Ocean Township School District projects $8 million initial budget shortfall as health premiums surge

School Business Administrator (S5) told the Township of Ocean School District Board of Education during the Jan. 27 work session that rising health‑benefit costs and constrained revenue options have created an initial planning gap of about $8 million for the 2027 budget. The district's operating budget for 2026 is about $88.5 million, S5 said, and administrators estimate that taking all allowable waivers would raise potential revenue to roughly $94.8 million while initial district‑wide expenditure requests total about $93 million.

S5 said the state allows a limited set of waivers beyond the 2% tax levy cap, including a health‑care waiver. “If the board were to allow us to take the full 4,700,000.0, that would be the 2% cap plus another 6.17 or an increase in the rate of approximately 8%,” S5 said, describing how the waiver would combine with the 2% levy cap. She presented a slide showing health‑benefit costs rising markedly in recent years: about $16.7 million in the 2024–25 school year, a figure near $19.08 million in the current reporting year, an estimate near $26.5 million in the next year, and an estimated $35 million for 2027–28.

Board members pressed administration on options to close the gap. One board member asked what concrete steps would be needed to eliminate the shortfall; Superintendent (S2) warned that “it's unlikely that you close this gap without personnel,” and said administration will look first at phasing capital projects, using reserves where allowable, repurposing staff where possible and identifying other cost reductions before recommending program reductions. S2 added administrators will present more detailed proposals in upcoming budget meetings.

Administrators noted additional constraints: the district was told to budget a smaller share of grant allocations this year (75% of current allocation versus a typical 85%) and out‑of‑district tuition and transportation costs continue to rise despite a small reduction in out‑of‑district placements (from 46 to 43). The slide deck also reminded the board of statutory timing: the tentative budget adoption window is March 19 (with a board presentation planned March 10) and the final budget adoption window runs April 24–May 7, so any decision on waivers must be settled before the tentative budget deadline.

The board did not vote at the work session. Administration said it will return with specific reduction scenarios, capital‑project phasing options and an updated revenue estimate in time for the board's March schedule.