates back at least 40 years, and possibly longer.

At a special Town Hall meeting held Sept. 2, borough officials reviewed the steps over the decades that have led to the extremely high school taxes, the many failed attempts to change the formula, and options being pursued for the future. (Officials say that it’s the formula they object to, not the quality of education Shore provides.)

At the root of the problem is a 1975 court ruling which caused the state legislature to enact the “thorough and efficient” — T&E as it is often called — tax formula in place today. However, by the time that formula was put in place, Sea Bright had already made decisions which would prove surprisingly troublesome years later.

A history of SB and schools

Councilman William Keeler said that in the 1950s, Sea Bright had its own school for elementary students, and sent its high school students to Long Branch.

Sea Bright paid Long Branch on a “per student” basis. That means that the school figured out its total budget, divided it by the number of students, and charged Sea Bright that amount for each student sent.

Then, for a variety of reasons, including the baby boom and a better highway system making the suburbs and commuting more attractive, Monmouth County saw a tremendous population growth.

“One of the consequences, the boom overwhelmed the school systems in the county,” Keeler said.

Long Branch could no longer accommodate all the sending districts, and new school systems were built. Sea Bright joined West Long Branch, Oceanport, and Monmouth Beach in the new Shore Regional High School district in 1962, again at a per student cost.
At the time Sea Bright had a choice of being a member district or a sending district. Since the main difference then was whether or not you were represented on the board, they chose to be a member district.

Then, in 1975, lawsuits in New Jersey argued that the per student formula was unfair to poorer municipalities. In response, the state legislators imposed the new T&E formula.
Keeler said that while some people think the rise of expensive housing in Sea Bright hurt, the problems started almost immediately, “long before our condominium units were built.”
In 1977, Sea Bright lost more control over its school system when the county superintendent declared the Sea Bright schools inadequate. The next year, the school building closed, and students began going to the Oceanport schools (on a per student basis).

Keeler said that in 1978 a rumor was going around town that the borough council wanted the school to close, so they could use it as a new borough hall. As a result, when the Sea Bright Board of Education offered to sell the building to Sea Bright for $1, council — which at the time shared space with the old police department and courts — turned them down, and it was put on the market instead.

The lack of its own elementary school and several other factors have made Sea Bright home to relatively few school-age children— only 23 will be attending Shore Regional this year, though Sea Bright will be paying more than $2.3 million in taxes to the high school.
The T&E formula breaks down when one part of a regional district has very few students enrolled. Mayor Dina Long noted that Sea Bright isn’t the only New Jersey town that’s really hurt by it. Seaside Park in Ocean County has paid $5 million a year in school taxes for its 25 high school students.

Failed solutions

Sea Bright officials have tried many times to get the law changed, through the courts, through legislation, and other methods. All have failed.

Keeler said that in the early 1980s — when the borough was paying $12,000 a year per student and other towns less than $6,000 — Sea Bright went to court to try to get the T&E formula overturned as unfair. The borough lost the case. It also lost the appeal, and the state Supreme Court refused to hear the case.

Following that, in the 1990s, Sea Bright tried the legislative route. With the help of then-Assemblyman Steve Corodemus, they got a bill through the state Assembly. Sea Bright officials — including then-Councilman Bill Gelfound and his wife, Shore Board member Ina — got an agreement with Governor Christine Whitman that if a bill to change the funding formula for Sea Bright hit her desk, she would sign it.

All that remained was the State Senate. The bill cleared the committee, and was slated to go to be voted on the last day of the senate’s term. On that day, all votes were pro forma; if it was introduced, it would be passed.
Sea Bright representatives waited in the gallery with “a bottle of champagne,” ready to celebrate, Keeler recalled.

The bill was never called for a vote.

It turned out the late Senator Joe Palaia had it killed, exercising “Senatorial Courtesy,” the option to stop a bill that might negatively affect a district. Presumably lowering Sea Bright’s tax burden would have raised it in districts with more voters.

A few years later, then-Mayor Gregory Harquail tried a legislative route, meeting with the state Commissioner of Education. The commissioner said he sympathized, but had no power to change it, that it had to be done through the legislation.

Keeler noted that all the people who worked on these three attempts to change the funding formula have since left Sea Bright. “I’m not saying it was the only reason, but it certainly played a role.”

Efforts didn’t stop there. In 2008 — when Sea Bright was being asked to pay $81,000 per student — the late Mayor Maria Fernandes attempted to get a referendum on the ballot to withdraw Sea Bright from Shore or change the funding formula. That’s the legal procedure to change it.

The Shore Board of Education — in charge of determining when the public votes on school issues — refused to put it on the ballot. When Fernandes tried to have a non-binding referendum for Sea Bright voters, to express their opinion, the county clerk at the time refused to allow it, saying that only the schools could legally put questions about the school on the ballot.

Long said Fernandes also considered refusing to pay Sea Bright’s share of taxes, knowing it was illegal. She thought the image of a woman in poor health being jailed would draw attention to the plight. But Long said the Borough’s CFO refused. Sea Bright has a legal obligation to pay its share of school taxes, and he feared he could lose his license if he went along with that plan.

Next week, The Link will look at what Sea Bright has been doing since Superstorm Sandy to try to address high taxes.