Goffstown schools set aside funds to pay Obamacare costs
GOFFSTOWN — In the two contracts coming before voters in March, the school district has made provisions for any future health insurance costs relating to the Affordable Care Act, and will use contingency funds to ease the tax impact.
School Board members Reta Chaffee and Ben Hampton and School Board Vice Chairman Philip Pancoast presented the contracts at the district's Feb. 1 deliberative session to a crowd of about 80.
In Warrant 3, the district is seeking the approval of a two-year agreement with Goffstown Education Association at an estimated cost of $528,091 for the first year, and $471,065 for the second year, of which $15,304 is offset from the reserve fund. The first year's amount to be raised through taxes is $512,787, which will be paid with the 2.5 percent contingency fund and $512,787 in returned insurance premiums to the district from the Local Government Center. The contingency fund was approved by voters in 2013.
Warrant 4 relates to the three-year collective bargaining contract with support staff. The first year's estimated cost is $117,299, $214,176 for the second year, and $246,687 for the third year. The contract for support staff will provide a salary increase of 92 cents per hour in the first year, and 93 cents per hour in the second and third years.
There will be no tax impact with either contract in the first year, and anticipated LGC refunds could result in a reduction in tax impact in the second year.
Negotiated language in the contracts state that if a successor agreement is not approved, the district will propose an insurance plan that falls below the level requiring the Cadillac tax.
The "Cadillac tax," created by the Affordable Care Act, is an excise tax on the value of generous health plans and is expected to go into effect in 2018.
"This will provide insurance that will not create a tax that we have to pay. This tax, which could be $1 million and all that will get you is less money in your pocket," said Hampton. "We're being proactive. This will be a model for other contracts."
The teacher/professional staff contract, the school board said, was designed to attract and retain good teachers. The contract would provide salary increases of 3.9 percent in the first year and 5.9 percent in the second year. A teachers' contract has not been approved in seven years, and they have not had a raise since 2011, said Hampton, who presented the article. The support staff has not had raises since 2010.
Chaffee said the state average for teachers is $54,314, $1,909 more than Goffstown, and new hires with a bachelor's degree is $34,023. Under the proposed contract, new Goffstown hires in 2014-15 will receive a minimum of $32,000, and $33,296 in the second year of the contract.
Teachers, professional staff and support staff will also pay an increase in insurance premiums and co-pays in the second year. The savings in health insurance and prescription costs to the district will be about $295,000 for the teacher contract, and about $98,488 for the support staff contract.
Merit pay for teachers
The teachers contract also provides merit pay with a different method than in previous contracts.
"We now use performance-based evaluations and qualifications as a consideration as well as longevity. If teacher A has 20 years and teacher B has 15 years but teacher B has done a better job, we can consider that and not have to keep a teacher strictly on longevity," said Hampton. "We are rewarding performance."
Resident Scott Gross, who said he supports the contracts, also made a motion to include the words "no tax impact" and that $512,787 in an overpayment rebate from the Local Government Center for employee health insurance premiums paid by the district in 2010-11.
Resident Ann Jordan spoke in favor of the motion; she said when she was a single mother raising two children she focused on how much her taxes would go up when voting on a budget and other costs.
"I think it's very critical that when it's proposed that teachers and staff are getting raises people should know there is no tax impact," she said.
Some warrant articles are worded specifically according to state statute and cannot be changed. But after the board contacted the district's lawyer for approval, the warrant will now include a note indicating the 2.5 percent contingency and "no tax impact for the first year" of the contracts.
Voters will be asked to approve the school district budget, warrants and to elect candidates on Tuesday, March 11, from 7 a.m. to 7 p.m. at Goffstown High School.