By Stephen Appezzato
RED BANK – Facing rising costs and a decrease in funding for the upcoming school year, the Red Bank Borough Public Schools District is eying a roughly 13% tax levy hike for the 2025-26 school year to generate $2.57 million in lost aid.
According to the district, the move will cost the average homeowner approximately $528 next year, or $44 per month. The school board will hold a public hearing and vote on the 2025-2026 school budget at its April 29 meeting.
The one-time tax hike, allowed as part of a new state program, will also allow the district to obtain an extra $93,000 in state incentive aid and remedy losses in state and federal aid for the next school year.
Red Bank isn’t the only school district facing this funding choice. The Middletown Township Public School District is in a similar situation, potentially seeking a one-time 10% tax increase to keep two schools open next year. Following weeks of public engagement and discussions, the Middletown Board of Education will vote on its final tax hike and 2025-26 budget at its April 30 meeting.
According to the Red Bank district, multiple factors have contributed to its funding gap, such as a $2.5 million decrease in aid, rising costs and bleak projections for future state and federal aid.
“It started with a decade of underfunding from 2013 to 2023 which resulted in a total shortfall of $44,108,540,” a release from the district read. “More recently, we have seen an annual decrease in federal grant funding with the strong possibility of additional cuts on the horizon.” That, combined with rising fixed costs, including contracts, transportation, utilities and more, has made it “difficult to implement longterm planning.”
“Based on the release of this information, our Board of Education needed to make a decision in a short period of time. After a deliberate assessment of our current situation heading into the 2025-26 school year and also considering the next five years, it was evident we needed to take advantage of this one-time opportunity,” said Jared Rumage, the district superintendent.
One-Time Tax Hike Above Cap
Normally, school districts are limited to a tax levy increase of 2% annually and require a referendum to exceed that amount. This year, with many districts around the state in a similar situation as Red Bank, some districts may request permission from the state for a one-time tax hike to cover 2025- 26 budget shortfalls.
“The 2% cap is suffocating all public school districts in New Jersey; however, our Board of Education is always mindful of our budget’s impact on the local taxpayer,” Rumage said.
“While our past history clearly shows a hesitancy to stray far from the 2% increase, this infusion of funds will enable us to con- tinue our outstanding service to the community,” he said.
Going forward, the district anticipates remaining closer to the 2.26% tax levy increase it averaged over the past five years.
The district is one of 280 in the state and 20 in Monmouth County that is below its “local fair share” of funding and considered “under adequacy” by the state, qualifying it for the one-time tax levy hike and extra incentive aid based on the tax increase. In the state’s school funding formula, home values and a community’s income are used to calculate how much of a school’s budget will be funded through its local tax levy. As both figures have increased in Red Bank, the state expects local taxpayers to foot more of the bill.
While the district could raise its taxes to generate up to $6.5 million next year – the amount under adequacy as determined by the state – according to a presentation available on the district’s website the school system is “strategically accessing only 39% of this potential.” That figure, which covers the overall reduction in state aid, will allow the district to “support all staffing needs, maintain or reduce class sizes and sustain all programming included in the current 2024-25 budget,” the presentation showed.
Additionally, the funding surge will allow the district to address new staffing needs due to increased enrollment while maintaining average class sizes and supporting services needed in September to comply with special education law without making cuts in other areas.
In the past, the district has used grant funds, like federal pandemic relief, and strategies like maximizing staff certifications and stretching its technology replacement schedule to manage unsustainable funding trends. Similarly, the district has worked closely with state legislators advocating for changes to the state funding formula to reduce volatility, like a legislation that capped aid losses at 3% this year. Without this, the district would have lost an additional $1.3 million.
However, the guardrail is only in effect this year, and “outside of major enrollment changes,” the district anticipates a projected loss of $1.5 million in state aid heading into the 2026-27 school year.
The article originally appeared in the April 24 – 30, 2025 print edition of The Two River Times.
