Nashua School Board Faces Hurdle in Offsetting $5m State Cutback (NH)

February 18, 2011

With Gov. John Lynch’s proposed budget poking a $5 million hole in the school department’s spending plan, Board of Education members are in a quandary over how to proceed with putting together their own budget.

At a budget meeting Wednesday, board members received a bleak assessment from Superintendent Mark Conrad on how Lynch’s proposed budget cuts will impact the schools. According to Conrad, there would be a loss of $5 million to the district next year, should Lynch’s budget be approved as is. The biggest hit will be in the state ending its reimbursement of 35 percent of the employers’ share of retirement costs for teachers, Conrad said.

“That could reflect for us an increase of over $3 million in personnel costs,” Conrad said.

After also factoring in cuts to reimbursements to school building aid and special education catastrophic aid, Conrad said there could be a $5 million swing in revenue.

“This has a significant impact on the local community,” Conrad said. “Many of us are disappointed that the governor decided to just shift down cos ts.”

While Conrad cautioned that it’s still early in the state’s budget process and those figures could change, Board of Education members must now decide how to approach preparing a budget for the next school year. Board President Bob Hallowell said if the projections are correct, it would require major cuts to the budget.

“That’s not just a few elementary school teachers,” Hallowell said. “That’s massive changes to the way we function.”

Conrad had proposed a $95.2 million budget for the 2011-12 school year, which would be a 1.9 percent increase. Wednesday’s meeting was supposed to mark the beginning of the board’s deliberations over how to amend that proposal. While some felt it was best to wait for more concrete numbers from Concord, others said the board should move forward.

“My inclination is to proceed with the current plans and come up with a budget that is reasonable,” board member Steve Haas said. “If we have to tweak it, at least we know what we’re tweaking it from.”

Hallowell said given the magnitude of the projected loss, it’s difficult to know how to proceed.

“I’m a little torn between that and pausing,” he said. “There’s value in having a budget we think we could be comfortable with, but if the problem is in the nature of millions of dollars, that’s like starting the budget all over again.”

Ultimately, after only a few general budget questions and no motions or decisions, the board adjourned. The next budget meeting is March 9.

In the mean time, some members are looking for ways to prepare should the district be forced to slash millions in spending. Board member David Murotake has asked administration to com e up with a budget that meets only the state’s minimum standards for school approval.

“Based against that, we could look at the recommended budget and identify line item by line item which satisfy the minimum requirements and which are in excess of the minimum requirements,” Murotake said.

Conrad said Murotake’s request is extensive and would require more dialogue at the board level before administrators began that process. Conrad cautioned that debating such a proposal publicly could have a devastating effect on staff morale.

“As soon as we say here’s a program we could eliminate, you’ve got teachers working with those students every day watching their jobs on the line,” Conrad said. “I can think of many positions that would be on a cut list based on the request you’ve made.”

Hallowell said he was disappointed in Lynch’s budget proposal, in that it shifts costs down to the local level but doesn’t free up communities to spend the money how they see fit. State and federal regulations require school districts to spend money in certain areas.

“He’s done nothing in his budget that gives this district any leeway in how we provide services,” Hallowell said.

Conrad said it’s clear the city as a whole is in a state of fiscal uncertainty. For the first time he could recall, Conrad said the mayor did not provide specific budget guidance to the district.

“She’s struggling with this just as we are,” Conrad said, referring to Mayor Donnalee Lozeau. “This may be a very difficult type of budget year as we try to figure out what’s going on in Concord.”

The school district has seen its reimbursement for special education catastrophic aid dwindle over the past four years. Special education catastrophic aid is reimbursement from the state for students whose costs far exceed the state average. In 2008, Nashua received $2.7 million. That was reduced to $1.6 million the next year, then $818,000 and $517,000 this year.

Conrad said based on the state’s new reimbursement formula, the district is projected to receive less than $100,000 next year. At the same time, the district continues to be legally required to meet the needs of the most intensive special education students.

Conrad said the longer the state takes to figure out aid amounts for districts, the closer districts get to have to start considering whether to send out layoff notices to teachers and other staff. Nashua has to let teachers know by early May whether they will be renominated for the following school year, Conrad said.