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Princeton Fact Check: Cranbury’s annual revenue to the Princeton Public Schools

More than one school board candidate for the Princeton Public Schools has stated during forums and in candidate profiles that the school district receives $6 million a year from Cranbury for tuition. That number is incorrect and overinflated by more than a million dollars.

The tuition the district receives for Cranbury students to attend Princeton High School is based on a formula that is determined by the state. Cranbury and the Princeton Public Schools have a 10-year agreement for their sending-receiving relationship, and that contract expires at the end of the 2019-20 school year.

For the 2017-18 academic year, about 272 students from Cranbury attend Princeton High School. Cranbury makes up about 17 percent of the high school population of about 1,617 students. The tuition rate the district receives this year is about $17,000 per student. For 272 students, a rate of $17,000 is $4,624,000 in tuition revenue. (The June 13, 2017 minutes do not list a specific tuition rate for 2017-18, but instead refer to an addendum that lists the total projected tuition income from Cranbury to be $4,801,320 for 2017-18 based on about 280 students.)

For the 2016-17, the tuition rate was $17,191, according to an April 2017 chart created by district officials that lists Cranbury tuition amounts and enrollment data for eleven years. The Princeton Public Schools received an estimated $4,813,480 in tuition revenue from Cranbury for educating about 280 students.

How much does it cost to educate a Princeton Public Schools student?

According to the New Jersey Department of Education’s Taxpayers’ Guide to Education Spending, the “budgeted costs amount per pupil” in the Princeton Public Schools for 2016-17 was $19,964.The budgeted costs are listed in the “user-friendly budgets” school districts distribute when budgets are developed.

This budgeted costs amount per pupil excludes the following: pensions paid by the state on behalf of districts, local contribution to special revenue, tuition expenditures, interest payments on the lease purchase of buildings, transportation costs, residential costs, judgments against the school district, equipment purchases, facilities acquisition and construction services, debt service, and expenditures funded by restricted local, state and federal grants. This number excludes transportation costs and out-of-district placement costs that Cranbury pays. But it also excludes some items that could be considered part of the expenses related to Cranbury, such as some legal costs and facilities expenses.

Total spending per pupil provides a more comprehensive picture of school district expenditures, because the per pupil budgeted costs exclude some significant cost categories. Total per pupil spending calculations include: transportation, special revenues, pension and benefits paid by the state, facilities costs, debt service, equipment, total food services, judgments against the school district, and tuition/costs for students sent out of district, except for payments to charter schools. It should be noted that sending districts pay for their own transportation costs.

For 2015-16, the last academic year data is available from the state, the total spending per pupil in Princeton was $25,910. The district spent $93,024,887 to educate about 3,590 students.

State Average Total Cost per Pupil 2015-16: $20,385

State Median Total Cost per Pupil 2015-16: $19,768

Revenue Sources for 2015-16 for the Princeton Public Schools, according to the Taxpayer Guide:

State: 16.1%
Local Taxes: 75.3%
Federal: 1.5%
Tuition: 5.5%
Use of Fund Balance: 0.1%
Other: 1.5%

Cranbury is not required to contribute to bond issues for renovations and expansions, though Cranbury could voluntarily agree to do so.

At a school board candidates forum sponsored by Not In Our Town on Sunday night, the candidates were asked to weigh in on continuing to receive Cranbury students when the high school is facing overcrowding issues. Voters will likely be asked to approve a bond referendum next year that would include funds to expand the high school.
Candidate Michele Tuck-Ponder said data about student enrollment and tuition should be reviewed to see if removing the Cranbury students saves money. “Taking them out does not necessarily save money,” Ponder said. “It doesn’t lessen expenses. You still have to pay for teacher overhead.” Ponder did not talk about overcrowding or the bond referendum.

Julie Ramirez said the district is under contract with Cranbury for many years to come and that the Princeton Public Schools would be damaged financially by sending Cranbury students away. The district values the students and there are more course offerings at the high school because of Cranbury.  “Talking about sending them away is divisive and I wish the conversation would stop,” Ramirez said.

Jenny Ludmer said she represents the voters and taxpayers of Princeton. “We need to analyze the data and make sure the arrangement is beneficial for Princeton taxpayers,” she said, adding that the most recent demographics report shows that the high school is exceeding its capacity by 60 students and will add another 200 students over the next 10 years. Once the town’s affordable housing settlement is negotiated that could affect the projected increase in students, she said. “Once we know the numbers, we have to analyze things without emotion with respect to the Princeton taxpayers,” Ludmer said.

James Fields said the school district’s relationship with Cranbury is the reverse of the relationship with Princeton Charter School. One brings in money and one takes it away. He said data needs to be reviewed, but that keeping Cranbury students seems like the right decision. “I see the relationship with Cranbury as beneficial moving forward,” Fields said.

