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SB2 and Default Budgets Legislation HB 1221

By CNHT | January 3, 2016

by Richard Evans,
Reprinted with Permission of the Author

Richard Evans lives in Bedford, and is a former school board member in Londonderry, and a winner of the Josiah Bartlett Center’s “Better Government for New Hampshire” award.

In communities across New Hampshire, school boards are preparing 2016-17 budgets to be voted on in the spring.

This is an excellent time for voters in the so-called SB2 communities to be asking the simple question: “Have all one-time expenditures been properly subtracted from the default budget?”

When SB2 passed in 1995, allowing official ballot voting to replace town meetings, it was welcomed because of the broader voter participation that it ushered in. Little noticed, at the time, was the poison pill spending defense known as “the default budget” that was lurking in the fine print.

Each year, on the budget article of the warrant, voters are asked if they want to support the board’s budget. If they vote that article down, then the default budget, printed in the same article, automatically takes effect. Voters may have noticed that the difference between the two budgets is often so small that it is barely worth voting. That is not how it should be, but it is no accident either.

The default budget is not an arbitrary figure. It is a legally defined, calculated amount based on the previous budget. It sounds scarily Spartan, but a much better title would be “status quo budget”. It provides, fully, for all the operating costs of the schools, exactly as for the previous year, and adds contractual raises already negotiated. It is not supposed to include one-time expenditures. So in broad terms, if the default budget is adopted, no cuts of programs are required and thermostats are not turned down, but no headcount is added, and no new construction or running tracks are developed.

In 1995, the total cost of educating the state’s 200,000 K-12 students was around $1.2 billion. Twenty years later, after only about a 58 percent increase on the Boston Consumer Price Index, the cost has exploded to $3 billion, but there are now just 180,000 students. If the price tag had moved in line with inflation and enrollment for the last two decades, cost would be only $1.7 billion. The difference, every year, is $1000 for every man, woman and child in the state. SAT scores meanwhile, have stagnated. All the extra spending has purchased nothing.

It is not difficult to see how the default budget can be shamelessly manipulated to deny voters an opportunity to put the brakes on the runaway train of spending. All that a school board has to do is to conveniently forget about making the subtraction of the one-time expenditures from the default budget. Since nobody is watching, presto, the two budget numbers on the ballot come out about the same, and the board creates a classic “heads the board wins, tails taxpayers lose” situation. Voters cannot say no. However we vote, the schools get not only the guaranteed raise in operating funds, to which they are entitled under the law, but also the one-time expenditures that are supposed to be decided by the rest of us.

For the last three years in my own town, Bedford, from a total combined budget of almost one-fifth of a billion dollars, the proposed amount subtracted from default budgets for one-time expenditures was exactly…zero. Last year, under pressure, the board eventually admitted to $140,000. But that still only represented about 10 percent of the annual capital expenditure on items like fuel tanks, parking lots, new roofs, fiber optic cables and a host of other things that the law clearly intends should be decided upon by the electorate.

Nor does this seem to be an isolated case. A public records request to the New Hampshire Department of Revenue Administration revealed there are 78 SB2 districts. For the last three years, representing 234 budgets, the DRA had no record for 101 of the default budgets. I wonder why? Of the remaining 133, no less than 75 claimed they had zero in one time expenditures to subtract. That does not pass any reasonable sniff test.

State Representative Bart Fromuth (R-Bedford), has submitted legislation, HB 1221
, that seeks to halt budget manipulation and restore decision-making on capital expenditure to the electorate. But that cannot become law in time to influence this year’s ballot. So anyone wanting a meaningful vote on slowing down school tax increases should call school board members, right now, and insist on an honest default budget.

Topics: School Spending, Town Meetings | Comments Off

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