The Claremont School Board announced Wednesday night it will push for special legislation to help it recover from its self-inflicted $5 million operational deficit.
State House Republicans, however, have a different message: Don’t bet on it.
James O’Shaughnessy, the attorney for the board, said efforts are underway to pass a state law establishing a temporary revolving loan fund for Claremont in the coming weeks. They hope the revolving fund law will be attached as an amendment to another law coming up for vote on the legislature’s Veto Day.
O’Shaughnessy said he and the others working to get Claremont out of its financial crisis have been hesitant to ask Concord for help. But the request is necessary now that the district’s fiscal picture is becoming clearer — and more dire.
“Your financial position right now is every bit as precarious as it was in August. You don’t have a safety net,” O’Shaugnessey told the district.
It will likely take two years for Claremont’s school system to recover from the cash crunch that forced the board to cancel 19 teacher contracts, lay off 20 non-teaching staff, and cancel sports, among other cuts, O’Shaughnessey said. The ability to access cash from the loan fund will mean the district can stay open as it works through the tough years ahead.
There are no reserve funds for Claremont, and the district has already spent down its trust accounts.
There’s something else missing, multiple state house sources say: House Republicans willing to help out a failed district still engulfed by scandal.
“Claremont has dug its own fiscal hole through years of mismanagement and bad decisions. The Legislature should not be in the business of bailing out communities that refuse to live within their means,’ said Rep. Joe Sweeney (R-Salem). “Granite Staters shouldn’t have to pay the price for Claremont’s irresponsibility. Claremont needs to tighten its belt and live with the consequences of its actions.”
Another House Republican speaking on background was surprised to hear Claremont officials were telling residents the revolving fund bailout was all but a done deal.
“I hope they aren’t putting any bets on that.”
The attitude among many Republicans is that Claremont is going to have to undergo reforms before they see any help from the state. “When a drunk wrecks the car, you don’t fix the car and then buy him another drink,” one Republican said.
Comptroller Matt Angell estimates the district will be able to operate for the rest of this year and reduce the deficit to about $1.9 million by June 30. That’s a daunting, but manageable number, O’Shaughnessy said.
“We’re hoping that by the end of next year, you’re done,” O’Shaugnessey said.
But there will be cash flow problems going forward as the district gets its accounts under control. Having the ability to get a short-term loan would ease that problem.
Claremont officials emphasized they would not be asking for any net increase in state funds. The proposal asks the state to create a $3 million revolving loan fund administered by the Department of Education. Any money the district withdraws from the fund would be repaid by state adequacy education grants, and the state would collect interest on any remaining balance. The loan fund will sunset at the end of three years.
Claremont has already received a $4 million loan from Claremont Savings Bank last month which enabled it to open schools at the start of the year. However, that loan must be repaid by the end of the school year.
