The Oyster Bay-East Norwich Central School District is continuing work on its proposed 2026-27 budget, with district leaders outlining revenue limits, rising costs and long-term planning during presentations at the Feb. 25 and March 10 Board of Education meetings.
Deputy Superintendent Maureen Raynor presented the financial framework of the budget in February, emphasizing that the district is operating within tight constraints despite ongoing cost pressures.
The proposed budget totals roughly $69.4 million, an increase of just under $1.6 million from the current year. Raynor said the district was able to remain within the allowable tax levy limit through “discipline resource alignment,” even as costs continue to rise.
Under New York state law, the tax levy growth factor is capped at the lower level of inflation, or 2 percent. Although the consumer price index is 2.64 percent for the coming year, the district’s levy increase is capped at 2 percent.
“The challenge is that that costs compound,” Raynor said, “they do not decline when the inflation moderates.”
The proposed tax levy for 2026-27 is $61.4 million, an increase of about $1.5 million. Local revenue continues to make up the vast majority of district funding, totaling roughly 90 percent according to the presentation.
State aid increases remain limited. The district’s foundation aid, which is the primary flexible aid source, is expected to rise by only 1 percent, or about $19,600.
Including expense-driven aid, the total increase to the levy is only slightly over $88,000, Raynor said, noting that expense driven aid reimburses costs already incurred and does not provide additional flexibility.
The district also anticipates appropriating more than $1.5 million in fund balance to help offset the tax levy and provide tax relief, while maintaining financial flexibility.
On the expenditure side, Raynor mentioned the budget is driven largely by contractual obligations, particularly salaries and benefits, which together account for more than 70 percent of spending.
Other major cost drivers include transportation, contracted services, insurance and special education mandates. Transportation costs in particular have risen, with Raynor explaining that the district expects more than a $400,000 increase in contractual transportation expenses.
Health insurance premiums are also projected to rise significantly, contributing to overall budget pressure.
“These are contractual, market driven operations,” Raynor added, “that must be managed within the tax cap.”
Despite those pressures, Raynor highlighted that the proposed budget maintains key programs and services, including small elementary class sizes, arts and music programs, athletics and all academic course offerings. The district’s three-part budget structure shows a continued shift toward program spending, with administrative and capital shares declining over time.
Looking at long-term trends, Raynor said a handful of cost drivers have consumed nearly all allowable revenue growth in recent years, including transportation, health insurance, retirement system contributions, IEP mandates and services and liabilities. Those cost drivers averaged nearly $1.3 million in annual growth.
The district is attempting to address those pressures through staffing alignment, retirement planning and multi-year financial strategies.
In addition to the operating budget, Raynor outlined a proposal to establish a new capital reserve fund to support future infrastructure needs. The proposed reserve would have a maximum funding level of $25 million, a 15-year term and annual transfers capped at $2 million.
“A capital reserve fund is a voter offering planning tool that allows the school district to set aside funds over time for future facility infrastructure improvements,” Raynor said. “Capital reserves provide a structured way to plan ahead for large products, reducing reliance on borrowing and helping protect taxpayers from unnecessary interest costs.”
The district’s current capital reserve, established in 2006 and amended several times, is set to expire. According to Raynor, creating a new reserve would improve transparency and allow the district to reset its parameters.
Superintendent Francesco Ianni reiterated that point during the March 10 meeting, responding to community questions about the proposal. He added that there would be no major change in how the reserve is used.
Officials emphasized that establishing the reserve would not increase taxes and that any spending from the fund would still require voter approval.
“The establish of a capital reserve will authorize the creation of the reserve,” Ianni said, “but in terms of spending the money… we need board action and voter approval.”
During the March 10 meeting, Ianni and Raynor also addressed community questions about budget details, including administrative costs and legal expenses.
Raynor explained that the administrative portion of the budget totals about $8.5 million, with general support functions accounting for about $7.4 million.
Legal expenses are projected at just over $200,000 in the budget, with actual costs estimated at just over $170,000 this year.
The budget hearing is scheduled for May 5 and the annual budget vote set for May 19.
