Flemington-Raritan Seeking Assistance From State Regarding Rising Health Insurance Costs

FLEMINGTON, NJ – The Flemington-Raritan Board of Education adopted a resolution May 13 calling on Gov. Mikie Sherrill and the state legislature to provide relief from rising health insurance costs that the district says are straining its budget and driving up local property taxes.

The resolution says school districts across New Jersey are "desperate for relief," and warns that the state's public employee health benefits programs are heading toward insolvency. It points specifically to the 31.9% premium increase that took effect in January 2026, further exacerbating an overall premium increase of nearly 74% in the preceding five years.

The resolution also cites a mid-year analysis released by the state Department of the Treasury in March, which concluded that "based on these projected losses and building in future trends, active premium rate increases for 2027 are likely to be in the double digits."

The resolution describes rising health benefits costs in both the School Employees' Health Benefits Program, known as SEHBP, and in the private insurance market as a source of "tremendous strain on district budgets and local taxpayers alike." It says Sherrill and legislative leaders have publicly acknowledged the urgency of the issue.

"Rising health-care premiums are consuming an ever-larger portion of already constrained school district budgets, forcing difficult decisions that directly affect students, staff and educational quality," the resolution says.

It warns that the downstream consequences for families and students include district deficits, program cuts and school closures.

In the resolution, the board calls upon the governor and state legislature to provide immediate, short-term relief from the unsustainable increases in health-care costs experienced by school districts in recent years, and urges Sherrill to "engage in meaningful engagement with all affected stakeholders to develop and implement practical long-term reforms to the state's system of delivering health care to its public employees."

The resolution will be forwarded to Sherrill, State Treasurer Aaron Binder, Sen. President Nicholas Scutari, Assembly Speaker Craig Coughlin, State Sen. Andrew Zwicker, Assembly members Mitchelle Drulis and Roy Freiman and the New Jersey School Boards Association.

Zwicker and Freiman represent the 16th Legislative District, which includes Flemington-Raritan.

Flemington-Raritan has absorbed a 35% increase in health benefits this year, an amount that accounts for roughly $4 million of the district's $4.6 million budget increase, board president Ryan Birkenstock said when the district adopted its $91.5 million budget for 2026–2027 April 29.

To cover the increase, the district raised its tax levy 7%, exceeding the state's typical 2 %annual cap by using a health-care exception that allowed an additional $3 million in local taxes. Even with that adjustment, district officials said the new revenue does not fully offset the rise in health care costs.

"Thirty-five percent increases are not sustainable," Birkenstock said at the April 29 meeting. "We're not the only district dealing with this. It's happening across the state. But it puts school systems in an incredibly difficult position."

Business administrator Tanya Dawson told the board that 90% of Flemington-Raritan's operating budget is funded through the local tax levy, while roughly 9% comes from state aid. Of the district's $4.5 million budget increase, state aid grew by about $200,000.

"That means any increase we feel, our community feels," Dawson said, "because our budget is primarily supported by local tax dollars."

The pressure on local taxpayers is compounded by the property tax levy cap, which limits how much districts can raise through local taxes even when costs rise faster than the cap allows. The state's limited health-care exception, the resolution says, has not been enough to close the gap for many districts.

The May 13 resolution echoes warnings district officials made when adopting the budget. Dawson told the board in April that long-term projections show district expenditures continuing to outpace revenues unless the funding system changes.

"Costs are rising faster than 2% annually, while revenue growth is limited by the tax cap," she said April 29. "Over time, that gap grows, and that's exactly what we're seeing now. At some point, the math simply stops working."

Birkenstock said advocacy at the state level remains the district's main option.

"Again, that's more advocacy with our local legislators, with our state legislators, with the DOE, in order to get the funding formula fixed," he said. "Because 90% shouldered on our local community is a substantial portion."