Like most districts across the state, Concord’s latest school budget was driven by climbing salaries, health insurance rates and retirement costs, which account for nearly 80% of all spending.
The combination of those increases along with lagging state funding for education meant another local tax increase or cuts elsewhere in the budget.
Last week, the Concord School Board approved a $96,316,405 operating budget for the next school year, which represents a 4.44% increase from this year’s $92.2 million spending plan. The combined local and state tax rate is projected to increase by 52 cents or 3.68%
The district continued to put away money for future use, including $1.7 million in the Facilities and Renovations Trust Fund, while retaining a $2.1 million unreserved fund balance at the end of the year.
Business administrator Jack Dunn said the unreserved fund balance is generally between $1.8 and $2.4 million, to cover unforeseen circumstances which may arise, like fluctuations in energy costs.
“That’s the only thing we have to gauge against volatility,” Dunn explained. “In these times, sometimes it’s helpful to have that little bit of float.”
Concord’s school budget has experienced a 35% budget increase over a period of 10 years, according to district data, from a $71,415,714 budget in the 2012-13 school year to $92,224,213 in 2022-2023. The average budget increase was 3.04% per year, with the biggest change, a 5.16% increase, occurring between the 2020-2021 and 2022-2023 school years.
At the same time, Concord School District’s student enrollment has been declining slowly, according to New Hampshire Dept. of Education enrollment data. Since 2011, total student enrollment has decreased 16% from 4,842 in 2011 to 4,079 in 2021.
Dunn said a decrease in enrollment doesn’t translate to budget savings because it isn’t enough to outweigh steadily increasing cost of salaries and benefits, and the district loses some state funding that is tied to enrollment.
“You also lose the revenue when you lose a student, because you have adequacy that’s tied to that,” Dunn said. “Losing those kids isn’t enough to offset the acceleration of salary and benefits. That’s the challenge.”
In next year’s budget, $74,346,959 – the majority of the proposed budget – will go toward salaries and benefits for school employees. Besides about $2.3 million in employee pay raises, the budget also contains $775,144 in new health insurance costs and $493,899 more in New Hampshire Retirement System contributions. Workers’ compensation and dental coverage also increased this year.
The amount that school districts have been mandated to contribute to the New Hampshire Retirement System has ballooned over the past decade.
Contribution rates to teacher retirements have nearly doubled over the last decade from 11.30% contribution in 2013-14 to 21.02% contribution in 2022-2023, an increase of 86%. The most recent jump was from 17.80% to the current rate of 21.02%.
“It’s significant,” Dunn said. “It’s probably the third largest line item in the budget, beyond health insurance and salaries.”
While the state of New Hampshire once contributed up to 40% for New Hampshire’s retirement system, lawmakers eliminated state contributions in 2011, meaning the state has contributed nothing to the retirement system for the last 10 years beyond the contributions it owes for its own state employees. On top of that, the rates have dramatically risen to cover the retirement system’s unfunded liability, which had grown to $5.7 billion by 2021.
The result is that towns and school districts like Concord have little control over the amount they must spend on employee retirement, which is passed on to the local taxpayer. Schools must either increase their budgets to cover the ever increasing costs or balance the budget by cutting spending in other areas.
Dunn says he’s noticed considerable downshifting in costs from the state to local school districts over the years, particularly with the amount the district receives from Statewide Education Property Tax (SWEPT).
The amount coming from SWEPT has decreased steadily in the last decade, but those losses have generally been made up by state adequacy aid. The net result is the Concord School District has received flat funding by the state for the past decade, according to figures provided by the Concord School District
This year’s budget was passed with some dissent among school board members, mainly around school discipline, mental health and the role of the SRO.
Board members Jonathan Weinberg and Kate West both voted against finalizing the budget on March 30, citing a desire for more discussion about the role of the district’s school resource officer position.
“I didn’t feel that we – including myself – really made it a priority to discuss the SRO role in the district, especially relative to the discipline task force recommendations,” Weinberg said Monday. “It’s important to show that it’s a priority to me to continue to discuss those recommendations, and voting against it was a way to demonstrate that.”
In recommendations, presented at a February meeting, the School Discipline and SRO Task Force suggested bringing in seven “school safety coaches” to offer mental health support while reducing the resource officer role to a crime-only focus.
Taking inspiration from the Task Force’s “safety coach” idea, the School Board decided to bring in four AmeriCorps members and a coordinator next year who will focus on supporting student mental health, but declined to reduce the SRO’s role. Weinberg proposed reducing the SRO position to part-time in a March 9 work session, a motion that other board members declined to pass, citing a need for more lengthy discussion.
“There were concerns that there needed to be more time to flesh things out for a plan, but I think we should have been in engaging in creating that plan with the discipline committee in order to meet our deadline before this budget,” West said Monday. “I did not want to include a budget that did not include financial support for the recommendations of that committee, and this budget did not have any investment for what was proposed.”