The Palisades Park Board of Education sued the borough on Oct. 8, alleging it improperly withheld $1,048,670.16 in school property-tax funds over roughly 15 months. The district says it has since received most of the disputed amount, but Superintendent Carl Albano said $86,180.98 remained outstanding as of Tuesday.
The lawsuit alleges that the borough was required to make 12 monthly payments totaling more than $2.26 million beginning in July 2025, but made only 11 payments totaling $2.21 million, according to NJ.com. The district says the shortfall put employees’ livelihoods and students’ education at risk. Board President Soo Chung told NJ.com that the board had raised the unpaid amount with borough officials repeatedly before filing suit and viewed the lawsuit as a last resort.
Chung also told NJ.com that the suit covers only the previous 15 months and that additional unpaid funds may exist beyond that period.
Borough Starts Paying Up, But a Gap Remains
Albano said the borough began repaying the district almost immediately after the lawsuit was filed. The district received $712,595.58 on Oct. 9 and another $249,893.60 on Oct. 14. Despite those payments, Albano said $86,180.98 remained outstanding as of Tuesday.
Albano said the recovered funds will help the district manage its finances and keep school operations running smoothly. He also said the district has offered to collaborate with the borough on a multi-year review aimed at identifying any additional discrepancies beyond the amount already in dispute, per the same NJ.com account.
Dueling Accounts on Whether Taxes Were Current
Borough attorney Allan Roth disputed the district’s account, telling NJ.com that the Board of Education was current in receiving the school tax levy. The district’s lawsuit, by contrast, alleges that the borough illegally withheld school-tax funds for more than a year. Roth declined to comment further or answer specific questions about the borough’s debt to the board, citing pending litigation, and borough officials did not respond to requests for comment, according to NJ.com.
How School-Tax Payments Are Transmitted
The district’s fiscal year 2024 annual comprehensive financial report says the municipality guarantees the collection of school taxes and transmits them to the district according to an installment schedule certified annually by the Board of Education, according to the Palisades Park School District report published by the New Jersey Department of Education.
A separate account from NorthJersey.com described the dispute similarly, noting a borough spokesperson said Palisades Park was willing to meet to resolve the issue rather than have the board go to court.
Lawsuit Also Targets the Borough's Budget Messaging
Beyond the withheld payments, the lawsuit alleges the borough's 2025 user-friendly budget misled the public about the school board's tax levy and understated the annual increase in the municipal tax levy assessment. The suit further claims the borough budget and municipal tax levy increased at a far greater rate than the Board of Education's and had twice as large an impact on residents, according to NJ.com's reporting.
The legal fight follows an earlier flashpoint between the two bodies. In April, the school board voted to formally request information from the borough about proposed residential developments and any PILOT, or payment-in-lieu-of-taxes, arrangements that could affect the district's finances, according to citizenportal.ai. The board authorized its president, superintendent and counsel to draft a letter to the borough and empowered select members to meet with borough representatives to discuss the developments' potential impacts and ways to limit harm to the district.
With $86,180.98 still unresolved and the two sides offering conflicting accounts of whether the district's tax levy has been paid on schedule, the dispute remains before the court as both sides stake out their positions.
