This story was originally produced by the Concord Monitor. NHPR is republishing it in partnership with the Granite State News Collaborative.
Faced with a pair of significant unforeseen expenses, Concord’s Board of Education voted to raise its budget for the year by about $3.5 million over what it had previously approved in the spring.
Board President Pam Walsh said the change was part of a “balanced plan” to ensure residents don’t experience a more significant tax increase next year and the district’s reserve funds remain at healthy levels. The district is also making reductions, withdrawing from trust funds and relying on unexpended money from last year to cover portions of a $5 million shortfall it is facing.
Board members considered a range of options to address the deficit, including relying more heavily on trust funds, but Walsh said that would create “the potential for a greater catastrophe” in the future.
“I don’t think any of us like being in this position,” Walsh said. “I do think this is a balanced solution that avoids an even greater spike next year.”
Related coverage: School districts look at savings and hiring freezes to cover a $30 million health care bill
The budget increase – combined with a lower-than-expected property valuation – will raise the local portion of district residents’ school property taxes by 6% from last year, which is 1.5 percentage points greater than what was initially projected. The total year-over-year growth is $0.86 per $1,000 of property value, or $301 on a home valued at $350,000.
The increase is the largest Concord residents have seen in their local education taxes since 2022, when the rate grew by nearly 8%. Over the last 10 years, the rate has grown by an average of 2% each year – slightly lower than the average rate of inflation during the same period.
As multiple districts across the state face financial challenges, board members said Concord is comparatively well-positioned to handle its shortfall due to its relatively robust reserves. Business administrator Jack Dunn said residents would have experienced a tax rate increase of 10% if not for the trust funds, which are covering a portion of the shortfall.
“I would advise folks who feel like they are getting hosed, that they read up on what other districts are having to deal with right now – maybe explore what Claremont is experiencing,” board member Sarah Robinson said.
“We’re in a good place,” she said. “It may not feel like it, but we’re incredibly fortunate to have really smart people who care about our children. And investing in our kids is the best thing we can do for our dollars.”
Concord’s shortfall was driven primarily by an unexpected $2 million bill the district received on Oct. 1 from the risk pool that administers its health insurance and by student services expenses that appear set to more than double what the district had projected in the spring.
“A tsunami’s coming. So how as a board do we find the balance between using money we have in the bank and saving money so that next year’s hit doesn’t break our jaw?”School Board member Barb Higgins
The insurance bill is part of a $50 million payment that is being shared by dozens of school districts across the state because the risk pool that provides their employees’ health insurance failed to adequately project how much insurance claims would cost over the past two years.
The student services are for out-of-district placements for students with special education needs that the district can’t meet and for other contractors, such as those that provide occupational and physical therapy. The district is legally required to provide these services.
The amount Concord submitted to the state for special education aid reimbursement – an imperfect indication of student service expenditures – nearly doubled from 2023-24 to last school year, according to data provided by the Department of Education. The 87% growth experienced far outpaced that of the state as a whole, which saw an increase of 10%.
District leaders have described the cost of the contracted services as a “new normal”, though the board has also discussed forming a committee to study the growth and consider how to bring it under control.
The insurance assessment, meanwhile, has prompted district leaders to consider other health insurance options. SchoolCare, the risk pool that Concord and many other school districts are in, has historically kept their insurance rates lower than they could find on the open market, but comes with the downside of having to pay the difference when costs exceed revenue.
This is the first time in SchoolCare’s 30-year history that it issued an assessment. Concord is one of 59 school districts in the state that received a bill.
Walsh said the district is planning to organize other members of the risk pool to call for an independent audit.
The budget increase comes as the board is set to potentially vote Thursday on whether to proceed with an estimated $155 million construction of a new middle school.
At their meeting on Wednesday, the district’s approach to managing its financial challenges prompted resident and frequent school board critic Charles Russell to threaten that the tax increase could prompt Concord’s board to lose some of the unusual control it holds over the district’s finances. Unlike in most districts, which require voter approval, the board currently has unilateral control over its budget.
“Raising taxes again, I think, is just another step toward a charter amendment basically taking away the school board autonomy,” he said.
Board members frequently emphasize that they take the power afforded to them seriously, particularly as they increasingly wrestle with how to handle rising district costs that show no sign of abating.
“A tsunami’s coming,” board member Barb Higgins said. “So how as a board do we find the balance between using money we have in the bank and saving money so that next year’s hit doesn’t break our jaw?”
