When Costs Rise Faster Than the 2% Cap

New Jersey's 2% property tax levy cap, established in 2010 and still in effect, restricts school districts from increasing their annual property tax levy by more than 2% over the previous year.  The intent of this legislation was to control cost and spending, but has inadvertently created constaints on public school budgets that are nearly impossible to reconcile.  For example, the cost of health care coverage has risen 9.1% for Little Silver Schools.  Salaries are contracted to increase 4.05% this coming year, which is a modest increase considering the cost of living in Monmouth County.  

In the public discussion during the April 30, 2026 budget meeting, residents asked about the possibility of a vote to approve a tax increase beyond the State’s allowable 2% levy cap in order to offset extraordinary cost increases, such as those related to employee health benefits. While that option may provide short-term relief, it also presents important considerations for the community.

Although residents could choose to support an increase, such a measure would likely provide only temporary relief and would not address the underlying structural challenges impacting public school budgets, including rising health insurance costs and ongoing concerns surrounding New Jersey’s school funding formula. Many believe taxpayers in New Jersey are already contributing substantially, and that these financial pressures should not be addressed solely through repeated increases to the local tax burden. This concern is especially relevant in Little Silver, where approximately 82% of the school district’s budget is funded through the local tax levy.

At the same time, others argue that the current 2% levy cap no longer reflects the financial realities facing school districts across New Jersey. The costs of services - including health benefits, transportation, utilities, and special education services - have risen at rates that consistently outpace the allowable cap.  Supporters of lifting the levy cap contend that expecting districts to absorb these increases year after year without additional revenue is increasingly unrealistic and will place added strain on educational programming and staffing, as well as longer term financial stability.

So what's right for Little Silver?  Tell us what you think. 

Your Board of Education is currently working on sample letters to send to our state Senators, asking for help with school funding.

Check back soon!