SANDOWN – Both Sandown’s school district and town budgets have gone to default this year, and there has been some concern over what that means for spending.
While some say that when voters turned down the operating budgets they were calling for a halt to any new spending for the year, as well as no new programs, the rules that govern the use of the default budget are the same as if the operating budget had passed, according to the state Department of Revenue Administration (DRA). This means that in both cases the governing body (school board or selectmen) uses a bottom line budget, and thus can move money around as they see fit.
The default budget was created when the state legislature created the SB or Senate Bill 2 system, under which both the town and district operate. The SB 2 system allowed towns to move away from the traditional town and district meeting, where all items were discussed and voted upon in one session, to a two-part system where the warrant is discussed at a deliberative session but decisions made on the passage of those articles occurs a month later at a secret ballot vote.
Stephan Hamilton, director of the Municipal and Property Division of the DRA, explained that the default budget exists as the contingency plan for the secret ballot vote, to make sure the town or district has money to operate, should the operating proposal be denied. There are rules specific to the creation of the default, but the use of that money falls under the same regulations as the operating budget.
In both cases the bottom line is the bottom line, he explained.
The law that defines the default budget reads that the default is “the amount of the same appropriations as contained in the operating budget authorized for the previous year, reduced and increased, as the case may be, by debt service, contracts, and other obligations previously incurred or mandated by law, and reduced by one-time expenditures contained in the operating budget. For the purposes of this paragraph, one-time expenditures shall be appropriations not likely to recur in the succeeding budget, as determined by the governing body, unless the provisions of RSA 40:14-b are adopted, of the local political subdivision.”
Basically the default is last year’s budget with one-time costs removed and future mandated known costs added.
The default budget is generally created by the school board or selectmen, but if the public votes to do so, the responsibility for that number can be moved to the budget committee of either group.
While Hamilton noted that the town or district may want to seek guidance from the town’s attorney on the roll out process of new programs under the default, typically, especially if contracts are in place, those programs can be part of the default’s creation and utilization.
Both entities use a bottom line budget, not a line item budget. The latter would restrict spending to amounts included in the individual lines.
The Sandown selectmen have been discussing how to move forward with their default, especially whether employees should get raises that were part of the operating proposal that was turned down. The town budgets differ by about $10,000.
At the Timberlane Regional School District, superintendent Earl Metzler explained in a message to the district after the vote that while he’s not ready to give specifics on how the district will use the default, it offered the opportunity to repurpose money and reorganize the way the district conducts its business.
“So please be assured that the impact of the default budget in Timberlane this year will be minimal,” said Metzler.
One of the items that will continue to roll out in the coming year is a new tuitioned full-time kindergarten program. At the school board’s first meeting, new budget committee member Arthur Green said the program, which he called the “principal new feature of the proposed budget,” should be stopped, as the voting down of the operating budget in his eyes was a call by the public to stop any new programs, such as the full-time kindergarten.