Thursday, October 1, 2026
The Rockville Centre School District is facing a projected $3.78 million budget deficit in 2026-27, district officials said at a Jan. 29 Board of Education work session, citing rising costs, declining enrollment and state-imposed limits on how much revenue the district can raise through property taxes.
Jacqueline Rehak, assistant superintendent for finance and operations, presented an overview of the district’s finances, beginning with the fund balance — the amount left at the end of the fiscal year, figuring in revenues and expenses. While the balance has been stable, Rehak said, it is trending downward.
“It was projected to decline, and it was purposeful,” she said, “but it’s also a signal that we need to be mindful moving forward.”
Rehak explained that the fund balance includes appropriated and unappropriated funds, reserves and restricted funds. The largest portion of reserves is the Employee Benefit Liability Reserve, which covers payouts for retiring district employees.
Other reserves cover the state and teacher retirement systems, which are budgeted annually. Rehak noted that the employee retirement system reserve of $2.5 million is slightly more than one year of expected expenditures, below the typical three- to six-year range. The teacher retirement system reserve stands at $1.65 million, less than one-third of one year’s expenditures, below the statutory limit of one year.
The appropriated fund balance — used to offset next year’s budget — has decreased from $2.8 million to a projected $1.6 million.
“Once it goes down to $1.6 million, I have to cut the budget,” Rehak said. “It becomes part of the revenue stream, and reliance on it is not sustainable long term.”
The unappropriated, unreserved fund balance, which can be used for emergencies, stands at $4.8 million, or 3.5 percent of the overall budget, slightly below the statutory maximum of 4 percent.
Rehak also discussed the impact of the state’s tax cap and inflation. While inflation has been high in recent years, the tax cap has remained at roughly 2 percent, limiting how much the district can raise through property taxes.
“It’s good for taxpayers, but it forces us to figure out how to operate within that cap,” she said.
Rehak projected the district’s allowable tax levy for 2026-27 at just under $112 million, a 2.45 percent increase over the current year.
The expected budget gap is driven by several factors, including declining state aid, rising health insurance costs, and out-of-district special-education placements. Foundation aid from the state is projected to rise by only 1 percent next year -- down from 2 percent the previous year -- while health insurance costs are expected to increase roughly 10 percent, adding about $2 million to the budget.
Out-of-district tuition and services are projected to rise by $2 million, due to increasing student needs.
K-12 enrollment in the district has fallen steadily over the past decade, mirroring a broader decline on Long Island. Total enrollment has dropped from 3,548 students in 2016 to a projected 3,260 in 2026-27.
Currently, student enrollment at South Side High School has declined from 1,102 students in 2016 to 969. South Side Middle School has seen a decrease from 816 to 789, Floyd B. Watson Elementary from 295 to 220, and Riverside Elementary School from 173 to 135. Other schools have experienced smaller changes, including William S. Covert Elementary School, which declined slightly from 299 to 298. However, Gaven noted that without its special classes, Covert “would clearly be at its lowest point.”
Francis F. Wilson Elementary Schoolalso also had a decrease, from 399 to 376.
Jennie E. Hewitt Elementary School was the only one to show an increase in enrollment, rising from 464 to 473 students.
Enrollment in private schools has also declined by nearly 15 percent over the past decade.
Board Vice President Donna Downing noted the impact. “These children are more expensive to educate,” she said. “We need to look at a lot of different scenarios.”
Board trustees emphasized the challenges of balancing rising costs with limited revenue. Downing noted that “the formula is antiquated. These are not the economic conditions we’re living in, with declining enrollment, yet students are more expensive to educate.”
Secretary Janet Gruner and Trustee Tara Hackett highlighted the importance of sustainable budgeting and building reserves to protect the district’s century-old buildings.
State and federal funding uncertainty also adds pressure. Superintendent Matthew Gaven said the board continues to advocate for changes to the state funding formula, which has not kept pace with current economic conditions or enrollment trends. Rehak noted that federal funding does not contribute to the general fund, making it unreliable for long-term planning.
The trustees acknowledged that difficult decisions lie ahead. Board President Kelly Barry requested that the district present a scenario for exceeding the property tax cap at the next meeting, while others emphasized the need to protect essential programs and special education services despite budget constraints.
Finally, Rehak outlined the next steps, including administrative meetings to finalize instructional schedules, staffing analyses and continued refinement of the tentative budget.