Jessica Deutsch said she would examine the data if she is elected. “All of the schools are bursting at the seams,” Deutsch said. “Ending the Cranbury agreement is not part of the solution to a larger overcrowding problem.”

Beth Behrend said that this is an exciting time for the Princeton community. She estimated that the town’s affordable housing obligations for the next eight years could be between 500 and 1,200 units. She said she has the financial and business experience to review the data. “We need to make sure everyone is on the same page, because we are looking at a big referendum for tens of millions of debt.”

Planet Princeton will be writing a follow up story about the Cranbury sending-receiving agreement in general.

Krystal Knapp

Krystal Knapp is the founding editor of Planet Princeton. She can be reached via email at editor AT planetprinceton.com. Send all letters to the editor and press releases to that email address.

  • powertotax

    Thank you Krystal for the fact checking. We need more of this kind of journalistic work to foster informed discussion about local policies, keep our officials accountable and utlimately make smarter decisions.

  • Princeton Homeowner

    I agree, I currently have 2 kids in the high school and it is hard to get a spot on most athletic teams and I doubt that we’d ever have the funds to add additional teams since there would be the added cost of coaches stipend, uniforms, buses… Also, the high school doesn’t have any type of recreational sports, so if you don’t make a team you really feel shut out.

  • TaxPoorInPrinceton

    Besides the financial impact, I am concerned about the social aspects of having a bigger high school than needed. PHS is well-known for being very competitive for extracurricular activities as well as academics. Having a larger high school means less opportunities to participate in music bands, athletics, and clubs as there are tryouts and only the top students are permitted to play. The school district has committed itself to the overall emotional well-being of the students. If the Cranbury agreement is renewed (with the 10% increase in PHS student population), Princeton parents should be assured that our children are not being denied these important opportunities. Are the extracurricular activities being expanded to allow all students to participate?

  • Princeton Homeowner

    I agree with Mr. Rubin’s analysis. The Cranbury agreement is only a win-win if they are filling seats that would otherwise be empty. This may have been the case when the agreement started but the demographics in Princeton have changed and we no longer have extra capacity. If we don’t renew the agreement, the high school will have 280 less kids and there will be NO NEED to build an addition. We are not talking about saving a few teachers salaries but rather the cost of building and maintaining another facility.

    Regarding increased enrollment in the K-8 grades, between our 4 elementary school and the Charter school we should be able to handle additional students. The demographer study that was presented at the 3/28/17 BOE mtg (can be viewed online) reports that there are 2 elementary schools that are under capacity, maybe we will need to redistrict the school boundaries.
    My kids didn’t go to Charter, but it is obviously highly regarded by many families which is evident in it’s growth from 1997 when it started with 72 students to approx. 340 now (per their website). Maybe the Charter school should be viewed as a blessing to our growth issue, they have a established school that can absorb some of this anticipated growth.

    The Cranbury decision can’t be an emotional one, this is not a personal attack on those students. The BOE needs to make a financially responsible decision that is sustainable and benefits all residents.

    I’m not sure what studies where done before Avalon Bay was approved, but shouldn’t the town have ensured that our schools could accommodate the increased enrollment? Unfortunately, we can’t do anything about the Avalon residences at this point but we can decide that the Cranbury agreement is no longer feasible.

  • George

    Well said!

  • Dennis

    You may be correct. So, build your own High School and burden your own local costs for educating your children. Clearly, the Princeton community is taking advantage of Cranbury residents.

  • Dennis

    Thanks for this article’s analysis. It appears we have been mislead about the cost per pupil in the Princeton school district. $26,000 per student per year is an obscene amount. The administrative overhead of this district is criminal. I will be moving my family soon out of this district and state. Property taxes, due to the school system, are unaffordable for normal Americans.

  • Pat Palmer

    Thanks to Krystal for looking into this matter, which I have been hoping to find out about for some time now. The last time we built on to schools (about 15 years back), it was a $60mil bond issue, which with cost overruns, turned into $90mil. I don’t think that another major build-out of school facilities is in the interest of tax payers, and thus, I strongly oppose continuation of agreements to educate children from other towns such as Cranbury–because if we have to increase facilities, it will cost us dearly and the added income from more students will not be enough to cover the costs.

    Then also, I don’t think that making our schools bigger is going to increase the quality of education for students. Quite the contrary. Keeping the size within the current bounds is much more likely to increase quality, IMO.

    Hence, I will be watching school board candidates closely on this issue. And I plan to make my feelings about this known. Bigger is not better. Princeton has little to gain–and plenty to lose–by continuing the current trend of taking all comers.

