UPCOMING
BUDGET
MEETINGS:
Wednesday, March 15
7 p.m.
City Council Special Meeting
School budget public hearing
Wednesday, March 15
follows special meeting
City Council Workshop
Budget review:
Police, Fire and Rescue, and Planning departments
Wednesday, March 22
7 p.m.
City Council Meeting
City budget public hearing
Wednesday, March 29
7 p.m.
City Council Workshop
Budget review:
Community Services
Wednesday, April 5
6 p.m.
City Council Workshop
General budget review
Wednesday, April 5
Following Workshop
City Council Special Meeting
Budget adoption
Wednesday, April 12
7 p.m.
City Council Meeting
Fallback budget adoption date
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MORE
INFORMATION, RESOURCES
AVAILABLE AT:
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Budget presentations continue |
The City Council held a second budget workshop on Wednesday, March 8, where it reviewed the School Department's proposed budget.
Next week, on Wednesday, March 15, the City Council will hold a public hearing on the School Department's budget, followed by a budget workshop where it will receive budget presentations from the Police, Fire and Rescue, and Planning departments.
School Department
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School Superintendent William Harbron, left, and Business Administrator Michael Limanni
School Superintendent William Harbron and Business Administrator Michael Limanni presented the School Department's budget to the City Council at the March 8 budget workshop. The School Department's budget represents several divisions, including student support services, instructional programs, administrative services, facilities and operations and transportation.
The School Department adopted its revised budget on Jan. 31, 2023, following budget presentations and deliberations that began in November 2022.
The department's FY2024 proposed budget totals $78,307,351 across all funds, an increase of $530,093 or 0.7% over the current FY2023 budget.
The proposed budget includes the following expenditures:
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General Fund: $78,347,873, an increase of $4,119,293, or 5.5%. This figure includes debt service of $6,307,427;
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School Cafeteria Fund: $1,729,405, an increase of $79,405, or 4.8%;
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Department of Education federal grants: $4,100,000, a decrease of $3,666,000 or 47.2%;
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School Special Programs and Grants: $175,000, no change from the current year;
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Tuition Programs: $125,000, no change from the current year;
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Facilities Fund: $137,500, a decrease of $57,500, or 29.5%;
The revenue for the proposed budget would be raised from:
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Local School tax (property tax): $52,383,727
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State School tax: $7,120,665
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State adequacy aid: $10,191,730
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Non-tax revenue: $8,651,749
The Local School portion of the property tax levy for the proposed budget is $512,900 more than the amount reflected in the tax cap formula. The tax cap overage attributable to the school portion of the tax cap formula is partially offset by the estimated city property tax levy being $74,320 less than the amount reflected in the city portion of the tax cap formula. As a result, the proposed budget as assembled exceeds the tax cap requirements of the Dover City Charter by $438,580.
The School Department budget begins on page 761 of the Proposed Budget Book, which can be viewed here. |
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How the tax cap works
To meet the requirements of the City of Dover Charter, the Finance Department annually calculates the maximum amount the City and School portions of the property tax levy can increase in the next fiscal year budget and be adopted by a simple majority vote of the City Council. This maximum amount is widely known as the tax cap. The tax cap's official name is "Limitation on Property Tax Levy Increase" and can be found in Section 3.1 of Article VI of the City of Dover's Charter. It states, in part:
The City Council shall adopt the annual municipal budget for city and school purposes to limit the property tax levy on taxpayers to the property tax levy from the previous tax year increased by the amount of inflation calculated from the Consumer Price Index-Boston and the net increase in new construction.
Voters instituted the tax cap through a charter amendment in the 2011 municipal election, and it went into effect for the 2013 fiscal year. The tax cap only applies to the City and Local School portions of the property tax levy; it does not include enterprise funds, dedicated funds, capital reserve funds, grants or other revenue sources. The tax cap does not apply to the County or State Education portions of property taxes.
Finance Department staff provides a preliminary tax cap calculation annually in January for budget planning purposes. The final tax cap calculation is determined during the budget season after the net new construction value for the previous calendar year in Dover is finalized.
The Finance Department uses the following steps to calculate the capped tax levy for the next fiscal year for the Local School and City portions of the budget.
1. Start with the current fiscal year's net amount to be raised by property tax levy for the City and Local School portions as certified by the New Hampshire Department of Revenue.
2. Calculate inflation by taking the average percent change of the last three calendar years of the U.S. Department of Labor's Consumer Price Index for Boston-Cambridge-Newton, MA-NH, not seasonally adjusted, available here.
3. Multiply the previous calendar year's net increase in new construction value by the current fiscal year's certified tax rate and divide by 1,000; this calculates an estimated property tax levy related to increased assessed value from new construction. The net increase in new construction value is the total value of building permits minus the total value of demolition permits based on information provided by city departments.
4. Add the totals from steps 2 and 3. This equals the capped amount the City and Local School portion of the property tax levy can increase in the next fiscal year budget from the current fiscal year.
5. Add totals from step 4 to the current fiscal year's property tax levy in step 1. This is the total amount allowed to be raised by the capped tax levy the City Council can adopt through a simple majority vote. If the proposed budget is above the capped levy calculation, the City Council may still adopt the budget, but it needs a two-thirds majority vote of all elected members of the City Council.
Tax cap calculation for FY2024 budget
The final FY2024 tax cap was calculated on March 1, 2023, and can be viewed here. Below are the numbers used in the calculation.
1. Current fiscal year net amount raised by property tax levies as certified by the Department of Revenue:
City portion: $35,506,280
School portion: $48,960,527
City portion: $35,506,280 x 3.83% = $1,359,891
School portion: $48,960,527 x 3.83% = $1,875,188
3. Multiply the net increase in new construction value for the 2022 calendar year ($107,154,416) by the current fiscal year certified tax rate for City ($7.22) and Local School ($9.66) portions, and divide by 1,000.
City portion: ($107,154,416 x $7.22)/1,000 = $773,655
School portion: ($107,154,416 x $9.66)/1,000 = $1,035,112
4. Add the bolded amounts for the City and Local School portions in steps 2 and 3 to calculate the capped tax levy increase for fiscal year 2024:
City portion: $1,359,891 + $773,655 = $2,133,545
School portion: $1,875,188 + $1,035,112 = $2,910,300
5. Add the amounts from steps 1 and 4 to calculate the total capped amount for FY2024 to be raised by tax levy for the Local School and City portions of the budget.
City portion: $35,506,280 + $2,133,545 = $37,639,825
School portion: $48,960,527 + $2,910,300 = $51,870,827
The proposed budget's Local School portion of the property tax levy is $512,900 more than the amount reflected in the tax cap formula. The tax cap overage attributable to the Local School portion of the tax cap formula is partially offset by the estimated City property tax levy being $74,320 less than the amount reflected in the City portion of the tax cap formula. As a result, the proposed budget as assembled exceeds the tax cap requirements of the Dover City Charter by $438,580. Therefore, adopting the budget as currently presented will require a two-thirds affirmative vote by the City Council instead of a simple majority.
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Want to know more? In addition to the online resource for this fiscal year's budget, check out Budget Revealed for more information about the budget process, including previous budgets, insight into the budget cycle, and additional multimedia content.
Click on the image below to view:
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