The Concord school board increased its budget by $490,000 on Wednesday to account for what may be a whopping heating bill this winter.
But taxpayers will be relieved to know that they’ll be asked to pay less per dollar of assessed property value for education than anticipated when the lesser budget was adopted in March.
That’s because the previously projected $105 tax increase over the prior year for the owner of a $250,000 home – or a 2.85 percent increase in the combined state and local property tax rates – assumed an increase in property values that proved to be too conservative.
Because property values within the Concord School District increased more than projected, the tax rate will be lower than imagined. SAU 8 Business Administrator Jack Dunn said the education-related portion of the tax bill for a $250,000 home will instead be $83 higher than the previous year, in spite of the decision to increase the budget.
That doesn’t account for city and county taxes, which round out the total tax bill.
The school board also decided the fate of a $495,000 surplus from fiscal year 2016 on Wednesday, an amount that resulted from one-time insurance holidays. That sum was put into an account to stabilize tax spikes that may arise in the future, Dunn said.
The board members unanimously chose the most cautious of the five options Dunn presented them. On the other end of the spectrum, they could have chosen not to increase the budget – hoping for a warm winter – and used the surplus to offset taxes. In that scenario, education taxes would have increased less than half of 1 percent, or a $15 increase for the owner of a $250,000 home.
But the impending closure of Concord Steam in May has brought emergency rate increases for steam heat, which warms four schools in the district, and board members agreed they should plan for the worst.
Based on the current cost of steam heat, Dunn projected that the $855,000 heating budget would be just enough to cover a mild winter like the one the area experienced last year.
On the other hand, if usage rates are as high as they were over the 2014-15 winter – when the area shivered amid near-record cold – the bill could approach $1.3 million, Dunn said.
“We’re luckily in a position of being able to decrease the percent increase of taxes, while still being really responsible planning for this budget,” said school board Vice President Jennifer Patterson.
The budget increase may also help in the case of other contingencies. Dunn said there’s potential, for instance, that Concord Steam will be allowed to increase its rates further, if it’s on track to be unable to pay for its responsibilities because the winter is exceptionally warm or because too many of its customers find alternative heat sources.
Dunn said he’s also keeping an eye on special education costs, which could run over budget and nearly exhaust a trust fund for that purpose. He noted, however, that those expenses are volatile and hard to predict.
The Concord Steam rates could also theoretically decrease, Dunn said, but only if the company is exceeding its revenue projections amid a particularly cold season. In that case, he said, the district will be left paying for increased usage.
“It’s sounding more and more like the $1.285 (million) number is the one we ought to be thinking about,” board member Jim Richards said.
Despite the smaller-than-expected increase in taxes, the combined state and local education rate will reach the highest it has been since 2003. Over the past 10 years, that rate has increased about 37 percent.