Londonderry recently came into a rather troublesome issue concerning the town’s 2017 tax rate.
One of the major factors within determining this tax rate came with totaling up property values across town. By finding this total and submitting it to the state government, the tax rate is then revealed for the town, decreasing when these values grow. This rate, in turn, allows town officials to determine how much revenue to collect from residents.
However, there was an error with the newly implemented electronic forms used for this purpose this year, with one line of inquiry not meant to be on the form. The inclusion of this line ultimately led to a lower tax rate than intended, meaning that the town saw around a six hundred thousand dollar revenue shortfall this year.
In order to remedy this situation, the Town Council recently held a joint session at Town Hall on December 11 with members of the School Board to come to a solution on the matter. Council Chair Tom Dolan was quick to remind residents that the town has the means to fix this problem.
“We have the money. It’s in the bank”, Dolan stated.
The conflict in this situation, however, was not if they had the funds, but who would be covering the costs. Both the town and school district have undesignated funds for emergency situations such as this. But while the school’s fund has only existed for a couple of years and currently sits at four hundred thousand dollars, the town’s fund has existed for far longer and dwarfs the school’s fund at eight million dollars.
It is for this reason that most of the board argued that they should not have to cover any of the shortfall, or at least only cover a rather minute amount. Board member Leitha Reilly felt that if they were to cover around one to two hundred thousand dollars of the shortfall, which was suggested by Dolan during the session, it would leave the schools in bad shape were one to go through some sort of structural emergency, such as flooding. Furthermore, Reilly also felt that current budget negotiations could be negatively impacted with a proposal such as this.
“As we enter budget season, this has bearing on that”, Reilly noted.
To add to their argument, Board Vice Chair Jenn Ganem felt that if the school’s funds were used for the shortfall it would create a hardship situation when they apply for a bond which will likely be needed in the next few years due to the growth in student population. She felt that taxpayers should be paying attention to this issue. After the meeting, Ms. Ganem clarified that applying for a bond is similar to applying for a mortgage, although the school district is put under extensive scrutiny due to the amount of the note. “If we reduce the amount in the reserve fund, or worse, we have a deficit – it will raise a lot of red flags and the interest rate on the bond could be higher. That has impact on the taxpayer.”
However, members of the council argued that the board should share some of the load. Council Vice Chair John Farrell, who was quite vocal opposed to the idea of the board not sharing the weight of the shortfall, argued that not only does the town’s fund need to remain above a certain level at all times, but that the board is obligated to assist because of all the tax payer dollars they receive each year.
“What I’m looking for is skin in the game from the schools”, Farrell said.
Since this was the first discussion between the two sides on the matter, neither side was able to come to a conclusion over who should be paying how much. Several school board members stated they wanted taxpayer input on this matter. Dolan instead suggested that both parties should pick two representatives to meet together at a future date to come to a decision.