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Budget gap narrows after PSEG pilot payment; proposed levy above tax cap
Summary
District business staff presented a 2025–26 budget that uses a new PSEG pilot payment and other changes to reduce a roughly $6.3 million gap to about $1.7 million, leaving a proposed 2.3% tax levy increase above the district's 1.12% tax-cap allowance.
Business Office staff member presented the Board with the second 2025–26 budget review, saying the draft plan assumes a flat tax levy worth roughly $73,100,000 and anticipates an increase in state aid and investment income that together help narrow a multimillion-dollar shortfall.
The presentation laid out revenue estimates of about $111,200,000 for 2025–26, a decline of roughly $2.9 million (2.5%) compared with the current year. State aid is expected to rise by about $759,000, with Foundation Aid contributing roughly $385,000 under the Governor's executive proposal. Interest earnings on cash balances were cited as roughly $1,700,000 but were described as sensitive to future Fed funds rate changes.
Why it matters: those revenue changes, plus a newly secured pilot payment tied to PSEG, substantially affect the district's options for balancing the budget and determining what, if any, tax increase the Board presents to voters.
Business Office staff member told the Board the district ended earlier budget work with a roughly $6.3 million gap between expenditures and revenues. After a series of reductions and the addition of an estimated $3.5 million in pilot revenue associated with the PSEG (GB2) pilot approved by the IDA, the presenter said the remaining gap is about $1.7 million. Under the draft budget presented at the meeting, that gap equates to a 2.3% tax levy increase.
The presenter noted the district's tax-cap calculation now allows roughly a 1.12% levy increase; under state tax-cap rules any proposal above that threshold would require a supermajority voter approval (an override) to pass. The business reviewer said the 1.12% allowance translates to about $820,000 of additional levy authority under the cap and contrasted that with the draft gap figure.
On the expenditure side, the presentation highlighted a substantial rise in fringe-benefit costs tied to an anticipated 11.5% increase in medical costs and higher pharmaceutical spending. Debt service was shown to fall by about $1.5 million because of financing choices, offsetting some of the benefit-cost pressure. Total appropriations were described at roughly $117,500,000 in the draft budget.
The Business Office staff member also summarized the calendar and next steps: the Board will receive further departmental presentations and may consider formal adoption of a proposed spending plan and any bus or capital propositions at upcoming meetings on March 19 and April 2; the public hearing is scheduled for May and the budget vote is slated for May 20.
The presentation included several qualifiers the Board reiterated during discussion: reliance on the PSEG pilot as a one‑year extension (with ongoing negotiations noted), the variable nature of interest earnings if market rates change, and the statutory limits that constrain tax-levy choices.
What's next: the Board will review additional department presentations and possible revisions before voting whether to place a final budget and any propositions before district voters this spring.
