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Merrimack school district announces $3.2 million surplus

Union Leader Correspondent

October 19. 2017 12:51AM
Buses line up at Merrimack High School in 2014. (Kimberly Houghton/Correspondent file)

MERRIMACK — A $3.2 million surplus from the school district’s 2016-17 budget will be used to reduce the school portion of the local tax rate.

Matt Shevenell, assistant superintendent, said the majority of the surplus was a result of personnel savings, as well as special education and health insurance savings. In addition, he said there was more revenue than projected for catastrophic aid and medicaid reimbursement.

With last year’s surplus at around $4.9 million and this year’s surplus at $3.2 million, Shevenell explained that the $1.7 million difference has to be made up by taxes. Even with a flat budget, the $1.7 million that needs to be raised by taxes will increase the school portion of the tax rate by about 55 cents, he said.

“We don’t retain any surplus by state law, but a portion of our surplus can be afforded to us in the event that we pass a warrant article,” said Shannon Barnes, chairman of the school board.

Although traditionally every dime of surplus has been returned to the taxpayer, Barnes said the school board is permitted to consider asking voters for permission for the school district to keep a portion of the annual surplus.

“Those of you who know me know that I have been advocating for this for a while, but it is up to you,” Shevenell told the school board this week.

If the district was permitted to bank some of its surplus over the years, it would be able to release some of that money from reserves to help level out the tax rate, he explained.

This idea is discussed vaguely every year, said Andy Schneider, school board member. The idea of retaining surplus for tax leveling should absolutely be discussed further, he said.

Still, Schneider said it is important to also study how the district is budgeting, and to determine where the excess funds are being assigned, and the potential pros and cons of adjusting some of those numbers within the budget.

“There are a lot of nuances that you are trying to do,” said Shevenell, explaining it is difficult to predict the price of oil or how many people will be retiring each year.

Currently, there is about a 10 to 12 percent employee turnover rate within the district each year, according to Shevenell, who said that number varies so it is important to budget for the current staff, their health insurance and potential step increases.

There is the option of looking at historic data to determine areas of frequent surplus in the budget and make reasonable cuts, which could decrease the amount of overall surplus at the end of the year.

“This can be dangerous too,” warned Shevenell.

Schneider said he is not advocating for budgeting differently, but said it would be beneficial to have those risks explained to the public during the upcoming budget process.

Education Local and County Government Merrimack

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