MIDDLEBURGH - A possible 10.5 percent increase in health insurance costs at Middleburgh Central School could cause a budget shortfall of more than $936,000 for the 2026-27 school year.

Health insurance costs will not be finalized until March, but business administrator Robyn Bhend warned school  board members at their January meeting that rising heath insurance costs may put MCS in a deep hole to begin the budget process.

Ms. Bhend detailed a "rollover" budget for board members on January 14 which maintains all personnel and programs from the current year.

The rollover budget would push spending to $26.2 million for the 2026-27 school year, up $1.1 million or 4.36 percent from the current $25.1 million budget for the current year.

Unless revenues increase or costs are cut, the district could be facing a budget shortfall of up to $936,934, Ms. Bhend said.

"Although this budget increase may look daunting, our goal is to  decrease the current budget gap as we continue developing the next year's budget," Ms. Bhend stressed. Budget gaps in the past have totaled more than $1 million and board members whittled them down to a manageable amount.

"Unfortunately, a lot of the regional school's budgets will be impacted by health insurance rate increases this year, which are much more than in recent year's past," Ms. Bhend noted.

The health insurance hike could be as much as $551,622 or 10.49 percent. This could include a 17 percent increase in medical premium (actives/retirees under age 65), which has been finalized,  a 10 percent hike for MAP plan (retirees over age 65), a 5 percent increase for Med. Part B reimbursements, and a 10 percent increase in prescription drug premium (estimated).

A budget gap of $936,934 allows for a 1.5 percent tax levy increase ($158,486) and $258,486 more in revenue, according to Ms. Bhend. If the state foundation aid goes up by 1 percent ($86,779) and the tax levy was increased by another half a percent ($52,829), the budget gap would be reduced to $797,326, Ms. Bhend said.

Possible adjustments before the budget is approved in April include:

* The final health insurance hike will most likely be between 3 and 7 percent, Ms. Bhend said.

A 7 percent hike would reduce the rollover budget by $31,468, a 5 percent hike would reduce spending by $52,446, a 3 percent increase would decrease spending by $73,425, and no increase would drop spending by $104,893.

* Incorporate confirmed retirements with replacement(s) or attrition. This impacts both payroll and benefits budgets.

* Order next year supplies with this year’s funding.

* Review software/subscription use analytics.

* Consider going above 1.5 percent tax levy increase to 2 percent.

* Offset health insurance cost applying CASHIC subsidies. Deposit one month’s funding with end of year 2026 funds to pay for one month’s costs in 2027 (approximately $420,000 with rollover rates). 

* Consider reduction of equipment and contractual line items.

The rollover budget includes a budget Increase for salaries of $418,152, or 4.28 percent, a 4 percent increase for all salaries plus MCSRPA salary enhancements, a 25 percent reduction of federal grants (nine FTEs in grants), and a budget increase for fringe benefits of $572,586, or 7.89 percent.

The next budget workshop is scheduled for February 11. Board members will approve the 2026-27 budget in April and it will go to voters in May.