Monmouth County town to pay $68K per student based on N.J. funding formula

Posted by ksantiag May 26, 2009 20:50PM

MONMOUTH COUNTY -- Under the state's latest school funding formula, the average cost per student in the tiny village of Loch Arbour is increasing to a whopping $68,750, a price tag local officials say is impossible for homeowners to shoulder and will surely drive prospective homebuyers away.

Loch Arbour has so few students that it pays to send its pupils to schools in neighboring Ocean Township, a community from which it seceded 52 years ago.

The decades-old arrangement was affordable for this seaside Monmouth County village, which spent anywhere from $14,000 to $16,000 per pupil on education over the past decade.

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"For a school funding formula that was supposed to benefit all children and all communities, this is backfiring big time," said Betty McBain, president of the village's board of trustees. "This is a formula for ruination for us."

Loch Arbour's woes started in 2007 when the state passed the School Funding Reform Act that based school funding on assessed property values instead of on a complex list of criteria. Loch Arbour and 32 other small communities had special arrangements under the Kiely bill for the past decade that allowed their school funding to be based on the number of students they sent. So instead of paying about $300,000 to Ocean Township annually, Loch Arbour will now be on the hook for $1.6 million a year under the new formula, which repealed the Kiely bill.

Although the average home in Loch Arbour is assessed at $1.4 million, McBain said the new formula hits the community particularly hard because it has a total population of about 245 and a median household income of $74,250.

With 24 students sent to Ocean Township schools, Loch Arbour residents would have to cough up $1.6 million in education costs. The hike would mean a $12,000 annual tax increase for the average homeowner -- just for the school portion of their property tax bills, which go out in August.

"Is there any school in the nation that's worth $68,000 per student, k-8?" McBain said.

The funding issue has pitted the community, just north of Asbury Park, against some Ocean Township residents, who say their more affluent neighbor should foot more of the bill because it can afford to.

But McBain said Loch Arbour tax payers have historically paid more than the state per-pupil average and more than Ocean Township's per-pupil cost.

In 2000, when the average per-pupil cost in the state was $9,000, Loch Arbour paid $15,700 while Ocean Township paid $8,500. And this year, when the state average was $13,539, Loch Arbour paid $16,608 while Ocean Township paid $13,000, McBain said.

"Just because you have a higher assessed value doesn't mean you're rich," McBain said. "For a lot of the residents in Loch Arbour, these are family homes that were passed down from generation to generation."

She said many Ocean Township residents are under the erroneous belief that Loch Arbour's $1.6 million tab is new money coming into the district when in reality, it is a redistribution of the district's total education tab.

The new formula would drop Ocean Township residents' tax bills by about $300 a year, but would mean tax bills in Loch Arbour would increase $300 a week, McBain said.

Kathryn Forsyth, spokeswoman for the state Department of Education, said her agency understands Loch Arbour's plight but its hands are tied.

"This has to be corrected legislatively," Forsyth said. "If the legislators want to pass special legislation, it's fine with us."

State Sen. Sean Kean (R-Monmouth) has drafted legislation phasing in the hike for Loch Arbour over five years, but would require the state to pick up the difference, $1.3 million for the first year and lower amounts in subsequent years.

Kean said his legislation has not seen the light of day because the administration does not want to spend the extra money in these tight budgetary times. But without that state assistance, the Ocean Township school district would most assuredly challenge the validity of the legislation, he said.

"If we don't do something about it, this community is going to be radically altered," he said. "The intent of the governor's school funding formula was certainly not to hurt people."

Kean said Loch Arbour, a year-round community with a vibrant downtown, would become a desolate resort populated only in the summer.