Friday, January 26, 2007

School bond cut to $10.5M Middle school addition eliminated

Is the Newport school board more concerned about looks or spending our tax dollars wisely?

Jim and Cathy attended their first school board meeting on Thursday January 25th. Prior to attending the meeting we did some primarily research on school district spending. Our resource was the financial reports from the New Hampshire Department of Education. During the 1998-1999 school year spending per pupil for Pre-School-12 was 5724.70 in 2004-2005 the amount spent per pupil for Pre-School - 12 was 9729.73. This is an increase of 70.9%. During this same time period inflation only rose about 17%. We expressed our concern about costs far exceeding the rate of inflation. We also expressed concern over the possibility of building a new school because the student population has been decreasing instead of increasing.

The story below appeared in the Eagle Times on Friday, January 26th.

School bond cut to $10.5M
Middle school addition eliminated

Aaron Aldridge
Contributing Writer

NEWPORT - The Newport School Board approved a scaled down version of a school building proposal at Thursday night's meeting that would drastically cut the impact on the local school property tax, but would still move six-graders out of the middle school and back to Towle School.

"We've really slashed it by a third," Newport building committee member Tony DiPadova said. "What we've really come down with is a bare bones project."

The new $10.5 million bonding proposal will not include the construction of a new middle school, but major renovations to Richards School were left intact.

"We're simply doing life safety at the high school and Towle," DiPadova said.

If the project is approved by voters, residents would see a property tax increase of about $1.22 per $1,000 of property value the first year, $3.01 the second year and $2.91 the third year.

Newport Superintendent Bill Mealey said the property tax increases were only an estimate and said the final numbers would be available sometime today. The building committee approached the board with a proposal of $10,434,000 for the school renovations which include a major addition to Richards School, life safety projects at Towle School and the middle high school. After some discussion by board members, an additional $41,000 was added to the grand total for "bump-outs" on the proposed Richards School multi-purpose room bringing the grand total to $10,475,000.

The board was split 2-2 on its first vote and the proposal failed due in part to board member Kathy Sarles objection to the $41,000 addition.

"For me it's just adding things back," Sarles said. "$41,000 isn't a lot of money, but it's not educationally based. It's aesthetics."

A second vote was called to accept the building committee's initial recommendation without the additional $41,000 and that vote was also defeated 2-2.

The discussion over the final project amount the board wanted to put before voters lasted almost two hours with the focus primarily on the final tax impact.

Sarles said she wanted to keep the tax rate impact under $3 per thousand dollars of property value and the additional $41,000 added to the project would put that rate at $3.01. She said she didn't think voters would approve anything over the $3 threshold.

School board chairman Anthony McConnell said he wanted a unanimous vote from the board, but said if he couldn't get it, he still wanted the aesthetics added to the Richards School addition.

Just before the third vote was called Sarles said she felt she was in a predicament.

The final vote approving the proposal was unanimous.

"I have a different feeling about what will be accepted," Sarles said.

Included in the proposal are new lockers for students at the middle high school, reengineering of the parking lot in front of the middle high school and life safety renovations at all three schools.

The original proposal before the school board had included a two-story addition at the high •school which would have housed all of the middle school students. That proposal was in excess of $15 million and would have added $1.78 to the tax rate the first year.

The bond and school budget will be voted on at the annual school meeting in March.

Thursday, January 25, 2007

Reminders for office deadlines, register to vote and school board meetings.

Thursday, January 25, 2007

7:00 p.m.
The regular meeting of the Newport School Board will be held in the Lou Thompson Room at the Sugar River Valley Regional Technical Center in Newport, NH

If town members wish to have a voice at the school deliberative session meeting on February 6th the must register to vote Saturday 27th between 11:00 and 11:30 at the town offices.


Filing Dates for Candidates for Newport School District Office

January 24, 2007 to February 2, 2007

Declaration of Candidacy forms are available at the SAU #43 Office, 9 Depot Street Suite 2, Newport, NH. The regular SAU Office hours are Monday-Friday, 7:30 – 4:30. Registrations will be accepted until 5:00 p.m. on February 2, 2007. If you have any questions, please call 863-3540 Ext. 106.

(2) School Board Member 3 Year Term
(1) School District Moderator 1 Year Term
(1) School District Treasurer 1 Year Term
(1) School District Clerk 1 Year Term

Charlie Arlinghaus: State retirees should own their pensions, not an IOU

The following is a continuation of yesterday's topic. The below article appeared in the Union Leader.

