When Town Meeting season rolls around each year in New Hampshire, much of voters’ attention is drawn to school budgets. In many communities, school taxes make up the largest share of property tax bills, often far outpacing municipal expenses.
School districts often have little control over increasing costs, and those expenses tend to hit smaller districts harder. A special education student who needs a special placement outside of a district’s schools, for example, can contribute to a significant increase in a budget. While the state provides some reimbursement, it can vary year to year.
Additionally, districts that do not have a middle and/or high school also must pay tuition for residents to attend other districts’ schools. The number of tuition students can vary significantly from year to year, further complicating budgets.
“If you have a smaller pond and throw a rock in it, it looks like a bigger ripple,” said Sydney Leggett, superintendent of SAU 75, a one-school district covering Grantham Village School. “We don’t have the budget to absorb the costs the ways bigger districts do.”
Grantham’s $10.3 million proposed operating budget is 0.1% higher than the current year’s budget. Voters will also be asked to approve a $700,000 bond for a playground and grounds project in addition to a new collective bargaining agreement. However, the projected education portion of the property tax rate is actually 31 cents lower, due to a one-time reduction in New Hampshire’s Statewide Education Property Tax, known as SWEPT.
But the lower rate will be fleeting.
“For us that made a significant difference,” Leggett said of the nearly $308,000 drop. “It’s definitely not going to last, we know, because the SWEPT decrease is just a one-year reprieve.”
If approved, it would be the first reduction in the tax rate in Leggett’s five years leading the district. Also adding to Grantham’s smaller budget increase this year is lower special education costs and a smaller cohort attending school in Lebanon, where most students attend after graduating from the K-6 Grantham Village School. But once again, voters should not expect that to continue.
“In five years, I project our tuition will double because our class sizes are getting bigger and tuition will increase gradually,” Leggett said.
A change in demographics — and the tuition increases that go along with it — is one of the main factors driving up the Cornish School District’s proposed $4.6 million operating budget, which is around 10% higher than the current year’s budget of $4.1 million.
Cornish lets students choose which high school to attend upon graduating from eighth grade. In addition to seeing more students in town, tuition rates at receiving schools have also risen. The budget proposal calls for a $320,000 increase for tuition payments in 2022-23.
“Could we have planned for it? Yes, we knew it was coming because we knew what our student counts were, but financially, there’s not a whole lot you can do to save for that in advance,” SAU 100 Superintendent Cory LeClair said. “You pay for tuition in the years it hits your budget.”
That a far cry from Plainfield, where LeClair is also superintendent of SAU 32. The proposed budget is $7.4 million, only about $10,000 higher than the current year’s budget.
The reason for the much-smaller increase comes down to student numbers, according to LeClair — the exiting eighth grade class is smaller than the exiting 12th grade class, and smaller numbers entering kindergarten.
Other costs have hit the neighboring districts hard, such as an increase in the amount they must contribute to the state retirement fund. The rate will rise 19.6% in the upcoming fiscal year.
“We don’t have any control,” LeClair said. “That can have a pretty big impact on the overall budget when 80% of your budget is staff and every staff member essentially is impacted by it.”
Instead, LeClair and other school administrators try to focus on the spending they can control. In addition to sharing a superintendent, the districts share a business administrator, a special education director and an art teacher, among other positions. Next year, they will share a facilities manager and a custodian. Currently, there are two full-time custodians at each school, but next year there will be one full-time custodian at each school and one that splits time between the schools.
“Staffing really is your largest expense in your budget, so we’re just exploring ways to collaborate,” LeClair said. “Our budgets in Plainfield and Cornish are very tight. There’s not a lot of fluff built in.”
Lyme’s proposed budget is $7.89 million for its K-8 school, which is 3.26% higher than last year. One of the biggest drivers of the increase is special education funding — particularly what it contributes to the high schools its students attend after leaving Lyme. SAU 76 administration costs are also on the rise as the district works to figure out what it wants its leadership structure to look like. Lyme has usually had a district administrator who took on the joint roles of superintendent and principal. That system is now being re-examined, said Jennifer Boylston, who serves on the Lyme School Board. Voters will also be asked to approve a one-time $70,000 warrant article for school building maintenance.
