Mahwah board hears preliminary 2026–27 budget; administrators cite health‑benefits waiver for levy above 2% cap
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Summary
Administrators told the Mahwah Township Board of Education the district’s preliminary 2026–27 tax levy would exceed New Jersey’s 2% cap because of large health‑benefit cost increases; officials also announced official referendum results showing Question 1 passed 2,048–1,822.
Administrators presented the first of three budget briefings for the 2026–27 school year on March 25, explaining that rising health‑benefit costs and limited local levy capacity are the primary drivers behind a tax‑levy increase that exceeds New Jersey’s 2% cap.
Miss Hemantia, the business‑office presenter, said the district’s allowable levy under the 2% cap is $74,468,294; after applying a health‑benefits waiver adjustment of $1,411,291, the total levy included in the preliminary budget is $75,879,585, an overall increase of $2,871,454 (3.93%) from the prior year. Hemantia also told the board the district projected a 20% increase in medical costs for the 2026–27 plan year, with prescription costs estimated to rise about 40% and dental costs about 12%.
"Under New Jersey state law, the district is limited to a 2% increase in the local tax levy," Hemantia said during the presentation, and she explained the health‑benefits waiver is an explicit exception districts may use when justified by unusually high insurance cost increases or significant enrollment changes.
Superintendent Dr. Detoro and other administrators said the district did not maximize the full waiver available to it; Hemantia said some districts pursue waivers of up to 29.9% when justified, while Mahwah requested a smaller adjustment. Administrators said switching from the state health plan to a private plan in 2025 reduced a potential spike but that upward pressure on premiums remains a statewide and national trend.
State aid and federal grant projections were also reviewed. Hemantia said state aid for 2026–27 is budgeted at $5,328,466, about a 6% increase from 2025–26. Federal ESEA and IDEA revenues were budgeted more conservatively than prior years; the presentation listed decreases in both ESEA (budgeted $139,396 for 2026–27) and IDEA (budgeted $515,109), with the business office citing county guidance to budget federal revenue at approximately 75% of prior‑year actuals.
The presentation emphasized reduced reliance on one‑time funds: the district’s planned use of fund balance fell to $2,506,002 (a 12.85% reduction), and withdrawals from certain reserves were lowered or eliminated in the preliminary plan. Hemantia told the board that next steps include two additional budget presentations (April 8 and April 29), with the final adoption planned for the April 29 meeting.
Board members asked for detail on what is driving health‑benefit inflation. Administrators pointed to national and provider trends and to prescription‑drug cost categories (including newer agent classes) as major contributors; they said precise renewal numbers arrive late in the fall, which complicates multi‑period budgeting.
The board also received official referendum totals for the March 10 special election: Question 1 passed with 2,048 yes and 1,822 no (3,870 total ballots), while Question 2 did not pass, with 1,586 yes and 2,215 no (3,801 total). Hemantia noted that 9 of 14 voting districts favored Question 1.
The presentation concluded with reminders of upcoming detailed budget sessions, and administrators said they would continue to prioritize program preservation while addressing cost pressures.