To learn more about public policies related to education visit the The Josiah Bartlett Center for Public Policy

Charlie Arlinghaus: State retirees should own their pensions, not an IOU

Wednesday, Jan. 24, 2007

THE TAXPAYERS of New Hampshire have been scammed by the Dover police chief. But he hasn't broken any laws. He is guilty of scamming a bad system, not of out-and-out theft. The real culprit here isn't a police chief who used clever accounting to make the rules work for him. The culprit is the system itself.

Benefits in the retirement system are supposed to be based on a person's last three years of service so that retirement pay is related to salary level at the end of your career. In fact, the system uses not the last three years but the three highest years of pay in case someone worked part time toward the end of the career.

Recognizing the potential for abuse, the retirement system requires that the final year not be more than 150 percent more than the second highest year. This limits the impact of huge severance bonuses that might give an inaccurate picture of a person's actual salary.

However, the Dover situation exposed all the seams in the system available for exploitation. The chief received bonuses and unused leave payments amounting to about $250,000. Cleverly, he staggered the payments over three years to avoid the safeguards in the system. As a result, he will retire on $125,000 a year, despite his salary of $114,000.

As a matter of public policy, we don't have a retirement system so the wealthiest employees can get rich at taxpayer expense. In theory, the system exists to protect a worker in old age after years of faithful service. The ability to game the system doesn't really exist for the rank and file worker.

With the retirement system facing significant financial problems, there will be much discussion about cuts and contributions vs. benefits. Current retiree incomes won't be affected, but the structure of future benefits will change to some extent.

The solution should include a system where a retiree's benefit isn't defined by how clever he is at playing games with the system rules. The real answer is ownership.

Currently, benefits are based on complex formulas with rules put into place to try and account for the possibilities of abuse. However, at the end of the day, the level of benefits is a promise that can be broken or underfunded.

Although fund managers recommend that a system have assets that represent 90 percent of liabilities, New Hampshire's assets are only 67 percent, a significant shortfall. Because contributions to the system by employers are not tied to a particular employee, they are only approximate. In a tight budget year, it can be easy to fund a little less this year and worry about the future later.

In theory, retirement systems were like giant pyramid schemes. As long as there were workers following behind to pay benefits for the retirees today, the fund was going to be safe. This is more or less the same way Social Security works. Today's workers pay not for their own retirement but for people already retired. Someone following behind will pay for me when I retire.

In this type of system, you don't own your benefits. Instead, they are held as a promise, a trust that you will be taken care of when it's your turn. But as the baby boom generation retires, it puts pressure on every retirement system that is based on promises. Financial pressure will force reductions in benefits, increases in taxes from local and state government, or both.

We should move toward a more responsible system of portable retirement benefits that are owned by each employee and not controlled by politicians. In theory, each year an employee works, he builds up benefits. If he's entitled to a full benefit after 25 years, we owe him 1/25 after each year. We should put that earned benefit into an account for him each year. If he changes jobs, he can take the account with him because it's already funded, fully portable.

In the case of the Dover police chief, the lump sum payments, because they are part of his compensation, would have had a retirement value already. It wouldn't matter if they were taken over 20 years, three years or one year. There's no system to play games with, no balloon payments at the end.

Each year an employee works, he shouldn't accrue good will. He should accrue actual money he owns that can't be taken away. Benefits would then be certain and manageable for both the retiree and the taxpayers.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy in Concord.

Quote of the day.

"Corruption is an evil inherent in every government not controlled by a watchful public opinion." Ludwig von Mises speaking of the Government.

Wednesday, January 24, 2007

Systematic abuse: Rethink state retiree pay

There are simple answers to the pension problem if legislators would only open their minds instead of pandering to the unions. Some solutions include, increasing the age of retirement to 67 as it is with social security or privatize the system to a 401K system as many companies in the private sector have. Companies over 20 years ago switched to 401K programs because it was long realized that pensions only destroy companies. One only need to look at the airlines and the car industry to see that this is true.

New Hampshire and Governor Lynch took New Hampshire a step backward when it allowed the State employees to unionize in the "Summer of 2006. We will only see the pension problem get worse. It is time to reverse that decision and no longer allow unions in our school systems either. Parents should not be forced to have their children taught by unionized employees, they should have a choice.

