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Palisades Park administrators urge board guidance as 32% health-cost spike forces possible 6.74% tax levy
Summary
Superintendent and finance staff told the Palisades Park board the district faces a roughly $2.6 million shortfall even if the state cap waiver raises the tax levy to 6.74%; administrators asked the board for direction by March 25 so staff can build tentative budgets around the preferred levy level.
Superintendent Mr. Caro and business administrator Mr. Deandria told the Palisades Park School District Board of Education on March 18 that a 32% rise in health insurance premiums has created a large budget shortfall and that the state allows a cap waiver that could raise the district’s tax levy to as high as 6.74%.
“This increase is so dramatic…for example…we can go up to 6.74%,” Mr. Caro said, explaining the waiver the state is permitting to address extraordinary health-cost escalation. Mr. Deandria said that even at 6.74% the district still faces about a $2.6 million deficit that must be closed with further reductions or additional revenues.
Why it matters: administrators said roughly 75–80% of the district’s roughly $32 million budget is personnel and benefits, limiting the effect of nonstaff cuts. The business office outlined a history of drawing down fund balance (including an $836,000 transfer in the prior year) and reported auditors will show an approximate $4.127 million fund-balance figure that will be further reduced by planned uses. Mr. Deandria summarized the current position: with a 6.74% levy the district remains in deficit and must identify about $2.6 million in reductions or revenue increases to balance a 2026–27 budget.
Board members pressed for household impact estimates and timing. One board member asked how a levy increase would affect a typical homeowner; administrators explained that tax-bill impacts depend on ratables and assessments and that half of any adopted increase is phased across years such that the full effect is realized over time. A board member asked whether the district could avoid the waiver; administrators warned that declining to use the waiver would require roughly $4 million in cuts at the 2% cap level.
Public reaction and context: teachers and staff in the audience urged caution about cuts to classroom programs if the board opts to stay at 2%. During public comment, a teacher said that a $4 million cut would likely mean reductions in staff, programs and supplies; other commenters asked about broader municipal cooperation on employee costs and questioned whether the borough could help under severe health-cost pressure.
What the board decided: administrators did not request an immediate final vote but asked each board member to indicate by March 25 what maximum levy percentage they would be comfortable with (options discussed included 2%, 4%, 5% and the full 6.74%) so staff can prepare one or more tentative budgets reflecting that guidance. A final budget adoption remains scheduled for later in April under the statutory timetable.
Key quotes:
• “The state is allowing us to go above the 2% tax cap…we can go up to 6.74%,” Mr. Caro said.
• “Even with the 6.74% we are still in a deficit of $2.6 million,” Mr. Deandria said.
• During public comment a teacher said: “If we stay at 2% then there’s $4 million that needs to be cut from the schools,” highlighting the trade-offs the board must weigh.
Next steps: administration will prepare budget scenarios around whichever percent the board indicates is acceptable and return with detailed cuts/options; board members were asked to provide a comfort-level number by March 25 so staff can draft and publish tentative budget documents ahead of the April adoption deadlines.
