FRANKLIN — In one of the few – and perhaps the only – cities in the state where municipal services receive more tax money than schools, students here will no longer have the option of learning French this fall. The last of the French foreign language positions was eliminated due to reductions in state aid.

Along with the French teacher, the Franklin School Board eliminated one of four guidance positions. Instead of having two guidance counselors at the middle school and two at the high school, each school will have one counselor, with the third being shared between the two schools.

Paul Smith Elementary School lost its behavior specialist; Positive Action, an in-school suspension program, was eliminated; and one custodian’s position was cut.

Far from eliminating five positions, the School Board had hoped to add three new positions for the 2018-19 academic year, but the third year of million-dollar reductions in state aid money forced members to hand out pink slips instead.

The School Board looked to the Franklin City Council for help and came away with $422,722 beyond the normal city allocation, which saved some other positions that were on the line. School Board Chair Tim Dow had proposed changing the way the city allocates local tax money, increasing the school’s share from 34 percent to something closer to a 50-50 split. But doing that  would decimate police, fire and other services, said Judie Milner, who serves dual roles as city manager and finance officer.

“It would have led to a skeleton police department responding to emergencies only, no ambulance services, we would have had to cut the library and make it part-time, eliminate people at City Hall — every department and services would be cut. For a small city, we do a great job to provide pretty much minimal service.”

Lopsided

The split between local municipal and school spending appears lopsided in Franklin, compared to other cities and towns in the state. Laconia for example, allocated 53 percent of local tax dollars to the schools and 47 percent to municipal operations in 2017.

(This calculation excludes both the county tax and the state education tax to conform with the way Franklin does its calculation. The state education tax actually is local property tax money, as well, which the state collects and then redistributes to school districts. By doing so, New Hampshire is able to claim that it is state money.)

Milner maintains that Franklin’s allocation does exactly what the Claremont II decision was designed to do: provide tax relief to residents of so-called “property-poor” communities. By providing additional state funding in the form of “stabilization” grants for schools, places like Franklin could focus their limited tax dollars on other municipal needs.

School advocates say the stabilization grants were intended to provide more money for the improvement of schools, and not to maintain them at the same level while freeing up money for municipal operations.

The education lawsuit that led to the Claremont II court decision had been filed by property-poor municipalities, including Franklin, that were having a hard time providing even a basic educational program without increasing taxes to unsustainable levels.

In Franklin’s case, the decision resulted in an $8 million windfall, between state stabilization funds and foundation aid, the latter based on the number of pupils attending public schools.

Today, those funds have dropped to $4 million. Declining enrollment, as well as the New Hampshire Legislature’s decision to phase out stabilization grants, are eroding the benefits of Claremont II and bringing those communities together to consider filing a new lawsuit.

In the meantime, Milner said, the shortfall that schools are facing will force the city to reconsider how it allocates the tax money it collects under the city’s tax cap.

Claremont, the lead plaintiff in the landmark court case, allocates 60 percent of its local tax money to the schools and 40 percent to municipal operations. Its total tax commitment is twice the size of Franklin’s — $29,757,929 vs. $14,159,884 — and it provided $15,792,768 to its schools and $10,351,795 to municipal operations in 2017. Franklin’s local school taxes were $3,789,264, with $7,484,351 going to municipal operations.

Laconia collected $19,069,311 in local taxes for schools and $16,964,122 for municipal operations.

Belmont collected $9,524,457 for schools and $5,637,821 for municipal operations, a 63-37 percent allocation.

Gilford collected $15,546,932 for schools and $8,612,704 for municipal operations, a 64-36 percent allocation.

Meredith collected $12,953,720 for schools and $9,538,824 for municipal operations, a 58-42 percent allocation.

“Now that the state is reducing that money for fiscal disparity, we have to consider that the buck stops at the city of Franklin, and we have to consider what we’re losing,” Milner said.

Impact on schools

School Administrative Unit 18 Superintendent Daniel LeGallo said Franklin’s stabilization grant was $162,000 less this year than last, and the projection for adequacy funding (the amount is not set until September) is $7,257,559, a reduction of $494,548 from last year.

To add to its fiscal problems, Franklin schools are losing tuition from students who live in Hill. The Hill School District is now sending its seventh- through 12th-graders to Newfound Area schools, with only four remaining to complete their education in Franklin.

In discussions with the City Council, the school district has had to explain why its budget does not go down as student enrollment decreases — a situation not unique to Franklin. LeGallo said that trend may be changing, as the incoming kindergarten class has 85 students, compared to 62 last year, requiring an additional kindergarten teacher.

While many parents said during the budget discussions that they were considering taking their children out of Franklin schools because of a lack of support from the city, LeGallo was unsure whether any had actually done so. Franklin has traditionally had a transient population with the numbers fluctuating throughout the year, and LeGallo said there has not been an observable change. He did acknowledge that parents have many other options — from home schooling to the Compass Classical Academy, a Franklin charter school — which can result in a loss of state aid because those students are not counted in the census for Adequacy Aid.

“We’re pleased that the City Council gave us $423,000 [more], but we’re still short of what we need to be whole,” LeGallo said.

Millner said, “We have a lot of people that need the tax cap, and they can’t afford any more.”

Franklin averages $500,000 a year in delinquent taxes, she said, noting that the number rose to $650,000 during the recession. This year, the city issued 58 notices to residents who might lose their properties to tax deeds, but Milner said they were able to work out payment arrangements to keep people in their homes, and Franklin ended up taking only five properties. Last year, it took eight.

“That’s going up if the taxes go up,” she said.

Milner said concerns about Franklin schools do not appear to be affecting home sales.

“I don’t know if I can quantify people moving out, but people are moving in,” she said, noting that homes have been selling in five to eight days after being placed on the market.

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