Now that Manchester has adopted another “record-setting” school budget, to quote Mayor Jay Ruais, it’s time to bring to light some facts about what’s really happened during his time as mayor, because it doesn’t square with the rhetoric he’s been feeding to news outlets and citizens.
On July 1, 2023, the Board of Mayor and Aldermen (BMA), then led by Mayor Joyce Craig, appropriated $192 million for the Manchester School District. In the process, it allowed the district to count as a “one-time revenue” a $3 million transfer from its emergency health insurance reserve to avoid an actual $1.6 million spending cut required by the tax cap.
Manchester’s tax cap requires the loss of any non-property tax revenue to be offset by any increase in taxes before spending can increase. In that budget, the district lost nearly $8 million in state adequacy aid due to declining enrollment. Because the BMA allowed the district to falsify revenue to skirt the tax cap, the FY 2024 school budget improperly increased spending by $1.4 million.
That wasn’t the only way the city and schools conspired to subvert the tax cap, which allows the city to increase property taxes by the rolling three-year average of the Consumer Price Index. For FY 2024, the allowed increase in taxes collected was 4.96 percent. In addition to applying that percentage to the prior year’s $97 million local tax warrant for schools, the district applied it to the statewide property tax, inflating the amount of new taxes that could be raised from $4.8 million to $5.6 million, soaking taxpayers for another $800,000 they weren’t entitled to under the cap.
After the city’s budget was adopted, the state changed the education aid formula, resulting in a post-budget increase in state aid of $35.2 million. On Oct. 16, 2023, the BMA held a public hearing on the un-budgeted revenue. On Oct. 17, it voted to give all the money to the schools, increasing its budget to $227 million.
The BMA could have lowered taxes by 15 percent with that windfall.
Importantly, Jay Ruais, then a candidate for mayor, failed to appear at either the public hearing or the BMA meeting to advocate for the taxpayer. He issued no public statement in opposition to that massive 18 percent spending hike, nor did he advocate for any of that money being used for tax relief. Given his oft-made campaign promises to not only “never raise our taxes” but also to cut them, his silence was deafening, especially given that his opponent, Alderman Kevin Cavanaugh, was in favor of that massive spending increase.=
Now comes the budgeting of Mayor Jay Ruais.
While the $228 million school appropriation recommended by Ruais in his first budget was about $4 million less than the district’s request, it was $1 million more than the prior year’s amended budget and $36.2 million more than was originally appropriated for FY 2024. Moreover, Ruais continued the terrible precedents of using “one-time revenues” from emergency reserves and calculating the district’s tax cap allowed increase in taxes using the statewide property tax. This time, the “one-time revenues” totaled $9 million, and the 5.63 percent cap, applied to the statewide property tax, saddled taxpayers with another $1.1 million bill. Those bogus revenues were needed to offset a $7.8 million projected decrease in state adequacy aid, tied to declines in student enrollment and an unprecedented decrease in the numbers of kids receiving free and reduced hot lunch.
Had Ruais followed the tax cap, the school budget would have actually been cut by over $5 million if the amount that could have been raised legitimately under the tax cap had been allowed. If taxes hadn’t been raised, the cut would have been $10.8 million.
After the school budget was adopted, a miracle happened, and the district found almost 500 kids who were now eligible for free and reduced hot lunch, leading to an “unexpected” increase in state adequacy aid of $6.5 million in October. A November public hearing was set on the unexpected revenue, but Ruais abruptly called an “emergency” meeting in October. The short notice prevented four Republican aldermen from attending and, with Ruais’ support, the BMA gave all the funds to the schools, with all Democrats in favor and Aldermen Crissy Kantor, Ed Sapienza, and Joe Levasseur opposed. Ruais could have vetoed it and given the taxpayers a break, but he didn’t.
Having backed $7.5 million in school spending increases, Ruais now claims that the additional $6.5 million was “state funds,” not local taxpayers’. Unfortunately, that “additional” aid still left the district about $1.2 million shy of the prior year’s funding. Had that $6.5 million been applied to the tax rate, it would have all but zeroed out the nearly 4 percent tax hike contained in Ruais’ budget, the largest since the Baines administration.
In the school budget that just passed, Ruais said he “struck a balance” to increase funding by $3.5 million, which raised the total school spending increase to $11 million on his watch, despite there being no increase in student population.
This budget uses $8.3 million from emergency reserves as “one-time funds” to avoid cuts and another $1 million in increased taxes, wrongly using the statewide property tax under the tax cap. Yes, there was a big increase in state adequacy aid, about $11.6 million. It covered the loss of the bogus “one-time revenues” used to prop up spending and other revenue losses. Without increasing taxes and without raiding the trust funds, the tax cap would require an actual spending cut of about $6.7 million. If the maximum amount of taxes that could be legitimately raised under the tax cap was allowed, there would still be an actual spending of $2.1 million.
It’s important to note that while spending has soared by over $46 million (24 percent) since July 1, 2023, school enrollment has declined by 151 students (1.3 percent). Since July 1, 2019, when the budget (FY 2020) was $176 million, spending has skyrocketed by over $62 million (35 percent) while district enrollment has plummeted by $1,611 students, or 12 percent.
Is Ruais’ the kind of budgeting Republican voters expected from the candidate who said he’d “prioritize and reduce spending” to “finally give us a tax cut”? What’s clear is that Ruais either doesn’t really understand how the tax cap works and how the schools are gaming the system, or he’s deceiving people and hoping to get away with it. Either way, Manchester taxpayers, clamoring for tax relief and demanding accountability for the profligate spending of the schools, are once again on the receiving end of City Hall as a result.
Add to this the reality that Ruais strong armed several Republican aldermen into opposing a budget proposal that would have delivered a tax cut last year and rushed through a school budget this year before Alderman Crissy Kantor, an announced candidate for mayor, brought in her own budget proposal and one has to wonder what the city budget might look like if he’d actually worked with Republicans instead of against them. Ruais is the personification of that “establishment” Republican who campaigned as a conservative but governs as a Democrat.
