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November 19. 2013 7:45PM

State aid cut blamed for Keene's 4.3% tax hike

KEENE — The city tax rate has gone up partly because of a reduction in state aid to the Keene School District, according to local officials.

Late last week the N.H. Department of Revenue Administration set Keene's tax rate at $32.75 per $1,000 of assessed value, an increase of $1.35, or 4.3 percent, over last year's rate of $31.40, said city finance director Elizabeth Fox.

Broken down, the new city rate is $12.44, up from $12.15 last year, representing a 2.3 percent increase. The local education rate of $14.60 is up 7.8 percent from last year's $13.54 rate. The state education portion of $2.44 is down one percent from $2.47 last year. And the county tax rate of $3.27 is up less than 1 percent from $3.24 last year.

Fox said the city rate went up mostly because of increases caused by several small capital investments, increases in retirement system costs and the cost of goods going up, Fox said.

"It increased more this year than it has the past few cycles," Fox said of the city tax rate.

"The majority of this year's rate change is related to changes in the school portion and in part to do with the local education grant," Fox said, adding the increase was not a surprise. "The school district went into their process predicting there would be a substantive change."

State aid to the school district through the state adequacy grant went down $267,447 this year.

The adequacy grant is the major form of state aid to education at the school district level, said John Harper, SAU 29 business administrator.

"The state adjusted the formula that it used this year and it resulted in less money to Keene, and I think it resulted in less money to a lot of school districts," Harper said.

Other revenue streams were down this year as well, he said. "The budget this year was only up 1.4 percent, but we had some reductions in revenue which played a role.

For instance, "Last year we had $750,000 left over from a construction project when we built the new middle school," Harper said. "One-time revenues are a boon in the year you have them. Then you kind of miss them when you don't have them to repeat the second year."

mpierce@newstote.com


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