Amid increased health care, salary costs, Merrimack Valley SD proposes 1 percent budget reduction

Last modified: Saturday, February 14, 2015
As the Merrimack Valley School District’s $38.9 million operating budget takes shape, so too do the annual discussions of district budget hawks looking to find savings.

Despite almost $1.6 million in downshifted state retirement costs, increases in health care costs and salary increases, the district has presented a budget 1 percent smaller than the current one. The budget is $391,010 less and includes no new programs or positions. The proposal has been met with skepticism from some taxpayers, including some who spearheaded failed efforts last year to cut more than $350,000 from the budget.

The district’s annual meeting is scheduled for March 5 at Merrimack Valley High School in Penacook.

“Our attempt is to be as transparent and forthcoming as possible. We understand what people are saying, and our main goal is to be good stewards of our taxpayers’ dollars, all while knowing we want to provide a top quality 21st-century education,” first-year Superintendent Mark MacLean said. “We know there is a fine balance there.”

Merrimack Valley was able to realize significant savings because $2 million in principal and interest from a 2005 bond is coming off the books next year. The $20 million bond paid for renovations at the middle and high schools, which serve Boscawen, Loudon, Penacook, Salisbury and Webster.

The budget’s impact varies by town, and is based on a complicated formula that includes the number of students from each town and property valuations. Webster has the lowest 2014 local school tax rate, at $11.69 per $1,000 of assessed property value; Penacook has the highest, at $17.29 per $1,000 of assessed property value.

The school portion of the tax rate could increase from 40 cents to $1.30 per $1,000 of assessed property value in the district’s towns, according to early estimates from the district. That number could change, MacLean said.

The current budget was trimmed in recent weeks by an additional $145,000 in transportation savings, in part a result of this year’s switch to full-day kindergarten. The initial budget’s $61,000 increase in transportation costs came under fire by residents who cited last year’s school district meeting, when officials estimated full-day kindergarten would result in savings. The transportation costs were then reduced by the $145,000, resulting in an $84,000 decrease from last year’s budget. In the district, more mandates from the state and continued health care increases, as well as a reliance on property taxes, have caused tension between some taxpayers and the school district.

“We never talk about the programs we want for our children or the quality of teachers we want to hire, we only talk about money and cut, cut, cut,” said Lorrie Carey, a school board member from Boscawen. “We are at a point that there is nothing left to cut. It is unreasonable for anyone to believe that constantly cutting the budget leads to a better education.”

The district’s increased costs include $338,000 more to the New Hampshire State Retirement System, $520,000 in additional health insurance costs and $699,266 in previously approved contractual salary increases.

“These are fixed items in next year’s budget,” MacLean said.

Residents have seemed leery of the continued increases in personnel costs, which many districts are dealing with.

“You’ve got to do a better job in negotiations,” Bill Murphy of Boscawen said. “Unless they are threatening to strike, you have not had effective negotiations.”

Roy Merrill, who last year tried to cut about $363,000 from the budget at the district meeting, said he didn’t see the increased costs as a benefit to students.

“None of the increases do a thing for the kids’ education. It all goes to faculty, and it has to come to an end,” Merrill said at a meeting last month.

Health care costs will be a focus of upcoming contract negotiations with the district’s three unions, MacLean said.

Next summer, the district will go to the table with the administration and support staff unions. The following year, the three-year agreement with district teacher ends.

(Iain Wilson can be reached at 369-3313 or iwilson@cmonitor.com or on Twitter @iainwilsoncm.)