Last week, the Manchester Board of Aldermen finalized several Fiscal Year 2021 budget appropriations, most notably appropriations for the Manchester School District. There were several options on the table, all worth a deeper look.
Putting $3.5 million in state aid into the school budget
Manchester received approximately $7 million in state aid earmarked to reimburse school district spending, but only about half of that amount could be placed into a proposed Fiscal Year 2021 budget without going over the city’s expenditure cap.
If that other half of state aid was placed into the district’s budget, it would have gone toward classroom supplies and the expendable trusts for Special Education and Curriculum Adoption.
“We structured the spending in that way because we knew it was one-time money, and it would not have been responsible to add a continuing expense that we couldn’t pay for in the future,” said Manchester School District Superintendent Dr. John Goldhardt. “Without that money, we now need to decide what pieces we will need to go without and what we will need to find funding for.”
If it had been placed into the budget, that would have put Manchester’s mill rate at $24.82, up from $24.32 this year. An individual’s property tax rate is the mill rate per thousand dollars of assessed value on their property. So, for example, if the mill rate is $20.00, the property tax bill on a property assessed at $1,000 is $20.00; a property assessed at $10,000 is $200.00; a property assessed at $100,000 is $2,000.00; and so on. Basically, a property owner can take the assessed value of their property
The Mayor Craig (and later) O’Neill/Long Budgets
Mayor Joyce Craig proposed an appropriation figure of just over $183 million in January, an amount followed by At-Large Alderman Dan O’Neill and Ward 3 Pat Long with modifications in certain line items brought forth by the COVID-19 pandemic. That amount hit the limit of the expenditure cap, as the Manchester City Charter does not allow mayors to submit budgets higher than the expenditure cap or revenue cap, the two parts of Manchester’s tax cap.
The mill rate for this plan, which is what was ultimately accepted by the Board of Aldermen, will be $24.44.
The $3.5 million in state aid above the expenditure cap in this proposal goes toward reducing property taxes for Manchester residents.
The Sapienza Plan
Ward 5 Alderman Anthony Sapienza noticed that in the O’Neill/Long budget that the School Department was receiving less proportionally than the non-school portion of the budget compared to the Fiscal Year 2020 budget, proposing to add $1.3 million to the O’Neill/Long budget to maintain the same ratio heading into Fiscal Year 2021.
This proposal, which like the $3.5 million plan, also exceeded the expenditure cap and would have put the mill rate at $24.57.
Alderman Shaw’s Request
During the meeting, Ward 9 Alderman Barbara Shaw wanted to keep the Fiscal Year 2020 mill rate of $24.32, which according to Manchester City Assessor Robert Gagne would have required approximately $1.09 million in cuts across the board.
Assumed Growth
One wild card that Gagne says could not be immediately taken into account last week due to the tax cap is Gagne’s projection that the tax base will likely grow $45 to $55 million by the time finalized mill rates are announced in the fall.
Assuming that level of growth, the Craig/O’Neil/Long proposed figure would actually produce a mill rate of $24.31, lower than last year’s figure.
With that scenario, the $3.5 million proposal mill rate would become $24.69 and the Sapienza proposal would become $24.44.
Comparisons Across the State and Across the Border
Manchester’s Fiscal Year 2020 mill rate was the 97th highest among 260 municipal entities in New Hampshire, between Wilmot ($24.39) and Newmarket ($24.26).
Among Manchester’s immediate neighbors, Goffstown ($24.58) was higher while Litchfield ($23.65) Hooksett ($21.55), Auburn ($18.81), Bedford ($18.95) and Londonderry ($19.39) were lower.
Manchester was also higher than its two cities of comparable size along the Merrimack River: Nashua ($21.76) and Lowell, Mass. ($13.36 – residential, $26.77 – non-residential)
CORRECTION: An earlier version of this story said the tax base would grow by 45 to 55 percent, rather than million, which was incorrect. Gagne said million. We apologize for the error.