Prior to salary talks, Laconia schools expect $1 million in new expenses
By DAVID CARKHUFF/THE LACONIA DAILY SUN
LACONIA — In 2017-2018, local schools can expect $590,000 in new revenues based on the city's property tax cap and state aid, while new expenses could exceed $1 million, members of the Laconia School Board learned Tuesday.
Business Administrator Christine Blouin, speaking to members of the district's budget and personnel committee, said over $1 million in increased expenses will primarily stem from New Hampshire Retirement System costs for teachers, which are expected to rise 11 percent; and health insurance costs, which are expected to increase about 7.7 percent.
The tax cap, which limits the annual increase in spending funded by property taxes, is based on the rate of inflation, measured by the Consumer Price Index — Urban (CPI-U), for the prior calendar year; and the value of new construction, which is calculated by multiplying the value of building permits minus the value of demolition permits issued between April 1 and March 31 by the prior year's property tax rate.
Last year, for the first time since the tax cap was first applied in 2006, the CPI-U was projected to be at or near zero — the CPI-U ultimately used to calculate the 2016-2017 budget was 0.1 percent.
For 2017-2018, Blouin said the CPI-U has been calculated to be 1.3 percent. With $19 million in building permits, she said the school district can anticipate $590,000 in revenues. The tax cap calculation estimates call for $532,389 derived by building permits and CPI and roughly $62,000 from miscellaneous revenues such as adequacy and vocational funds, totaling $594,389, she reported. The figures are estimates only, she added.
State adequacy aid partly stems from enrollment estimates so this year the forecasts are for a minor increase.
"Our enrollment seems about flat, roughly," Superintendent Brendan Minnihan said Tuesday.
But the retirement system and health insurance cost spikes again will put pressure on the district, said Mike Persson of the Laconia School Board, chairman of the budget and personnel committee.
And Persson said new salary costs from pending teacher negotiations are not included in the $1 million in additional expenses.
Persson, when asked how much teacher raises could add to the budget, said that won't be known until the school board negotiates with the teachers union.
"Our teachers are so far behind at this point in time compared with other districts," he said. "Many of our teachers, actually over 100 of our teachers, are over four years behind on their steps. There are a lot of moving parts that we have to consider before we come to that."
In March 2016, the budget and personnel committee distributed a schedule of proposed cuts amounting to $1,641,995. These were cuts from a proposed budget in order to reach the tax cap threshold.
For fiscal year 2016, the total amount of property taxes collected in support of schools — a number controlled by the city's property tax cap — was $22,784,384, according to the current school budget (2016-2017). For fiscal year 2017 and the 2016-2017 school year, that property tax figure was $23,195,328, an increase of $410,944.
This year, as requested by School Board members, an adjustment sheet with the proposed budget will reflect district needs vs. tax cap mandates, Blouin said.
Persson said this comparison will help illustrate the district's financial challenges.
"Maybe it's just a matter of having the tax cap-based budget with the needs-based add-ons to it so we understand the trade-offs that we're making in coming to that budget number," he said.
Blouin said the district's leadership — much of it new due to a turnover in top positions — will focus on developing budget documents.
"We've met with the administrators. We're looking at coming up with a plan to make sure we can meet the tax cap constraints," she said.
Saturday, March 18 is "Super Saturday," the daylong review of the school district budget.