The following article appeared in the Union Leader.

Systematic abuse: Rethink state retiree pay

THE STATE'S $2 billion shortfall in employee retirement funding could be as high as $6 billion when all benefits are tallied. For comparison, the total state general fund budget is $1.4 billion. If the system is not fixed, a financial train wreck like the state has never seen is on the way.

The situation is so dire that the head of the State Employees Association has said publicly that his organization would be open to hiking employee contributions to the retirement plan. When the head of a public employees union starts negotiations by saying that an employee pay cut is on the table, you know things are bad.

In the past, most of the discussion about the retirement system has focused on who pays more: employees or employers. Employees pay a fixed percentage of their income. Employers -- the state and municipal governments -- pay varying rates, adjusted every two years.

Starting this summer, the rates employers pay will rise dramatically. The new rates are expected to add $1.5 million to Manchester's budget and $240,000 to Londonderry's, sending already burdensome tax rates even higher. And still the system will remain dreadfully underfunded.

One reason is a drop in the system's investment income. But the most important reason is the system itself. Not only are contributions set improperly, but it is designed so that employees can boost their retirement benefits well beyond what the normal pay throughout their careers would provide.

In Dover, Police Chief William Fenniman is set to retire this Friday. Though his current salary is $114,000 a year, he stands to make more than $125,000 a year in retirement. How? The system calculates retirement benefits based on the three highest-paid years in an employee's career. Fenniman gamed the system, taking huge cash payouts for unpaid leave and severance (totalling more than $200,000) in his last three years of employment.

None of this would have come to light had Dover councilor David Scott and the Union Leader not challenged the city to obtain employee compensation information the city manager did not want to reveal. If this is going on in Dover, it's a sure bet it's going on statewide at every level of government.

This type of abuse has to end if the state is to have any hope of bringing its retirement spending down to a manageable level. The only way to do that is to fix the system so that contributions are fair and sensible and employees cannot artificially inflate their benefits.

Quote of the day.

The weapon of the trade union is the strike. It must be borne in mind that every strike is an act of coercion, a form of extortion, a measure of violence directed against all who might act in opposition to the strikers intentions. Ludwig von Mises on Labor Unions.

Tuesday, January 23, 2007

School Board Meeting Thursday January 25th, 2007

There is a Newport District School Board
meeting on Thursday January 25th, 2007. Croydon residents have a voice even though they can not vote for the proposed bonds and increased spending. Please attend and speak up.

The following is important information from the January 16th, 2007 budget hearing.

Mr. MacConnell read warrant article 4 (attached). The proposed budget is
$14,434,666.00. The default budget would be $14,230,076.00. Mr. MacConnell reviewed page 6 of the blue packet which was the general fund summary budget. He pointed out the area of increases. The total general fund increase is 3.9% or $504,841. All but approximately $58,000 of the increase is due to contractual obligations.

On page 5, the reduction in revenue were discussed. There is approximately $242,000 in revenue that was reduced.

There was a discussion about the large decrease in the building and grounds line item and this issue would need to be addressed at some time.

Ms. Sarles read warrant article 5 (attached). The tax impact is zero. This is recommended by the school board and budget advisory committee (BAC).

Dr. Schissel read article 6 (attached). The tax impact is zero. Recommended by the school board and the BAC.

Ms. Harrison read article 7 (attached). The tax impact is zero. Recommended by the school board and the BAC.

Ms. DiPadova read article 8 (attached). The tax impact is zero. Recommended by the school board and the BAC.

Mr. MacConnell read article 9 (attached). The tax impact is zero . Recommended by the school board and the BAC.

The deliberative session will be at the gymnasium of Newport Middle High School on February 6, 2007 at 7:00 p.m. The ballot voting will be on March 13, 2007, between 8:00 a.m.-7:00 p.m at the Newport Opera House.

The following is important information from the January 16th, 2007 bond hearing.

Mr. Clough also asked the tax impact on the bond proposal in the upcoming years. Mr. MacConnell read the figures from the last page of the blue packet. The first year is for a half of a year and interest only at a tax impact of $1.78. Year two tax impact would be $4.28 for principal and interest at 5%. Year three tax impact $4.13, year 4 tax impact $3.97, year 5 tax impact $3.81. The tax impact will continue to decrease over the twenty years. Of the $14,890,000.00 requested bond, the state will pay $8,934,000.00 principal. The community would pay $5,956,000.00 in principal plus all interest.
There was a discussion of doing just improvements at Richards and the life safety at Towle and Middle High School. The estimated cost would be 15% higher than the projected costs in the packet for these items. Mr. Nelson noted that if they did the new building at Richards and life safety improvements, the state would pick up 60% of the cost.

