Karen Horoszewski, assistant superintendent for business in the Locust Valley Central School District, presented the second phase of the district’s 2026-27 budget plan at the Board of Education meeting Wednesday night, focusing on the district’s tax cap calculation and noninstructional spending.
“Everything we do in this budget process is driven by our district mission, which is ‘to educate the whole student in a safe and nurturing environment,’” Horoszewski said. “Our budget mission is to support those educational goals while remaining fiscally responsible to you, the community.”
The current budget for the 2025-26 school year, totaling just under $98.3 million, is supported by a tax levy of about $90.16 million, 2.3 percent larger than total property taxes in 2024-25. Horoszewski addressed common misconceptions about the state’s 2 percent tax cap, emphasizing that it is not a flat limit. Instead, the allowable increase for a given district is determined by a formula that factors in inflation, property value growth and specific exclusions.
“The tax cap is actually a formula that is based on inflation and other factors,” she explained, “meaning it could be lower or higher than 2 percent.” Certain costs, including capital debt service and BOCES capital expenditures, are excluded from the cap, while state aid for building and transportation is subtracted from the calculation.
Based on preliminary figures, the district’s maximum allowable tax levy for the coming year is just over $92.7 million, an increase of 2.84 percent.
Horoszewski emphasized that the number represents a ceiling set by the state formula, and doesn’t necessarily indicate what the district will ultimately propose to voters.
She also reviewed the district’s fund balance, describing it as a measure of financial health and flexibility. The fund balance is divided into nonspendable, restricted, assigned and unassigned categories. The unassigned fund balance, which functions as a state-approved rainy-day fund, currently stands at $3.9 million, or 4 percent of the operating budget, the maximum level permitted by the state.
Horoszewski said that the district’s total fund balance declined between 2023 and 2025, from roughly $22.6 to just under $20 million, but she stressed that the reduction was planned and tied to the use of capital and repair reserves, not to lost revenue.
“I want to make this very clear,” she said, “that this was a planned and positive utilization of funds.”
The reserves, she added, provide stability for students by protecting classrooms during economic downturns and allowing the district to respond quickly to emergencies without cutting programs.
The remainder of the presentation focused on the noninstructional and transportation categories in the 2026-27 budget. Horoszewski reported a projected slight decrease in spending by the Board of Education, driven by reduced contractual expenses that better align with actual costs. The district clerk’s budget is expected to remain flat, while district meeting expenses, which include budget vote costs, are projected to increase by about $800.
The superintendent’s office budget shows an increase of just over 1 percent, from $386,000 to $390,000, primarily due to contractual salary obligations for support staff. Business administration spending is projected to rise by roughly 2.6 percent, reflecting salary increases and a significant jump in contractual costs tied to Medicaid cost filing, which is calculated as a percentage of reimbursement claims.
Auditing costs are expected to increase by approximately 2.1 percent, as the district enters the third year of five-year contracts for its external, internal and claims auditors. Modest increases are also projected for the treasurer and legal services lines, the latter to account for potential additional legal expenses.
The cost of personnel services is projected to rise by 4.27 percent, or just over $20,000, largely because of salary increases and a 5.44 percent increase in estimated BOCES services. Public relations spending is expected to increase by less than 1 percent.
Operations and maintenance of plant costs are projected to increase by 3 percent, driven by salaries and higher utility costs. The preliminary budget also includes a $102,000 increase for the purchase of a tractor for snow removal and grounds work. To offset that expense, the district plans to reduce contractual maintenance spending by $182,000.
Transportation spending is projected to decrease by 2.4 percent, largely due to a $49,000 reduction in salary costs. Contract transportation costs for buses the district does not own are expected to rise by less than 1 percent, though Horoszewski said that figure could change as the district reviews submissions from a recent request for proposals.
She also highlighted a reclassification in the unallocated insurance budget, shifting special-education stipulations into instructional codes.
While BOCES administrative costs are projected to remain flat, property and liability insurance is expected to increase by 13 percent based on estimates from insurance carriers.
The board thanked Horoszewski for her presentation, and will continue its budget review at its Feb. 25 meeting, with presentations planned on athletics, technology and transfers to the capital line. To watch Wednesday’s meeting on YouTube, visit the district’s page, Locust Valley Board of Education.
