The Jericho Union Free School District is widely celebrated as one of the premier public school systems in the United States. The academic excellence is real and well-documented.

So too is a decade-long financial pattern that raises fundamental questions about budget calibration, levy setting, and capital allocation.

The district operates a $143,870,018 annual budget for 2025-2026, funded almost entirely by property taxes. Every May, the community votes to approve the next year's spending plan. Every year, it passes. And every year, for ten consecutive years, the district generates substantial surplus - collecting more revenue than projected while spending less than budgeted.

This analysis examines ten years of independent auditor reports - Fiscal Year 2016 through Fiscal Year 2025 - to document the pattern and pose the questions it raises.

Through consistent over-projection of expenditures and under-projection of revenues, the district has generated approximately $146.8 million in combined budget surplus over the past decade. As of June 30, 2025, the district holds $78,437,498 in total cash and cash equivalents - approximately 54% of the annual operating budget.

The academic achievements speak for themselves. The financial patterns deserve equal scrutiny.

Every year, the district presents a budget projecting expected revenues and required expenditures. Every year, actual results diverge from those projections - in the same direction.

One year of variance could reflect conservative budgeting. Two years might be coincidence. Ten consecutive years of surplus in the same direction constitutes a structural pattern that demands examination.

The Ten-Year Record: From the District's Own Audited Financial Statements

Over the past decade:

Revenue projections: In all ten years examined, actual revenue exceeded projections. Not once did actual revenue fall below the budgeted estimate. The annual over-collection ranges from $2.2 million to $4.7 million.

Expenditure projections: In all ten years examined, actual spending came in below budget. Not once did actual expenditures exceed the budgeted amount. The annual under-spending ranges from $7.6 million to $15.1 million.

Combined result: Every year produces surplus. The range is $11.6 million to $17.9 million annually.

If budget projections represented best estimates of expected outcomes, one would anticipate variance in both directions over a decade - some years over, some years under.

Ten years of one-directional variance is not random noise. It is either structural inaccuracy or structural design.

Both explanations warrant Board attention. The first suggests a methodology problem requiring correction. The second suggests a policy choice that should be explicitly acknowledged and debated.

What Does $146.8 Million Represent?

To contextualize the ten-year surplus:

New York State law limits school district unassigned fund balances to 4% of the following year's budget. This provision exists to prevent accumulation of excessive reserves in general operating accounts.

Jericho's compliance with this requirement follows a precise pattern:

Each year, surplus funds are transferred to restricted reserve accounts so that the unassigned fund balance closes at exactly 4.00% of the following year's budget.

The precision of this result is not in question. The question is: Why are annual surpluses consistently large enough to require transfers of $8-15 million to restricted reserves every year?

If the district routinely generates surplus sufficient to fund the statutory maximum unassigned balance plus millions in restricted reserve transfers, the tax levy is being set above realized operating need.

The 4% cap was designed to prevent districts from holding excessive general fund balances. Transferring surplus to restricted reserves maintains technical compliance while accumulating substantial cash holdings that face no statutory limit.

As of June 30, 2025, district cash holdings total $78,437,498.

As a percentage of annual budget: $78.4 million represents approximately 54.5% of the $143.9 million annual operating budget. The district holds cash equivalent to more than six months of total operations.

Per enrolled student: With approximately 3,300 students enrolled, cash holdings equal approximately $23,757 per student.

Interest earnings potential: At current rates of approximately 4%, $78 million in cash generates roughly $3.1 million annually in interest income - which flows back into reserves.

Relative to annual surplus: If the district generates $11-15 million in annual surplus, the current cash position represents approximately 5-7 years of accumulated variance between budgeted and actual operations.

If actual spending closes $8-15 million under budget every year, and actual revenue exceeds projections by $2-5 million every year, then the tax levy is consistently set above realized operating need.

The accumulated result is $78 million in cash holdings.

At what level do cash holdings become sufficient? What is the target? When does the district determine that reserves are adequate and levy calibration should change?

These are not rhetorical questions. They are governance questions that the Board should answer explicitly.

While restricted reserves have grown to $53 million, the district's largest actuarial liability remains unfunded.

OPEB (Retiree Healthcare): $102,704,080

OPEB - Other Post-Employment Benefits - represents the district's obligation to provide healthcare coverage to retirees. The actuarially calculated liability is $102.7 million.

Amount set aside to fund this obligation: $0.

New York State does not require prefunding of OPEB liabilities. Many districts operate on a pay-as-you-go basis, funding retiree healthcare from current revenues as costs are incurred.

However, the district has chosen to prefund other future obligations:

This raises a capital allocation question: Why are volatility reserves for pension contributions funded while the largest actuarial liability - three times larger than pension reserves combined - remains 0% funded?

The district operates with $102.7 million in OPEB liability at 0% funded - demonstrating that pay-as-you-go is a workable approach for substantial long-term obligations. If that arrangement is acceptable for the largest liability on the books, what risk justifies accumulating $53 million in reserves for smaller, more predictable obligations?

Compensated Absences: $19,508,417

Employees have accumulated $19.5 million in sick and vacation time payouts owed upon retirement. The EBALR reserve holds $17.3 million to fund this obligation.

Gap: $2.2 million underfunded.

The district is accumulating capital reserves while the liability owed to current employees remains underfunded by $2.2 million.

On August 1, 2019, the district made its final payment on outstanding serial bonds. As of that date, Jericho became entirely debt-free.

Prior to 2019, a portion of the annual tax levy funded debt service payments - principal and interest on bonds issued for prior capital projects.

