Laconia officials propose 4.4% school budget increase, warn cuts of 15 teachers if tax‑cap exemption is denied

Business administrator Diane Clary presented a proposed 4.4% operating budget for the 2026–27 Laconia School District at a special Laconia City Council meeting on May 11, 2026, citing rising contractual costs and a sharp health‑insurance premium increase. Clary told councilors the district faces a roughly $1.5 million increase in expenses and would use $300,000 from a health‑insurance stability reserve to help balance the budget.

Clary framed the proposal as the district’s middle option after developing three budget scenarios: a full “want-and-need” budget that exceeds available revenue, a deep‑cut option that would entail widespread layoffs, and the presented “green forgo” that aims to preserve core services. “Our goal this year was simple. Keep the doors open, the lights on, the students learning, and the teachers smiling,” Clary said during the presentation.

The budget’s main cost drivers, Clary said, are contractual salary and benefit increases tied to collective bargaining, an anticipated 16.9% rise in health‑insurance premiums, a new five‑year bus contract with 5% annual increases, and steadily rising special‑education costs. Clary said about 74% of the 4.4% increase is salary and benefits, meaning most of the growth is contractual and not discretionary.

To achieve the 4.4% proposal the district plans to eliminate five teaching positions through attrition, make six support‑staff adjustments, reduce facility projects to essential repairs only, and transfer funds from reserve accounts. Clary said facility reserves have fallen from about $2.7 million to roughly $400,000 following recent high‑school renovations. She also asked the council to consider approving a tax‑cap exemption to help close the remaining gap.

During questioning, Clary warned that denying a tax‑cap exemption would require much deeper reductions: “I would have to cut 15 teachers and probably 10 support staff,” she said, describing the more severe option as the alternative if the council does not grant the requested flexibility. Councilors pressed for detail on reserves and the composition of costs; Clary said the stabilization reserve (for contracts) stood at about $933,000, the health‑insurance fund about $710,000, and impact fees about $200,000.

Special‑education was a major focus of the discussion. Amy, the district’s special‑education expert, described cost pressures from contracted related services (speech, occupational therapy, physical therapy) and out‑of‑district placements. She said contracting outside providers increases costs and that hiring district staff where possible has reduced specific lines—citing an example where hiring a school psychologist cut a particular cost by nearly half. The district reported roughly 389 students receiving special‑education services out of a current enrollment figure in the 1,700s, placing the district’s special‑education share above the state average, officials said.

Councilors also questioned the district’s enrollment and revenue outlook. Clary showed long‑term enrollment declines (from about 1,945 in 2016–17 to the mid‑1,700s currently) and said state “adequacy” funding has been largely flat, citing totals of roughly $12.3 million in 2021 versus about $12.87 million projected next year. She explained that the state formula and local tax revenues (the district’s “swept” contribution, which she stated as about $5,155,000) influence local funding availability.

Clary and councilors discussed other program matters, including career/technical offerings at the Huitt Center, impact‑fee rules, and the district’s in‑district transition program for older students (up to age 22). Clary also announced that she will retire at the end of the academic year and said her replacement, Don Silly, is slated to begin on July 1 and that she will assist during a transition period.

The meeting concluded with questions and no formal vote on the budget; councilors indicated they would consider the tax‑cap exemption request and the district’s recommendation before any final action.