Part I - Tax Impact

SUMMARY

PART I - TAX IMPACT

The over-riding concern in any potential regionalization is the tax impact, especially in these tough economic times. In these potential regionalizations, there are varying tax impacts for each district depending on the individual regional configuration.

East Greenwich Township taxes would increase in two of the three potential regionalizations. Becoming part of a new regional district that includes the current constituent districts would result in an increase of $999,091 above their Status Quo Taxes of $17,253,887 in FY 2011/2012 according to Table 4. By becoming part of a new regional district that includes the current constituent districts but removes Logan Township as a tuition paying district would result in an increase of $1,936,502 above their Status Quo Taxes according to Table 16. The only tax decrease would be in a new expanded regional district that would include Logan Township that would result in a decrease of $421,879 below their current Status Quo Taxes according to Table 10. The best-case scenario from Table 10 would be a tax decrease of $426,812 or a 6.88¢ tax decrease. For a home assessed at $100,000, this would be a tax decrease of $68.80. The worst-case scenario from Table 16 would be a tax increase of $1,936,502 or a 31.23¢ tax increase. For a home assessed at $100,000, this would be a tax increase of $312.34. A penny (1¢) on the tax rate in East Greenwich Township is equal to $62,000.

Logan Township taxes would only be impacted in one of the potential regionalizations. If Logan Township would become part of a new expanded regional district, it would result in an increase of $4,754,559 above their Status Quo Taxes of $11,905,912 according to Table 11. Logan Township could be impacted by an unknown amount if the Kingsway Regional Board of Education, their Board of Education and the Gloucester County Executive Superintendent of Schools would all approve the removal of Logan's high school tuition students and find an acceptable high school for their students to attend. The $4,754,559 tax increase listed above would result in a tax increase of 77.37¢ on a home assessed at $100,000. The total dollar increase resulting from a 77.37¢ tax increase would be $773.70. A penny (1¢) on the tax rate in Logan Township is equal of $61,451.

South Harrison Township taxes would also increase in two of the three potential regionalizations. Becoming part of a regional district that includes the current constituent districts would result in an increase of $898,353 above the Status Quo taxes of $6,169,619 in FY 2011/2012 according to Table 5. By becoming part of a new regional district that includes the current constituent districts but removes Logan Township as a tuition paying district would result in an increase of $1,261,340 above their Status Quo Taxes according to Table 18. The only tax decrease would be in a new expanded regional district that would include Logan Township that would result in a decrease of $546,709 below their Status Quo Taxes according to Table 12. The best-case scenario from Table 12 would be a tax decrease of $546,709 or a 13.575¢ tax decrease. For a home assessed at $100,000, this would be a tax decrease of $135.75. The worst-case scenario from Table 18 would be a tax increase of $1,261,340 or a 31.32¢ tax increase. For a home assessed at $100,000, this would be a tax increase of $313.20. A penny (1¢) on the tax rate in South Harrison Township is equal to $40,272.

Swedesboro Borough taxes would decrease in two of the three potential regionalizations. Becoming part of a new regional district that includes the current constituent districts would result in a decrease of $34,152 below their Status Quo Taxes of $3,675,229 in FY 2011/2012 according to Table 6. A second tax decrease would result in a tax decrease of $712,045 from Table 13 if Swedesboro Borough would become part of a new expanded regional that would include Logan Township. The only tax increase would be if Logan Township would be removed as a tuition paying district and the current constituent districts would be in a new regional. This would result in a tax increase of $152,841 according to Table 19. The best-case scenario from Table 13 would be a tax decrease of $712,045 or a 37.18¢ tax decrease. For a home assessed at $100,000, this would be a tax decrease of $371.83. The worst-case scenario from Table 19 would be a tax increase of $152,841 or a 7.98¢ tax increase. For a home assessed at $100,000, this would be a tax increase of $79.80. A penny (1¢) n the tax rate in Swedesboro Borough is equal to $19,150.

Woolwich Township taxes would decrease in all three potential regionalizations. Becoming part of a new regional district that includes the current constituent districts would result in a decrease of $1,863,292 below their Status Quo Taxes of $20,497,036 in FY 2011/2012 according to Table 7. By becoming part of a new expanded regional district that includes Logan Township would result in a tax decrease of $3,068,993 according to Table 14. The final tax decrease of $906,326 from Table 20 would result from the current constituent districts forming a new regional district but removing Logan Township as a tuition paying district. The best-case scenario from Table 14 would be a tax decrease of $3,068,993 or a 48.827¢ tax decrease. For a home assessed at $100,000, this would be a tax decrease of $488.27. The least-case scenario from Table 20 would be a tax decrease of $906,326 or a 14.42¢ tax decrease. For a home assessed at $100,000 this would be a tax decrease of $144.20. A penny (1¢) on the tax rate in Woolwich Township is equal to $62,855.

PART II - DEBT SERVICE

A critical factor that is often not considered by state and municipal officials is the total amount of Debt Service that must be repaid by the members of a regionalized district. The total collective debt that would have to be shared by taxpayers in East Greenwich Township, Logan Township (if it were part of a regional), South Harrison Township, Swedesboro Borough, and Woolwich Township is $103,635,368, in Long-Term Debt Principal balance on June 30, 2010 and $49,976,353 in interest payments to be made for a Grand Total Debt Service of $153,611,721 to be made until FY 2030/2031. These totals do not include the additional debt resulting from the passed referenda of East Greenwich Township and Kingsway Regional. At the time of this study, the actual additional debt will not be known until the bonds are sold in January or February of 2012. In addition to continuing the repayment of the Debt Service of Kingsway Regional, all of the communities, depending on the regional situation would also now have to repay each other's collect Debt. This would become an increasing burden on taxpayers in East Greenwich Township and Logan Township as South Harrison Township and Swedesboro-Woolwich both have a high amount of Debt.

PART III - TEACHERS' CONTRACTS

Another important factor that must be considered in a potential regionalization is teachers' contracts. Currently, the unresolved contract in South Harrison Township from June 30, 2009 complicates in any of the proposed regionalizations. It will be hard to get a handle on a teacher's contact for any new regional until that situation is resolved. There are, however, several positives in the teachers' contracts. There are no significant bubble steps in any of the districts, and the new 2% cap law has lowered recent settlements. The only negative besides the unresolved South Harrison Township contract is the high starting salaries in East Greenwich Township and Logan Township.

PART IV - MOVING FORWARD

If the districts involved in any of the potential regionalizations mentioned above decide to form that new regional district, the process as outlined in NJ18A:13-34 to NJ18A:13-42 would be as follows:

Petition the Commissioner of Education and the Executive County Superintendent of the intention to regionalize and the proposed constituent members.

Complete a comprehensive study of the proposed new regional district to include but not limited to past and projected enrollments, financial data, tax rates and ratable data, curriculum comparisons, racial data, and the tax impact.

Submit the comprehensive study to the Commissioner of Education and a copy to the Executive County Superintendent.

The Commissioner of Education will decide if the data in the comprehensive study warrants a special election to vote on forming the proposed new regional district. As part of his decision, the Commissioner will hold a public hearing to gather input from citizens of the municipalities of the proposed new regional district.

If the Commissioner of Education decides that a special election is warranted, a special election will be scheduled. In order for a new regional district to be formed, EACH constituent member must vote YES.

The above process could take approximately two years to complete.