I would not have a problem with it. In fact, I would have a problem if the school did not allow celebrating Halloween. To me it is a traditional, fun time for all of us, but especially children. I know some school districts restrict celebrating Halloween, but I think this is wrong. I can remember how much I looked forward to it as a child. I made my DD's Halloween costumes each year, her first one, at 18 months was a mouse. In kindergarden, she was a girl devil, red leotard, red tights, black cape, black skirt, forked tail, horns, and pitch fork. She is 22 now, a senior in college. Even in high school they wore costumes on Halloween, and she still dresses up. This year she is going to be a fairy.
I really think you should celebrate with your students. It is good to have traditions continued.