Article 10 will slow the growth of Bedford taxes

Friday, February 3, 2012

On the school district ballot in March, Article 10 will be a citizens’ petition that could act to slow the explosive growth of school district expenditure by restricting the use of budget surplus. I urge your support.

As recently as the 2001-02 school year, the district budget was only $28.6 million. If the proposed teachers’ contract passes for 2012-13, the budget will be approximately $61 million. Over the intervening period, if spending had risen only at the combined rate of inflation and enrollment growth, the budget would be approximately $43 million. The difference of $18 million on the tax rate is $5.50 per $1,000 of property value, or $1,650 per year in taxes on a property assessed at $300,000. We could each have quite a nice vacation every year for that.

One of the drivers of this staggering increase is the school district’s practice of including excessive contingencies in the budget.

Every year, the school board, despite its claims of frugality, puts forward a budget that assumes an absolute worst-case scenario in several major areas of expense, particularly salaries, health care, special education and utilities. The impact of these overestimations is that a surplus, which has run at an average in excess of $2 million for the last few years, materializes at the end of the year.

In salaries, for example, the budget assumes that all current teachers will return, ignoring the obvious effect that older, more highly paid, teachers will retire or leave and be replaced with younger ones who are lower on the salary scale. The generating of a surplus in the salaries account is so predictable that the annual auditors’ report uses a similar sentence every year to explain the overage. They probably have it set up in their word processor so that they only have to plug in a different number each time!

A reasonable contingency, in and of itself, is not such a bad thing if it were all rolled forward each year to form revenue for the following year.

The problem that arises, though, is that excessively large surpluses have proven irresistible for school boards. Capital expenditure items, which would properly require the scrutiny of a warrant article, have been purchased without the consent of the voters.

Data provided by the school district shows the following unbudgeted expenditures that have been made from surplus in recent years without voter approval:

• 2006-07: High School Construction Transfers, $1,514,000.

• 2007: Bleachers, $285,000.

• 2008: High School Construction Transfers, $336,253; Concession stand, $227,000.

• 2009: Athletic field, $931,000.

Last year, voters allocated $300,000 of the surplus to be used at the board’s discretion for maintenance purposes. Yet, at the end of the year, rather than use what had been approved, the board withdrew an additional $386,000, with only Bill Foote voting against the proposal, to fund a major roof repair and a new telephone system, neither of which was budgeted for 2011. That decision directly impacted your tax rate this year, without citizens getting a vote on it, because it reduced the carryover to 2012.

Perhaps worse, surplus funds can be leveraged politically to influence bond votes by reducing the apparent, but not the actual, amounts for building expansions. In a couple of years, when the development itch returns, without the constraint of Article 10, we could well see: “Oh, we need a field house for $6 million, but because we have a $2 million surplus, it only costs $4 million.”

Of course, you and I still pay the full $6 million because the funds that form the contingency would be consumed and require topping up through property taxes the following year.

No doubt the school board and administration will react with indignation to Article 10, and claim discretion to spend up to the amount approved in the budget. Legally, they are correct, and, to be clear, no suggestion of any illegal conduct is implied in the article. But voters deciding how to cast their ballots should ask themselves whether this “bait and switch” tactic of padding some large accounts, and then diverting the inevitable surplus to wish list items in economically challenging times, is a deceptive practice that should find no standing in our community.

On the town side of local government, Bedford already adopts an informal policy of sealing off surplus in the salary and health care accounts from poaching for other projects. Article 10 would align fiscal policy for town and schools, reduce taxes by increasing fund balances rolled forward as revenue, and restore the correct relationship between board and electorate by ensuring that future capital expenditures receive the full public scrutiny of a warrant article.

Richard Evans is a Bedford resident and a former member of the Londonderry School Board.