In response to what it claims is a financial crisis caused by the state, the Toms River Regional School District says it intends to declare bankruptcy.
Following the school board’s rejection of a warning from the state Department of Education that the district must accept a 2025–2026 budget or halt all operations, the announcement was made Monday night.
District officials claim that as a result of New Jersey’s updated school funding structure, Toms River Regional has lost $175 million in state aid in recent years.
The district has had to raise taxes, sell facilities, raise class sizes, and lay off 250 employees in order to remain viable.
In order to balance the budget for the following year, state officials informed the district that it would have to raise taxes once more, this time by over 13%. School administrators stated that they were not willing to make this change.
Ashley Lamb, president of the Toms River Regional Board of Education, said in a statement that the state department’s directive cannot and will not be followed without seriously undermining an educational system that our taxpayers deserve.
Devastating cuts have already been made to our district, resulting in the loss of over 250 staff and teacher positions as well as dangerously high class sizes. “Enough,” Lamb declared.
A request for comment Wednesday was not immediately answered by the state Department of Education.
The district and state authorities are still at odds over school funding, which is why the bankruptcy plan was announced. For creating a funding crisis that school officials characterize as child abuse, Toms River Regional officials announced last year that they would sue the state, the Department of Education, and the acting education commissioner.
With 18 schools and 14,500 pupils, Toms River Regional is one of New Jersey’s biggest school districts.
Since New Jersey changed its school financing model in 2018, which transferred help from overfunded districts to historically underfunded ones, the district’s financial crisis has been worsening. Deep cuts were made in districts like Toms River as a result of the move.
The district’s financial woes reached a tipping point on Monday evening. The Toms River Board of Education overwhelmingly decided not to approve a budget for the next academic year for the second time.
In a letter to Toms River Regional Superintendent Michael Citta before to the meeting, the state Department of Education issued a warning, which was directly violated by the decision.
The agency stated in the letter, which the Asbury Park Press was able to get, that the district would not be allowed to spend any funds or operate any educational activities beginning on July 1 if the board was unable to enact a budget.
School administrators stated that summer programs will start this week and that classes will go on as usual in spite of the state’s warning.
Additionally, officials indicated that rather of raising taxes, the board decided to begin the process of declaring Chapter 9 bankruptcy, a legal measure that would shield the district from creditors while it develops a plan for debt adjustment.
According to Lamb, we will keep trying to work with DOE to find a solution that works best for our community. But rest certain that while the state ignores the catastrophe they caused, we will not desert our pupils or jeopardize their education.”
Officials say the district has lost around 60% of its overall state money since 2018, when the updated formula started to phase in, despite receiving a $1.69 million increase in state funds this year.
To assist fill budget deficits, the district offered to sell a property on Hooper Avenue that was owned by the district and had been utilized as an early learning center for $15 million in April.
This year marks the first full implementation of New Jersey’s school funding system, which was developed to attain what the state refers to as full fairness. However, other districts throughout the state have taken severe steps to close budget gaps brought on by sharp reductions in aid, such as increasing property taxes, firing employees, and closing schools.
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