Montclair approves one-time tax hike for schools in close vote

Residents of Montclair, New Jersey, voted in favor of a one-time tax increase to help their cash-strapped public school system address a nearly $18 million deficit.

Montclair Public Schools held a special election on March 10 asking residents to approve two tax hikes: a one-time levy that will generate $12.6 million to address the school district's overspending, as well as a permanent increase designed to raise $5 million a year to tackle ongoing budget shortfalls. 

Voters approved the one-time hike, but not the permanent increase, according to official results posted Monday. This comes almost two weeks after the original results were too close to call, though the outcomes are the same. 

That means the average homeowner's property tax bill is slated to rise by about $1,120, according to a presentation by school officials. The average homeowner's bill is already one of the highest in New Jersey at $21,631 a year, per state data. 

Voters agreed to the one-time hike by a margin of 300 votes, according to results posted on the county's website. They rejected the permanent increase by a much smaller margin of 13 votes.

Even with the additional taxes from residents, the school district will be turning to the New Jersey Department of Education to advance state aid to cover its ongoing budget gaps, and will expect a state monitor to be put in place to keep tabs on the school system's spending, according to a presentation from superintendent Ruth Turner.

The district still has cuts to make to address the funding gap it's projecting for the 2026-2027 year, according to a presentation. It's already moving forward with converting one middle school into a dedicated pre-kindergarten facility.

The special election was held after months of divisive debate within the town of about 41,000 on how to make up the school district's shortfall, which was first announced in July. 

The deficit is the result of unbudgeted and escalating expenses including transportation costs — some of which had gone unpaid — and the district's self-insured health plan, according to administrators and an October report from S&P Global Ratings that dropped the district's credit rating to BBB+, three levels above junk.

The particulars of Montclair's challenges are unique to the suburb, but the overarching crisis of expenses continually outpacing revenue is a familiar refrain. This issue is challenging public school budgets across the country as federal aid from the pandemic has dried up and enrollment slips due to the drop in the U.S. birth rate. 

In the months leading up to the vote, diversity and the cost of living in Montclair — where home prices have skyrocketed in recent years — became a focus as some residents say they're being priced out.

The district cut over 100 positions in December in order to trim about $2.8 million off the deficit.