Health insurance, tax cap force Newfound schools into $1.85M budget cut

BRISTOL — A 16.4% increase in health insurance is among the budget increases that are forcing the Newfound Area School District to look at eliminating field trips and staff positions next year to keep spending within the tax cap.

Interim Superintendent Steven Nilhas introduced his budget proposal during a joint meeting of the school board and budget committee on Nov. 13. He explained that estimated revenue for the 2024-25 fiscal year is $154,524 higher than the current year, while initial budget amount increases to $2.3 million. Under Newfound’s tax cap, the allowed increased in spending is $474,420, putting the budget $1.846 million beyond the allowed appropriation.

The tax cap limits the increase in the property tax assessment to the seven member towns to 2% a year. That means the district can increase spending by more than 2% if it receives extra grant money or more state and federal aid, but if revenue decreases, or does not keep up with rising costs beyond the district’s control, the budget may have to shrink. In 2016, for example, all of the money earmarked for facilities improvements had to be cut.

Nilhas is proposing reductions in facilities spending, but noted the district has made great strides in recent years to catch up on deferred maintenance.

While the state’s education tax (local property taxes collected by the state and then redistributed to the schools) is estimated to increase by $1.3 million next year, equitable eduction aid (also known as adequacy aid) is expected to fall by $1,2 million. Most other revenue sources are projected to change very little, although earnings on investments increase from $700 to $20,000.

The 16.4% increase for participation in the Health Trust adds $428,604 to the budget when compared to the current year, while contractual expenses for transportation increase by $133,371 and for teachers’ salaries by $474,969. Special education contracts are projected to increase by $155,794, and special education transportation and tuition increase by $96,656.

The one discretionary increase is the addition of a fifth grade teacher at Danbury Elementary School. Last year’s decision to move the fifth grade out of Danbury proved to be controversial, and the superintendent wants to restore that position at a cost of $79,044 for wages and benefits.

“We know that the more times students change their schools, that’s disruptive to their education,” Nilhas said. “At the end of the day, it really comes down to people, and remembering, again, why we’re here. We’re here for kids, we’re here for staff to support the kids, while being mindful of the people who pay the bills.”

In order to bring spending within the tax cap, Nilhas said they first looked at the “easy” cuts: $151,000 from the maintenance trust fund, $54,350 in supplies, and $282,250 in repairs and maintenance. That still left $1.36 million to cut. Another round of reductions still left the overage at $1 million.

That is when the tough decisions came: taking $71,950 out of the field trip account and making staff reductions of $544,091. Those included one elementary school teacher (a wash with the addition of the DES teacher), two middle school teachers, two high school teachers, a support staff member at the high school, and a district-wide teacher.

“We reduced field trips to pretty much zero,” Nilhas said. “That means they either won’t have a budget or will have to find alternative funds or methods to fund those trips.”

He continued, “The most painful part ... reducing staff ... gets us to where we need to be budgetarily for this presentation.”

Voters have a chance to increase spending beyond the tax cap at the deliberative session in February. Last year, teacher and Alexandria resident Jay Peringer was able to increase the proposed budget at the deliberative session to avoid several staff cuts.

Meanwhile, Nilhas said, “we are pursuing other insurance options. We’ve already put out requests to other insurance carriers to see if they’ll give us a better deal for either short-term or long-term.”

Changing insurance carriers would require renegotiating teacher contracts, but Nilhas said he hopes to find options that would lower costs while offering something acceptable to teachers, as well.

The superintendent also hopes to achieve savings through economies of scale.

“I want to acknowledge that inflation affects everybody,” Nilhas said. “I’m not here to whine and complain, but I’m just stating a fact, that this is gonna be hard on people.”

During an interview at his office the following day, Nilhas elaborated on the decision to drop field trips. The cost, he said, is close to the cost of a teacher, so it would be saving one teaching position, while some fundraising may be able to restore the field trips.

He said he is concerned the loss of positions and support of field trips are hurting morale in the school community. Mika Austin, the student representative to the school board, voiced her concern about the cuts, lamenting that taxpayers are spending time complaining about non-educational matters, rather than supporting students.

“We can lose teachers over this,” Nilhas said. “Some people are gonna say, ‘I’m tired of fighting for my job and I’m tired of waiting until February or ultimately ’til the vote in March’ ... I think it’s not a good place to be where you have to fight for your job.”

At the same time, he sympathizes with taxpayers. “It’s not easy on anybody, with inflation, the things we’re dealing with, it’s not unique to schools; people are having to deal with it and I certainly don’t want to discount that factor.”

The budget committee has started reviewing the proposal in preparation for a presentation on Jan. 8. The school board then will vote whether to support that budget as part of its preparations of the warrant for the deliberative session on Feb. 3. Ballot voting will occur on March 12.