Toms River Schools Defy State Order To Shut Down Until Board OKs 2025-26 Budget

TOMS RIVER, NJ — The Toms River Regional Board of Education is defying an order from the New Jersey Department of Education to shut down after the school board rejected the state's demand that it approve a budget for the 2025-26 school year.

The state order came in a letter to Superintendent Michael Citta and board President Ashley Lamb dated June 30, hours before a special meeting Monday night, that demanded the board approve a budget immediately or "it is prohibited from expending any funds or operating any educational programs past today's date until a budget for FY26 is approved."

"Accordingly, the Board and Administration must initiate closure procedures and activities to ensure no funds are expended until a budget for FY26 is approved," according to the letter signed by David Corso, the assistant education commissioner and head of the department's Division of Financial Services.

Citta on Tuesday said the district is not halting its operations.

"Starting tomorrow (Wednesday) are the extended school year programs," Citta said. "We are not shutting down." Those programs are critical pieces of individualized education plans for special education students and are federally funded as well as receiving state funding.

A request for comment from the state Department of Education was not immediately answered.

Instead, the Toms River Regional School District will be filing for Chapter 9 federal bankruptcy protection and plans to continue its summer education programs, district officials said.

The board has refused to approve a budget for the 2025-26 school year due to its ongoing battle over state aid that has resulted in severe cuts to programs since the 2017-18 school year under S2, which was put into place to address what were alleged to be inequities in the distribution of state aid.

Initially imposed to remove so-called "adjustment aid" that a number of districts, including Toms River, had received in the wake of the introduction of the School Funding Reform Act of 2008, S2 resulted in deep cuts to districts across the state. In Toms River, the district has seen a cumulative loss of $175 million in state aid for student programs, while cutting more than 250 positions and selling off property, including the district's administration building at 1144 Hooper Ave.

For 2025-26, while the district received a 6 percent increase in aid over 2024-25, it was still left with a $22.5 million budget gap. In April districts with large gaps were informed they could obtain additional state aid if they agreed to exceed the state's 2 percent cap on property tax levies. Toms River applied to participate in that program, and while the state approved its measure that would increase the levy 12.9 percent, the Toms River school board later rejected its finalized budget, declining to impose that levy.

On Monday night in a statement read into the record, Lamb called the state's orders to cease operations and impose a 12.9 percent tax increase on top of the 9.3 percent increase in 2024-25 "illegal and immoral directives."

"This is unconscionable, especially when the state's own flawed funding formula has created this crisis by underfunding our district by $107 million," Lamb said.

The rejected budget of $293 million included $271 million in general fund spending — the part that funds the day-to-day educational activities of the district — along with debt service. The overall tax levy was $222,945,373, up from $193,201,141 for the 2024-25 budget. Those figures include the debt service payments from the bonds for the $147 million in capital projects throughout the district approved by voters in January 2019.

"We cannot and will not acquiesce to the State Department of Education's direction without severely undercutting an educational system that our taxpayers deserve," Lamb said. "Our district has already endured devastating cuts – we've lost over 250 teacher and staff positions and seen class sizes increase to critical levels. Enough is enough."

"While other districts received loans and state aid advancements, Toms River has been consistently denied such funding," Lamb said. "We've been forced to sell $20 million in assets just to keep our doors open while providing what we can only describe as 'survival' education to our students."

The Chapter 9 federal bankruptcy protection will provide the district protection from creditors while developing a debt adjustment plan, board attorney William Burns said.

"We will continue to attempt to engage the DOE in finding a solution that best serves our community," Lamb said. "But make no mistake – we will not abandon our students or compromise their education while the state refuses to address the crisis they created."

Additional reporting:

• Toms River Regional Schools Applying For New NJ Tax Levy Incentive Aid
• Toms River School Board Rejects 2025-26 Budget With Double-Digit Tax Increase
• Budget Crunch Leading To Administrative Cuts For Toms River Schools