Presentation educates officials, residents about Donor Town status
October 06, 2010
CENTER HARBOR — Local officials heard explanations on their pending Donor Town status and how much it will impact their budgets during a presentation at the Center Harbor's selectmen meeting last week.
Pat Remick, coordinator of the Coalition Communities, made the presentation for Center Harbor as well as officials from Moultonboro, including Town Administrator Carter Terenzini, Board of Selectmen Chair Joel Mudgett, Advisory Budget Committee members Jean Beadle and Alan Ballard, and Superintendent Mike Lancor.
The Coalition Communities is also sponsored by the city of Portsmouth and the city provides the organization with an office.
On July 1, 2011, Meredith, Moultonboro, Center Harbor, Sandwich, and many other Lakes Region Communities will become Donor Towns and will be required to contribute a portion of their statewide property tax.
Remick said Moultonboro will be the second hardest hit donor community in the state, contributing $3,442,033. This ranks next to Derry, which will lose $7,132,379. Sandwich is 37th in contributions with $325,255 and Center Harbor ranks 40th with $298,093. Meredith is 88th, losing $64,247. Remick said communities like Meredith will not have to contribute money, but will be receiving less from the state.
According to the current law, the state is required to raise $363.5 million in Statewide Education Property Taxes (SWEPT) to pay for education funding. The total amount to be raised will be 941.8 million in 2011 and $1.01 billion in fiscal year 2012. The remainder of the total comes from the general fund, such as lottery revenue, real estate transfer tax, and other sources. The SWEPT rate is set to raise the $363.5 million at the $2.19 tax rate. If a community with high property values raises more under SWEPT than what the state determines is the cost of adequacy, this is called their excess SWEPT.
Remick said he formula is in transition and if a community raises more SWEPT than its 2009 cost of adequacy, the community can keep the excess if it is spend on local education, otherwise the excess is sent to the state for redistribution. In fiscal year 2012, any excess must be sent to Concord.
Adequacy is calculated by multiplying a $3,450 base by average daily membership for every student in grades K-12 with half-day kindergarten counted as half a student.
Additional monies are added to that total for special education students, English learners, and students eligible for free and reduced lunch with an accompanying formula.
The presentation said state aid does not equal the reality of costs and the $3,450 base is a "pretend number." While $3,450 is allocated per student, the cost of education for Inter-Lakes Elementary is $15,336.20 and $14,774.09 for Inter-Lakes High School.
Remick said there is no stat supreme curt ruling on if the formula is constitutional, though supporters of the formula said it is.
The coalition said the best solution for this will be to pass a constitutional amendment to target aid. There is a possibility the free and reduced meals factor could change causing donor communities to have to pay more. Additionally the legislature could attempt to continue the transition/collar on aid, or there could be an increase in the SWEPT.
"I think we're going to be in an area of not being able to budget again," Remick said.
Remick said the Coalition Communities does not advocate for any specific political party, but noted that those supporting the new formula are Democrats and many opponents are Republicans. However, either party might create provisions that could intensify the situation.
"I beseech you to talk to your candidates to ask them what they are going to do for your town," Remick said
Remick said any residents who are upset at the changes should be encouraged to tell their opinion to the state.
"As local officials you have no control over the state portion of the tax," Remick said.
While some residents have said this formula could lead to people not paying their taxes, Remick said that would not be effective as the town has to pay that amount anyway.