Rochester budget proposal $6.6M less than last year: Why and what it means

ROCHESTER — The city's initial fiscal year 2025 budget proposal of $162.2 million represents a decrease of $6.6 million-plus from the previous year.

If the proposal of precisely $162,216,791 is approved with no changes, it would be 3.92% or $6,621,498 less than the approved 2024 budget appropriation of $168,838,289, according to City Manager Katie Ambrose.

Expiring grants and a one-time expense in last year's budget are big reasons why the budget is proposed to be less in 2025, she said.

"Large drivers contributing to the net decrease in total appropriations include a $6.7 million decrease in school grants and the reduction of the $7.5 million one-time appropriation from general fund unassigned fund balance for the new school appropriated within the current budget," said City Manager Katie Ambrose.

More: Rochester moves to demolish Nancy Loud School, considers recreation options for site

Ambrose explained the decrease in school grant money.

"Revenues are paired with expenses in the budget, so it also impacts their expenditures," she said. "The decrease is due to elementary and secondary school emergency relief funds (ESSER) ending in September, which will have some impact on their FY25 operating budget but is manageable. These are federal funds to support schools in responding to the COVID-19 pandemic. Eighty percent of the grant monies were spent on larger construction projects to improve air quality in the schools. The other 20% was used towards learning loss in a number of ways. A few areas that were included in this portion were new technology, intervention, funding of tutoring and summer school programs."

Ambrose recently told the City Council the budget came in $149,852 below the tax cap. The city side of the budget was under by $135,474, and the school district was under by $14,378.

When creating the budget, each year, the city has an amount of money it cannot exceed to stay within the year's determined tax cap. That amount applies to the city and the school district budgets combined.

Rochester budget and revaluation to have impact on taxes

The tax rate impact right now is estimated to represent a decrease of $3.21 per $1,000 of property valuation from last year's $25.75 down to $22.54. Ambrose said the tax bills cannot yet be definitely calculated because the city is currently in the process of a property revaluation. A lower tax rate doesn't typically mean a lower tax bill. It may simply reflect property values are higher.

Ambrose said the tax rate is projected to decrease due to an estimated $600 million increase in net assessed value.

Ambrose said the new revaluation property assessments are estimated to be published after September but prior to the second issue of 2024 tax bills in December.

"The revaluation is projected to decrease the tax rate, which is usually established by the New Hampshire Department of Revenue Administration in late fall," she said. "An increase in property value does not necessarily mean an increase or decrease in a property tax bill."

Through the last several budget cycles, Ambrose said the "City of Rochester has maintained its sound fiscal health without a loss of services and without significant increases in property taxes."

"The proposed fiscal year 2025 budget continues along these trends,” she said.

Ambrose said she had instructed all departments to present an operation and maintenance budget that was no more than a 3% increase over last year. Any items above that could be submitted through an issues and options request. Seventeen were submitted and 13 were then included in the budget, with four omitted, adding $822,370.

The City Council will continue to review the budget May 10 in council chambers at 9:30 a.m. Public hearings for the budget will be scheduled for May 21, and the target date to vote on the budget is June 4.

This article originally appeared on Fosters Daily Democrat: Rochester budget proposal $6.6M less than last year: Why and what it means