LACONIA — As he sat in a local breakfast diner near McIntyre Circle, Mike Persson of the Laconia School District and member of the Budget and Personnel Committee spoke both directly and philosophically about preparing a level-services school budget for next year, which, by all estimates, will be about $1 million short next year.
Noting he can't speak for the whole committee, Persson said one of the issues with preparing next year's budget is factoring in the cuts made by the city council to the past two years' budgets. The City Council cut $60,000 from the 2014-2015 budget and cut an additional $100,000 from this year's budget.
The 2015 -2016 budget totals $38,085,000 with about $18.4 million being raised through local property taxes.
Persson calls it the multiplier effect, meaning every time one budget is cut it means the base budget used to calculate new money as a factor of how the city's tax cap works, is lower than it would have been without the cuts.
"Expenditure cuts below the tax cap erodes services over time because of the tax cap," he said, adding he applied a theory brought forth by the Columbia Business School regarding Massachusetts's Proposition 2 ½ and declining property values over time. Specifically, the study notes that about 208 communities in the years 1990 to 1994 were forced to override Prop 2 ½ to meet community, especially school district, needs.
Yet, said Persson, the school is bound by collective bargaining agreements that include step raises and cost-of-living increases coupled with never-ending increases to the costs of health insurance. The district is beginning its negotiations with the three unions whose contracts expire in June.
School budgets, said Persson, are further complicated by the unknown factor of special education costs, which is the item that could cause the school district to nearly deplete its special education trust fund this year.
Persson calls the cuts "arbitrary" because the city council didn't say what should be cut, but just gave the School Board a dollar amount with the stipulation in 2015-2016 that it couldn't come from contributions to one of the many trust funds the schools use for emergencies, like the special education trust fund or the building maintenance trust fund.
"I stood before the City Council last year when they cut the $100,000," he said Saturday. "I told them we may be able to cut it for this year but that it would make it much more difficult to meet the district's needs for future years."
"I told them that now, [meaning last year,] was not the time to reduce the districts budget but was the time to build reserves so that we can effectively manage future budgets," he said.
Persson said both the School Board and the City Council knew last year that the Consumer Price Index Urban or CPIU – a measure of inflation – used to calculate one portion of how much the city can raise through property taxes was going to be negligible. School District Business Administrator Ed Emond said the CPIU being used to calculate the 2016-2017 budget is 0.1 percent, or next to nothing.
Persson also told the City Council that the CPIU is a national measure of inflation and does not necessarily reflect the New Hampshire or even New England's rate of inflation.
School District Business Administrator Emond said last week the total amount the school district will be able to raise through taxation is about $350,000, which means that to put forward a level-services budget, the amount that could be raised through local property taxes will leave the district short about $1 million.
Persson said he knows the school district would still come up short on the revenue side even without the previous year's cuts, but, by his calculations, the shortage would be about $380,000 less if its budget hadn't been cut in prior years.
He also agrees that the city shouldn't override the tax cap that he says has done a good job at keeping property taxes level and taming any large increases in rates.
"Nobody wants to override the tax cap," he said.
While the Budget and Personnel Committee looks at expenses that can be cut, Persson is also advocating for a more aggressive look by the school district at alternative sources of revenue.
First among them are public-private programming endeavors. As an example, a good portion of the Huot Technical Center science and technology program was built with a large donation from the late Richard Dearborn the owner of Eptam Plastics.
Persson suggested at the Budget and Personnel meeting that the district should look at more programs like that where community partners, like LRGHealthcare, the Lakes Region Community College, and private businesses would contribute to education programs that would help them have a large pool of qualified job applicants.
He also suggested more aggressive grant seeking. The committee identified three individuals within the school district, including Asst. Superintendent Kirk Beitler, and Huot Director Dave Warrander who are especially adept at finding pertinent grants for LHS and Huot Center programming.
During that conversation, Persson also said the district may have to look at user fees for some after-school programs, like sports, band, and drama, and from only those families that can afford them.
He said the Columbia study said many Massachusetts families pay user fees for after-school activities and that many families in Laconia spend a lot of money on summer camps to hone their children's skills.
"But they still get their essential components for free through taxes," he said.
Persson said the school district should do a better job of coordinating all of the fundraising efforts for individual class projects. He said the school district has not idea where all of these clubs come from, except for donations made through the United Way and the Children's Auction.
People are exhausted from having multiple hands out, he said, saying that in some cases money could be going to organizations that don't need it.
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