Keyport School District proposes 4.9% budget increase as health benefits, enrollment squeeze district finances

Keyport School District leaders on Monday presented a proposed 4.9% budget increase for the 2026 fiscal year, saying a sharp rise in employee health benefits and other fixed costs make the increase necessary to preserve programs and avoid staff layoffs.

"Everything in this budget is guided by these key focus areas," Superintendent Dr. Savoia said, listing student safety, equitable access, athletics and technology as priorities. She told the board that while the district has generated roughly $1.5 million through grants and other efforts, rising costs and a state funding formula tied to enrollment have created a gap officials cannot close without the adjustment.

Board Secretary Mr. Rapola provided the financial detail, saying the districttax levy for 202526#x201326 was about $12.2 million and the proposed levy of $12.8 million reflects a 4.9% increase (a 2% general cap plus a 2.9% health-cost adjustment). He identified health insurance as a principal driver, saying Keyports health benefit costs are up about 23.5%, equal to roughly $809,000 in added expense.

Mr. Rapola said the districts total general fund increase in the proposal is $700,000 while salaries, utilities and insurances together rose by about $1.385 million; to reconcile those figures the district identified approximately $685,000 in cuts across operating areas. "This budget is beyond lean," he said, warning the board that the only remaining noninstructional source of significant savings would be staff reductions.

Officials also pointed to enrollment declines as a constraint on state aid. Dr. Savoia said resident enrollment fell from about 833 students in 2019 to roughly 750 in the current year, a drop of about 83 students, which reduces the districts state funding under the current formula.

On capital needs, Mr. Rapola said the budget includes a roughly $171,000 capital outlay for the high school elevator to address a more-than-40-year-old unit that currently impedes ADA compliance; most of that expense is expected to come from capital reserves. He also reviewed debt-service obligations tied to a past $16.7 million referendum financed through the Monmouth County Improvement Authority, noting annual payments and state debt-service aid.

Officials discussed transportation, which spiked in recent years because of driver shortages; Mr. Rapola said historical costs peaked around $1.05 million and the budgeters current projection is about $1.04 million for 202526#x201326, though he estimated actual costs might be closer to $930,000 and flagged the risk of needing interfund transfers next year if fuel or market conditions change.

Public commenters asked about insurance and volunteer screening. Resident John Marla asked whether the same company provides health and property insurance and how many employees receive benefits; Mr. Rapola said roughly 100 to 120 employees receive benefits and that the district uses state-conducted fingerprint background checks for recurring volunteers and coaches.

When asked how the proposed levy would affect homeowners, Mr. Rapola said the average home value used in the budget moved from $463,000 to $502,000; the projected school tax on an average home would be about $4,840, an increase of $254 from last year (about $21.33 monthly). The board noted the increase in debt-service payments is small (about $2 on the average bill) and that a $1.5 million underrun from prior capital projects will be returned to taxpayers over time as credits to debt service.

Board President said an additional meeting was added for next week, and the board will continue reviewing the budget in upcoming sessions ahead of the public hearing and final adoption this spring. No formal budget vote was taken at Mondays meeting.

"We have utilized every available tool to avoid staff reductions and to maintain equitable programs for the students here in Keyport," Dr. Savoia said. "But we are mindful of the impact to our taxpayers."