Bernards Township board previews 4.98% school levy rise as health‑benefit costs nearly double

The Bernards Township Board of Education on Monday previewed a preliminary 2026–27 school budget that administrators say results in an effective 4.98% increase in the school portion of local property taxes, largely because health‑insurance costs have surged.

"Our cost, our budgeted cost in health benefits was 11 and a half million in the 19‑20 year. '26, '27, we're looking over 21,000,000. It's almost doubled," Jim Rallo, the district's business administrator, told the board during a detailed budget presentation. Rallo said roughly $3.0 million of the district's $3.2 million operating increase is attributable to benefits.

Why it matters: administrators said the district is operating within the state's 2% levy cap but must use allowed exceptions — including the automatic health‑benefit adjustment and expiring levy capacity — and dip into capital reserves to avoid deeper program and staff cuts. The board is also proposing a new activity‑fee program to generate supplemental revenue.

Superintendent Nick Markarian framed the budget priorities as attempts to "maintain programs and services" while being "good stewards of the resources in the community." Markarian said the district will submit its budget to the county office by March 26 and hold a public hearing on May 4. He also said the administration would develop a system for collecting activity fees for sports, clubs and parking, estimating that fees could total roughly $500,000.

Board member Dave, summarizing the board's view, said the plan kept the levy increase below 5%. "The bottom line for our taxpayers is that the total tax levy increase is below 5%," he said, and credited the administration's use of banked levy capacity and capital reserve for that outcome.

Administrators blamed two primary pressures. Rallo said changes under what he called "Chapter 44" — a state policy governing how employee contributions tie to salary and restricting plan‑design changes for several years — have shifted more health‑cost burden onto districts. He also flagged reductions in extraordinary special‑education aid, saying the district faces an unfunded gap of about $4.4 million from prior years' extraordinary‑aid shortfalls.

Public comment briefed the board on community concerns. Resident Frank Klaus thanked the board for transparency and asked for more explanation of the health‑cost drivers and clarity about which positions might be affected by reductions. "Would appreciate a bit more of an education as to what is driving these health care costs up," Klaus said. Several speakers urged the district to provide talking points so parents can contact state lawmakers about funding and Chapter 44.

Administration response and next steps: Rallo told the public that, as a self‑insured district, claims variability (for example, the way certain new medications are covered) is a major driver of recent cost spikes. On activity fees, administrators described potential ranges — roughly $50 to $200 per activity depending on the event or sport — and said final decisions would be made through the finance committee.

The board also flagged a resolution on the agenda urging the governor and Legislature to repeal or reform Chapter 44 and to restore extraordinary aid for impacted districts; the resolution is tied to the finance agenda discussed and is expected to be part of the board's formal actions. The board voted on routine agenda items, finance items and committee reports during the meeting; roll calls recorded the votes of listed board members.

What comes next: the district will finalize the budget package for submission to the county office, hold a public hearing on May 4, and continue work with the finance committee on activity‑fee design and potential staffing adjustments that rely first on attrition. The board also continues a confidential superintendent search that administrators said will result in an appointment only after required approvals.

(Reporting based on the Bernards Township School District Board of Education meeting transcript.)