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Toms River schools face $22.3 million revenue shortfall; board to present tentative budget with tax-cap options
Summary
District staff told the Board of Education the tentative 2025–26 budget, due March 19, will show a $22.3 million revenue gap driven by rising special-education and transportation costs and state aid limits; the district plans to present a 2% levy increase and await Department of Education guidance on exceeding the cap or obtaining a state loan.
District finance staff told the Toms River Regional School District Board of Education on March 12 that the tentative 2025–26 budget, to be presented at the March 19 meeting, will show a $22.3 million revenue shortfall.
“We still have a budget hole on the revenue side that’s substantial — 22.3 million,” the staff presenter said, outlining drivers that include projected increases in out‑of‑district special‑education tuition (+$2.7 million), higher transportation costs, rising utility bills, and expected health‑insurance increases.
The presenter said the district’s initial plan is to present a budget using the 2% tax‑levy cap available to districts, plus use of a health‑insurance “cap stretcher” that staff estimate could add about 2.3 percentage points to the levy for an effective 4.3% increase when combined with the general fund request. The presenter noted a $3.4 million reduction in the debt‑service levy this year because an older bond series was paid off, which would reduce the net levy impact to about 2.5% under the assumptions presented.
The staff presenter attributed part of the revenue pressure to recently implemented state “guard rails” on aid calculations, saying the initial allocation would have produced a larger increase but the formula was capped at 6% (with a 3% floor on decreases). The presenter said the initial allocation showed about a $1.6 million increase before the cap but that the cap materially reduced the district’s expected state aid. “By the formula it would have been a lot higher than 1.6 million,” the presenter said.
Board and staff described steps under consideration to close the gap: continued legislative outreach, operational reviews, and monitoring for Department of Education guidance that might permit a district to exceed the 2% levy cap or pursue a state aid advancement (a loan). The presenter said district leaders were awaiting detail from the county office and the Department of Education about eligibility and the caveats that would accompany any guidance.
District leaders also said they are reviewing high‑cost areas of the budget, including special education, and exploring operational changes. One presenter said the district has amended an ongoing lawsuit to address concerns about the state’s guard‑rail treatment of aid allocations and to preserve options should court or legislative remedies affect funding distributions.
The board was told there are no plans at this time to close or sell school buildings as part of the fiscal plan for 2025–26. Staff emphasized that the tentative budget will be a draft based on current assumptions and that figures may change once the Department of Education issues further guidance.
The tentative budget draft is scheduled for the board’s March 19 meeting; the district also scheduled a budget‑advisory meeting for April 2 to gather public and stakeholder input.