When debt service ended, the ethical expectation would be levy recalibration - reducing the tax burden by the amount no longer needed for debt payments.

What happened instead:

The district now funds all capital improvements from accumulated reserves rather than bonding. The FY2025 audit notes:

And:

Municipal bonds exist to spread the cost of long-term assets across the years of taxpayers who benefit from them. A roof installed in 2025 serves students through 2055. Bonding allows families arriving in 2030 or 2040 to share the cost of infrastructure they will use.

Pay-as-you-go funding shifts the entire cost to current taxpayers. Families paying Jericho property taxes from 2019-2025 funded capital improvements that will serve students for decades - including families who haven't yet moved to the district.

This represents an intergenerational transfer: current residents subsidize future residents.

Whether this is appropriate policy is debatable. What is not debatable is that it should be an explicit policy choice, discussed openly, rather than the default result of maintaining levy levels after debt service ended.

The levy calibration question: If debt service payments ended in 2019 and annual surplus has continued at $11-15 million, the levy appears to be set above the level required for current operations plus reasonable reserves.

Victor Manuel serves as Assistant Superintendent for Business at an annual salary of $289,405.

This compensation places the position among the highest-paid school business officials on Long Island and reflects the expectation of sophisticated financial management.

Over the ten years examined:

Forecasting is not a passive exercise. It is an iterative discipline that should converge toward accuracy over time. A decade of directional variance suggests the model is not converging.

The performance question:

If a business administrator produces projections that miss in the same direction by $11-17 million every year for a decade, one of two conclusions follows:

If the first explanation applies, ten years without methodology correction represents a performance issue. Compensation at $289,405 should correlate with accurate financial forecasting and continuous improvement.

If the second explanation applies, this should be explicitly stated as district policy. The Board and community should understand that budgets are calibrated to produce surplus rather than to estimate actual operating need.

What documentation exists?

For $289,405 in annual compensation, taxpayers should expect documented answers to these questions.

The district's budget process follows incremental methodology: each year's budget starts from the prior year's baseline and adjusts upward.

This approach has a structural flaw: it never questions whether the baseline itself is correct.

Example: If legal services were budgeted at $195,000 last year, the starting point for this year is $195,000 - not the amount actually spent. If actual spending was $162,000, the $33,000 variance doesn't reduce the baseline. Next year starts at $195,000 (or $201,000 with a 3% increase), not $162,000.

Over time, this creates persistent gaps between budgeted and actual amounts - exactly what the ten-year data shows.

Zero-based budgeting requires each budget category to justify its requested amount from zero, based on documented need and historical actual spending - not prior-year budget.

Evidence of incremental budgeting effects:

Administrative overhead grew at nearly twice the rate of instruction. In a zero-based environment, this ratio would require explicit justification: what administrative expansion was so critical that it warranted growth at double the rate of classroom spending?

The structural question: When was the last time any major budget category was subjected to zero-based review - justification from actual need rather than prior-year baseline plus increase?

Ten consecutive years of:

This pattern continued through multiple Board compositions, multiple budget cycles, and multiple economic conditions (including pre-pandemic, pandemic, and post-pandemic years).

The governance question:

At what point does the Board examine the structural pattern rather than approving individual annual budgets in isolation?

The Board's fiduciary duty includes ensuring that tax levies are calibrated to actual operating need - not set at levels that produce predictable eight-figure surplus year after year.

Either:

Both possibilities warrant public discussion.

Tomorrow night (February 12, 2026), the Board of Education will hold Budget Workshop #2. The following questions address the patterns documented in this analysis:

On the Ten-Year Variance Pattern:

On the 4.00% Fund Balance:

On Cash Holdings:

On Liability Funding:

On the Debt Payoff:

On Forecasting Accountability:

On Budget Methodology:

On Transparency:

The data presented in this analysis comes entirely from the district's own audited financial statements - documents prepared by independent accountants and submitted to state authorities.

The pattern is clear: for ten consecutive years, the district has generated substantial annual surplus by collecting more revenue than projected while spending less than budgeted. That surplus flows to restricted reserves, cash holdings grow, and the tax levy continues to increase.

This creates a structural choice that the Board must address:

Option A: Acknowledge that projections are calibrated conservatively

If budgets are intentionally set to produce predictable surplus for reserve accumulation, this should be explicit policy. The community should understand that levies are set above expected operating need by design, and debate whether that design serves taxpayer interests.

Option B: Commit to improving projection accuracy

If budgets are intended to reflect best estimates of actual operations, the ten-year pattern represents a methodology failure. The district should implement changes to bring projections closer to realized results - which would naturally reduce the gap between levy and actual operating need.

Option C: Recalibrate the levy

If reserves have reached adequate levels - $78 million representing 54% of annual budget - the district should consider whether continued surplus generation serves any purpose beyond further accumulation. Levy calibration to actual operating need would reduce taxpayer burden while maintaining appropriate reserves.

The status quo - continuing the pattern without acknowledgment or adjustment - is not a responsible option. Ten years of data make the pattern undeniable. The only question is how the Board chooses to respond.

The Jericho School District delivers exceptional educational outcomes. This analysis does not dispute that record.

What this analysis documents is a financial pattern that warrants equal attention:

The academic excellence and fiscal patterns can both be true simultaneously. Acknowledging one does not require ignoring the other.

Taxpayers fund a $143.9 million annual operation. They deserve confidence that:

The Board of Education has the authority and responsibility to address these questions. Budget Workshop #2 provides an opportunity.

The pattern is documented. The questions are clear. The choice belongs to the Board.