Concord School District Faces $17 Million Budget Shortfall
The Concord School District in New Hampshire faces a significant budget shortfall of $17 million for the upcoming fiscal year, posing a potential threat to staffing and programs. Expenses are projected to increase by approximately $10 million, while revenue is expected to drop by $7.1 million, creating a substantial financial gap.
The proposed budget reveals a rise in total spending by 8.2% to $134 million, intending to maintain current staffing levels and programs. This budgetary strain is partly due to a decrease in state education funding. To limit the increase in the school portion of the property tax rate to 5%, the board may need to implement $14.5 million in spending cuts, as noted by Business Administrator Jack Dunn. Part of the shortfall might be addressed by utilizing reserves, but not entirely covered.
Superintendent Tim Herbert highlighted the difficult situation, acknowledging that various factors, many beyond their control, have converged to present an exceptionally challenging year. The Concord Board of Education has initiated budget workshops, with an official proposed budget release scheduled for March 4. Public hearings will follow on March 16 and 18, with a finalized budget anticipated on March 25.
Rising Costs and Revenue Reductions
Salary and benefits, debt payments, and student support programs are key contributors to the potential rise in spending. Unexpected costs arose last fall from the district's insurance carrier, and a 10% increase in health insurance rates is anticipated. Additionally, the demand for specialized student services, including special education, continues to escalate. Although reserves offer some relief, the $155 million middle school project debt exceeds $6 million in its first year, impacting taxpayers with $1.3 million of new debt in this budget.
The fiscal hurdles were compounded last fall by rising special education costs and a requisite $2 million payment to SchoolCare, the district's health insurance risk pool. A $5 million deficit prompted the board to deplete special education reserves and increase taxes by 1.5% to bridge the gap. These rising costs are exacerbated by a $2.8 million reduction in state education funding, following changes in Concord’s equalized property value assessment.
The district foresees a $300,000 decrease in Medicaid revenue and diminished tuition income of around $168,000, as fewer Deerfield students enroll. The district also contends with a $1.5 million shortfall due to prior reserve usage for special education and insurance funding gaps.
Currently, the school tax rate stands at $14.81 per thousand dollars of assessed property value. A citywide property revaluation is underway and will soon adjust local tax rates and assessed values, with new values expected in the fall. Until then, budget predictions rely on existing rates. The board targets a 5% tax increase, translating to a 74-cent hike in the tax rate. However, exact impacts on homeowners' taxes will only be known once property assessments and tax rates are published, likely affecting owners of rapidly appreciating properties more significantly.