School District administrators estimate that under the provisions of the city’s tax cap, the school district could see as little as $142,000 in additional money for next year’s local budget.
In addition, all three union contracts are up for renegotiation and administrators also learned this week that health insurance rates could rise as much as 26.2 percent — or a maximum increase of $1,064,000.
The provisions of the current tax cap allow next year’s budget to increase by a “capped amount” that is based on the Consumer Price Index-Urban — a standard measure of inflation — and the dollar amount of building permits in a 12-month time period from April 1 to March 31.
For example, the 2009-10 budget was based on a CPI-U of 3.8 percent, meaning that the local portion of the school budget was $20,001,940 and was multiplied by 3.8 percent — giving the district the potential to raise an additional $760,000.
That increase was added to the local school tax rate of $9.32 per $1,000 evaluation multiplied by the dollar amount of building permits as of March 31, 2008 — or new growth — giving the district an additional $242,000.
With adjustments and according to the cap, the school district could have raised an additional $1.1 million for this school year — a number that was reduced by $500,000 in June by the Laconia City Council.