Financial Strategy
Tapping debt service aid to minimize
local share
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Our model of careful financial planning revolves around seeking efficiencies and maintaining buildings to avoid costly repairs.
Our model of careful financial planning revolves around seeking efficiencies and maintaining buildings to avoid costly repairs.
The Nov. 7 bond referendum is in step with these priorities, with projects such as energy-efficient building controls and improved ductwork. Other upgrades in the $13 million referendum address the universal needs of modern school buildings: Accelerated technology to support devices and communication; accessible play equipment; and of course, layered security systems to protect students and staff.
The Nov. 7 bond referendum is in step with these priorities, with projects such as energy-efficient building controls and improved ductwork. Other upgrades in the $13 million referendum address the universal needs of modern school buildings: Accelerated technology to support devices and communication; accessible play equipment; and of course, layered security systems to protect students and staff.
These projects are important to ensure our schools operate as safely and smoothly as possible. Finding the most responsible way to fund the improvements is just as important. By holding a bond referendum, the district could access state debt service aid that only comes with voter approval. After that state aid is factored in, the owner of a home assessed at Princeton’s average ($848,037) could expect to pay $104 more per year if the referendum passes.
These projects are important to ensure our schools operate as safely and smoothly as possible. Finding the most responsible way to fund the improvements is just as important. By holding a bond referendum, the district could access state debt service aid that only comes with voter approval. After that state aid is factored in, the owner of a home assessed at Princeton’s average ($848,037) could expect to pay $104 more per year if the referendum passes.
THE DEBT SERVICE AID FACTOR
THE DEBT SERVICE AID FACTOR
Taxpayers across the state pay toward the revenue that funds school construction projects. Only communities that pass referenda get to bring some of that money back home as debt service aid.
Most of the proposed projects are eligible for the maximum amount of aid under the state’s formula, which awards more for renovations and rehabilitation than new construction.
If voters approve the bond referendum, Princeton Public Schools will receive $5 million in debt service aid. This amount would offset the local share of payments for the projects.
LOWER INTEREST RATE, STEADY TAX RATE
LOWER INTEREST RATE, STEADY TAX RATE
The property tax rate falls as the cost of previous projects is paid off. By scheduling new projects, the district can make continual investments in the schools while keeping the tax rate steady.
There is another benefit to Princeton’s strategy. Many school districts borrow by selling bonds for 20- or 25-year terms; our district has shorter borrowing timelines that historically have garnered a lower interest rate. Princeton Public Schools is estimating a 13-year maturity on the bonds with a 3.5 percent interest rate.
ASSESSED VALUE VS. MARKET VALUE
ASSESSED VALUE VS. MARKET VALUE
The amount remaining after debt service aid will be covered by local property taxes.
A home’s assessed value is different (and often less) than the market value. The assessed value is what appears on tax bills and is not to be confused with market value, which is used in real estate sales.
Princeton Public Schools
Princeton Public Schools
Live to Learn, Learn to Live
25 Valley Road, Princeton NJ 08540
Ph: 609.806.4200
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