“That’s been another thing that’s kind of hitting Lyme this year,” Boylston said. “So the question becomes, ‘Do we increase the budget, or do we take something away?’ That’s always been the battle.”
Lyme has a special education reserve fund and enrollment response reserve fund that allow the district to absorb unexpected costs.
“We’re lucky to be able to do that,” Boylston said. “Not a lot of districts in New Hampshire can.”
The impact of those uncontrollable costs is also being felt in the Mascoma Valley Regional School District this coming year, which includes the towns of Canaan, Enfield, Dorchester, Grafton and Orange. The proposed $30.5 million budget is nearly 3% higher than the current year’s, SAU 32 Superintendent Amanda Isabelle said. Much of that is attributable to an out-of-district placement for special education that is projected to cost as much as $500,000 for a single year, Isabelle said. While the district expects to receive special education aid from the state to offset the cost, they must budget for the full expense.
“We want to make sure that we have adequate funds to send a student to a placement,” Isabelle said.
During the budget planning process, the district does not know how much the state will kick in. The amount can vary year to year based on how many districts around the state need special education assistance and how much money the state has budgeted to distribute.
“If we did get special education aid, it’s money that goes into the unassigned fund balance and typically gets returned to taxpayers at the end of year,” Isabelle said.
Another source of strain is increasing retirement and health care costs.
“Health care increases are always well beyond our control,” Isabelle said. “It’s those kinds of things that we’re never really sure of. We budget for the worst and hope for the best.”
There have long been complaints about New Hampshire education funding system, which relies heavily on property taxes. That model can lead to vast differences from town to town, as municipalities with higher property values wind up with lower tax rates and more money for education than property-poor districts.
Since two court decisions in 1990s involving the Claremont School district, when the New Hampshire Supreme Court ruled that the state is constitutionally required to provide an “adequate” education and that it must be “equal in valuation and uniform in rate,” officials have wrangled with how to achieve equitable funding.
The wrangling is not over.
Another lawsuit working its way through the courts challenges what the state determines is adequate to fund public education. Known as the ConVal lawsuit after the Peterborough district that initiated it, the effort has been joined by numerous Upper Valley districts including Grantham, Lebanon, Newport, Claremont and Mascoma.
“We do not believe the state contributes enough to adequacy,” said Leggett, of SAU 75 in Grantham.
According to information compiled by the New Hampshire School Funding Fairness Project, a nonprofit and nonpartisan organization, educating a student in a New Hampshire public school costs an average of $17,000 . The state pays around $3,800 per pupil in adequacy grants.
While taxes collected as part of SWEPT stay local, the amount varies by district.
“They’re making the same sacrifice but they’re not getting anything for it,” said Boylston, who is chairwoman of the New Hampshire School Funding Fairness Project. “The state should really be working to normalize it to make things even and fair for all the towns.”
That could require diversifying funding sources.
“To reform the system what we really need is systemic tax policy reform,” Boylston said. “Neither Democrats or Republicans or independent people really want to bring that conversation to the people, and I think that it at least should be part of the conversation”
In multi-town districts such as Mascoma, things are further complicated because each of the five towns pays a different rate and per-pupil cost, based on enrollment numbers and local property values.
“What I really see is there becomes an issue with taxpayers in general, no matter which town they’re from, in resentment to the school,” Isabelle said. “They really see the school budget in driving up their taxes.”
There is a general agreement that changes need to be made to the system to make it better for everyone.
“I think every legislature tries to do something to make things better regarding education funding, but we really haven’t solved the problem yet,” LeClair said. “We haven’t had wide-scale reform of the funding structure in New Hampshire yet.”
Liz Sauchelli can be reached at esauchelli@vnews.com or 603-727-3221.
