FUNDING
Princeton Public Schools Facilities Bond Referendum
Addressing needs while considering taxpayers
The Princeton Board of Education believes a bond referendum is the best way to balance its responsibilities to students and taxpayers because:
A voter-approved referendum would secure up-front funding to complete timely improvements within a few years.
The state will contribute toward the principal and interest for projects if the referendum passes. For Princeton, this debt service aid would be $19.9 million if all three ballot questions pass.
If any of these improvements were addressed through the annual budget, they would be fully funded through local property taxes – debt service aid is not available to offset costs.
Building needs are separated into three questions. Question 2 can’t pass unless Question 1 passes, and Question 3 can’t pass unless Questions 1 and 2 pass.
Any projects funded through the annual budget would not be eligible for the state debt service aid that comes with a voter-approved referendum. If all projects are approved, the district will receive an estimated $19.9 million in debt service aid.
How a Bond Referendum Works
By holding a bond referendum, a district asks voters for permission to borrow money by selling bonds. The funding tool is similar to financing a consumer purchase: The district will pay back the principal and interest over time.
If a referendum passes, the district sells bonds through a competitive bidding process that often yields a lower rate than financial advisor’s estimates.
The district then pays back the principal and interest over the bond term; state debt service aid toward these payments offsets the amount needed from property taxes.
All Princeton residents – including future residents – will share in paying this amount over the borrowing terms: 25 years for the projects in Question 1 and 27 years for the projects in Questions 2 and 3.
The district has the option to refinance the bonds in the future if interest rates drop. The savings would be passed along in the form of a lower tax rate.
Three Questions,
Est. $19.9M in Aid
Est. $19.9M in Aid
The bond referendum is structured into three questions, each of which addresses a different need. Question 1 must pass for Question 2 to pass, and Question 3 is dependent on both Question 1 and Question 2 passing. The tax impact is based on Princeton’s average assessed home value of $853,136.
Question 1:
Community Park Elementary School expansion/renovations and Princeton High School end-of-life HVAC replacement and rehabilitation
Cost: $37.9 million
Estimated annual tax impact: $222
Estimated debt service aid: $11.4 million
Question 2:
Princeton Middle School expansion/renovations and Princeton High School renovations
Cost: $38.3 million
Estimated annual tax impact IF BOTH Q1 and Q2 PASS: $447
Estimated debt service aid for Q1 and Q2: $18.5 million
Question 3:
Littlebrook Elementary School expansion/renovations
Cost: $12.9 million
Estimated annual tax impact IF ALL QUESTIONS PASS: $532
Estimated debt service aid for Q1, Q2 and Q3: $19.9 million
DEBT SERVICE AID: STEADY AS WE GROW
When Princeton Public Schools uses bond borrowing to fund major school improvements, the district makes principal and interest payments over time that are known as debt service.
Property taxes pay toward debt service, but the state also reimburses part of the amount when voters approve bond borrowing through a referendum. The state’s payments are known as debt service aid.
PPS has kept debt service manageable and steady by addressing needs when they arise. The chart shows that the prospective debt service from the proposed improvements, combined with existing debt service, would be near or lower than the peak amount in 2021. The total amount would vary depending on how many ballot questions are approved.
Assessed Value vs. Market Value
Market value is the amount that a home buyer could expect to pay – it’s the price seen in real-estate listings.
But the tax impact for school debt is based on assessed value, which is different than and typically less than market value. It's the value assigned by a resident’s local municipality, and it determines property taxes.
A property’s assessed value can be found in the database NJpropertyrecords.com. Enter your address and click to find your “assessment total.”
A Solution with Savings
The proposed projects require an investment, but would slash costs over time:
HVAC equipment replacement and refurbishment at PHS would save an estimated $150,000 to $200,000 annually in energy and maintenance costs.
Adding space so more students could attend their neighborhood schools would reduce bus routes - and the associated costs.
Expanded buildings would avoid the need for temporary but costly modular classrooms (trailers) to accommodate growth. Modulars would strain the annual budget, costing around $400,000 each to set up and about $50,000 each per year to rent.
Senior Tax Relief
Senior Tax Freeze
The State of New Jersey offers a property tax reimbursement program known as "Senior Freeze."
Once applicants are approved, their property tax payments are “frozen” at the current amount, and they will receive a rebate if taxes increase because of a bond referendum or any other reason.
Eligibility Requirements include:
You or your spouse must be 65 or older on December 31, 2022 OR be receiving federal Social Security disability benefit payments on or before December 31, 2022.
You have owned and lived in your home since December 31, 2019 or earlier.
Your total annual income was:
2022 - $150,000 or less
2023 - $164,050 or less
More information, including how someone qualifies for this program, is available through the state’s Senior Freeze webpage or by calling the Senior Tax Freeze hotline at 1-800-882-6597.
Eligible seniors must reapply every year to be reimbursed.
Other Current Tax Relief Programs
Future Tax Relief
The Stay NJ Property Tax Credit Program, which would cut tax bills in half for seniors making up to $500,000, is targeted to start in early 2026.
