The School Budget

This year's proposed school budget is $3,069,665, which is $42,216 or 1.39% higher than last year's budget. The school board also expects a decrease in revenues of $138,636 for a net increase in the budget of $180,852. This will increase the mill rate by approximately $0.68. The cost of education makes up 45% of the tax rate in Ashland. Approximately %68.5 of the cost comes from salaries and benefits of teachers, administrators, and staff.

A common perception is that the education budget is too high. The school budget, after all, makes up 45% of the total tax burden. A little over 68% of the budget goes to salaries and benefits, and many of the teachers and staff are at or near the top of the pay scale. Still, compared to other towns with populations between 1400 and 2600, the Ashland school budget in 2009 was $512,000 less than the average, and the cost per resident was $238.78 less than the average.

There are other factors to consider as well. (1) The debt service for the school budget is $0.00. (2) There are no large large capital expenses anticipated over the next few years. (3) A number of teachers are likely to retire over the next few years. (4) There are no proposed funded warrant articles for the school. (5) Increases in this year's budget have come from outside sources: increased fuel costs, increased enrollment, increases in health insurance, and increases in retirement contributions. Increases in expenses or decreases in revenues will be offset somewhat by retirement. The school budget may increase, but increases in the budget will not cause large spikes in the tax rate because the school board has budgeted for short-term and long-term expenses.

One of the reasons that the school budget makes up 45% of the tax burden is that the town has put off large capital expenditures and has not budgeted for long-term capital expenses. As of 2009, the town had $20,440,271 in accumulated depreciation of capital assets and $7,470 in capital reserves. Accumulated depreciation is an estimate of the cost of replacing or repairing assets, and a capital reserve is money saved for capital expenses. The town is proposing approximately $235,000 in warrant articles for capital expenses this year, $150,000 to establish a capital reserve account for roads and the rest for equipment and building repair. We will still have $20,200,000 in capital expenses to take care of over in the future.

One additional problem is that the town has a very high debt to expense percentage. The average debt to expense percentage for towns in New Hampshire is about 15%, but Ashland's percentage as of 2009 was 77.5%. This means that a large portion of what we pay in taxes and utility bills goes to pay off debt. It also means that our ability to borrow more money will be limited in future.

These facts help to explain, in part, why the town budget is $3,135,756 higher than the average of towns with populations between 1400 and 2600 even though the education budget is lower. Unfortunately, we can expect large spikes in the tax rate in future years because we have not only put off replacing and repairing our capital assets, and we have put off saving for them while running up a huge debt. We need to begin to reverse this situation if we are to restore the town to financial health.