  • Douglas Rubin

    This is a terrific discussion. Thanks for the diligent research and publishing Krystal.

    Interestingly, the Cranbury HS discussion is the flip-side of the dispute between the PPS and the PCS. They both come down to basic Micro-Economics. When there is plenty of capacity, marginal cost is almost always less than average cost. Presuming PPS has plenty of room at the High School, the arrangement with Cranbury has certainly been a win-win. Great students and families in my experience.

    Now of course, if the increment of additional Cranbury students would be the difference-maker requiring expansion of the HS or the school system in general, the marginal cost of those additional students skyrockets. Of course, the same analysis could be done to any large addition of students to the school system (e.g., Avalon).

    The argument with the Charter School is the reverse of this situation. If/when PPS incurs a loss in revenues by losing students to PCS that is less than their marginal cost of educating 25 ~ 50 students, PPS is worse-off financially. I make no judgment re. “who is right,” but I believe the argument comes down to money.

    But if the Charter School capacity and education of those students means that PPS does NOT have to pay for an expensive Valley Rd expansion, the savings in capital costs may mean PPS is actually better off. One might hope that a mediator numerate in cost-accounting could find a balance point.

    One of the reasons, I am pleased that many of the current and prospective School Board members are familiar with financial analysis.

  • krystalknapp

    Cranbury students who attend the high school and are classified also receive such services. Some Cranbury students with special needs go to private schools and Cranbury pays the tuition, but others with special needs attend Princeton High School and receive speech services, etc.

  • kbaa

    Beyond budgetary considerations, there are other reasons why some may want to continue accommodating Cranbury students at PHS:
    The more students there are, the more teachers we need, so the teacher’s union is in favor. Administrators are generally paid more in larger school districts, so the administrators are in favor. Managing expansion is always more interesting than managing contraction, so the School Board is in favor.

    Four of the six candidates have made clear statements of support for continuing the current agreement with Cranbury. I will vote for none of them, but I appreciate their candor. The remaining two still seem to be on the fence. I urge them to do their due diligence before election day. I would very much like to vote for someone.

  • Guest

    Your number is still high. There are children in special education that only get speech services. Those services dont cost $50,000 per student.

  • krystalknapp

    We do not have a stance, but people are asking for data. We specifically included the lower budgetary cost per pupil in addition to the bigger number because it excludes transportation and other costs. What are the costs in the budgetary numbers that should be eliminated that are not Cranbury costs? Please elaborate. There are also costs that couold be added beyond budgeted costs that are not in there. The numbers give people at least a general ballpark idea of cost per pupil, and they are the official state data. We reached out to district officials in the spring about Cranbury and they never responded, nor have they responded to emails since then. They have not cited a figure for the actual per pupil cost of Cranbury students. Residents should ask them for a thorough breakdown of the costs and show how they arrive at a cost per pupil figure. We are writing a follow up about the district’s pov for a future story, as is noted at the bottom of the post. The $6 million being quoted by Cranbury supporters is clearly wrong. There is no data to support $6 million. Regarding numbers, books like Damned Lies and Statistics make it clear that people pick and choose numbers and data to suit their own agendas. https://www.amazon.com/Damned-Lies-Statistics-Untangling-Politicians/dp/0520274709/ref=pd_lpo_sbs_14_t_0?_encoding=UTF8&psc=1&refRID=Q9A3MFSM3RXV3NJCX5GB
    As for Lawrence, we already reached out to officials and former officials regarding the termination of their agreement and we are working on a story that looks at what happened there and what the process is regarding state approvals, etc. http://www.nj.gov/education/legal/commissioner/2001/oct/389-01.pdf

  • financial

    Krsytal, It seems you have an anti-Cranbury stance. The total spending number of 25K is a meaningless number in relation to Cranbury and the point is about what is Cranbury doing or not doing for the district. You’ve simply convoluted the picture by adding a figure that means nothing to the discussion at hand. It would be very relative if you want to address the tax revenue vs schooling costs of affordable housing and rental units like Avalon.

    The budgeted number is the key number, but even then there are factors included that are not Cranbury costs.

    And it is not the district’s position. The good thing about numbers is unlike many subjects, numbers are absolute. The board laid out the numbers very plainly to the residents at a meeting and the video is on youtube for anyone interested in listening.

    Here are the facts:

    A reduction in enrollment at the high school by 280 students across four grades
    would lead to a corresponding decrease of about 12 teachers. At $80,000 per
    teacher, the savings would be $960,000. Teachers would be released based on
    seniority.

    – The effective loss in revenue to our operating budget would be $3,853,480, ~
    $4,813,480 minus $960,000 (approximately 12 teachers).
    – A loss in revenue of that magnitude would impact the PPS budget equivalent of
    about 48 additional FTE staff at an average cost of $80,000 each.
    – PPS’s debt payment of approximately $5.7 million year.

