The average Edison homeowner pays about $88 on a yearly tax bill in paying down debt. That'll no longer be in play by 2020.
EDISON -- Earlier this week, the Edison school board voted to settle a lawsuit against its insurance company in the wake of the James Monroe Elementary School fire. The agreement gave the board enough money to cancel planned borrowing for the school.
And with that move -- along with years of reluctance among school officials and Edison voters to pass new bonds -- Edison school taxes could pay zero dollars in long-term debt payments by 2020, according to school officials. It will make Edison, the state's fifth-largest town by population, the first K-12 district in the state to go debt-free, according to the schools chief.
"We haven't issued any long-term debt, and any debt that we currently have over the period of time would be paid off completely," said Richard O'Malley, the superintendent of Edison public schools.
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The school district will continue to pay down debt for the next five years for previous bonds, totaling $14.5 million. The district also consolidated borrowing for 2021 and 2022, a move that saves the average Edison homeowner $40 per year, O'Malley said.
About $88 of the tax bill on an average home is composed of debt service, according to district figures. The owner of an average assessed home of $177,300 is paying about $4,999 in school taxes. By 2021, the $88 in debt payments won't be in play.
The district does have some short-term debt obligations -- for example, leases on computers -- but that's part of the annual budget, not an additional item on the tax bill.
In March, voters approved long-term borrowing for the first time in years when they approved an $18 million bond for the James Monroe Elementary School. But that was always a backup plan in case settlement talks with the district's insurance company didn't end in time to get the new James Monroe open by fall 2016.
And with the success of those negotiations, the district is canceling the bonds.
"We have not issued a single dime of that referendum up to this point," O'Malley said.
The new James Monroe Elementary School is set to open on time.
Brian Amaral may be reached at bamaral@njadvancemedia.com. Follow him on Twitter @bamaral44. Find NJ.com on Facebook.