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Matawan-Aberdeen district cites flat state aid, new tax-incentive option as budget pressure
Summary
District administrators told the board the district received $22.7 million in state aid for fiscal year 2025–26, but rising costs, a Medicaid reduction and a 2% budget cap mean officials are reviewing expenses and new state tax-incentive options that could raise local revenue.
District administrators told the Matawan-Aberdeen Regional School District Board of Education on March 20 that the district received $22,700,000 in state aid for fiscal year 2025–26 and is facing rising costs that exceed that flat aid figure.
The administrators said the state released a one-time tax-incentive program allowing eligible districts under the state funding formula to apply for an increase in their tax levy for 2025–26; under the program, the state would contribute $50,000 for every $1 million raised through an increased tax rate. A district administrator said about 300 districts were initially identified as eligible and that 20 of those are in Monmouth County.
Why it matters: The board must balance the district’s budget while complying with the local 2% tax-levy cap. Administrators said rising costs—including utilities, benefits and special-education services—plus an anticipated Medicaid reduction, are straining the operating budget.
Administrators discussed cost drivers and revenue offsets. They said special-education services are among the largest expenditures, and early-intervention preschool programming is one tool the district uses to reduce long-term special-education costs. The district also generates some noninstructional revenue — the business office provides payroll and other services to smaller nearby districts, producing about $400,000 in revenue, administrators said.
Board members and members of the public asked about details that the district does not yet have. A district administrator said officials do not yet have the application form or final program rules for the tax-incentive application and cannot yet determine how the funds could be allocated beyond the program’s stated requirement that funds be used to “deliver a thorough and efficient education.”
Administrators also noted operational pressures such as difficulty recruiting substitutes and the rising cost of utilities and fuel. The board encouraged community members to share candidate referrals for substitute teaching positions and pointed to the district’s online resources describing how to apply.
Ending: District staff said central-office teams are continuing line-by-line budget reviews and will present tentative budget resolutions and specific reserve draws later in the budget process. No final budget votes were recorded in the meeting transcript.