    – Operating budget or General Fund and Fund 40 Debt payment fund are
    completely separate accounting structures.

    You are also forgetting the tax levy cap which Cranbury helps us manage.

    Plus, there are the legal costs to exit even if the contract is up for renewal and the state has to agree to let Princeton out of the agreement not an easy task to achieve especially if Cranbury says no or a good number of residents who have looked at the numbers come out and oppose it. It is not a simple contract like one would have on cable TV or an alarm system where you can just opt not to renew.

    I do believe it is very hard in a limited space like this article to cover what would be a 3-4 page economic and legal paper given all the complexities involved. Just look at the lawsuits in Lawrenceville over first Cranbury and then Robbinsville leaving and the loss of revenue that happened or go back further when West Windsor was a sending district to Princeton and we lost their revenue.

  • aCranburyResident

    sorry my number is off. but based on ASAH Cost Study in 2011, special ed cost per pupil is much higher than regular”

    The average per pupil cost for special education services in county special services school districts is: $65,266

    The average per pupil cost for special education services local public schools who receive students with disabilities on a tuition basis from sending school districts is: $50,146

  • Guest

    It’s simply not true that it costs $80,000 to educate every special education student. Special education covers a broad range of disabilities. That figure did not come from Princeton BOE

  • krystalknapp

    The budgeted cost per pupil we include in the numbers does not include transportation, special ed, debt service, and many other items. That is why we provided both state figures – the budgeted cost and the total cost per pupil. The district’s position on why Cranbury should stay will be the topic of another story.

  • Financial

    The article is a bit misleading in the front. For example, Transportation costs are factored into the costs of students, but Cranbury’s transportation costs are not included in the tuition number.

    The spending per student does not factor in the cost of special ed, Cranbury does not pay Princeton for Special Ed services, but does so on it’s own.

    So it is not as the author seems to want people to believe that you take 25k-17K and see a gap. What the author should have done is look at spending based on what services Princeton is providing to Cranbury.

    The BOE had a meeting a few months ago and went in detail through the numbers. The fact is that Cranbury’s money allows for programs and staffing we would not otherwise enjoy. We’d have to cut teachers, staff and programs without their money. Let’s say you have 280 kids divided among 4 grades and considering multiple classes (i.e. more than one English, History, etc…) means we’re not over taxing the school.

    When the affordable housing numbers hit the tax base will subsidize the education costs for those homes since they do not pay the same tax money, plus you have Avalon and other developement which increases kids at below tax revenue income. As such we’ll need Cranbury’s money more than ever to maintain programs.

  • TaxPoorInPrinceton

    Why does Ms. Ramirez find it divisive for the community to discuss whether Princeton residents should continue to subsidize Cranbury taxpayers. The Cranbury students are wonderful but shouldn’t Cranbury be paying the full cost (including buildings) for their education?

    The Cranbury agreement expires in a couple of years and this year’s board candidates will be helping to shape that agreement. Taxes in Princeton are very high. Let’s look at the figures and not try to shut down the discussion.

  • aCranburyResident

    As a Cranbury resident who has sent 2 kids to PHS, I appreciate PHS provides rich high-quality programs in academics, sports and arts. Regarding the discrepancy in tuition rate, I was told from Princeton BOE meeting that it was mainly from special education program. It costs about $80K per special ed student versus less than $20K for regular. Maybe the district provides more special ed programs so it results in higher average rates per pupil than other neighboring towns such as WWPS.

  • joe small

    Why are the candidates promising to analyze the data only after they are elected? They should do their analysis now with their conclusions placed before the electorate before we have to decide whose analysis of the facts is more persuasive. Are we selling Cranbury residents a first class education at the price of a second class school system. If we need 300 extra seats for Cranbury students shouldn’t the Cranbury taxpayers pay to build those new classrooms? Cranbury needs to have a bond referndum if they want Princeton to build classrooms for Cranbury students. Pay full freight or go elsewhere. Last I heard the residents of Cranbury were wealthy enough to pay for their residents’ education without a subsidy from Princeton.

  • D14

    Krystal, thank you for this data! It has been troubling to hear BoE candidates speak only to revenue, without verifying even that number it seems, rather than the net impact on Princeton’s taxpayers. I agree with the statement attributed to Ms. Ludmer, this cannot be addressed as an emotional issue. I think most people recognize that Cranbury students add qualitative value to PHS. But Princeton taxpayers cannot continue to subsidize a net-loss agreement. I hope to see at least some candidates, as well as current BoE members, do their research and give careful consideration to the issue in the transparent, fact-based manner their fiduciary duty to the residents of Princeton requires.

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