South Kingstown presents preliminary FY2026-27 budget with modest tax increase; officials propose using OPEB and reserves to close school gap

South Kingstown officials presented a preliminary FY2026-27 budget April 15 that proposes a tax rate of $9.09 and a preliminary tax levy of $80,886,982, a $1.7 million (2.16%) increase over the prior year.

Town Manager Jim Manney and the finance director summarized the package, saying the school operating budget is proposed at $64,313,034 — roughly $1.05 million above the prior year — while the town operating budget is proposed at $35,754,674 and debt service at about $4.4 million. Finance staff said the town's net assessed value is estimated at $8,876,821,594 and that a one-cent change in the rate would equal about $87,765 in revenue.

The presenters flagged several large items shaping the budget: projected interest costs on bond anticipation notes for the new high school (an estimated $3.05 million in year two), anticipated school debt service that will grow as the high school financing rolls out, and revenue changes tied to assessed-value shifts and collection-rate assumptions. Officials noted the state places a cap on levy increases and said the town is tracking that 4% limit.

Superintendent Furtado told the joint meeting the school district has seen higher-than-expected costs since submitting its budget: health insurance increases (about 12.06% versus an assumed 10%), dental cost increases, a near-$458,000 reduction in the governor's proposed state aid, and the non-carryforward of a one-time local appropriation (about $608,000). Taken together, she said, those pressures represent more than $3.2 million in required costs even before pending contract negotiations or changes to federal funding.

To close much of the gap without cutting core programming, finance staff and school leaders proposed a combination of one-time measures: take advantage of the town's strong OPEB (other post-employment benefits) funding position and the actuary's recommendation that a contribution is not necessary this year; reallocate the roughly north-of-$700,000 OPEB contribution currently in the school budget; and consider increasing the town-to-school transfer by roughly $500,000 (the amount the town had budgeted for OPEB). Officials said those steps could free roughly $2.3 million'$2.4 million when layered onto the $1 million increase the council already adopted in March.

Finance director (listed in the presentation as Ryan/Brian Silvia) emphasized these are one-time strategies. "The actuary suggested we do not have to make the contribution this year," the presentation said, and council members repeatedly cautioned that skipping a recommended contribution now does not guarantee the same option next year.

Officials also highlighted the town's projected year-end surplus for FY26, which was revised upward to roughly $1.6 million because of unexpectedly strong short-term rental revenues, and an unassigned school fund balance projected near $1.9 million. School and council members said they are comfortable keeping an internal target (1—2% of the school operating budget) but open to using limited excess above a prudent reserve level to support operations.

Council and school leaders stressed the need for longer-term planning. Several speakers noted the $150 million school bond and the profile of rising debt service and benefits will put greater pressure on future years, arguing the town should move from year-by-year fixes to a multi-year fiscal plan.

The town council and school committee will consider final adoption of the budget on April 27; officials said amendments and final adjustments will be taken up at that meeting.