The Toms River Board of Education is suing the state of New Jersey as the district faces a near-$27 million budget shortfall.

The school board introduced a $291 million budget for the 2024-2025 school year that was balanced on the revenue side by an anticipated state loan or another funding source that would have made up the massive shortfall in state aid.

But the state has not made loans available this year to distracts like Toms River that have seen significant cuts in state education aid under the State Aid Formula S-2.

"The fallout has pushed the most cost-efficient district in the state of New Jersey to bankruptcy, as districts that spend far more and tax less have benefited with major aid increases to their budgets, leading to wasteful spending and ridiculous salary increases and non-essential pet projects,” said Toms River School Superintendent Michael Citta.

News 12 has reached out to the state for comment but did not year back.