Understanding Town And School Budgets
This is the second in a series of articles serving as a primer on what the Town Meeting process is all about.
As we head into the season of town and school district meetings, citizens who have not participated in the past may be confused about how to deal with the budget. Indeed, the budget process can be very confusing, especially in towns that have adopted RSA 40:13, the Official Ballot Act, commonly known as SB2.
Under the traditional town meeting process, town or school leaders propose a budget that voters will consider.
Most municipalities and school districts also have adopted RSA 32, the Municipal Budget Law, which provides for voters electing a budget committee that serves as a second set of eyes to review the governing body’s budget proposals in light of their impact on taxpayers and to consider whether the proposed spending is justified. It is the budget committee’s recommendation that then goes before the voters.
Because SB2 requires a ballot vote on each article after it has already been debated during the deliberative session, the town or school district must prepare a default budget to maintain operations if voters do not pass the budget as proposed. The default budget keeps spending at current levels for the coming fiscal year, with adjustments for one-time expenditures that are not necessary in the coming year, and contractual increases such as collective bargaining agreements and multi-year contracts that have built-in spending increases.
Recent trends have led many communities to blur the line between what a town or school governing body proposes and what the budget committee recommends. Instead of separately considering the budget, budget committees often meet with officials as they develop their spending plan, resulting in identical versions of the budget proposal. The budget committee still has the ultimate authority in deciding what goes before the voters, so if officials disagree with that decision, they still have the option of publishing their own recommendation. That preserves voters’ ability to judge between the two budget proposals.
Default budgets have presented difficulties because of the way they can be manipulated. Instead of having clear criteria for deciding what constitutes an ongoing expense, the law is a bit vague, and the New Hampshire Legislature’s efforts to clarify that calculation have only partially helped. Additionally, factors such as inflation and government policies often mean that the default budget is higher than the one proposed, leaving voters with little choice.
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