By Barbara A. Preston for The Montgomery News | April 30, 2026
The Montgomery Township School Board voted 7 to 2 in favor of a budget that includes a tax levy increase of 6.37% for the 2026-27 school year. Even with this tax increase, the district still will have to cut $4.4 million districtwide through position reductions, facilities, services, and supplies.
Business Administrator Andrew Italiano, and Superintendent of Schools Mary E. McLoughlin led the public hearing for the 2026-27 school year budget on Tuesday, April 28. They cited salaries/union contracts, health benefits, energy costs, and inflation as cost drivers.
In Montgomery Township, where the average home is assessed at $505,749 for tax purposes, the average resident will pay about $12,408.55 in school taxes this year. Last year, the average payment was $11,681 — so its an increase of $727 a year.
In Rocky Hill, where the average home is assessed at $645,896 for tax purposes, the average resident will pay $8,383 in taxes this year. Last year, the average school tax payment was $6,356 — so its an average increase of $2,027. The large increase in Rocky Hill has more to do with the recent tax reassessment.
The Montgomery News took these tax rates from the "User Friendly Budget 2026-2027" budget posted on the Montgomery School District webpage on April 30. It lists the new Montgomery school tax rate at 2.4535 and the new Rocky Hill school tax rate at 1.2979.
This year's budget process was driven by out-of-control fixed costs, primarily historic healthcare increases, according to Business Administrator Italiano. He discussed the following talking points:
• Healthcare Costs: Employee healthcare insurance increased 17%, which is comparable to the regional average of 16.5%. Italiano noted that being in a private plan, as opposed to the state plan (which had a 32% increase this year), is the more competitive option at this time.
"Our district is already working on a plan to significantly lower this cost for the 2027-28 cycle," Italiano said.
• State Aid: State aid is decreasing by 3% for the district, amounting to $248,302 less than the previous year.
• Salaries and Benefits: About 82% of the budget goes to salaries and benefits, which is in line with the state average for school district. Union contracts are set to increase by over 2% every year for the next three to five years.
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Some members of the audience balked at the property tax increase, and the general high cost of school taxes in Montgomery Township.
Three residents, Raj Koltur, Bala Naik, and PJ Singh, spoke during the public comment session and brought attention to a district petition with 445 signatures on it asking the School board to "Reduce Our School Tax Burden."
Naik cited “taxpayer burnout" and the need to "share inflationary sacrifice." "We are paying more for food, energy, and healthcare," he said. "We are all making sacrifices at our own kitchen tables, and we ask the school district to do the same.”
According to the petition, $14.65 million to $16.6 million in potential annual savings could be had if the school board were to take certain actions, such as the following:
Reducing Employee Benefits: Certain positions within regular programs (Instruction) may be structured as part‑time roles (approximately 20 hours per week) to reduce employee benefit costs.
School Bussing: Conduct and publicly report a transportation efficiency review with a primary focus on the feasibility of shared‑service transportation arrangements and shared bidding with neighboring districts.
Special Education: Evaluate opportunities to reduce reliance on high‑cost out‑of‑district OOD special‑education placements—often costing $75,000–$120,000+ per student annually, by expanding or sharing appropriate in‑district special‑education programs. The district, they said, places 35 students out-of-district at an estimated cost of $3.2M-4.2M. Developing in-district programs to reduce OOD placements could yield net annual savings of approximately $2 million after accounting for the in-district staffing costs and transportation needed to serve those students.
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PJ Singh, the husband of Montgomery Mayor Neena Singh, said: "The combined salaries and benefits, account for 82% of operating costs. The New Jersey efficiency threshold commonly used to assess financial sustainability is 75% of operating costs for salaries and benefits.”
He suggested that an $8.25 million reduction in recurring salary and benefit costs starting with this year's budget and continuing in the years ahead would enable the district to meet its efficiency goals.
Victoria Franco-Herman, yes.
Christina Harris, yes.
Vanita Nargund, abstain.
Julius Nunez, yes.
Francine Pfeffer, yes.
Maria Spina, yes.
Patrick Todd, yes.
Ting Wang, abstain.
Kathryn Worland, yes.
Board member Pfeffer said, "Everyone is struggling with expenses right now. The grocery store bills and gas prices are incredible. Everyone is feeling it.
"We are invested in this budget because we care about schools. A budget is a statement of priorities. I support this budget because it's a compromise between the resources we need for our students, and the taxpayers."
Julius Nunez concurred. "Our first important priority is the children, and protecting our schools and the class sizes. That's why people came to Montgomery - for our schools. There are some unavoidable cost increases, but they're explainable.
"Also, enrollment is down 2%, but staffing is flexing to match that. So I fully support this budget. I know it took me a little bit to get there. But I'm convinced."
The budget totals $97.4M, an increase of $5.8M or 6.7% over the prior year. This increase is considered the "standard in the area" for districts seeking to maintain their current level of programs, according to Italiano.
The largest budget expenses overall are:
26.4% Regular instruction Programs
(Refers to the direct costs of classroom education for general student populations, excluding specialized services like special education. This includes teacher salaries, instructional supplies, textbooks, and technology used in everyday teaching for grades K-12.)
25.7% Employee benefits
(The non-wage costs of hiring staff, encompassing healthcare, retirement contributions, and mandatory social insurance. Often making up over 20-25% of school district budgets, these essential expenses attract staff and, with health costs rising, now consume a growing share of funds beyond base)
16.1% Special services
(Funds allocated for specialized instruction, support personnel, and related services for students with disabilities (ages 3–21) or specific learning needs.)
9.6% Operations/Maintenance (M&O)
General operating Funds cover day-to-day expenses required to keep school facilities open, safe, and functional. It pays for essential items like utility bills, cleaning supplies, janitorial staff salaries, and routine building repairs, rather than new construction.
6.7% Transportation
This covers the costs to transport students to and from school, funded via local property taxes and state aid. NJ school districts are required to provide busing for students living outside a 2-mile (K-8) or 2.5-mile (9-12) radius. This covers the cost of buses, contractors, special education transportation needs, and "Aid in Lieu" (AIL) payments ($1,177 per student) to parents if buses aren't provided. In Montgomery, no students are allowed to walk or ride bikes to school because it is deemed unsafe, on account of a lack of sidewalks - so 100% of students are provided with transportation or AIL.
6.1% Administration
The costs associated with managing, supervising, and operating the district and its schools, rather than direct classroom instruction. It generally covers salaries, benefits, and office expenses for district superintendents, principals, assistant principals, and clerical staff, typically making up about 6.7% of a district's budget
5.5% Total Support Services
A broad category of operational expenses that support student learning but are not direct classroom instruction, such as salaries for nurses, counselors, librarians, and social workers.
2% Total Basic Skills/English as a Second Language (ESL) Instruction
Refers to targeted, supplemental instruction for multilingual learners who need extra help meeting state proficiency standards in reading, writing, and math. It provides intensive English language development, bridging the gap between home language and academic English.
1.9% Co-Curricular Activities/Athletics
Co-curricular activities are any kinds of school-related activities outside the regular classroom that directly add value to the formal or stated curriculum. Co-curricular activities involve a wide range of student clubs and organizations. Athletics include a wide variety of organized sports.
