Colts Neck board adopts 2026–27 budget using reserves to hold tax levy flat

The Colts Neck Township School District Board of Education adopted the 2026–27 school budget on May 6, approving the spending plan that keeps the district’s local tax levy flat for the third consecutive year.

Auditor John Swisher of Suplee Clooney & Company opened the fiscal portion of the hearing with an overview of the year ended June 30, 2025. "You have a clean opinion on your financial statements, an unmodified opinion," Swisher told the board and the packed cafeteria audience, and walked attendees through the state-driven categories of fund balance — restricted, assigned and unassigned — and how the district uses those categories for planning and compliance.

Swisher explained the state's "excess surplus" rule (roughly 2% of operating expenditures) and traced how the district’s June 30, 2025 balances moved through encumbrances, restricted reserves (capital, maintenance, impact aid) and assigned balances. He reported an audited excess surplus of about $1.43 million that, under state rules, must be applied in a future year. "These categories are common across districts," Swisher said, urging the board to plan to "regenerate" surplus if it is deployed to support future budgets.

Board members questioned whether the roughly $12 million in fund balance constituted an improper "slush fund" and pressed the auditor on alternatives such as returning larger amounts to taxpayers. Swisher framed that as a policy decision, not an accounting error: districts commonly allocate money to reserves to fund predictable future needs and to protect against uncertain revenue sources such as impact aid and extraordinary aid. He also said a strong balance sheet typically supports favorable bond ratings.

District administrators presented the budget’s programmatic details. School business administrator Vincent Marasco said the board is using about $3.8 million of fund-balance/reserve resources in the proposed 2026–27 revenue mix, including planned transfers to restricted reserves and recognizing a portion of audited excess surplus. Marasco noted major cost drivers: healthcare and insurance, pension obligations, special-education contracted services, increased energy use (air conditioning), and routine capital and maintenance needs. The administration highlighted investments in academic programs, special education supports, transportation, and facility improvements (including HVAC work completed through an energy‑savings improvement program).

Public comment included concerns about sustainability and service-level impacts: resident Allison DeNoia asked how reductions in SR-funded mental-health supports will be replaced and whether the current level of fund-balance use is sustainable beyond one to two years. Another speaker, Kevin O’Brien, commended the board’s fiscal stewardship and defended district staff and board members against local political attacks.

After closing the public hearing, the board approved action items 1–11, including formal adoption of the 2026–27 budget with a zero tax-levy increase. During roll call on the adoption motion, recorded votes were affirmative for the named board members; a recusal was noted during roll call and the motion carried.

Next steps: the adopted budget will be submitted to the New Jersey Department of Education as required; the administration and board indicated ongoing monitoring and the need to regenerate surplus in future years to avoid taxing volatility.