Bernards Township budget proposes 4.98% levy increase as health benefits drive costs; district cuts 23.5 FTE and proposes activity fees

The Bernards Township Board of Education heard a detailed presentation on the districtbudget for 2026–27 Tuesday, when officials said a sharp rise in health‑benefit costs required staffing reductions, new fees and drawing on capital reserve to limit taxpayer impact.

Superintendent Nick Markarian introduced the budget and said the district needed to close roughly a $2.0 million gap since March. "We began back in the spring of last school year looking for opportunities where we thought we could manage without," Markarian said, explaining administrators took advantage of retirements and resignations to avoid involuntary layoffs.

Jim Rallo, the districtschool business administrator, told the board the operating budget rose about $3.2 million year over year and that roughly $3.0 million of that increase is attributable to health benefits. He gave a multi‑year example showing health‑benefit spending rising from about $11.5 million in 2019–20 to about $21.1 million in 2026–27.

Rallo attributed the trend to two forces: higher utilization and increased dollars per visit. He also pointed to a statutory change, saying Chapter 44 altered how employee contributions are calculated compared with Chapter 78, tying contributions to salary rather than premium and limiting local ability to negotiate plan design. "Chapter 44 separates that cost sharing agreement," Rallo said. "You cannot change any of the plan designs."

Board member Dave, speaking for the board, reiterated the district's constrained options and the rationale for the district's chosen insurance structure. "We chose self insurance because the data consistently showed it was the most cost effective structure for a district our size," he said, and added that required plan designs set at the state level limit local levers to curb costs. He and Rallo both cited industry renewal projections: a statewide brokersurvey of 583 districts showed the "best" renewal projection at 16 percent and many joint funds seeing renewals in the low 20s to the 30s.

To limit immediate tax impact, Rallo said the district will use about $1.2 million from capital reserve to smooth the debt-service levy. He reported the combined effect of the 2% statutory operating levy, the health‑benefits adjustment and other factors produced a 4.98% effective tax increase for the budget, which the presentation translated to about $489 on the average home based on the district's assessed values.

On staffing, Markarian said roughly 23.5 full‑time equivalents were not refilled as part of an effort to close the budget gap; about two‑thirds of those savings came from voluntary retirements and resignations. He stressed the district would monitor enrollment and class sizes, and that he would seek board approval before making any emergency hires to meet classroom‑guideline needs.

The administration also proposed a simplified activity-fee structure to raise revenue while protecting taxpayers who have no students in extracurriculars: a flat $100 activity fee at Ridge High School (one fee per student, not per activity), $50 at William Ann, and no fee at elementary schools; the district would provide fee accommodations for students eligible for free or reduced‑price meals. Student parking fees at the high school were proposed to rise from $60 to $100.

Parents and residents urged additional actions and transparency. Frank Klaus, a resident, called the staffing reductions "devastating," warned of widespread impacts and urged community calls to state legislators. Faisal Chaudhary suggested earlier and broader public engagement on the budget and asked whether the district had correlated staffing changes to student outcomes; Markarian said no formal correlation analysis had been done.

Administration officials suggested advocacy pathways for residents, noting the district had sent a certified board resolution to listed state entities and shared contact information with PTOs and CPAC to coordinate outreach. Rallo and Markarian emphasized that some changes — notably the plan design requirements under Chapter 44 and the actions of the state plan‑design committee — are controlled at the state level rather than by local boards.

The board approved several routine finance and personnel agenda items by roll call during the meeting; the budget presentation and public feedback set the contours of the district's fiscal plan as it moves toward final adoption and continued monitoring.

The board will continue to review claims and enrollment monthly as it finalizes the 2026–27 budget.