CONNERS/ALBANO/MILAM BILL DESIGNED TO SAVE SCHOOLS MONEY ON FOOD SERVICES CLEARS COMMITTEE

CONNERS/ALBANO/MILAM BILL DESIGNED TO SAVE SCHOOLS
MONEY ON FOOD SERVICES CLEARS COMMITTEE
Measure Would Exempt Purchases from State Sales Tax

(TRENTON) - Legislation Assemblymen Jack Conners, Nelson Albano and Matt Milam sponsored to allow school districts to save taxpayer money in purchasing student food services was released today by an Assembly panel.

The bill (A-2057) would exempt items purchased and used by school food vendors from the state's 7 percent sales tax. It would be retroactive to 1999.

"At a time when schools are being forced to make every dollar stretch a little further, exempting cafeteria vendors from state sales taxes would keep a little more money free to flow back into the classroom where it belongs," said Conners (D-Camden/Burlington).

"Schools provide meals to ensure students are properly fueled so they can focus on learning, not to make a profit," said Albano (D-Cumberland/Atlantic/Cape May). "School food vendors deserve this extra savings that they can pass along to school districts and taxpayers."

State Department of Education guidelines explicitly allow boards of education to contract with food service management companies without profit to the district. The most common form of contracting for these services is a "cost plus a fixed fee (management fee) contract," where the provider receives a set fee for managing the food operation and the board of education is liable for the reimbursement of all costs incurred.

Recent audits of these contracts by the state Division of Taxation asserted that the sales tax should be applied to food services, even though the contracts flow through tax-exempt boards of education. The sponsors said the exemption is needed since the audits raised numerous red flags for unpaid sales taxes dating back to 1999.

"School districts already are making smart contracting decisions by selecting vendors who can best feed students in the most cost-effective way possible," said Milam (D-Cumberland/Atlantic/Cape May). "This exemption will not only keep costs down for the kids who purchase lunch, but for local property taxpayers."

The Assembly Appropriations Committee released the bill 12-0. It now heads to the Assembly Speaker, who decides if and when to post it for a floor vote.

On the Net:

www.assemblydems.com

www.youtube.com/user/njassemblydems

New Jersey Assembly Democrats on Facebook