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Exeter Region presents lean FY26 budget as special-education costs surge
Summary
School finance officers told the Exeter Regional Cooperative School District that a tight, needs-based FY26 operating budget is driven by higher special-education needs, contractually required salary increases, lower federal/state grant offsets and rising out-of-district tuition and transportation costs.
The Exeter Regional Cooperative School District on Monday presented a tightly constrained FY26 operating budget that administrators said is driven mostly by rising special-education needs, negotiated salary increases and lower grant reimbursements.
"This is a needs based budget ... it is a very lean budget," Molly O'Keefe, the district's director of finance, told the public at the budget hearing. She said the district ended the prior year with a 1.4455% fund balance and emphasized the packet shown was the same one reviewed in the board's workshop.
Trish Cox, representing the Budget Advisory Committee, said the panel examined the proposal across multiple two-hour sessions and unanimously recommended the budget. "Rest assured, this is not a budget with a built in cushion," she said, adding the BAC "grilled" administrators to understand each line.
Administrators told residents that most operating costs are contractual or mandatory — salaries, benefits (FICA, New Hampshire retirement), required special-education services and student transportation. Heather Murray, human resources director, said paraprofessionals and administrators receive contractual increases and that nonaffiliated staff were budgeted at a 3% increase.
Special-education directors said the percentage of students with individualized education programs (IEPs) has increased substantially. "When I started in 2016, 11 percent of students were in an IEP; we're next year projected to be at 24 percent," Sonia Roche, special-education director at the middle school, said. Administrators said the district is trying to reduce out-of-district placements by expanding early intervention and hiring additional interventionists, but acknowledged that some placements remain necessary and costly.
District leaders warned that state catastrophic-aid reimbursement has fallen from prior levels and now reimburses a smaller share of extraordinary special-education costs. "We are asking the state for emergency funding to restore the higher reimbursement rate," Esther Asbell said, urging residents to press legislators for aid. The board later received a similar endorsement from state Sen. Deborah Altschuler, who said she would join efforts to seek emergency funds.
Administrators also cited insurance-plan changes and inflation as drivers: the district's HMO premium rose about 5.2% and dental about 5% this year; Title II federal grant funding for professional development has declined, shifting those costs into the operating budget.
The board moved to place the FY26 budget and related warrant articles on the deliberative-session agenda. Board members said the district had limited room to cut because roughly 95% of the budget is fixed or contractual.
What happens next: The proposed operating budget will go to the deliberative session, and voters will choose between the proposed and default budgets at town meetings and on the ballot, administrators said. District officials urged residents to review the line-by-line packet posted on the SAU website and to attend deliberative and legislative forums for state-level action on education funding.
