I certainly don’t think the right idea is to send a message to the schools that, if you don’t spend every penny, you’re going to get penalized by the town because you have a surplus.”

Emily Copeland, chair of the School Committee

PORTSMOUTH — The Town Council voted 5-1 Monday night to provisionally approve a $74,404,959 municipal budget for next fiscal year that would increase the current tax rate by about 3.15 percent.

Under the spending plan, the tax rate would rise from its current $12.782 per $1,000 of assessed valuation to $13.185 — an increase of about 40 cents.

That means the owners of a property assessed at $450,000 would see their tax bill increase from the current $5,751 to $5,933.25 next year, or $182.25 more. The owners of property assessed at $600,000 would be taxed $7,911 next year — $241.80 more than what they pay now.

The public will have a chance to comment on the spending plan during the annual budget hearing scheduled for 7 p.m. on Wednesday, June 12. Changes can still be made to the spending plan before it is formally adopted on June 24 and then sent to the state.

Town Administrator Richard Rainer Jr.’s original budget recommendation called for a lower tax rate of $13.174, but on Monday the council voted 4-2 to add $58,000 to the town contingency fund to pay for a shortfall, if needed, in the projected School Department health care premiums. School Superintendent Thomas Kenworthy notified the council late last month that the rate increases came in after the School Committee approved the district’s budget on March 12.

During a budget workshop April 23, council members Keith Hamilton and David Gleason balked at adding any more to the budget to cover the projected shortfall, with Hamilton noting the school budget has consistently run a surplus. He expressed confidence that the money could be found somewhere in the existing proposed budget.

Schools plead case

On Monday, School Committee Chair Emily Copeland urged the council to add $58,000 to the school side, as council member Charles Levesque proposed. 

“We worked really hard this year to come in with a very conservative budget because things were tight,” Copeland said. “We brought it down from a 5.1-percent increase in expenditures to 3.9 to 3.1, and we were too conservative with the health care estimate. I don’t think we should be penalized for trying to really work with the town.

“I was very concerned because at the last meeting there was the assertion made that somehow it didn’t matter; we had extra surplus and we padded the budget, and that’s absolutely not true. I think that’s really missing the point and insulting to the professionalism of the district. We worked since November to come up with this … We’ve gone through three revisions, and it just came out a little higher.”

Copeland said the council should be “singing the praises” of the school district for being so careful with its spending, and that surpluses can cover emergencies — such as a septic system failing at the high school — so school officials don’t have to come to the town for help.

“I certainly don’t think the right idea is to send a message to the schools that, if you don’t spend every penny, you’re going to get penalized by the town because you have a surplus,” she said.

Council President Kevin Aguiar said if $58,000 were to be added to the budget, he would prefer it be kept in the town’s contingency fund. “If that money is indeed necessary, we can shift it from our contingency to pay that bill,” Aguiar said.

The council voted 4-2 to add the $58,000 to the contingency fund. Hamilton and Gleason voted against the motion. Council member Leonard Katzman was absent from Monday’s meeting.

Finance Director Kayla Marsden said the added money would increase the levy to 3.761 percent. That keeps the town about $150,000 under the state-mandated cap on new expenditures, Rainer noted.

Hamilton, the sole council member to vote against approving the provisional budget Monday, said he was concerned the town could still lose more funding under the state budget, which would mean even less breathing room when it comes to the cap.

“This is the hardest part about us doing a budget. The state doesn’t finish their budget sometimes until June 30, and we’ve already passed ours. If they came in and socked us with $126,000, we have to do a lot of adjustments,” he said.

Upcoming meetings

In addition to the June 12 budget hearing, the council will hold regular meetings at 7 p.m. on Tuesday, May 28, and Monday, June 10.