The tax rates for Andover for 2013 have been finalized – up about 3.9% over last year. A property in the Andover Fire District assessed at $200,000 will have its tax bill increase from $3,734 for 2012 to $3,876 for 2013, an increase of $142. Similar amounts apply for a property in the East Andover Fire Precinct.

What happened to reduce the gloomy prediction in the April Beacon of a 10% increase in taxes for this year? That estimate was based on the significant increase in appropriations voted at the annual meetings (up $360,461, or 6.2% over the previous year’s budgets) and the conservative assumption that there would be no unexpended funds available from the previous year to offset these increased appropriations.

However, at the end of the school’s fiscal year on June 30, 2013, the Andover School District reported that they had under-spent their appropriated funds for that year by $309,095 (approximately 6.7% of their total budget). By statute, that “unexpended surplus” is returned to the Town for the sole purpose of reducing the tax rate.

Major areas of under-spending for the school included Regular Education salaries ($62,000, due to personnel turnover), High School Tuition ($89,000, due to overestimating the student population), Special Education expenses ($71,000, due to overestimating needs), Employee Benefits ($70,000, due to a wind-fall reduction in charges), Utilities ($23,000, due to lower fuel oil bills), and Legal Expenses ($13,000,  due to fewer unanticipated expenses). Several areas of over-spending, including Repair and Maintenance of $19,000, brought the net under-spending to the resultant $309,095.

Budgeting for expenses that are impossible to anticipate is always a difficult process. High School Tuition costs are directly related to the number of students attending, which is difficult to predict. A trust fund of $26,000 has been established to fund unbudgeted High School Tuition costs.

Special Education costs are directly related to the needs of the student population, and are even more difficult to predict. A trust fund of $65,000 has been established to fund unbudgeted Special Education costs.

The school’s year-end unexpended balance for 2012-2013 was returned to the Town to reduce the tax burden for 2013 and is primarily responsible for reducing the tax rate increase from the predicted 10% to the final 3.9%.

The components of the tax rate discussed below are summarized in the tables that accompany this article.

Andover School Taxes

The 2013 School District Meeting voted to increase the Budget Committee’s recommended budget of $4,484,528 by $131,428. The increases consisted of $67,000 for an additional fourth grade teacher and $64,428 to fund a full-day kindergarten program. This brought the total appropriation for 2013 to $4,615,956, up over the 2012 appropriation of $4,351,029 by $264,927 (6.1%).

After accounting for offsetting revenues, including the New Hampshire Education Grant of $856,642 and applying the unexpended previous year surplus of $309,095, the amount to be raised by taxes for 2013 is $3,281,778, up from last year’s amount of $3,190,276 by $91,502.

The School tax rate for 2013 becomes $12.38 ($2.35 for the State component and $10.03 for the Town component). This is an increase of $0.36 (3.0%) over the tax rate for 2012 of $12.02.

Andover Town Taxes

The 2013 Town Meeting voted to appropriate a total budget of $1,570,583. This is an increase of $169,089 above the $1,401,494 appropriated in 2012. After accounting for estimated revenues and other adjustments, the amount to be raised by taxes in 2013 comes to $949,810, up $54,060 from $895,750 in 2012.

As a result, the Town tax rate for 2013 is $3.55, up $0.20 (6.0%) over the tax rate for 2012 of $3.35.

County Taxes

The bill that Andover received from Merrimack County for the Town’s share of the County’s 2013 budget is $752,807, up from the 2012 amount of $712,308. The tax rate to fund this bill is $2.82, up $0.16 over the 2012 rate of $2.66.

Fire Department Taxes

The total amount to be raised by taxes for the two Andover fire departments for 2013 is $121,435, down by $3,731 from last year. The tax rates for 2013 are $0.63 for the Andover District and $0.34 for the East Andover Precinct, each down $0.01 from last year.