Monday, January 22, 2007

Study finds education suits do little to improve schools

The following article appeared in the Union Leader on January 19, 2007. The article below is a must read in light of the Claremont decision and the need to define an "adequate education". More taxes, for example an increase in the income taxes for schools will only beget more taxes in the future. Public schools are government schools and like all forms of government there is waste, corruption and fraud. Public schools have a spending problem not a funding problem.

Study finds education suits do little to improve schools
Union Leader Staff
Friday, Jan. 19, 2007

A report released yesterday contends states that increased their share of spending on education in response to legal challenges throughout the 1990s did not see corresponding benefits such as tax relief and tax equity among communities.

Even the promise of more overall spending on education was not realized, according to the report, when a state's burden was increased.

The report by the Committee for Sensible School Funding, "State Education Finance Reforms: Fiscal Lessons for New Hampshire from Other States," was distributed yesterday to the governor's office and state lawmakers.

Rick Jenkinson, of Thermo Fisher Scientific Inc. and a member of the committee comprised of a variety of New Hampshire businesses, said he hopes the report is used as a resource in the Legislature's looming debate on education funding.

"It shows there are unintended consequences, both on the expenditure side and tax side," said Jenkinson, to increasing school funding at the state level.

The state Supreme Court in October charged state lawmakers with devising a funding mechanism that provides each child with an "adequate" education. If that undefined standard isn't met by June 30, the court has threatened to impose its own funding plan.

New Hampshire is not alone. Education funding has faced legal challenges in 45 states since the 1970s. Education finance laws have been overturned in 27 states, but most that have adopted reforms continue to face litigation.

"It just never goes away," said Brian Gottlob, principal of PolEcon Research and author of the report, "so there's got to be some lessons to be learned from this."

Among the report's findings:

Overall state and local taxes per capita increased more in states that increased their share of education funding.

Local taxes drop at first in response to more state aid, but within three years that effect is eliminated and local property taxes return to rapid growth.

Increasing a state's share of education funding comes at the expense of funding other state programs and activities.

Within New Hampshire, Gottlob cited programs with bipartisan support, such as the Land and Community Heritage Investment Program and spending for the developmentally disabled, that have lost funding to the "super right" mandate of education funding.

Over the long term, per-pupil expenditures grow more slowly in states that provide a larger share of education funding.

In states that take a larger portion of education funding, local government spending grows more than in states that don't take on an increased education funding burden.

Lawsuit abuse is a major contributor to the increased costs of healthcare, goods and services to consumers.
Charles W. Pickering

Sunday, January 21, 2007

Welcome to Croydon Citizens for Reasonable And Fair Taxes

Croydon - Citizens for Reasonable And Fair Taxes (CRAFT) Mission Statement

We support education reform and fiscal responsibility for all school districts. We believe that the majority of public schools in New Hampshire receive ample funding and require no more.

We promote enhanced local control of school districts, and discourage undue influence from higher levels of government and by private special interest groups. School Districts should not be compelled to negotiate with Teacher Unions or other groups; they should answer to the taxpayers alone.

We oppose and deplore the dumbing down of the academic curriculum through fads (ex. "middle schools" as opposed to junior high), and we oppose political propaganda in the curriculum.

We support parents' rights to guide the education of their own children and to home-school without oppressive government regulation.

We support parents' rights to choose a public or private school and to be able to fund this education through public funds with minimal regulation.

We fully support accountability such as the No Child Left Behind Act and do not consider such accountability an unfunded mandate.

We support the notion of free education and encourage schools to discontinue the practice of registration fees. This excludes fees for extracurricular activities.

We support the discontinuation of end of the career pay raises and lump sum payouts to increase retirement benefits.

We oppose State shoring up of funds for the teacher's retirement system and believe it should be solely funded by employees that use the system. If the teachers retirement system does go bankrupt the State should not be responsible to bail out the system.

We oppose any increases in tax rates for schools such as increases in income taxes, property taxes or sales taxes to our schools.

If I paid my taxes as carelessly and dishonestly as the politicians spend them, I would have been in jail long since. – Richard Needham