Banked CAP Explained

Visual demonstration of concept displaying spending authorization used

against backdrop of Tax Authorization at 100% of given Fiscal year. 

[City of Summit Board of School Estimate Presentation 3/6/14]

The Budget process in school districts is long and detailed spanning approximately eight months from the end of September to the middle of April for fiscal year budgets starting July 1st - June 30th. 

While the process is arduous, the approach is systemic in gathering input and analysis from all levels of the organization in order to prepare a final compressed budget representative of those needs against a backdrop of tax levy needed to support this effort.

The final stages of the budget cycle remains one of the toughest... explaining the process, outcomes and tax impact in a clear, concise manner.  Typically this is presented in a 30-40 minute presentation, "Quite Challenging".  Add to it, new concepts such as "Banked Cap", and the challenge reaches a whole new level.

This year many districts are forced to consider the use of Banked Cap:

"I am sure the BOE does not want to use Banked CAP, but not sure if they can afford not to without cutting programs next year.  We have kicked the can down the road and are at a dead end!" - Vincent Gonnella, BA Kennilworth, NJ School District

Further complicating the issue is a general reluctance to accept the fact that district's in New Jersey as established and defined by N.J.S.A. 18A:7F-39, have the additional taxing authority in construction of their budgets.  


The key factor is addressing or explaining the Banked CAP is that its generation was based on the ability of a district to deliver a final budget under the Tax Authorization in a prior year.  This demonstrates the fiscal responsiveness of that district and should not be discounted.  In many cases such as Summit, districts are forgoing the request to use even a portion of the "bank" as its establishment was created to provide emergent relief in subsequent years should the district face sever obstacles such as significant loss of revenues in preparing a budget within CAP in any given year.  As prescribed by the statute the ability to carry bank created in any given year has a shelf life of three years prior to expiration.