School chief paints bleak picture of UTSD finances, talks of cuts made, prevented, and OCHS tuition
PETERSBURG — “We’re scraping by at this point,” Superintendent Allison Pessolano said of the Upper Township School District during a public forum April 20.
The Upper Township Board of Education introduced its $43,178,687 budget for 2026-27 on March 23, calling for a tax rate increase of 3.9 cents. The tax rate would increase to $1.6888 and the tax levy would rise more than $2 million to $32,665,274. A public hearing is scheduled for 7 p.m. April 27 at Upper Township Middle School.
Pessolano said the district was prepared to cut 10 positions, all after-school sports and clubs, two bus routes, materials and supplies and significant funds for professional development to balance the budget.
However, several factors, including a switch in health insurance plans, allowed the district to keep five of those positions and all sports and clubs.
Speaking before a crowd that included a couple of dozen members of the Upper Township Education Association decked out in matching T-shirts, she said the district cannot raise enough money under the 2 percent tax levy cap to fund the rising costs of educating students.
“Eight to 10 years ago, Upper Township had a very healthy budget. We were getting $10 million in state aid. We had money to do pretty much anything we needed to do,” Pessolano said. “We’re not in that position anymore. We don’t have a savings account anymore. We don’t have a rainy day fund. We don’t have any of that. It’s all been spent.”
Pessolano said the problems started under S2, the bill that redistributed state aid beginning in 2017-18. Under the adjustment, the district’s funding dropped from $10 million to $4 million in seven years.
Pessolano called the state’s school funding formula broken.
“It’s not adequately funding districts and it’s overfunding other districts. There are districts who have excess, they have plenty of money to spend, and there are districts like us who are really, we’re scraping by at this point,” she said.
Following the full implementation of S2, the district is considered to be taxing its residents less than its fair share — $32,665,274 compared with $36,886,933 — even after raising taxes 8.8 percent and 6 percent in the past two years.
“Two things that are important when we talk about school funding, and that also don’t really make a lot of sense, are the local fair share and then our actual tax levy,” Pessolano said. “According to the state, we should be raising $4 million more from our community.”
While state aid has plummeted by 60 percent, the district faces a rising number of special education students; increased costs for transportation, out-of-district placements and educating homeless students; along with skyrocketing health insurance and tuition costs.
Pessolano said the 2 percent tax levy cap allows the district to raise about $650,000 more per year. Since 2017-18, the levy has risen $8.6 million but expenditures in just four main categories — health benefits, special education, transportation and tuition — increased $8.4 million.
“Without additional state aid, we cannot continue to sustain our budget and our district needs,” she said. “It’s not balancing out, and so that gap between what we have to spend and what’s coming in is getting wider.”
Pessolano said the district is taking several steps to try to mitigate the situation, including reaching an agreement with Ocean City School District to limit tuition to $21,000 per student for three years, reducing positions through attrition, shopping for health insurance and reducing transportation routes/costs.
Other steps include reducing professional development and supplies, expanding preschool to boost aid and lobbying legislators to change the funding formula.
“Anything that we could reduce, we have. To the point now where some of the conversations we’re going to be having are what do we need to cut to be able to fund our technology department so that we can keep the district running. Those are the kinds of conversations that we’re having,” Pessolano said. “We don’t have any extras, we don’t have a rainy day fund, we don’t have reserves, we don’t have any excess to cover surprises that come up like the five out-of-district students that moved into our district this year that were not even on our radar, weren’t budgeted for.”
Pessolano urged residents to attend Ocean City Board of Education meetings to advocate for decreased spending and to reach out to legislators to urge a change in the funding formula. Upper Township sends its students to Ocean City High School in a sending-receiving relationship.
“The majority of the changes that need to happen are really in the state’s hands — even if one of these changes was capping what a receiving district can charge for tuition or can spend — those are all things that would have to happen at the state level,” Pessolano said.
– STORY and PHOTOS by CRAIG D. SCHENCK/Sentinel staff