A Bergen County school district may be forced to cut jobs in light of a looming fiscal crisis driven by skyrocketing health insurance costs, district officials said recently.
The Westwood Regional School District is facing a 32% increase in health insurance premiums and a 25% increase in prescription benefits, according to Superintendent Patrick McQueeney.
The increases in both categories equal roughly $3.2 million, he said.
“However, given these external financial realities, I must be honest with our community: we are in a position where staffing reductions across our administration, support areas, and teaching staff are a very real possibility,” he said in a March 4 letter to the community.
“We do not take these potential impacts lightly, as our staff is the backbone of our children’s success and the engine of our academic rigor,” he added.
McQueeney and other school officials gave a general overview of the district’s budget at the March 5 school board meeting, citing the rising health care costs that many school districts across the state are experiencing.
Officials have not outlined specific potential cuts.
“It doesn’t paint a great picture, but the picture is not just Westwood,” said McQueeney, who said he’d heard similar stories from three superintendent colleagues. “It’s the entire state.”
Westwood is also seeing a 33% increase in out-of-district tuition rates, he said.
The state allows districts to exceed the 2% tax cap through health care waivers, but the adjustments don’t bridge the entire gap, McQueeney said in his letter.
“Our health care insurance went up so high that even the health care waiver provided by the state will not cover the entire amount,” he said at the meeting.
The district serves roughly 2,770 students in Westwood and Washington Township. Enrollment has largely remained flat, officials said.
The school board will introduce a preliminary budget March 24 for public review and board approval, officials said. The final budget is scheduled to be adopted April 30.
“Unless we’re going to eliminate entire student programs or opportunities for our students, we have to unfortunately look at staffing as a part of that,” McQueeney said of potential budget cuts.
Three years ago, the district left the state health benefit plan and saved more than $1 million in doing so, according to the district’s business administrator, Keith Rosado.
But despite the cost-saving measure, district officials are still contending with rising premiums. They’re also statutorily obligated to provide employees with certain health plans until the relevant law sunsets in December 2027, Rosado said at the meeting.
Westwood’s insurance provider, Horizon, initially said the district could expect an increase in health insurance premiums of 46%. Officials rejected the offer and looked to negotiate. They also shopped around the marketplace for other plans.
“In shopping for the plans, no other provider would accept us,” Rosado said.
Horizon returned to Westwood officials and offered a 32% increase, which they accepted.
The price hike is due to the district’s experience rating, which means the insurance company’s cost of doing business with the school district. Horizon is losing money covering Westwood, leading to a cost increase, district officials said.
But those leaders cautioned during the meeting that they’re proceeding as if state aid remains flat.
The budget may see additional changes if the district receives a boost or a reduction in aid, officials said. It’s unclear how much the district will receive in Gov. Mikie Sherrill’s first year in office as her administration crafts a new budget, which will be proposed this week.
In 2025, the district received a 5% increase in state funding.
Still, the school system has continued to save money by forgoing the state health benefit plan. If Westwood remained in the plan, the budget would increase by an additional $2.5 million, officials said.
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