The Trenton Times published the following article on April 7, 2013. To read the full article, click here.

Debt service costs across Mercer County school districts skyrocket

By Emily Brill/Times of Trenton 
on April 07, 2013 at 7:45 AM

ROBBINSVILLE – Eight school districts in Mercer County saw their debt service costs for state grants for past construction projects skyrocket this year.

The Princeton school district, for example, paid about $215,000 to the state for a 2001 grant that helped fund an $80 million project. This year, it will pay more than $331,000 — a 54 percent increase that shocked business administrator Stephanie Kennedy.

“We had anticipated hiring some additional staff for some overcrowded classes in the high school, and we will not be able to fund those positions now,” Kennedy said.

Kennedy said the district expected the assessment to rise, but not as significantly as it did.

“Last year, it did go up by about 17 percent,” Kennedy said. “This year, we anticipated another 17 percent increase and we were hit with a 54 percent increase.”

Other school districts are reeling from the state’s Schools Development Authority’s introduction of double-digit percentage increases on debt service costs.

In Ewing, the public school district went from paying no debt service costs in fiscal year 2013 to paying more than $7,500 in fiscal year 2014.

The district is paying off its regular operating district grants, which it uses to improve facilities, Ewing schools superintendent Michael Nitti said.

“The state is, in essence, now treating our SDA grants as partial loans instead of grants,” Nitti said. “The amount of each school district’s SDA assessment is directly related to the amount of grants that they received from the SDA.”

Statewide, districts will pay about $34 million in SDA assessments during the next fiscal year.

The state treasury department determines how much a district pays by looking at how much grant money it received, treasury department spokesman Bill Quinn said.

Quinn said the SDA assessment fluctuates from year to year, and this year’s amount was not unusual.

“In fiscal year 2012, the assessment went down as a result of savings that were realized on refinancing some of the underlying EDA (Economic Development Authority) bonds,” Quinn said. “In fiscal year 2013 and fiscal year 2014, there were no savings available from refinancing, so the debt-service assessment has gone back to its previously scheduled level.”

Kennedy said she wishes districts were notified about the assessment, which was announced in March, earlier in the budgeting process.

“It would be nice to know at the beginning of the budget process instead of the end,” Kennedy said. “Between the time that the governor gives his address and the time we have to submit to the county is about seven days. We’ve prepared for months for this budget, and we would have done other things if we had known (about the assessment).”

Elsewhere in Mercer County, schools in East Windsor will pay $313,000, Hamilton will pay $146,000, Hopewell will pay $166,000, Lawrence will pay $132,000, Robbinsville will pay $120,000 and West Windsor will pay $64,000 in assessment costs next year.

Bordentown schools will pay $129,000.

All of the districts saw double-digit increases in their slice of the assessment from last year.

Contact Emily Brill at ebrill@njtimes.com or (609) 989-5731.