The superintendent elaborated on the financial challenges facing the district, highlighting an alarming $925,000 decrease in revenues. This decline is attributed to the loss of $250,000 in federal ESSER aid and a reduction in surplus funds available for future budgets. Over the past five years, the district has endured a cumulative loss of $8.4 million in state aid, severely impacting budget planning. The superintendent likened the situation to a child expecting a $50 holiday check from a grandparent but receiving only $25.

Expenditure increases are particularly concerning, with salaries and health insurance costs rising by nearly $900,000. This increase is due to a 14% premium hike from the state health benefits consortium. Moreover, anticipated increases in casualty property and auto insurance premiums are expected to range between 11% and 12%. The district’s participation in a self-insured fund helps avoid profits going to insurance companies, but it also limits options for generating additional revenue.

The board is considering various measures to address the budget shortfall, including staff reductions across multiple areas while striving to minimize the impact on classroom instruction and avoid increasing class sizes. Details regarding potential cuts are expected to be shared in the coming month, which may affect coaching staff, extracurricular activities, and other district services.

Despite the challenges, the proposed budget includes a 3.62% increase, aligning with the Consumer Price Index (CPI) inflation rate of 3.57%. The superintendent emphasized that the tax increase will apply only to the local tax levy of approximately $29 million, rather than the total budget of $42 million, resulting in a 2.4% total budget increase, which remains below the inflation rate. He criticized the state’s funding formula, which, although fully funded, fails to allocate appropriate funds to the district. This results in a significant loss over the years, as Hopatcong schools are entitled to a $753,000 increase in state aid but will receive only $172,000, due to state-imposed caps on aid increases and decreases.

In other financial matters, the board approved a budget of approximately $42 million, featuring a local tax levy increase of 3.62%, composed of a 2% statutory cap increase and other funding adjustments. The budget includes funding for preschool expansion initiatives and payments on referendum bonds. The complexities of the budget were explained, noting that certain funds, such as those for preschool and bond payments, are not directly utilized for classroom instruction. The interest rates on bonds sold were favorable at 2.92%, with a current investment return of 4.15%. Interest earned on the bond money is restricted to specific referendum-related costs and cannot be redirected to general operating funds.

The meeting also addressed various community events and financial initiatives. A Fun Run is scheduled for the end of May, with organizers seeking volunteers and donations. Additionally, the PTSO’s Tricky Tray event is planned for Saturday, with pre-sale ticket purchases encouraged to save money. The public comment section of the meeting featured expressions of gratitude for the passing of a recent referendum, which was praised for effective marketing strategies, particularly the use of yellow signs.