Palisades Park administrators urge board guidance as 32% health-cost spike forces possible 6.74% tax levy

Superintendent Mr. Caro and business administrator Mr. Deandria told the Palisades Park School District Board of Education on March 18 that a 32% rise in health insurance premiums has created a large budget shortfall and that the state allows a cap waiver that could raise the district’s tax levy to as high as 6.74%.

“This increase is so dramatic…for example…we can go up to 6.74%,” Mr. Caro said, explaining the waiver the state is permitting to address extraordinary health-cost escalation. Mr. Deandria said that even at 6.74% the district still faces about a $2.6 million deficit that must be closed with further reductions or additional revenues.

Why it matters: administrators said roughly 75–80% of the district’s roughly $32 million budget is personnel and benefits, limiting the effect of nonstaff cuts. The business office outlined a history of drawing down fund balance (including an $836,000 transfer in the prior year) and reported auditors will show an approximate $4.127 million fund-balance figure that will be further reduced by planned uses. Mr. Deandria summarized the current position: with a 6.74% levy the district remains in deficit and must identify about $2.6 million in reductions or revenue increases to balance a 2026–27 budget.

Board members pressed for household impact estimates and timing. One board member asked how a levy increase would affect a typical homeowner; administrators explained that tax-bill impacts depend on ratables and assessments and that half of any adopted increase is phased across years such that the full effect is realized over time. A board member asked whether the district could avoid the waiver; administrators warned that declining to use the waiver would require roughly $4 million in cuts at the 2% cap level.

Public reaction and context: teachers and staff in the audience urged caution about cuts to classroom programs if the board opts to stay at 2%. During public comment, a teacher said that a $4 million cut would likely mean reductions in staff, programs and supplies; other commenters asked about broader municipal cooperation on employee costs and questioned whether the borough could help under severe health-cost pressure.

What the board decided: administrators did not request an immediate final vote but asked each board member to indicate by March 25 what maximum levy percentage they would be comfortable with (options discussed included 2%, 4%, 5% and the full 6.74%) so staff can prepare one or more tentative budgets reflecting that guidance. A final budget adoption remains scheduled for later in April under the statutory timetable.

Key quotes:

• “The state is allowing us to go above the 2% tax cap…we can go up to 6.74%,” Mr. Caro said.

• “Even with the 6.74% we are still in a deficit of $2.6 million,” Mr. Deandria said.

• During public comment a teacher said: “If we stay at 2% then there’s $4 million that needs to be cut from the schools,” highlighting the trade-offs the board must weigh.

Next steps: administration will prepare budget scenarios around whichever percent the board indicates is acceptable and return with detailed cuts/options; board members were asked to provide a comfort-level number by March 25 so staff can draft and publish tentative budget documents ahead of the April adoption deadlines.