NASHUA, N.H. — Nashua's property tax rate is going up about 9.5%, more than city officials projected. Mayor Jim Donchess told the Board of Aldermen on Tuesday that the state cut the city's school aid by more than twice what the city had expected.

The mayor said tax bills will go out next week with a rate of $18.43. When aldermen adopted the budget, Donchess said, the city expected its state adequacy grant to fall by about $2 million, based on information from the state. The school department has since been told the reduction will be $4.5 million.

"Our residents are gonna have a lot of trouble paying this rate," Donchess said. He urged the board to start on next year's budget as early as possible.

More cost increases ahead

The mayor said costs will keep rising quickly. He said medical benefits are projected to go up 13% to 15%, an increase of about $6 million on that one line. He said school special education costs, especially out-of-district placements and other contracted services, are rising far faster than inflation.

Donchess blamed the state. He said New Hampshire pays a smaller share of local education costs than any other state, and that the New Hampshire Supreme Court has repeatedly found the state isn't meeting its constitutional obligation to fund an adequate education.

He also said spending on the state's voucher program is projected to rise 25% to $64 million this fiscal year, while Nashua's school aid is being cut. "I believe that the current majority in the legislature is starving public education and diverting money elsewhere," he said.

The mayor said the city's budget team will show aldermen what it would cost to keep current services after the school department presents in about two weeks. A communication read into the record said a special Board of Aldermen meeting on school finances has been called for Nov. 24.

Aldermen react

One alderman called the 9.5% figure "disturbing" and said it was the first time they had heard it. "I thought it would be in the eights," the alderman said. "Nine and a half is gonna be a lot."

Several aldermen connected the increase to the school district's study of closing schools. The superintendent has presented options for closing one to five schools, according to aldermen. Closing schools is the Board of Education's decision, but aldermen approve its budget.

One alderman said that if the school board doesn't close a school, it will have to cut teachers and programs. "Someone's gonna have to make a tough decision there," the alderman said. Another said the school board needs to decide quickly, because staffing and programs are locked in by the time the city's budget is approved in June.

Another alderman said the board should make it "abundantly clear" to the school board that if it doesn't close a school, aldermen won't pass its budget. That alderman also asked the mayor to consider an amnesty period for residents behind on property tax, sewer or wastewater bills, waiving interest and fees.

Another alderman said that with tax bills arriving right before the holidays, residents "are going to be angry with the cost of everything."

Not all members agreed that closing schools is the answer. One alderman called the district's facility study "skewed" and said the board should look harder at how the schools are run, including their reliance on outside contractors for special education. That alderman warned the city could be left maintaining a closed school building it can't sell.

Others said they hope the incoming Legislature and the governor will send more aid to cities and towns. "This is not a unique Nashua issue, it's definitely a state issue," one alderman said.