One of New Jersey’s smallest school districts is facing an uncertain future after voters rejected a steep tax increase officials said was needed to keep its only school open.
More than 68% of voters, or 386 residents, voted down the proposed tax hike in the Ocean Gate School District’s Jan. 27 special election, according to unofficial results.
The referendum would have allowed the district to exceed the state’s tax levy cap and permanently raise school taxes by more than 27% to help close a nearly $700,000 budget gap.
District officials said the measure would have raised taxes by about $53 per month, or $636 per year, for the average home assessed at $413,297 in the Ocean County borough.
With the tax increase rejected by voters, the school district now faces an uncertain future that could include closing its only school and sending students to another school district.
“The next step involves the Board of Education investigating the setup of a sending-receiving relationship and being forced to close the school,” Ocean Gate Superintendent Doug Corbett told the Asbury Park Press.
Officials pushed for the tax increase at a lengthy, emotional Board of Education meeting earlier this month, saying the district was struggling to close a budget gap for the 2026–27 school year.
The small Ocean County school district serves 149 students in grades pre-K through 6 and has said years of state aid cuts tied to New Jersey’s school funding formula have left it financially strained. Officials say state aid has fallen by nearly 60% over the past six to seven years, even as enrollment has grown slightly.
In a statement following the vote, Ocean Gate School Board President Richard Casey said the result of the special election sent a clear message from residents already facing high property taxes.
“By voting ‘No,’ the community has made it clear: you do not support filling that gap through increased local taxes,” Casey said. “That is a powerful message.”
Casey also blamed cuts under the state’s school funding law, which he said shifted more responsibility for school funding onto local taxpayers.
Ocean Gate’s state aid fell from about $951,000 in the 2019–20 school year to roughly $367,000 this year — a loss of nearly $600,000 over six to seven years. During that same period, enrollment increased by about 13%, the district said.
New Jersey’s school funding law, fully implemented for the first time in 2024, was designed to redirect aid from districts considered overfunded to those deemed underfunded. But some districts say the formula is unfair.
Ocean Gate school board members previously warned that rejecting the referendum could prevent the district from submitting a balanced budget for the 2026–27 school year, triggering oversight by the county superintendent and the state Department of Education.
In that case, officials said, the most likely outcome would be closing Ocean Gate School and sending students to a neighboring district.
As part of those discussions, Central Regional School District received a $130,000 state grant in 2024 to study a possible merger with neighboring K-6 districts, including Ocean Gate. District officials said the study’s findings will be presented at a public meeting on Feb. 9.
“This is not the end of the road,” Casey said. “It is the beginning of a new and uncertain chapter.”
Ocean Gate’s next school board meeting is scheduled for Feb. 3.
